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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended October 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 1-14315
NCI BUILDING SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
Delaware 76-0127701
(State or other jurisdiction (I.R.S. employer
of incorporation or organization) identification no.)
7301 Fairview
Houston, Texas 77041
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (713) 466-7788
Securities registered pursuant to Section 12(b) of the Act: Common Stock,
$0.01 par value
Securities registered pursuant to Section 12(g) of the Act: None
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 that 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 [ ].
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
The aggregate market value of the voting stock held by non-affiliates
of the registrant on January 4, 1999, was $414,275,401.
The number of shares of common stock of the registrant outstanding on
January 4, 1999, was 18,182,534.
DOCUMENTS INCORPORATED BY REFERENCE
Certain information required by Parts I and II of this Annual Report is
incorporated by reference from the registrant's 1998 Annual Report to
Shareholders, and information required by Part III of this Annual Report is
incorporated by reference from the registrant's definitive proxy statement for
its annual meeting of shareholders to be held on March 17, 1999.
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PART I
ITEM 1. BUSINESS.
GENERAL
NCI Building Systems, Inc. (the "Company" or "NCI") is one of North
America's largest integrated manufacturers of metal products for the building
industry, with 38 manufacturing and distribution facilities located in 18 states
and Mexico. The Company sells metal components as well as complete metal
building systems, offering one of the most extensive metal product lines in the
building industry with well-recognized brand names. Management believes that the
Company's leading market positions and strong track record of growth and
profitability have resulted from its focus on improving manufacturing
efficiency, controlling overhead costs, developing new markets and successfully
identifying and integrating strategic acquisitions. In May 1998, the Company
acquired Metal Building Components, Inc. ("MBCI") for an aggregate of $593
million (the "MBCI Acquisition"), thereby doubling its revenue base, becoming
the largest domestic manufacturer of nonresidential metal components and
significantly improving its product mix. The Company's sales and income from
operations were $675.3 million and $81.4 million, respectively, for the fiscal
year ended October 31, 1998.
Metal Components. With a market share at least twice that of its
largest competitor, the Company is the largest domestic supplier of metal
components to the nonresidential building industry. The Company designs,
manufactures, sells and distributes one of the widest selections of metal roof
and wall systems, overhead doors, fascia, mansard and various trim accessories
for commercial, industrial, architectural, agricultural and residential
construction and repair and retrofit uses. The Company is also one of the
largest independent providers of hot roll and light gauge metal coil coating and
painting services and products. The Company coats and paints hot roll coil metal
for use in its own metal components manufacturing, as well as processing hot
roll coil metal and toll coating light gauge metal for use by third parties. The
Company markets its metal components products and coating and painting services
nationwide primarily through a direct sales force under several brand names,
including "Metal Building Components," "American Building Components," "DBCI,"
"MBCI," "Metal Coaters," "Metal-Prep" and "DOUBLECOTE." The Company's sales of
metal components and coating and painting services were $257.1 million, or 38%
of total sales, for the fiscal year ended October 31, 1998.
Metal Building Systems. The Company is one of the largest domestic
suppliers of metal building systems. The Company designs, manufactures and
markets metal building systems, self-storage building systems and metal home
framing systems for commercial, industrial, agricultural, governmental,
community service and residential uses. The Company markets these systems
nationwide through authorized builder networks totaling over 1,200 builders and
a direct sales force under several brand names, including "Metallic Buildings,"
"Mid-West Steel Buildings," "A & S Buildings," "All American Systems," "Steel
Systems" and "Mesco." The Company's sales of metal building systems were $418.2
million, or 62% of total sales, for the fiscal year ended October 31, 1998.
Prior to their combination, NCI and MBCI both demonstrated strong
growth in sales and income from operations. NCI achieved a five-year compound
annual growth rate of 38.9% and 49.6%, respectively, in sales and income from
operations for its five fiscal years ended October 31, 1997. MBCI achieved a
five-year compound annual growth rate of 15.3% and 16.2%, respectively, in sales
and income from operations for its five fiscal years ended December 31, 1997.
The Company was founded in 1984 and was reincorporated in Delaware on
December 31, 1991. Its principal offices are located at 7301 Fairview, Houston,
Texas 77041 and its telephone number is (713) 466-7788. Unless indicated
otherwise, references herein to the Company include its predecessors and its
subsidiaries.
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INDUSTRY OVERVIEW
The building industry encompasses a broad range of metal products,
principally composed of steel, sold through a variety of distribution channels
for use in diverse applications. These metal products include metal components
and complete metal building systems.
Metal Components. Manufacturers of metal components for the building
industry supply pre-formed components, including roof and wall panels, doors,
partitions, related trim, accessories and other metal components used in metal
building systems and other repair, retrofit and new construction applications
for commercial, industrial, agricultural and residential uses. Metal components
are used in a wide variety of construction applications, including purlins and
girts, roofing, walls, doors, trim and other parts of traditional commercial,
industrial, agricultural and residential buildings as well as in architectural
applications and complete metal building systems. Management estimates the metal
components market (including roofing applications) to be a multi-billion dollar
market, although market data is limited. Metal components are used to a greater
extent in repair and retrofit applications than in new construction of metal
building systems and, therefore, management believes that the metal components
business exhibits less cyclicality than the metal building systems business.
Management believes that metal products have gained and continue to gain a
greater share of new construction and repair and retrofit markets due to
increasing acceptance and recognition of the benefits of metal products in
building applications.
Metal roofing accounts for a significant portion of the overall metal
components market, but a relatively small percentage (approximately 5%) of the
large commercial roofing market estimated at over $20 billion annually. As a
result, management believes that significant opportunities exist for metal
roofing, with its advantages over conventional roofing materials, to increase
its overall share of this market. Metal roofing systems have several advantages
over conventional roofing systems, including the following:
o Lower Lifecycle Cost. The total cost over the life of metal
roofing systems is lower than that of conventional roofing
systems for both new construction and retrofit roofing. For
new construction, the cost of installing metal roofing is
greater than the cost of conventional roofing. Yet, the longer
life and lower maintenance costs of metal roofing make the
cost more attractive. For retrofit roofing, although
installation costs are 60-70% higher for metal roofing due to
the need for a sloping support system, the lower ongoing costs
more than offset the initial expenditure.
o Increased Longevity. Metal roofing systems generally last for
20 years without requiring major maintenance or replacement,
compared to five to ten years for conventional roofs. The cost
of leaks and roof failures associated with conventional
roofing can be very high, including damage to building
interiors and disruption of the functional usefulness of the
building. Metal roofing prolongs the intervals between costly
and time-consuming repair work.
o Attractive Aesthetics and Design Flexibility. Metal roofing
systems allow architects and builders to integrate colors and
geometric design into the roofing of new and existing
buildings, providing an increasingly fashionable means of
enhancing a building's aesthetics. Conventional roofing
material is generally tar paper or a gravel surface, and
building designers tend to conceal roofs made with such
materials.
Metal Building Systems. Metal building systems consist of structural
beams and panels that are welded and roll formed in a factory and shipped to a
construction site complete and ready for assembly. Metal building systems
manufacturers design an integrated system that meets applicable building code
requirements. These systems consist of primary structural framing, secondary
structural members (i.e., purlins and girts) and covering for roofs and walls.
Over the last fifteen years, metal building systems have significantly increased
penetration of the market for non-residential low rise structures and are being
used in a broad variety of other applications. According to the Metal Building
Manufacturers Association, reported sales of metal building systems have
increased from approximately $1.5
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billion in 1993 to $2.5 billion in 1997. The Company believes this increase has
resulted primarily from (i) the significant cost advantages offered by these
systems, (ii) increased architectural acceptance of metal building systems for
construction of commercial and industrial building projects, (iii) advances in
design versatility and production processes and (iv) a strong general economic
environment. The Company believes the cost of a metal building system generally
represents approximately 15-20% of the total cost of constructing a building,
which includes land cost, labor, plumbing, electrical, heating and air
conditioning systems installation and interior finish. Technological advances in
products and materials, as well as significant improvements in engineering and
design techniques, have led to the development of structural systems that are
compatible with more traditional construction materials. Architects and
designers now often combine a metal building system with masonry, glass and wood
exterior facades in order to meet the aesthetic requirements of customers while
preserving the inherent characteristics of metal building systems. As a result,
the uses for metal building systems now include office buildings, showrooms,
retail stores, banks, schools, warehouses, factories and distribution centers,
government and community centers for which aesthetics and architectural features
are important considerations of the end users.
In its marketing efforts, the Company and other major manufacturers
generally emphasize the following characteristics of metal building systems to
distinguish them from other methods of construction:
o Shorter Construction Time. In many instances, it takes less
time to construct a metal building than other building types.
In addition, because most of the work is done in the factory,
the likelihood of weather interruptions is reduced.
o More Efficient Material Utilization. The larger metal building
systems manufacturers use computer-aided analysis and design
to fabricate structural members with high strength-to-weight
ratios, minimizing raw materials costs.
o Lower Construction Costs. The in-plant manufacture of metal
building systems, coupled with automation, allows the
substitution of less expensive factory labor for much of the
skilled on-site construction labor otherwise required for
traditional building methods.
o Greater Ease of Expansion. Metal building systems can be
modified quickly and economically before, during or after the
building is completed to accommodate all types of expansion.
Typically, a building system can be expanded by removing the
end or side walls, erecting new framework and adding matching
wall and roof panels.
o Lower Maintenance Costs. Unlike wood, metal will not
deteriorate because of cracking, rot or insect damage.
Furthermore, factory-applied roof and siding panel coatings
resist cracking, peeling, chipping, chalking and fading.
CONSOLIDATION
Over the last several years, there has been consolidation in the metal
components and metal building systems industry, which includes a large number of
small local and regional firms. Management believes that this industry will
continue to consolidate, driven by the needs of manufacturers to increase
manufacturing capacity, achieve greater process integration and add geographic
diversity in order to meet customers' product and delivery needs, improve
production efficiency and manage costs.
PRODUCTS AND MARKETS
The Company's product lines consist of metal components for the
building industry and metal building systems. The Company's sales, respectively,
for the periods indicated attributable to these product lines were approximately
as follows:
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<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
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1994 1995 1996 1997 1998
--------------- --------------- --------------- --------------- ---------------
(IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Metal building systems ... $126.7 75.5% $173.9 74.3% $213.0 64.0% $246.6 60.5% $418.2 62.0%
Metal components ......... 41.1 24.5% 60.3 25.7% 119.9 36.0% 161.2 39.5% 257.1 38.0%
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total revenues ........... $167.8 100% $234.2 100% $332.9 100% $407.8 100% $675.3 100%
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
</TABLE>
Metal Components. The Company's metal components consist of individual
components, including secondary structural framing, covering systems and
associated metal trims, that are sold directly to contractors or end users for
use in the building industry, including the construction of metal buildings. The
Company also stocks and markets metal component parts for use in the maintenance
and repair of existing buildings. Specific component products consist of end and
side wall panels, roof panels, purlins, girts, partitions, header panels and
related trim and screws. The Company believes it offers the widest selection of
metal components in the building industry.
Purlins and girts, which are medium gauge, roll formed steel
components, are supplied to builders for secondary structural framing. The
Company custom produces purlins and girts for its customers and offers the
widest selection of sizes and profiles of purlins and girts in the United
States. Covering systems, consisting of wall and roof panels, protect the rest
of the structure and the contents of the building from the weather, while also
contributing to the structural integrity of the building.
The Company's metal roofing products are attractive and durable. The
Company uses standing seam roof technology to replace traditional built-up and
single-ply roofs as well as to provide a distinctive look to new construction.
The Company manufactures and designs metal roofing systems for sales to regional
metal building manufacturers, general contractors and subcontractors. The
Company believes it has the broadest line of standing seam roofing products in
the building industry. The Company has also developed and patented a retrofit
metal panel, Retro-R(R), that is used to replace wall and roof panels of metal
buildings. Retro-R(R) can be installed over the top of existing metal panels to
remodel or preserve a standing structure. Although metal roofing is somewhat
more expensive than traditional roofing in upfront costs, its durability and low
maintenance costs make metal roofing a lower cost roofing product after the
first 10 years.
The Company manufactures overhead doors and interior and exterior doors
for use in metal and other buildings. The Company is one of the largest
suppliers in the U.S. of roll-up doors to builders of self-storage facilities.
The Company provides its own metal coating and painting products and
services for use in component manufacturing. As a toll coater of hot roll steel
coils, the Company also provides pre-painted hot roll coils to manufacturers of
metal building systems and metal components. Either a customer provides coils
through its own supply channels, which are processed by the Company, or the
Company purchases hot roll coils and processes them for sale as a packaged
product. The Company also pre-paints light gauge steel coils for steel mills,
which supply the painted coils to various industrial users, including
manufacturers of metal building systems, metal components and lighting fixtures.
The Company's metal coating and painting operations apply a variety of
paint systems to metal coils. The process generally includes cleaning and
painting the coil and slitting it to customer specifications. The Company
believes that pre-painted metal coils are a better quality product,
environmentally cleaner and more cost-effective than painted metal products
prepared in other manufacturers' in-house painting operations. Painted metal
coils also offer manufacturers the opportunity to produce a broader and more
aesthetically pleasing range of products.
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Metal Building Systems. Metal building systems consist of structural
beams and panels that are welded and roll formed in a factory and shipped to a
construction site complete and ready for assembly. The Company designs an
integrated metal building system that meets customer specifications and allows
easy on-site assembly by the builder or independent contractor. Metal building
systems typically consist of three systems:
o Primary Structural Framing. Primary structural framing,
fabricated from heavy-gauge steel, supports the secondary
structural framing, roof, walls and all externally applied
loads. Through the primary framing, the force of all applied
loads is structurally transferred to the foundation.
o Secondary Structural Framing. Secondary structural framing
consists of medium-gauge, roll-formed steel components called
purlins and girts. Purlins are attached to the primary frame
to support the roof. Girts are attached to the primary frame
to support the walls. The secondary structural framing is
designed to strengthen the primary structural framing and
efficiently transfer applied loads from the roof and walls to
the primary structural framing.
o Covering Systems. Covering systems consist of roof and wall
panels. These panels not only lock out the weather but also
contribute to the structural integrity of the overall building
system. Roof and siding panels are fabricated from
light-gauge, roll-formed steel. Accessory components complete
the metal building system. These components include doors,
windows, gutters and interior partitions.
SALES, MARKETING AND CUSTOMERS
Metal Components. The Company sells metal components directly to
regional manufacturers, contractors, subcontractors, distributors, lumberyards,
cooperative buying groups and other customers under the brand names "Metal
Building Components," "American Building Components" and "MBCI." Roll-up doors,
interior and exterior doors, interior partitions and walls, header panels and
trim are sold directly to contractors and other customers under the brand names
"Doors & Building Components" or "DBCI." These components also are produced for
integration into self storage and metal building systems sold by the Company.
The Company markets its components products within four product lines:
(i) commercial/industrial; (ii) architectural; (iii) wood frame builders; and
(iv) residential. Customers include regional metal building systems
manufacturers, general contractors, subcontractors, roofing installers,
architects and end-users. Commercial and industrial businesses are heavy users
of metal components and metal buildings systems. Standing seam roof and
architectural customers are growing in importance. As metal buildings become a
more acceptable building alternative and aesthetics become an increasingly
important consideration for end users of metal buildings, the Company believes
that architects are participating in metal building design and purchase
decisions to a greater extent. Wood frame builders also purchase the Company's
metal components through distributors, lumberyards, cooperative buying groups
and chain stores for various uses, including agricultural buildings. Residential
customers are generally contractors building upscale homes that require an
architect-specified product.
The Company's metal components sales operations are organized into four
geographic regions. Each region is headed by a general sales manager supported
by individual plant sales managers. Each local sales office is located adjacent
to a manufacturing plant and is staffed by a direct sales force responsible for
contacting customers and architects and a sales coordinator who supervises the
sales process from the time the order is received until it is shipped and
invoiced. The regional and local focus of the Company's customers requires
extensive knowledge of local business conditions.
The Company provides its customers with product catalogs tailored to
its product lines, which include product specifications and suggested list
prices. Certain of the Company's catalogs are available on-line through the
Internet, which enables architects and other customers to download drawings for
use in developing project
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specifications. Customers place orders via telephone or facsimile to a sales
coordinator at the regional office who enters it onto a standard order form. The
form is then sent via computer to the plant and downloaded automatically to the
production machines.
The Company has a small number of national accounts for its coating and
painting products and services and relies on a single sales manager. The
Company's metal coating joint venture has an independent sales force.
Metal Building Systems. The Company sells metal building systems to
builders nationwide under the brand names "Metallic Buildings," "A&S Buildings"
and "Mesco." The Company markets metal building systems through an in-house
sales force to authorized builder networks of over 1,200 builders. The Company
markets metal building systems under the brand name "Mid-West Steel Buildings"
directly to contractors in Texas and surrounding states using an in-house sales
force. The Company also sells metal building systems under the name "All
American Systems" and various private labels.
The Company's authorized builder networks consist of independent
general contractors which market the Company's Metallic Buildings, A&S Buildings
and Mesco products to end users. Most of the Company's sales of metal building
systems outside of Texas and surrounding states are through its authorized
builder networks. The Company relies upon maintaining a satisfactory business
relationship for the continued receipt of job orders from its authorized
builders and does not consider the builder agreements to be material to its
business. During fiscal 1998, the Company's largest customer for metal building
systems accounted for less than 2% of the Company's total sales.
The Company enters into an agreement with an authorized builder, which
generally grants the builder the non-exclusive right to market the Company's
products in a specified territory and which is cancelable by either party on 60
days notice. The agreements do not prohibit the builder from marketing metal
building systems of other manufacturers. The Company establishes an annual sales
goal for each builder and provides to the builder sales and pricing information,
design and engineering manuals, drawings and assistance, application programs
for estimating and quoting jobs and advertising and promotional literature. The
Company also defrays a portion of the builder's advertising costs and provides
volume purchasing and other pricing incentives to encourage them to deal
exclusively or principally with the Company. The builder is required to maintain
a place of business in its designated territory, provide a sales organization,
conduct periodic advertising programs and perform construction, warranty and
other services for customers and potential customers. An authorized builder
usually is hired by an end user to erect a metal building system on the
customer's site and provide general contracting and other services ancillary to
the completion of the project. The Company sells its products to the builder,
which generally includes the price of the building as a part of its overall
construction contract with its customer.
MANUFACTURE AND DESIGN
Metal Components. The Company operates 37 facilities used for
manufacturing of metal components for the building industry, including its metal
coating and painting operations. The Company believes this broad geographic
penetration gives it an advantage over its components competitors because major
elements of a customer's decision are the speed and cost of delivery from the
manufacturing facility to the product's ultimate destination. With the exception
of the Company's architectural and standing seam products, the Company is not
involved in the design process for the components it manufactures. The Company
also owns a fleet of trucks to deliver its products to its customers in a more
timely manner than most of its competitors.
The Company's doors, interior partitions and other related panels and
trim products are manufactured at dedicated plants in Georgia, Texas and
Arizona. The products are roll-formed or fabricated at each plant using
roll-formers and other metal working equipment. Orders are processed at the
Georgia plant and sent to the appropriate plant, which is generally determined
in a manner to obtain the lowest shipping cost.
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Metal Coating and Painting. The Company operates two metal coating and
painting facilities for hot rolled, medium gauge steel coils and two metal
coating and painting facilities for painting light gauge steel coils. These
facilities primarily service the needs of the Company, but the Company also
processes steel coils at these facilities for other manufacturers. Metal coating
and painting processes involve applying various types of chemical treatments and
paint systems to flat rolled continuous coils of metal, including steel and
aluminum, giving the coils a baked-on finish that both protects the metal and
makes it more attractive. Initially, various metal substrates in coil form are
flattened, cleaned and pretreated. The metal is then coated, oven cured, cooled,
recoiled and packaged for shipment. Slitting and embossing services can also be
performed on the coated metal prior to shipping pursuant to customer
specifications. Hot roll steel coils typically are used in the production of
secondary structural framing of metal buildings and other structure
applications. Painted light gauge steel coils are used in the manufacture of
products for building exteriors, metal doors, lighting fixtures and appliances.
The Company's metal coating operation is one of only two metal coaters in the
United States to receive the Supplier Excellence Award from Bethlehem Steel
Corporation.
The Company is a joint venture partner in two metal coating operations.
The Company owns 50% of an existing metal coating joint venture with a
processing plant in Jackson, Mississippi for painting light gauge steel coils.
The Company also owns 50% of a new joint venture, which has acquired land in
Granite City, Illinois and is building a hot rolled coil coating facility that
is expected to commence operations in early 1999. The new facility will be used
to slit and coat hot rolled coils of medium gauge steel for use in manufacturing
purlins and girts. The Company has agreed to purchase a substantial portion of
its production requirements for that product from the new joint venture.
Metal Building Systems. After the Company receives an order, the
Company's engineers design the metal building system to meet the customer's
requirements and to satisfy applicable building codes and zoning requirements.
In order to expedite this process, the Company uses computer-aided design and
engineering systems to generate engineering and erection drawings and a bill of
materials for the manufacture of the metal building system. The Company employs
approximately 185 engineers and draftsmen in this area.
Once the specifications and designs of the customer's project have been
finalized, the manufacturing process of frames and other building systems begins
at one of the Company's six manufacturing facilities in Texas, Georgia, South
Carolina or Tennessee or its joint venture facility in Mexico. The fabrication
of the primary structural framing consists of a process in which rigid steel
plates are punched and sheared and then routed through an automatic welding
machine and sent through further fitting and welding processes. The secondary
structural framing and the covering subsystem are roll-formed steel products
that are manufactured at the Company's full manufacturing facilities as well as
its components plants. In roll forming, pre-finished coils of steel are unwound
and passed through a series of progressive forming rolls which form the steel
into various profiles of medium-gauge structural shapes and light-gauge sheets
and panels.
Once manufactured, structural framing members and covering systems are
shipped to the job site for assembly. The Company generally is not responsible
for any on-site construction. The time elapsed between the Company's receipt of
an order and shipment of a completed building system has typically ranged from
four to eight weeks, although delivery can extend somewhat longer if engineering
and drafting requirements are extensive.
The Company owns 51% of a joint venture, which began operation of a
framing facility in Monterrey, Mexico in July 1997. The Company purchases
substantially all of the framing systems produced by the Mexico joint venture.
RAW MATERIALS
The principal raw material used in the manufacture of the Company's
metal building systems and component products is steel. Components are
fabricated from common steel products produced by mills including bars, plates,
sheets and galvanized sheets. During the 1998 fiscal year, the Company purchased
an aggregate of approximately 80% of its steel requirements from National Steel
Corporation and Bethlehem Steel Corporation. No other steel supplier
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accounted for more than 10% of the combined steel purchases for the same period.
The Company believes concentration of its steel purchases among a small group of
suppliers that have mills and warehouse facilities in close proximity to the
Company's facilities enables it, as a large customer of those suppliers, to
obtain better service and delivery. These suppliers generally maintain an
inventory of the types of materials required by the Company, enabling the
Company to utilize a form of "just-in-time" inventory management with regard to
raw materials.
The Company does not have any long-term contracts for the purchase of
raw materials. A prolonged labor strike against one of its principal domestic
suppliers could have a material adverse effect on the Company's operations.
Alternative sources, however, including foreign steel, are currently believed to
be sufficient to maintain required deliveries.
BACKLOG
At October 31, 1998, the total backlog for orders for the Company's
products believed by the Company to be firm was $137 million. This compares with
a total backlog for NCI's products of $110 million at October 31, 1997 and for
MBCI's products of $16.1 million at December 31, 1997. The increases in backlog
reflect the results of the marketing activities of the Company and market
demand. Backlog primarily consists of metal building systems. Job orders
generally are cancelable by customers at any time for any reason and,
occasionally, orders in the backlog are not completed and shipped for reasons
that include changes in the requirements of the customers and the inability of
customers to obtain necessary financing or zoning variances. None of the backlog
at October 31, 1998 currently is scheduled to extend beyond October 31, 1999.
WARRANTIES
The Company provides a limited warranty on all fabricated products.
This warranty generally provides for repair or replacement of fabricated and
roll-formed materials, but does not include the cost of field installation. The
Company also passes through to its customers certain warranties it receives on
paint coatings, which vary from three to 20 years, and the 20-year warranties it
receives on galvalume coated steel. To respond to certain competitive
situations, the Company may provide a limited weather tightness warranty of up
to 20 years covering potential leakage on certain roofing systems offered by the
Company. The Company has not experienced any significant claims under any of its
warranties.
COMPETITION
The Company competes with a number of other manufacturers of metal
components and metal building systems for the building industry, ranging from
small local firms to large national firms. Most of these competitors operate on
a regional basis, although the Company believes that at least four other
manufacturers of metal building systems and several manufacturers of metal
components have nationwide coverage. In addition, the Company and other
manufacturers of metal components and metal building systems compete with
alternative methods of building construction, which may be perceived as more
traditional, more aesthetically pleasing or having other advantages. Competition
is based primarily on price, speed of construction, quality of builder/dealer
networks, the ability to provide added value in the design and engineering of
buildings and, among manufacturers of metal components and metal building
systems, service, quality and delivery times.
REGULATORY MATTERS
The Company's operations are subject to a wide variety of federal,
state and local laws and regulations governing, among other things, emissions to
air, discharges to waters, the generation, handling, storage, transportation,
treatment, and disposal of hazardous substances and other materials and health
and safety matters. Laws protecting the environment generally have become more
stringent than in the past and are expected to continue to do so. Environmental
laws and regulations generally impose "strict liability," which means that in
some situations the Company
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could be exposed to liability for cleanup costs, and "toxic tort" or other
damages as a result of conduct that was lawful at the time it occurred or
conduct of, or conditions caused by, prior operators or other third parties,
regardless of fault on the part of the Company. The Company believes it is in
substantial compliance with all environmental standards applicable to its
operations. There can be no assurance, however, that cleanup costs, natural
resource damages, criminal sanctions, "toxic tort" or other damages arising as a
result of environmental laws and costs associated with complying with changes in
environmental laws and regulations will not be substantial and will not have a
material adverse effect on the Company's financial condition. From time to time,
claims have been made against the Company under environmental laws. The Company
has insurance coverage for certain environmental claims and certain locations
after payment of the applicable deductible. The Company does not anticipate
material capital expenditures to meet current environmental quality control
standards. There can be no assurance that more stringent regulatory standards
will not be established that might require such expenditures.
The Company is also subject to federal, state and local laws and
regulations governing occupational safety and health, including review by the
federal Occupational Health and Safety Administration and similar state
agencies. The Company believes it is in substantial compliance with applicable
laws and regulations, and compliance does not have a material adverse affect on
the Company's business.
The metal building systems manufactured by the Company must meet zoning
and building code requirements promulgated by local governmental agencies.
PATENTS, LICENSES AND PROPRIETARY RIGHTS
The Company has a number of United States patents and pending patent
applications, including patents relating to metal roofing systems and metal
overhead doors. The Company does not, however, consider patent protection to be
a material competitive factor in its industry. The Company also has several
registered trademarks and pending registrations in the United States. EMPLOYEES
As of October 31, 1998, the Company had approximately 3,700 employees,
of whom over 2,700 were manufacturing and engineering personnel. The Company
regards its employee relations as satisfactory.
The Company's employees are not represented by a labor union or
collective bargaining agreement, although the United Steel Workers of America
petitioned the National Labor Relations Board to be recognized as the collective
bargaining representative of the production and maintenance employees of the
Company's Tallapoosa, Georgia facility. An election for that purpose was held in
January 1996 and the union lost the election to be recognized as the collective
bargaining representative of such employees. Similar elections were held at the
Company's Mattoon, Illinois facility in November 1997 and the Rancho Cucamongo,
California facility in August 1998, and the United Steel Workers of America lost
those elections.
ITEM 2. PROPERTIES.
The Company conducts manufacturing operations at the following
facilities:
<TABLE>
<CAPTION>
Square Owned
Facility Products Feet or Leased
- -------- -------- ------ ---------
<S> <C> <C> <C>
Chandler, Arizona Doors and related metal components 35,000 Leased
Tomlinson, Arizona Metal components(1) 65,980 Owned
Atwater, California Metal components(2) 85,700 Owned
Rancho Cucamonga, California Metal coating and painting 98,000 Owned
Tampa, Florida Metal components(3) 28,775 Owned
</TABLE>
9
<PAGE> 11
<TABLE>
<CAPTION>
Square Owned
Facility Products Feet or Leased
- -------- -------- ------- ---------
<S> <C> <C> <C>
Adel, Georgia Metal components(1) 59,550 Owned
Douglasville, Georgia Metal components(4) 110,536 Owned
Douglasville, Georgia Doors and related metal components 60,000 Owned
Marietta, Georgia Metal coating and painting 125,700 Owned
Tallapoosa, Georgia Metal building systems(5) 246,000 Leased
Metal components
Nampa, Idaho Metal components(6) 42,900 Owned
Mattoon, Illinois Metal components(2) 90,600 Owned
Shelbyville, Indiana Metal components(6) 66,450 Owned
Nicholasville, Kentucky Metal components(7) 41,280 Owned
Monterrey, Mexico(8) Metal building systems(9) 64,125 Owned
Jackson, Mississippi Metal components(2) 96,000 Owned
Jackson, Mississippi(10) Metal coating and painting 363,200 Owned
Omaha, Nebraska Metal components(7) 51,750 Owned
Hobbs, New Mexico(11) Metal components(2) 60,800 Leased
Rome, New York Metal components(6) 57,700 Owned
Oklahoma City, Oklahoma Metal components(1) 59,695 Owned
Chester, South Carolina Metal building systems(5) 124,000 Owned
Metal components
Caryville, Tennessee Metal building systems(5) 193,800 Owned
Metal components
Memphis, Tennessee Metal coating and painting 61,500 Owned
Nesbitt, Tennessee Metal components(1) 71,720 Owned
Ennis, Texas Metal components and studs 33,000 Owned
Grand Prairie, Texas Metal components(1) 48,027 Owned
Houston, Texas Metal components 97,000 Owned
Houston, Texas Metal components(4) 209,355 Owned
Houston, Texas Metal coating and painting 39,550 Owned
Houston, Texas(12) Metal building systems(5) 382,000 Owned
Metal components
Doors
Lubbock, Texas Metal components(1)(7) 64,320 Owned
San Antonio, Texas Metal components(6) 52,360 Owned
Southlake, Texas Metal building systems(5) 123,000 Owned
Metal components
Stafford, Texas Metal components 105,000 Leased
Stafford, Texas(11) Metal components 56,840 Leased
Salt Lake City, Utah Metal components(1) 93,150 Owned
Colonial Heights, Virginia Metal components(1) 37,000 Owned
</TABLE>
- ----------
(1) Secondary structures and covering systems.
(2) Includes secondary structures and covering systems.
(3) Covering products.
(4) Full components product range. Includes 18,000 square feet used for the
principal offices of the metal components and metal coaters divisions.
(5) Primary structures, secondary structures and covering systems.
(6) Covering systems.
(7) Specialized products.
(8) The Company owns a 51% interest in a joint venture that owns this
facility.
(9) Primary structures.
(10) The Company owns a 50% interest in a joint venture that owns this
facility.
(11) Currently targeted for closure by the end of 1999.
(12) Includes 33,600 square feet used for the Company's principal executive
offices and the principal offices of the metal buildings division.
10
<PAGE> 12
The Company also maintains several drafting office facilities and
retail locations in various states. These additional facilities are subject to
short-term leases. The Company has a facility in Jemison, Alabama that will be
sold in early 1999.
The Company believes that its present facilities are adequate for its
current and projected operations.
The Company has purchased approximately five acres of land in Houston,
Texas upon which it plans to construct a new 60,000 square foot facility that
will be used as the Company's principal executive offices and the principal
offices of the metal buildings, metal components and metal coaters divisions.
ITEM 3. LEGAL PROCEEDINGS.
The Company is involved in various legal proceedings that the Company
considers to be in the normal course of business. Management believes that such
litigation will not have a material adverse effect on the Company's results of
operations or financial condition.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS.
The information required by this Item is incorporated by reference from
the Company's 1998 Annual Report to Shareholders, bottom of page 31, regarding
the market for the common stock of the Company.
ITEM 6. SELECTED FINANCIAL DATA.
The information required by this Item is incorporated by reference from
the Company's 1998 Annual Report to Shareholders, top of page 1.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
The information required by this Item is incorporated by reference from
the following portions of the Company's 1998 Annual Report to Shareholders:
Management's Discussion and Analysis of Results of Operations and Financial
Condition, pages 28 through 30.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The information required by this Item is incorporated by reference from
the Company's 1998 Annual Report to Shareholders, page 30.
11
<PAGE> 13
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The following consolidated financial statements and supplementary
financial information are incorporated by reference from the indicated pages in
the Company's 1998 Annual Report to Shareholders.
<TABLE>
<CAPTION>
Pages of
Annual Report
to Shareholders
---------------
<S> <C>
Selected Quarterly Financial Data 31
Consolidated statements of income for
each of the three years in the period
ended October 31, 1998 18
Consolidated balance sheets at
October 31, 1998 and 1997 19
Consolidated statements of shareholders'
equity for each of the three years in the
period ended October 31, 1998 20
Consolidated statements of cash flows
for each of the three years in the
period ended October 31, 1998 21
Notes to consolidated financial statements 22-26
Report of independent auditors 27
</TABLE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not applicable.
PART III
The information required by Items 10 through 13 of Part III is
incorporated by reference from the indicated pages of the Company's definitive
proxy statement for its annual meeting of shareholders to be held on March 17,
1999.
<TABLE>
<CAPTION>
Pages of
Proxy Statement
---------------
<S> <C>
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY. 3-7
ITEM 11. EXECUTIVE COMPENSATION. 8-15
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT. 1-3
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. 17
</TABLE>
12
<PAGE> 14
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) The following documents are filed as a part of this report:
1. Consolidated financial statements (see Item 8).
2. Consolidated financial statement schedules.
Schedule II - Valuation and Qualifying Accounts
All other schedules are omitted because they are inapplicable or the
requested information is shown in the financial statements or noted therein.
3. Exhibits.
3.1 Restated Certificate of Incorporation of the Company (filed as
Exhibit 3.1 to the Company's registration statement no. 33-45612
and incorporated by reference herein)
3.2 Certificate of Amendment to Restated Certificate of Incorporation
of the Company (filed as Exhibit 3.1.1 to the Company's
registration statement no. 33-45612 and incorporated by reference
herein)
3.3 Certificate of Amendment to Restated Certificate of Incorporation
of the Company (filed as Exhibit 3.3 to the Company's Annual
Report on Form 10-K for the fiscal year ended October 31, 1994
and incorporated by reference herein)
3.4 Certificate of Amendment to Restated Certificate of Incorporation
of the Company (filed as Exhibit 2.4 to the Company's
registration statement on Form 8-A filed with the Securities and
Exchange Commission on July 20, 1998 and incorporated by
reference herein)
*3.5 Certificate of Amendment to Restated Certificate of Incorporation
of the Company
3.6 Amended and Restated By-Laws of the Company, as amended through
February 5, 1992 (filed as Exhibit 3.2 to the Company's
registration statement no. 33-45612 and incorporated by reference
herein)
4.1 Form of certificate representing shares of Company's common stock
(filed as Exhibit 1 to the Company's registration statement on
Form 8-A filed with the Securities and Exchange Commission on
July 20, 1998 and incorporated by reference herein)
4.2 Stock Registration Agreement, dated April 10, 1989, between the
Company and Equus II Incorporated, formerly Equus Investments II,
L.P. (filed as Exhibit 4.2 to the Company's registration
statement no. 33-45612 and incorporated by reference herein)
*4.3 Credit Agreement, dated March 25, 1998 (the "Credit Agreement"),
by and among the Company, NationsBank, N.A. (as successor in
interest to NationsBank of Texas, N.A.), as administrative agent
("NationsBank"), NationsBanc Montgomery Securities LLC, as
arranger and syndication agent, Swiss Bank Corporation, as
documentation agent ("Swiss Bank"), and the several lenders named
therein
13
<PAGE> 15
*4.4 First Amendment to Credit Agreement, dated May 1, 1998, among the
Company, NationsBank, Swiss Bank and the parties named therein
*4.5 Second Amendment to Credit Agreement, dated May 5, 1998, among
the Company, NationsBank, Swiss Bank and the parties named
therein
*4.6 Master Assignment and Acceptance, dated as of May 6, 1998, among
NationsBank, Swiss Bank and the several lenders named therein
*4.7 Facility A Notes (Revolving Credit), dated May 6, 1998, of the
Company in favor of lenders named therein
*4.8 Facility B Notes (Term Loan), dated May 6, 1998, of the Company
in favor of lenders named therein
*4.9 Facility C Notes (364-day Revolving Facility), dated May 6, 1998,
of the Company in favor of lenders named therein
*4.10 Guaranty, dated May 1, 1998, between NationsBank and A&S Building
Systems, L.P.
*4.11 Guaranty, dated May 1, 1998, between NationsBank and NCI Building
Systems, L.P.
*4.12 Guaranty, dated May 1, 1998, between NationsBank and NCI Holding
Corp.
*4.13 Guaranty, dated May 1, 1998, between NationsBank and NCI
Operating Corp.
*4.14 Guaranty, dated May 1, 1998, between NationsBank and Metal
Building Components Holding, Inc.
*4.15 Guaranty, dated May 1, 1998, between NationsBank and Metal
Coaters Holding, Inc.
*4.16 Guaranty, dated May 1, 1998, between NationsBank and Metal
Building Components, L.P. (formerly MBCI Operating, L.P.)
*4.17 Guaranty, dated May 1, 1998, between NationsBank and Metal
Coaters Operating, L.P.
*4.18 Guaranty, dated May 13, 1998, between NationsBank and Metal
Coaters of California, Inc.
*4.19 Pledge Agreement, dated May 1, 1998, between the Company and
NationsBank
*4.20 Pledge Agreement, dated May 1, 1998, between NCI Holding Corp.
and NationsBank
*4.21 Pledge Agreement, dated May 13, 1998, between the Metal Coaters
Holding, Inc. and NationsBank
*4.22 Assignment of Partnership Interests, dated May 1, 1998, between
NCI Operating Corp. and NationsBank
*4.23 Assignment of Partnership Interests, dated May 1, 1998, between
NCI Holding Corp. and NationsBank
14
<PAGE> 16
*4.24 Assignment of Partnership Interests, dated May 1, 1998, between
Metal Building Components Holding, Inc. and NationsBank
*4.25 Assignment of Partnership Interests, dated May 1, 1998, between
Metal Coaters Holding, Inc. and NationsBank
*4.26 Promissory Note, dated May 5, 1998, of NCI Holding Corp. in favor
of the Company
*4.27 Note Pledge Agreement, dated May 5, 1998, between the Company and
NationsBank
4.28 Loan Agreement "A," dated September 1, 1991, between the City of
Mattoon and the Company (filed as Exhibit 4.11 to the Company's
registration statement no. 33-45612 and incorporated by reference
herein)
4.29 $250,000 Promissory Note A, dated October 31, 1991, in favor of
the City of Mattoon executed by the Company (filed as Exhibit
4.12 to the Company's registration statement no. 33-45612 and
incorporated by reference herein)
4.30 Loan Agreement "B," dated September 1, 1991, between the City of
Mattoon and the Company (filed as Exhibit 4.13 to the Company's
registration statement no. 33-45612 and incorporated by reference
herein)
4.31 $250,000 Promissory Note B, dated January 20, 1992, in favor of
the City of Mattoon executed by the Company (filed as Exhibit
4.14 to the Company's registration statement no. 33-45612 and
incorporated by reference herein)
4.32 Stock Retention and Registration Agreement, dated November 13,
1995, by and between the Company, Doors & Building Components,
Inc., and David B. Curtis (filed as Exhibit 4.14 to the Company's
Annual Report on Form 10-K for the fiscal year ended October 31,
1995, and incorporated by reference herein)
4.33 7% Convertible Subordinated Debenture dated April 1, 1996, Due
April 1, 2001, between NCI Building Systems, Inc. and John T.
Eubanks (filed as Exhibit 4.15 to the Company's Annual Report on
Form 10-K for the fiscal year ended October 31, 1996, and
incorporated by reference herein)
4.34 Rights Agreement, dated June 24, 1998, between the Company and
Harris Trust and Savings Bank (filed as Exhibit 2 to the
Company's registration statement on Form 8-A and incorporated by
reference herein)
10.1 Employment Agreement, dated April 10, 1989, between the Company
and Johnie Schulte, Jr. (filed as Exhibit 10.1 to the Company's
registration statement no. 33-45612 and incorporated by reference
herein)
10.2 Amendment to Employment Agreement, dated February 21, 1992,
between the Company and Johnie Schulte, Jr. (filed as Exhibit
10.1.1 to the Company's registration statement no. 33-45612 and
incorporated by reference herein)
*10.3 Amended and Restated Bonus Program, as amended and restated on
December 11, 1998
15
<PAGE> 17
*10.4 Amended and Restated Nonqualified Stock Option Plan, as amended
and restated on December 12, 1996
10.5 Form of Employee Stock Option Agreement (filed as Exhibit 4.3 to
the Company's registration statement no. 33-52080 and
incorporated by reference herein)
10.6 Form of Director Stock Option Agreement (filed as Exhibit 4.4 to
the Company's registration statement no. 33-52080 and
incorporated by reference herein)
10.7 401(k) Profit Sharing Plan (filed as Exhibit 4.1 to the Company's
registration statement no. 33-52078 and incorporated by reference
herein)
10.8 Form of Metallic Builder Agreement (filed as Exhibit 10.10 to the
Company's registration statement no. 33-45612 and incorporated by
reference herein)
10.9 Form of A&S Builder Agreement (filed as Exhibit 10.17 to the
Company's Annual Report on Form 10-K for the fiscal year ended
October 31, 1992 and incorporated by reference herein)
10.10 Purchase Agreement, dated September 7, 1994, between NCI Building
Systems, L.P., Ellis Building Components, Inc., Tony Ellis and
Ronald Ellis (filed as Exhibit 2.1 to the Company's Current
Report on Form 8-K dated October 14, 1994 and incorporated by
reference herein)
10.11 Amendment to Purchase Agreement, dated October 14, 1994, between
NCI Building Systems, L.P., Ellis Building Components, Inc., Tony
Ellis and Ronald Ellis (filed as Exhibit 2.2 to the Company's
Current Report on Form 8-K dated October 14, 1994 and
incorporated by reference herein)
10.12 Form of Mesco Metal Buildings Agreement (filed as Exhibit 4.13 to
the Company's Annual Report on Form 10-K for the fiscal year
ended October 31, 1996 and incorporated by reference herein)
10.13 Asset Purchase Agreement, dated October 13, 1995, by and among
Doors & Building Components, Inc., David B. Curtis, DBCI
Acquisition Corp. and the Company (filed as Exhibit 2 to the
Company's Current Report on Form 8-K dated November 13, 1995 and
incorporated by reference herein)
10.14 Asset Purchase Agreement, dated April 1, 1996, by and among
Anderson Industries, Inc., Charles W. Anderson, Thomas L.
Anderson, Jr., John T. Eubanks, Robert K. Landon, NCI Building
Systems, L.P. and the Company (filed as Exhibit 2 to the
Company's Current Report on Form 8-K dated April 1, 1996 and
incorporated by reference herein).
10.15 Employment Agreement, dated April 1, 1996, between the Company
and John T. Eubanks (filed as Exhibit 10.19 to the Company's
Annual Report on Form 10-K for the fiscal year ended October 31,
1997 and incorporated by reference herein)
10.16 Stock Purchase Agreement, dated March 25, 1998, by and among BTR
Australia Limited and the Company, and joined therein for certain
purposes by BTR plc (filed as Exhibit 2.1 to the Company's
Current Report on Form 8-K dated May 19, 1998 and incorporated by
reference herein)
16
<PAGE> 18
10.17 Letter Agreement, dated May 4, 1998, by and among the Company,
BTR Australia Limited and BTR plc, amending the Stock Purchase
Agreement (filed as Exhibit 2.2 to the Company's Current Report
on Form 8-K dated May 19, 1998 and incorporated by reference
herein)
*13 1998 Annual Report to Shareholders. With the exception of the
information incorporated by reference into Items 5, 6, 7 and 8 of
this Form 10-K, the 1998 Annual Report to Shareholders is not to
be deemed filed as part of this Form 10-K.
*21 List of Subsidiaries
*23 Consent of Ernst & Young LLP
*27 Financial Data Schedule
- ----------
* Filed herewith
(b) Reports on Form 8-K.
(i) The Company's Current Report on Form 8-K dated May 4, 1998,
and filed with the Commission on May 19, 1998, with respect to
the MBCI Acquisition, as amended by Current Report on Form
8-K/A filed with the Commission on July 20, 1998, and Current
Report on Form 8-K/A, Amendment No. 2, filed with the
Commission on August 5, 1998 and Current Report on Form 8-K/A,
Amendment No. 3, filed with the Commission on August 25, 1998.
(ii) The Company's Current Report on Form 8-K dated and filed with
the Commission on August 21, 1998, with respect to the
Company's audited consolidated financial statements.
"This Annual Report contains forward-looking statements concerning the business
and operations of the Company. Although the Company believes that the
expectations reflected in the forward-looking statements are reasonable, these
expectations and the related statements are subject to risks, uncertainties, and
other factors that could cause the actual results to differ materially from
those projected. These risks, uncertainties, and other factors include, but are
not limited to, industry cyclicality and seasonality, adverse weather
conditions, fluctuations in customer demand and other patterns, raw material
pricing, competitive activity and pricing pressure, the ability to make
strategic activities accretive to earnings, and general economic conditions
affecting the construction industry, as well as other risks detailed in the
Company's filings with the Securities and Exchange Commission. The Company
expressly disclaims any obligations to release publicly any updates or revisions
to these forward-looking statements to reflect any changes in its expectations."
17
<PAGE> 19
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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 on the 15th day of
January, 1999.
NCI BUILDING SYSTEMS, INC.
By: /s/ Johnie Schulte, Jr.
--------------------------------------------
Johnie Schulte, Jr., Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated as of the 29th day of January, 1999.
<TABLE>
<CAPTION>
Name Title
---- -----
<S> <C>
/s/ Johnie Schulte, Jr. Chief Executive Officer and Director
- ------------------------------------ (principal executive officer)
Johnie Schulte, Jr.
/s/ Robert J. Medlock Executive Vice President and Chief Financial Officer
- ------------------------------------ (principal accounting and financial officer)
Robert J. Medlock
/s/ Thomas C. Arnett Director
- ------------------------------------
Thomas C. Arnett
/s/ William D. Breedlove Director
- ------------------------------------
William D. Breedlove
/s/ Gary L. Forbes Director
- ------------------------------------
Gary L. Forbes
/s/ A.R. Ginn Director
- ------------------------------------
A.R. Ginn
/s/ Leonard F. George Director
- ------------------------------------
Leonard F. George
/s/ Kenneth W. Maddox Director
- ------------------------------------
Kenneth W. Maddox
Director
- ------------------------------------
Robert N. McDonald
/s/ C.A. Rundell, Jr. Director
- ------------------------------------
C. A. Rundell, Jr.
/s/ Daniel D. Zabcik Director
- ------------------------------------
Daniel D. Zabcik
</TABLE>
18
<PAGE> 20
NCI BUILDING SYSTEMS, INC.
SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
<TABLE>
<CAPTION>
===========================================================================================================
Balance at Additions Balance
Beginning Charged to Costs at End
Description of Period and Expenses Deductions(1) of Period
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Year ended October 31, 1998:
Reserves and allowances
deducted from asset accounts:
Allowance for uncollectible
accounts and backcharges....... $1,498,000 $2,625,000 $1,802,000 $2,321,000
- -----------------------------------------------------------------------------------------------------------
Year ended October 31, 1997:
Reserves and allowances
deducted from asset accounts:
Allowance for uncollectible
accounts and backcharges....... $1,629,000 $1,223,000 $1,354,000 $1,498,000
- -----------------------------------------------------------------------------------------------------------
Year ended October 31, 1996:
Reserves and allowances
deducted from asset accounts:
Allowance for uncollectible
accounts and backcharges....... $1,340,000 $ 681,000 $ 392,000 $1,629,000
===========================================================================================================
</TABLE>
- ----------
(1) Uncollectible accounts, net of recoveries.
19
<PAGE> 21
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
3.1 Restated Certificate of Incorporation of the Company (filed as
Exhibit 3.1 to the Company's registration statement no. 33-45612
and incorporated by reference herein)
3.2 Certificate of Amendment to Restated Certificate of Incorporation
of the Company (filed as Exhibit 3.1.1 to the Company's
registration statement no. 33-45612 and incorporated by reference
herein)
3.3 Certificate of Amendment to Restated Certificate of Incorporation
of the Company (filed as Exhibit 3.3 to the Company's Annual
Report on Form 10-K for the fiscal year ended October 31, 1994
and incorporated by reference herein)
3.4 Certificate of Amendment to Restated Certificate of Incorporation
of the Company (filed as Exhibit 2.4 to the Company's
registration statement on Form 8-A filed with the Securities and
Exchange Commission on July 20, 1998 and incorporated by
reference herein)
*3.5 Certificate of Amendment to Restated Certificate of Incorporation
of the Company
3.6 Amended and Restated By-Laws of the Company, as amended through
February 5, 1992 (filed as Exhibit 3.2 to the Company's
registration statement no. 33-45612 and incorporated by reference
herein)
4.1 Form of certificate representing shares of Company's common stock
(filed as Exhibit 1 to the Company's registration statement on
Form 8-A filed with the Securities and Exchange Commission on
July 20, 1998 and incorporated by reference herein)
4.2 Stock Registration Agreement, dated April 10, 1989, between the
Company and Equus II Incorporated, formerly Equus Investments II,
L.P. (filed as Exhibit 4.2 to the Company's registration
statement no. 33-45612 and incorporated by reference herein)
*4.3 Credit Agreement, dated March 25, 1998 (the "Credit Agreement"),
by and among the Company, NationsBank, N.A. (as successor in
interest to NationsBank of Texas, N.A.), as administrative agent
("NationsBank"), NationsBanc Montgomery Securities LLC, as
arranger and syndication agent, Swiss Bank Corporation, as
documentation agent ("Swiss Bank"), and the several lenders named
therein
*4.4 First Amendment to Credit Agreement, dated May 1, 1998, among the
Company, NationsBank, Swiss Bank and the parties named therein
</TABLE>
<PAGE> 22
<TABLE>
<S> <C>
*4.5 Second Amendment to Credit Agreement, dated May 5, 1998, among
the Company, NationsBank, Swiss Bank and the parties named
therein
*4.6 Master Assignment and Acceptance, dated as of May 6, 1998, among
NationsBank, Swiss Bank and the several lenders named therein
*4.7 Facility A Notes (Revolving Credit), dated May 6, 1998, of the
Company in favor of lenders named therein
*4.8 Facility B Notes (Term Loan), dated May 6, 1998, of the Company
in favor of lenders named therein
*4.9 Facility C Notes (364-day Revolving Facility), dated May 6, 1998,
of the Company in favor of lenders named therein
*4.10 Guaranty, dated May 1, 1998, between NationsBank and A&S Building
Systems, L.P.
*4.11 Guaranty, dated May 1, 1998, between NationsBank and NCI Building
Systems, L.P.
*4.12 Guaranty, dated May 1, 1998, between NationsBank and NCI Holding
Corp.
*4.13 Guaranty, dated May 1, 1998, between NationsBank and NCI
Operating Corp.
*4.14 Guaranty, dated May 1, 1998, between NationsBank and Metal
Building Components Holding, Inc.
*4.15 Guaranty, dated May 1, 1998, between NationsBank and Metal
Coaters Holding, Inc.
*4.16 Guaranty, dated May 1, 1998, between NationsBank and Metal
Building Components, L.P. (formerly MBCI Operating, L.P.)
*4.17 Guaranty, dated May 1, 1998, between NationsBank and Metal
Coaters Operating, L.P.
*4.18 Guaranty, dated May 13, 1998, between NationsBank and Metal
Coaters of California, Inc.
*4.19 Pledge Agreement, dated May 1, 1998, between the Company and
NationsBank
*4.20 Pledge Agreement, dated May 1, 1998, between NCI Holding Corp.
and NationsBank
*4.21 Pledge Agreement, dated May 13, 1998, between the Metal Coaters
Holding, Inc. and NationsBank
</TABLE>
<PAGE> 23
<TABLE>
<S> <C>
*4.22 Assignment of Partnership Interests, dated May 1, 1998, between
NCI Operating Corp. and NationsBank
*4.23 Assignment of Partnership Interests, dated May 1, 1998, between
NCI Holding Corp. and NationsBank
*4.24 Assignment of Partnership Interests, dated May 1, 1998, between
Metal Building Components Holding, Inc. and NationsBank
*4.25 Assignment of Partnership Interests, dated May 1, 1998, between
Metal Coaters Holding, Inc. and NationsBank
*4.26 Promissory Note, dated May 5, 1998, of NCI Holding Corp. in favor
of the Company
*4.27 Note Pledge Agreement, dated May 5, 1998, between the Company and
NationsBank
4.28 Loan Agreement "A," dated September 1, 1991, between the City of
Mattoon and the Company (filed as Exhibit 4.11 to the Company's
registration statement no. 33-45612 and incorporated by reference
herein)
4.29 $250,000 Promissory Note A, dated October 31, 1991, in favor of
the City of Mattoon executed by the Company (filed as Exhibit
4.12 to the Company's registration statement no. 33-45612 and
incorporated by reference herein)
4.30 Loan Agreement "B," dated September 1, 1991, between the City of
Mattoon and the Company (filed as Exhibit 4.13 to the Company's
registration statement no. 33-45612 and incorporated by reference
herein)
4.31 $250,000 Promissory Note B, dated January 20, 1992, in favor of
the City of Mattoon executed by the Company (filed as Exhibit
4.14 to the Company's registration statement no. 33-45612 and
incorporated by reference herein)
4.32 Stock Retention and Registration Agreement, dated November 13,
1995, by and between the Company, Doors & Building Components,
Inc., and David B. Curtis (filed as Exhibit 4.14 to the Company's
Annual Report on Form 10-K for the fiscal year ended October 31,
1995, and incorporated by reference herein)
4.33 7% Convertible Subordinated Debenture dated April 1, 1996, Due
April 1, 2001, between NCI Building Systems, Inc. and John T.
Eubanks (filed as Exhibit 4.15 to the Company's Annual Report on
Form 10-K for the fiscal year ended October 31, 1996, and
incorporated by reference herein)
</TABLE>
<PAGE> 24
<TABLE>
<S> <C>
4.34 Rights Agreement, dated June 24, 1998, between the Company and
Harris Trust and Savings Bank (filed as Exhibit 2 to the
Company's registration statement on Form 8-A and incorporated by
reference herein)
10.1 Employment Agreement, dated April 10, 1989, between the Company
and Johnie Schulte, Jr. (filed as Exhibit 10.1 to the Company's
registration statement no. 33-45612 and incorporated by reference
herein)
10.2 Amendment to Employment Agreement, dated February 21, 1992,
between the Company and Johnie Schulte, Jr. (filed as Exhibit
10.1.1 to the Company's registration statement no. 33-45612 and
incorporated by reference herein)
*10.3 Amended and Restated Bonus Program, as amended and restated on
December 11, 1998
*10.4 Amended and Restated Nonqualified Stock Option Plan, as amended
and restated on December 12, 1996
10.5 Form of Employee Stock Option Agreement (filed as Exhibit 4.3 to
the Company's registration statement no. 33-52080 and
incorporated by reference herein)
10.6 Form of Director Stock Option Agreement (filed as Exhibit 4.4 to
the Company's registration statement no. 33-52080 and
incorporated by reference herein)
10.7 401(k) Profit Sharing Plan (filed as Exhibit 4.1 to the Company's
registration statement no. 33-52078 and incorporated by reference
herein)
10.8 Form of Metallic Builder Agreement (filed as Exhibit 10.10 to the
Company's registration statement no. 33-45612 and incorporated by
reference herein)
10.9 Form of A&S Builder Agreement (filed as Exhibit 10.17 to the
Company's Annual Report on Form 10-K for the fiscal year ended
October 31, 1992 and incorporated by reference herein)
10.10 Purchase Agreement, dated September 7, 1994, between NCI Building
Systems, L.P., Ellis Building Components, Inc., Tony Ellis and
Ronald Ellis (filed as Exhibit 2.1 to the Company's Current
Report on Form 8-K dated October 14, 1994 and incorporated by
reference herein)
</TABLE>
<PAGE> 25
<TABLE>
<S> <C>
10.11 Amendment to Purchase Agreement, dated October 14, 1994, between
NCI Building Systems, L.P., Ellis Building Components, Inc., Tony
Ellis and Ronald Ellis (filed as Exhibit 2.2 to the Company's
Current Report on Form 8-K dated October 14, 1994 and
incorporated by reference herein)
10.12 Form of Mesco Metal Buildings Agreement (filed as Exhibit 4.13 to
the Company's Annual Report on Form 10-K for the fiscal year
ended October 31, 1996 and incorporated by reference herein)
10.13 Asset Purchase Agreement, dated October 13, 1995, by and among
Doors & Building Components, Inc., David B. Curtis, DBCI
Acquisition Corp. and the Company (filed as Exhibit 2 to the
Company's Current Report on Form 8-K dated November 13, 1995 and
incorporated by reference herein)
10.14 Asset Purchase Agreement, dated April 1, 1996, by and among
Anderson Industries, Inc., Charles W. Anderson, Thomas L.
Anderson, Jr., John T. Eubanks, Robert K. Landon, NCI Building
Systems, L.P. and the Company (filed as Exhibit 2 to the
Company's Current Report on Form 8-K dated April 1, 1996 and
incorporated by reference herein).
10.15 Employment Agreement, dated April 1, 1996, between the Company
and John T. Eubanks (filed as Exhibit 10.19 to the Company's
Annual Report on Form 10-K for the fiscal year ended October 31,
1997 and incorporated by reference herein)
10.16 Stock Purchase Agreement, dated March 25, 1998, by and among BTR
Australia Limited and the Company, and joined therein for certain
purposes by BTR plc (filed as Exhibit 2.1 to the Company's
Current Report on Form 8-K dated May 19, 1998 and incorporated by
reference herein)
10.17 Letter Agreement, dated May 4, 1998, by and among the Company,
BTR Australia Limited and BTR plc, amending the Stock Purchase
Agreement (filed as Exhibit 2.2 to the Company's Current Report
on Form 8-K dated May 19, 1998 and incorporated by reference
herein)
*13 1998 Annual Report to Shareholders. With the exception of the
information incorporated by reference into Items 5, 6, 7 and 8 of
this Form 10-K, the 1998 Annual Report to Shareholders is not to
be deemed filed as part of this Form 10-K.
*21 List of Subsidiaries
*23 Consent of Ernst & Young LLP
*27 Financial Data Schedule
</TABLE>
- ----------
* Filed herewith
<PAGE> 1
EXHIBIT 3.5
CERTIFICATE OF AMENDMENT
TO THE
RESTATED CERTIFICATE OF INCORPORATION
OF
NCI BUILDING SYSTEMS, INC.
Pursuant to the provisions of Section 242 of the General Corporation
Law of the State of Delaware, NCI Building Systems, Inc., a corporation
organized and existing under and by virtue of the General Corporation Law of the
State of Delaware (the "Corporation"), does hereby certify:
FIRST: That the Board of Directors of the Corporation, at a meeting
duly called pursuant to Section 141(f) of the General Corporation Law of the
State of Delaware, adopted the following resolutions setting forth and declaring
advisable the following proposed amendment to the Restated Certificate of
Incorporation of the Corporation:
A. Article Fourth, Section 1 of the Restated Certificate of
Incorporation of the Company is hereby amended by deleting in
its entirety the first sentence of Article Fourth, Section 1
of the Restated Certificate of Incorporation and adding the
following revised text:
"FOURTH.
SECTION 1. Capitalization. The Corporation is
authorized to issue Fifty-One Million (51,000,000)
shares of capital stock. Fifty Million (50,000,000)
of the authorized shares shall be common stock, one
cent ($0.01) par value each ("Common Stock"), and One
Million (1,000,000) of the authorized shares shall be
preferred stock, one dollar ($1.00) par value each
("Preferred Stock")."
SECOND: That at a special meeting of stockholders held on September
29, 1998 and duly called pursuant to Section 222 of the General Corporation Law
of the State of Delaware, a majority of the stockholders approved the foregoing
amendment in accordance with the provisions of Section 242 of the General
Corporation Law of the State of Delaware.
THIRD: That said amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
FOURTH: That the capital of said corporation shall not be reduced
under or by reason of said amendment.
FIFTH: In accordance with Section 103(d) of the General Corporation
Law of the State of Delaware, this amendment shall become effective as of the
filing hereof.
<PAGE> 2
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Amendment to its Restated Certificate of Incorporation to be executed by a duly
authorized officer on this 29th day of September, 1998.
NCI BUILDING SYSTEMS, INC.
By: /s/ Robert J. Medlock
-------------------------------------
Robert J. Medlock, Vice President and
Chief Financial Officer
2
<PAGE> 1
EXHIBIT 4.3
===============================================================================
CREDIT AGREEMENT
AMONG
NCI BUILDING SYSTEMS, INC.,
BORROWER
NATIONSBANK OF TEXAS, N.A.,
ADMINISTRATIVE AGENT
NATIONSBANC MONTGOMERY SECURITIES LLC,
ARRANGER AND SYNDICATION AGENT
SWISS BANK CORPORATION,
DOCUMENTATION AGENT
AND
THE LENDERS NAMED HEREIN
$600,000,000
MARCH 25, 1998
===============================================================================
<PAGE> 2
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
----
<S> <C> <C>
SECTION 1 DEFINITIONS AND TERMS..........................................1
1.1 Definitions....................................................1
1.2 Number and Gender of Words....................................11
1.3 Accounting Principles.........................................11
SECTION 2 COMMITMENT....................................................12
2.1 Facilities A, B and C.........................................12
2.1.1 Facility A...........................................12
2.1.2 Facility B...........................................12
2.1.3 Facility C...........................................12
2.2 Loan Procedure................................................13
2.3 LC Subfacility................................................13
2.4 Termination of Revolving Facilities...........................16
SECTION 3 TERMS OF PAYMENT..............................................16
3.1 Notes and Payments............................................16
3.2 Interest and Principal Payments...............................16
3.3 Interest Options..............................................19
3.4 Quotation of Rates............................................19
3.5 Default Rate..................................................19
3.6 Interest Recapture............................................19
3.7 Interest Calculations.........................................19
3.8 Maximum Rate..................................................19
3.9 Interest Periods..............................................20
3.10 Conversions...................................................20
3.11 Order of Application..........................................20
3.12 Right of Set-off..............................................21
3.13 Adjustments...................................................21
3.14 Booking Loans.................................................21
3.15 Increased Cost and Reduced Return.............................21
3.16 Limitation on Types of Loans..................................23
3.17 Illegality....................................................23
3.18 Treatment of Affected Loans...................................23
3.19 Compensation..................................................24
3.20 Taxes.........................................................24
3.21 Extensions and Conversions of Facility C Termination Date.....26
3.22 Replacement Lender............................................26
SECTION 4 FEES..........................................................26
4.1 Treatment of Fees.............................................26
4.2 Underwriting and Administrative Fees..........................27
4.3 LC Fees.......................................................27
4.4 Commitment Fee................................................27
</TABLE>
(i)
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 5 SECURITY......................................................27
5.1 Guaranty......................................................27
5.2 Collateral....................................................27
5.3 Additional Security and Guaranties............................27
SECTION 6 CONDITIONS PRECEDENT..........................................28
6.1 General.......................................................28
6.2 Supplements to Schedules......................................28
SECTION 7 REPRESENTATIONS AND WARRANTIES................................29
7.1 Purpose of Credit Facility....................................29
7.2 Corporate Existence, Good Standing, Authority and Compliance..29
7.3 Subsidiaries..................................................29
7.4 Authorization and Contravention...............................29
7.5 Binding Effect................................................29
7.6 Financial Statements; Fiscal Year.............................30
7.7 Litigation....................................................30
7.8 Taxes.........................................................30
7.9 Environmental Matters.........................................30
7.10 Employee Plans................................................31
7.11 Properties; Liens.............................................31
7.12 Location......................................................31
7.13 Government Regulations........................................31
7.14 Transactions with Affiliates..................................31
7.15 Debt..........................................................31
7.16 Material Agreements...........................................31
7.17 Insurance.....................................................31
7.18 Labor Matters.................................................31
7.19 Solvency......................................................32
7.20 Trade Names...................................................32
7.21 Intellectual Property.........................................32
7.22 Full Disclosure...............................................32
7.23 Acquisition...................................................32
SECTION 8 AFFIRMATIVE COVENANTS.........................................33
8.1 Items to be Furnished.........................................33
8.2 Use of Proceeds...............................................34
8.3 Books and Records.............................................34
8.4 Inspections...................................................34
8.5 Taxes.........................................................34
8.6 Payment of Obligations........................................34
8.7 Expenses; Indemnification.....................................34
8.8 Maintenance of Existence, Assets, and Business................35
8.9 Insurance.....................................................36
8.10 Preservation and Protection of Rights.........................36
8.11 Environmental Laws............................................36
</TABLE>
(ii)
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
8.12 Subsidiaries..................................................36
SECTION 9 NEGATIVE COVENANTS............................................36
9.1 Taxes.........................................................36
9.2 Payment of Obligations........................................36
9.3 Employee Plans................................................36
9.4 Debt..........................................................36
9.5 Liens.........................................................37
9.6 Transactions with Affiliates..................................37
9.7 Compliance with Laws and Documents............................37
9.8 Loans, Advances and Investments...............................37
9.9 Dividends and Distributions...................................38
9.10 Sale of Assets................................................38
9.11 Mergers and Dissolutions......................................38
9.12 Assignment....................................................38
9.13 Fiscal Year and Accounting Methods............................38
9.14 New Businesses................................................38
9.15 Government Regulations........................................38
9.16 Tax Sharing Agreements........................................39
SECTION 10 FINANCIAL COVENANTS...........................................39
10.1 Minimum Net Worth.............................................39
10.2 Maximum Leverage Ratio........................................39
10.3 Maximum Senior Debt Ratio.....................................39
10.4 Minimum Fixed Charge Coverage Ratio...........................40
SECTION 11 DEFAULT.......................................................40
11.1 Payment of Obligation.........................................40
11.2 Covenants.....................................................40
11.3 Debtor Relief.................................................40
11.4 Judgments and Attachments.....................................41
11.5 Government Action.............................................41
11.6 Misrepresentation.............................................41
11.7 Ownership of Other Companies..................................41
11.8 Default Under Other Agreements................................41
11.9 LCs...........................................................41
11.10 Validity and Enforceability of Loan Documents.................41
11.11 Change of Control.............................................41
</TABLE>
(iii)
<PAGE> 5
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 12 RIGHTS AND REMEDIES...........................................42
12.1 Remedies Upon Default.........................................42
12.2 Company Waivers. ............................................42
12.3 Performance by Agent..........................................42
12.4 Not in Control................................................43
12.5 Course of Dealing.............................................43
12.6 Cumulative Rights.............................................43
12.7 Application of Proceeds.......................................43
12.8 Diminution in Value of Collateral.............................43
12.9 Certain Proceedings...........................................43
SECTION 13 AGREEMENT AMONG LENDERS.......................................43
13.1 Appointment, Powers, and Immunities of Agent..................43
13.2 Reliance by Agent.............................................44
13.3 Defaults......................................................44
13.4 Rights as Lender..............................................44
13.5 Indemnification...............................................45
13.6 Non-Reliance on Agent and Other Lenders.......................45
13.7 Resignation of Agent..........................................45
13.8 Relationship of Lenders.......................................45
13.9 Collateral Matters............................................46
13.10 Benefits of Agreement.........................................46
SECTION 14 MISCELLANEOUS.................................................46
14.1 Headings......................................................46
14.2 Nonbusiness Days; Time........................................47
14.3 Communications................................................47
14.4 Form and Number of Documents..................................47
14.5 Exceptions to Covenants.......................................47
14.6 Survival......................................................47
14.7 Governing Law.................................................47
14.8 Invalid Provisions............................................47
14.9 Venue; Service of Process; Jury Trial.........................48
14.10 Amendments, Consents, Conflicts and Waivers...................48
14.11 Multiple Counterparts.........................................49
14.12 Successors and Assigns; Assignments and Participations........49
14.13 Discharge Only Upon Payment in Full; Reinstatement in Certain
Circumstances.................................................51
14.14 Entirety......................................................51
</TABLE>
(iv)
<PAGE> 6
<TABLE>
<CAPTION>
SCHEDULES AND EXHIBITS
----------------------
<S> <C>
Schedule 1 Addresses, Commitments and Wiring Information
Schedule 6 Conditions Precedent
Schedule 7.2 Jurisdictions of Incorporation and Business
Schedule 7.3 Corporate Structure
Schedule 7.7 Material Litigation
Schedule 7.9 Environmental Matters
Schedule 7.11 Permitted Liens
Schedule 7.12 Chief Executive Offices
Schedule 7.14 Material Transactions with Affiliates
Schedule 7.15 Permitted Debt
Schedule 7.20 Trade Names
Schedule 9.8 Existing Investments
Exhibit A Facility A Note (Revolving Credit)
Exhibit B Facility B Note (Term Loan)
Exhibit C Facility C Note (364-day Revolving Facility)
Exhibit D Guaranty
Exhibit E Loan Request
Exhibit F Conversion Request
Exhibit G LC Request
Exhibit H Compliance Certificate
Exhibit I Assignment and Acceptance
Exhibit J Pledge Agreement
Exhibit K Assignment of Partnership Interests
Exhibit L Legal Opinion
</TABLE>
(v)
<PAGE> 7
CREDIT AGREEMENT
This CREDIT AGREEMENT is entered into as of March 25, 1998, among NCI
Building Systems, Inc., a Delaware corporation ("Borrower"), the Lenders
(defined below), NationsBank of Texas, N.A., as Administrative Agent for itself
and the other Lenders ("Agent"), NationsBanc Montgomery Securities LLC, as
Arranger and Syndication Agent, and Swiss Bank Corporation, as Documentation
Agent.
Borrower has requested Lenders to extend credit not to exceed an
aggregate principal amount of $600,000,000, to be allocated as follows:
A. A revolving facility of up to $200,000,000 ("Facility A");
B. A term loan in the principal amount of up to $200,000,000
("Facility B"); and
C. A 364-day revolving facility of up to $200,000,000 ("Facility C").
Lenders are willing to extend the requested credit on the terms and conditions
of this Agreement. Accordingly, the undersigned agree as follows:
SECTION 1 DEFINITIONS AND TERMS.
1.1 Definitions. As used in the Loan Documents:
ACQUISITION means the purchase by Borrower of the stock of Amatek
pursuant to the Purchase Agreement.
ADJUSTED EURODOLLAR RATE means, for any Eurodollar Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) determined by Agent to be equal to the sum of (a) the
quotient obtained by dividing (i) the Eurodollar Rate for such Eurodollar Loan
for such Interest Period by (ii) 1 minus the Reserve Requirement for such
Eurodollar Loan for such Interest Period, plus (b) the Applicable Margin.
AFFILIATE of a Person means any other individual or entity who directly
or indirectly controls, or is controlled by, or is under common control with,
that Person. For purposes of this definition, "control," "controlled by," and
"under common control with" mean possession, directly or indirectly, of power to
direct (or cause the direction of) management or policies (whether through
ownership of voting securities, or other ownership interests, by contract, or
otherwise).
AGENT means NationsBank of Texas, N.A., a national banking association,
and its successor or successors as agent for Lenders under this Agreement.
AGREEMENT means this Credit Agreement, as amended, supplemented or
restated from time to time.
AMATEK means Amatek Holdings, Inc., a Texas corporation.
APPLICABLE LENDING OFFICE means, for each Lender and for each Type of
Loan, the "Lending Office" of such Lender (or of an affiliate of such Lender) as
such Lender may from time to time specify to the Agent
<PAGE> 8
and the Borrower by written notice in accordance with the terms hereof as the
office by which its Loans of such Type are to be made and maintained.
APPLICABLE MARGIN means, on any day, the interest margin over the Base
Rate or the Eurodollar Rate, as the case may be, based on the ratio of Funded
Debt to EBITDA, as follows:
<TABLE>
<CAPTION>
==========================================================================================
RATIO OF FUNDED DEBT APPLICABLE APPLICABLE
TO EBITDA MARGIN FOR MARGIN FOR
BASE RATE EURODOLLAR
LOANS LOANS
- ------------------------------------------------------------------------------------------
<S> <C> <C>
Greater than 3.75 to 1.0 0.500% 2.000%
- ------------------------------------------------------------------------------------------
Less than or equal to 3.75 to 1.0, but greater than 0.250% 1.750%
3.25 to 1.0
- ------------------------------------------------------------------------------------------
Less than or equal to 3.25 to 1.0, but greater than 0% 1.375%
2.5 to 1.0
- ------------------------------------------------------------------------------------------
Less than or equal to 2.5 to 1.0, but greater than 0% 1.000%
2.0 to 1.0
- ------------------------------------------------------------------------------------------
Less than or equal to 2.0 to 1.0 0% 0.750%
==========================================================================================
</TABLE>
The ratio of Funded Debt to EBITDA is determined from the Current Financials and
any related Compliance Certificate. EBITDA is calculated for the most
recently-completed four fiscal quarters of Borrower (using pro forma combined
information for the Companies and Amatek and its Subsidiaries for any fiscal
period (or portion thereof) of Borrower prior to the Acquisition included in the
calculation) and Funded Debt is calculated as of the last day of such four
fiscal quarter period. The Applicable Margin, as adjusted to reflect such
calculations, shall become effective on the first day following the last day of
the four fiscal quarter period for which such calculation is made,
notwithstanding that Current Financials are delivered, and the calculations are
actually made, at a later date. If Borrower fails to timely furnish to Agent the
Current Financials and any related Compliance Certificate or, if for some other
reason, a new Applicable Margin for a current period cannot be calculated, then
the Applicable Margin in effect on the last day of the last four fiscal quarter
period for which EBITDA was calculated shall remain in effect until a new
Applicable Margin can be calculated, which new Applicable Margin shall become
effective as provided in the immediately preceding sentence. Notwithstanding the
foregoing, the ratio of Funded Debt to EBITDA shall be deemed to be (a) less
than 2.00 to 1.0 until consummation of the Acquisition, and (b) thereafter,
greater than 3.75 to 1.0, in each case, until delivery of Current Financials
(and any related Compliance Certificate) for the fiscal quarter of Borrower
ending July 31, 1998.
APPLICABLE PERCENTAGE means, on any day, the commitment fee percentage
applicable under Section 4 based on the ratio of Funded Debt to EBITDA, as
follows (calculated in accordance with the definition of "Applicable Margin"):
2
<PAGE> 9
<TABLE>
<CAPTION>
===============================================================================
RATIO OF FUNDED DEBT APPLICABLE
TO EBITDA PERCENTAGE
- -------------------------------------------------------------------------------
<S> <C>
Greater than 3.75 to 1.0 0.500%
- -------------------------------------------------------------------------------
Less than or equal to 3.75 to 1.0, but greater than 3.25 to 1.0 0.500%
- -------------------------------------------------------------------------------
Less than or equal to 3.25 to 1.0, but greater than 2.5 to 1.0 0.375%
- -------------------------------------------------------------------------------
Less than or equal to 2.5 to 1.0, but greater than 2.0 to 1.0 0.300%
- -------------------------------------------------------------------------------
Less than or equal to 2.0 to 1.0 0.250%
===============================================================================
</TABLE>
ASSIGNMENT OF PARTNERSHIP INTERESTS means an assignment substantially
in the form of EXHIBIT K.
BASE RATE means, for any day, the rate per annum equal to the sum of
(a) the higher of (i) the Federal Funds Rate for such day plus one-half of one
percent (0.5%) and (ii) the Prime Rate for such day. Any change in the Base Rate
due to a change in the Prime Rate or the Federal Funds Rate shall be effective
on the effective date of such change in the Prime Rate or Federal Funds Rate.
BASE RATE LOANS means Loans that bear interest at rates based upon the
Base Rate.
BORROWER is defined in the preamble to this Agreement.
BUSINESS DAY means (a) for all purposes, any day other than Saturday,
Sunday, and any other day that commercial banks are authorized by Law to be
closed in Texas or New York and (b) for purposes of any Eurodollar Loan, a day
that satisfies the requirements of clause (a) and is a day that commercial banks
are open for domestic or international business in London.
CAPITAL LEASE means any capital lease or sublease that has been
capitalized on a balance sheet.
CODE means the Internal Revenue Code of 1986, as amended, and related
rules and regulations.
COLLATERAL is defined in SECTION 5.2.
COMMITMENT USAGE means, at any time, for each Lender, the sum of its
Facility A Commitment Usage, its Facility B Principal Debt, and its Facility C
Principal Debt.
COMMITMENT means the amounts (which are subject to reduction and
cancellation as provided in this Agreement) stated beside a Lender's name for
Facility A, Facility B and Facility C on SCHEDULE 1 as most recently amended
under this Agreement.
COMPANY or COMPANIES means, at any time, Borrower and each of its
Subsidiaries.
COMPLIANCE CERTIFICATE means a certificate substantially in the form of
EXHIBIT H and signed by a Responsible Officer.
3
<PAGE> 10
CONTINUE, CONTINUATION, and CONTINUED shall refer to the continuation
pursuant to SECTION 3.9 or SECTIONS 3.15 through 3.19 of a Loan of one Type as a
Loan of the same Type from one Interest Period to the next Interest Period.
CONVERT, CONVERSION, and CONVERTED shall refer to a conversion pursuant
to SECTION 3.10 or Sections 3.15 through 3.19 of one Type of Loan into another
Type of Loan.
CONVERSION REQUEST means a request substantially in the form of EXHIBIT
F.
CURRENT FINANCIALS means, at any time, the consolidated Financial
Statements of Borrower and its Subsidiaries most recently delivered to Agent
under SECTIONS 8.1(a) or 8.1(b), as the case may be.
DEBT means (without duplication), for any Person, (a) all obligations
required by GAAP to be classified upon such Person's balance sheet as
liabilities, (b) liabilities secured (or for which the holder of the Debt has an
existing Right, contingent or otherwise, to be so secured) by any Lien existing
on property owned or acquired by that Person, (c) obligations that have been (or
under GAAP should be) capitalized for financial reporting purposes, and (d) all
guaranties, endorsements and other contingent obligations with respect to
obligations of others of the types described in clauses (a), (b) and (c) above.
DEBTOR RELIEF LAWS means Title 11 of the U.S. Code and all other
applicable state or federal liquidation, conservatorship, bankruptcy,
moratorium, rearrangement, receivership, insolvency, reorganization, suspension
of payments or similar Laws affecting creditors' Rights in effect from time to
time.
DEFAULT is defined in SECTION 11.
DEFAULT RATE means an annual rate of interest equal from day to day to
the lesser of (a) the rate otherwise applicable under this Agreement (or if no
rate is otherwise specified by this Agreement, then the Base Rate plus the
Applicable Margin) plus 2% and (b) the Maximum Rate.
DETERMINING LENDERS means any combination of Lenders holding more than
(a) 51% of the Total Commitments, if no Principal Debt or LC Exposure is
outstanding, or (b) 51% of the Total Commitment Usage if any Principal Debt or
LC Exposure is outstanding.
DISTRIBUTION means, with respect to any shares of any capital stock or
other equity securities or other interests issued by a Person, (a) the
retirement, redemption, purchase or other acquisition for value of those
securities by such Person, (b) the declaration or payment of any dividend on or
with respect to those securities by such Person, (c) any loan or advance by that
Person to, or other investment by that Person in, the holder of any of those
securities, and (d) any other payment by that Person with respect to those
securities.
EBITDA means, in respect of any period, the following (calculated on a
consolidated basis for the Companies in accordance with GAAP): net income before
interest expenses, Taxes, non-cash operating charges (such as depreciation and
amortization expense), non-cash charges in respect of pension and retiree
benefits, and extraordinary gains and losses; provided that, with respect to
Amatek and its Subsidiaries, EBITDA shall include amounts expended for corporate
overhead and executive employee compensation
4
<PAGE> 11
during the three fiscal quarters of Amatek preceding the Acquisition and the
fiscal quarter of Amatek in which the Acquisition is consummated.
EMPLOYEE PLAN means an employee pension benefit plan covered by Title
IV of ERISA and established or maintained by any Company.
ENDING CALENDAR MONTH is defined in SECTION 3.9.
ENVIRONMENTAL LAW means any Law that relates to the pollution or
protection of the environment or to Materials of Environmental Concern.
ERISA means the Employee Retirement Income Security Act of 1974, as
amended, and related rules and regulations.
EURODOLLAR LOANS means Loans that bear interest at rates based upon the
Adjusted Eurodollar Rate.
EURODOLLAR RATE means, for any Eurodollar Loan for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as the
London interbank offered rate for deposits in U.S. dollars at approximately
11:00 a.m. (London time) two Business Days prior to the first day of such
Interest Period for a term comparable to such Interest Period. If for any reason
such rate is not available, the term "Eurodollar Rate" shall mean, for any
Interest Period therefor, the rate per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London
interbank offered rate for deposits in U.S. dollars at approximately 11:00 a.m.
(London time) two Business Days prior to the first day of such Interest Period
for a term comparable to such Interest Period; provided, however, that if more
than one rate is specified on Reuters Screen LIBO Page, the applicable rate
shall be the arithmetic mean of all such rates (rounded upwards, if necessary,
to the nearest 1/100 of 1%).
EXISTING BANK DEBT means all obligations of the Companies under the
Credit Agreement dated as of March 12, 1993, as amended.
FACILITIES means Facility A, Facility B and Facility C.
FACILITY A is defined in the preamble to this Agreement.
FACILITY A COMMITMENT means, at any time, the sum of all Commitments
for all Lenders under Facility A (as reduced or canceled under this Agreement)
then in effect.
FACILITY A COMMITMENT USAGE means, at any time, the sum of the Facility
A Principal Debt plus the LC Exposure.
FACILITY A NOTE means a promissory note substantially in the form of
EXHIBIT A.
FACILITY A PRINCIPAL DEBT means, at any time, the unpaid principal
balance of all Loans under Facility A.
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<PAGE> 12
FACILITY A TERMINATION DATE means the earlier of (a) July 1, 2003, and
(b) the effective date that Lenders' commitments to lend under Facility A are
otherwise canceled or terminated in accordance with this Agreement.
FACILITY B is defined in the preamble to this Agreement.
FACILITY B COMMITMENT means, at any time, the sum of all Commitments
for all Lenders under Facility B (as reduced or canceled under this Agreement)
then in effect.
FACILITY B MATURITY DATE means the earlier of (a) July 1, 2003, or (b)
the acceleration of maturity of Facility B in accordance with SECTION 12 of this
Agreement.
FACILITY B NOTE means a promissory note substantially in the form of
EXHIBIT B.
FACILITY B PRINCIPAL DEBT means, at any time, the unpaid principal
balance of all Loans under Facility B.
FACILITY C is defined in the preamble to this Agreement.
FACILITY C COMMITMENT means, at any time, the sum of all Commitments
for all Lenders under Facility C (as reduced or canceled under this Agreement)
then in effect.
FACILITY C NOTE means a promissory note substantially in the form of
EXHIBIT C.
FACILITY C PRINCIPAL DEBT means, at any time, the unpaid principal
balance of all Loans under Facility C.
FACILITY C TERMINATION DATE means, for each Lender, the earlier of (a)
the date 364 days after the date on which the Acquisition is consummated
(subject to extensions and conversions of such Lender's Loans for Facility C
under Section 3.21), but in no event later than July 1, 2003, and (b) the
effective date that Lenders' commitments to lend under Facility C are otherwise
canceled or terminated in accordance with this Agreement.
FEDERAL FUNDS RATE means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided that (a) if such day is not a Business Day, the Federal Funds Rate
for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (b) if no
such rate is so published on such next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate charged to Agent (in its
individual capacity) on such day on such transactions as determined by Agent.
FINANCIAL HEDGE means a swap, collar, floor, cap, or other contract
between any Company and any Lender, which is intended to reduce or eliminate the
risk of fluctuations in interest rates and which is legal and enforceable under
applicable Law.
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<PAGE> 13
FINANCIAL STATEMENTS of a Person means balance sheets, profit and loss
statements, reconciliations of capital and surplus, and statements of cash flow
prepared (a) according to GAAP, (b) except as stated in Section 1.3, in
comparative form to prior year-end figures or corresponding periods of the
preceding fiscal year, as applicable, and (c) on a consolidated basis if that
Person had any consolidated Subsidiaries during the applicable period.
FUNDED DEBT means, when determined, the following (calculated on a
consolidated basis for the Companies in accordance with GAAP): (a) all
obligations for borrowed money (whether as a direct obligor on a promissory
note, bond, debenture or other similar instrument, a reimbursement obligor on an
LC or other letter of credit, a guarantor, or otherwise) plus (b) all Capital
Lease obligations.
FUNDING LOSS, means, without duplication, (a) the administrative or
reemployment costs customarily charged by a Lender when (i) Borrower fails or
refuses (for any reason other than such Lender's failure to comply with this
Agreement) to take any Loan that it has requested under this Agreement, or (ii)
Borrower prepays or pays any Loan or Converts any Loan to a Loan of another
Type, in each case, before the last day of the applicable Interest Period, plus
(b) an amount equal to the excess of the amount of interest that would have
accrued on the Loan at the elected interest rate during the remainder of the
applicable Interest Period (but for such failure, refusal, payment, prepayment
or Conversion) over the amount of interest that would accrue on the same Type of
Loan for an interest period of the same duration as the remainder of the
applicable Interest Period.
GAAP means generally accepted accounting principles of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
the Financial Accounting Standards Board that are applicable on the date of this
Agreement.
GUARANTORS means A&S Building Interests, Inc., a Texas corporation
(f/k/a A&S Building Systems, Inc.), A&S Building Systems, L.P., a Texas limited
partnership, NCI Building Systems, L.P., a Texas limited partnership, NCI
Holding Corp., a Delaware corporation, NCI Operating Corp., a Nevada
corporation, and any future domestic Subsidiary of Borrower (including, without
limitation, Amatek and its domestic Subsidiaries upon consummation of the
Acquisition and delivery of Guarantees under Section 8.12).
GUARANTY means a guaranty substantially in the form of EXHIBIT D.
INTEREST PERIOD is determined in accordance with SECTION 3.9.
LAWS means all applicable statutes, laws, treaties, ordinances, rules,
regulations, permits, orders, writs, injunctions, decrees, judgments, opinions
and interpretations of any Tribunal.
LC means a letter of credit (in such form as shall be customary in
respect of obligations of a similar nature) (a) existing on the date hereof and
issued by NationsBank in connection with the Existing Bank Debt, or (b) issued
by Agent under this Agreement and under an LC Agreement.
LC AGREEMENT means a letter of credit application and agreement (in
form and substance satisfactory to Agent) submitted by Borrower to Agent for a
letter of credit for the account of any Company.
LC EXPOSURE means, at any time (without duplication) the sum of (a) the
aggregate undrawn and uncancelled portions of all outstanding LCs plus (b) the
aggregate unpaid reimbursement obligations of
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<PAGE> 14
Borrower under drawings or drafts under any LC, excluding Loans to fund such
reimbursement obligations under SECTION 2.3(c).
LC REQUEST means a request substantially in the form of EXHIBIT G.
LENDER LIENS means Liens in favor of Lenders, or Agent on behalf of
Lenders, securing any of the Obligation.
LENDERS means the financial institutions named on the attached SCHEDULE
1 or on the most recently amended SCHEDULE 1, if any, delivered by Agent under
this Agreement, and, subject to this Agreement, their respective successors and
assigns (but not any Participant who is not otherwise a party to this
Agreement).
LIEN means any lien, mortgage, security interest, pledge, assignment,
charge, title retention agreement or encumbrance of any kind and any other
arrangement for a creditor's claim to be satisfied from assets or proceeds prior
to the claims of other creditors or the owners.
LITIGATION means any action by or before any Tribunal.
LOAN means (without duplication) any amount disbursed by (a) one or
more Lenders to or on behalf of Borrower under the Loan Documents, whether such
amount constitutes an original disbursement of funds, the Continuation of an
amount outstanding under Facility A, Facility B or Facility C, or the financing
of an LC reimbursement obligation under Facility A, or (b) any Lender in
accordance with, and to satisfy the obligations of any Company under, any Loan
Document.
LOAN DATE means for any Loan the date for which funds are requested by
Borrower.
LOAN DOCUMENTS means (a) this Agreement, certificates and reports
delivered under this Agreement, and exhibits and schedules to this Agreement,
(b) the Notes, Guarantees, Security Documents and other agreements, documents
and instruments in favor of Agent or Lenders (or Agent on behalf of Lenders)
ever delivered in connection with or under this Agreement or otherwise delivered
in connection with all or any part of the Obligation (excluding financial
projections), (c) all LCs and LC Agreements, (d) any Financial Hedge between any
Company and any Lender (or any Affiliate of any Lender), and (e) all renewals,
extensions and restatements of, and amendments and supplements to, any of the
foregoing.
LOAN REQUEST means a request substantially in the form of EXHIBIT E.
MATERIAL ADVERSE EVENT means (a) any Default, or (b) any circumstance
or event that, individually or collectively with other circumstances or events,
reasonably is expected to result in any (i) impairment of the ability of
Borrower (individually) or the Companies (as a whole) to perform any payment or
other material obligations under any Loan Document, (ii) impairment of the
ability of Agent or any Lender to enforce (A) any of the material obligations of
Borrower (individually) or the Companies (as a whole) under this Agreement, or
(B) any of their respective material Rights under the Loan Documents, or (iii)
material and adverse effect on the financial condition of Borrower
(individually) or the Companies (as a whole) as represented to Lenders in the
Current Financials.
MATERIAL AGREEMENT means, for any Person, any agreement (excluding
purchase orders for material or inventory in the ordinary course of business) to
which that Person is a party, by which that Person is
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<PAGE> 15
bound, or to which any assets of that Person may be subject, and that is not
cancelable by that Person upon 30 or fewer days' notice without liability for
further payment other than nominal penalty, and that requires that Person to pay
more than $5,000,000 during any 12-month period.
MATERIALS OF ENVIRONMENTAL CONCERN means any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products,
polychlorinated biphenals, urea-formaldehyde insulation, asbestos, pollutants,
contaminants, radioactive materials, and any other substances of any kind,
whether or not such substance is defined as hazardous or toxic under any
Environmental Law, that is regulated pursuant to or could give rise to liability
under any Environmental Law.
MAXIMUM AMOUNT and MAXIMUM RATE respectively mean, for a Lender, the
maximum non-usurious amount and the maximum non-usurious rate of interest that,
under applicable Law, such Lender is permitted to contract for, charge, take,
reserve or receive on the Obligation.
MBCI means Metal Buildings Components, Inc., an indirect wholly-owned
subsidiary of Amatek.
MULTIEMPLOYER PLAN means a multiemployer plan as defined in Sections
3(37) or 4001(a)(3) of ERISA or Section 414(f) of the Code to which any Company
(or any Person that, for purposes of Title IV of ERISA, is a member of
Borrower's controlled group or is under common control with Borrower within the
meaning of Section 414 of the Code) is making, or has made, or is accruing, or
has accrued, an obligation to make contributions.
NATIONSBANK means NationsBank of Texas, N.A.
NET WORTH means, when determined, total assets minus total liabilities
(in each case calculated on a consolidated basis for the Companies in accordance
with GAAP).
NOTES means all outstanding and unpaid Facility A Notes, Facility B
Notes and Facility C Notes.
OBLIGATION means all present and future indebtedness and obligations,
and all renewals, increases and extensions thereof, or any part thereof, now or
hereafter owed to Agent or any Lender by any Company under any Loan Document,
together with all interest accruing thereon, fees, costs and expenses
(including, without limitation, all attorneys' fees and expenses incurred in the
enforcement or collection thereof) payable under the Loan Documents or in
connection with the protection of Rights under the Loan Documents.
OTHER TAXES is defined in SECTION 3.20.
PARTICIPANT is defined in SECTION 14.12(e).
PAYMENT TAXES is defined in SECTION 3.20.
PBGC means the Pension Benefit Guaranty Corporation, or any successor
thereof, established under ERISA.
PERMITTED DEBT means Debt described on Schedule 7.15.
PERMITTED LIENS means Liens described on Schedule 7.11.
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<PAGE> 16
PERSON means any individual, entity or Tribunal.
PLEDGE AGREEMENT means a Pledge Agreement substantially in the form of
EXHIBIT J.
POTENTIAL DEFAULT means the occurrence of any event or the existence of
any circumstance that would, upon notice or lapse of time or both, become a
Default.
PRIME RATE means the per annum rate of interest established from time
to time by NationsBank as its prime rate, which rate may not be the lowest rate
of interest charged by NationsBank to its customers.
PRINCIPAL DEBT means, at any time, the unpaid principal balance of all
Loans.
PRINCIPAL OFFICE means the principal office of NationsBank, presently
located at 901 Main Street, Dallas, Texas 75202.
PRO RATA and PRO RATA PART means, when determined for any Lender, (a)
if there is no Principal Debt or LC Exposure, the proportion (stated as a
percentage) that such Lender's Commitment bears to the Total Commitment, or (b)
if there is any Principal Debt or LC Exposure, the proportion (stated as a
percentage) that the sum of (i) the Principal Debt owed to such Lender and (ii)
and (without duplication) the LC Exposure of such Lender, bears to the (x)
aggregate Principal Debt owed to and (y) (without duplication) the LC Exposure
of all Lenders.
PURCHASE AGREEMENT means the Stock Purchase Agreement (and all
schedules and exhibits) between Borrower and BTR Australia Limited, a company
organized under the laws of Australian, and joined in for certain limited
purposes, by BTR plc, dated as of March 25, 1998.
PURCHASER is defined in SECTION 14.12(b).
REGISTER is defined in SECTION 14.12(c).
REPLACEMENT LENDER is defined in SECTION 3.22.
REPRESENTATIVES means representatives, officers, directors, employees,
attorneys and agents.
RESERVE REQUIREMENT means, at any time, the maximum rate at which
reserves (including, without limitation, any marginal, special, supplemental, or
emergency reserves) are required to be maintained under regulations issued from
time to time by the Board of Governors of the Federal Reserve System (or any
successor) by member banks of the Federal Reserve System against "Eurocurrency
liabilities" (as such term is used in Regulation D). Without limiting the effect
of the foregoing, the Reserve Requirement shall reflect any other reserves
required to be maintained by such member banks with respect to (i) any category
of liabilities which includes deposits by reference to which the Adjusted
Eurodollar Rate is to be determined, or (ii) any category of extensions of
credit or other assets which include Eurodollar Loans. The Adjusted Eurodollar
Rate shall be adjusted automatically on and as of the effective date of any
change in the Reserve Requirement.
RESPONSIBLE OFFICER means the chairman, president, chief executive
officer, chief financial officer, chief operating officer, chief accounting
officer, any vice president, controller or treasurer of Borrower.
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RIGHTS means rights, remedies, powers, privileges and benefits.
SCHEDULE means one of the Schedules attached to this Agreement, as
amended or supplemented pursuant to SECTION 6.2.
SECURITY DOCUMENTS means, collectively, the Pledge Agreements, the
Assignments of Partnership Interests, and any other security agreement,
mortgage, deed of trust or other agreement or document, together with all
related financing statements, stock powers, etc., in form and substance
satisfactory to Agent and its legal counsel, executed and delivered by any
Person in connection with this Agreement to create a Lender Lien on any of its
real or personal property, as amended, supplemented or restated.
SENIOR DEBT means, when determined, the Obligation and all other Funded
Debt, except for Debt which is contractually subordinated or junior in right of
payment to the Obligation.
SOLVENT means, as to a Person, that (a) the aggregate fair market value
of its assets exceeds its liabilities, (b) it has sufficient cash flow to enable
it to pay its Debts as they mature, and (c) it does not have unreasonably small
capital to conduct its businesses.
SUBSIDIARY OF ANY PERSON means any entity of which greater than 50% (in
number of votes) of the stock (or equivalent interests) is owned of record or
beneficially, directly or indirectly, by that Person.
TAXES means, for any Person, taxes, assessments or other governmental
charges or levies imposed upon it, its income, or any of its properties,
franchises or assets.
TERMINATION DATE means, as applicable, the Facility A Termination Date,
the Facility B Maturity Date, or the Facility C Termination Date.
TOTAL COMMITMENT means, at any time, the sum of the Facility A
Commitment, the Facility B Commitment, and the Facility C Commitment.
TOTAL COMMITMENT USAGE means, at any time, the sum of the Facility A
Commitment Usage, the Facility B Principal Debt, and the Facility C Principal
Debt.
TRIBUNAL means any (a) local, state or federal judicial, executive, or
legislative instrumentality or agency, (b) private arbitration board or panel,
or (c) central bank.
TYPE means any type of Loan (i.e., a Base Rate Loan or Eurodollar
Loan).
U.S. means United States of America.
1.2 Number and Gender of Words. The singular includes the plural where
appropriate and vice versa, and words of any gender include each other gender
where appropriate.
1.3 Accounting Principles. Under the Loan Documents, unless otherwise
stated, (a) GAAP determines compliance with financial covenants, (b) otherwise,
all accounting principles applied in a current period must be comparable in all
material respects to those applied during the preceding comparable period,
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<PAGE> 18
and (c) while Borrower has any consolidated Subsidiaries, all accounting and
financial terms and compliance with financial covenants must be on a
consolidated basis, as applicable.
SECTION 2 COMMITMENT.
2.1 Facilities A, B and C. Subject to the provisions in the Loan
Documents, each Lender severally and not jointly agrees to lend to Borrower
under Facility A, under Facility B and under Facility C on the following
conditions:
2.1.1 Facility A. Each Lender agrees to lend Borrower its Pro
Rata Part of one or more Loans under Facility A, which Borrower may
borrow, repay and reborrow under this Agreement.
Loans under Facility A are subject to the following conditions:
(a) Each Loan under Facility A must occur on a Business Day
and no later than the Business Day immediately preceding the
Facility A Termination Date;
(b) Each Loan under Facility A must be in an amount not less
than (i) $500,000 or a greater integral multiple of $100,000 (if a
Base Rate Loan), or (ii) $5,000,000 or a greater integral multiple
of $1,000,000 (if a Eurodollar Loan); and
(c) When determined, (i) the Facility A Commitment Usage may
not exceed the Facility A Commitment, (ii) no Lender's Pro Rata
Part of the Facility A Commitment Usage may exceed such Lender's
Commitment for Facility A, and (iii) the Facility A Commitment
Usage, when aggregated with the Facility B Principal Debt and the
Facility C Principal Debt, may not exceed the Total Commitment.
2.1.2 Facility B. Each Lender agrees to lend to Borrower its
Pro Rata Part of a single Loan under Facility B, which, after it has
been prepaid, may not be reborrowed. The Loan under Facility B is
subject to the following conditions:
(a) The Loan under Facility B must occur on or before July 1,
1998;
(b) The Loan must be in an amount equal to the Facility B
Commitment; and
(c) (i) The Facility B Principal Debt may not exceed the
Facility B Commitment; (ii) no Lender's Pro Rata Part of the
Facility B Principal Debt may exceed such Lender's Commitment for
Facility B; and (iii) the Facility B Principal Debt, when
aggregated with the Facility A Commitment Usage and the Facility C
Principal Debt, may not exceed the Total Commitment.
2.1.3 Facility C. Each Lender agrees to lend to Borrower its
Pro Rata Part of one or more Loans under Facility C, which Borrower may
borrow, repay and reborrow under this Agreement.
Loans under Facility C are subject to the following conditions:
(a) Each Loan under Facility C must occur on a Business Day
and no later than the Business Day immediately preceding the
Facility C Termination Date;
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(b) Each Loan under Facility C must be in an amount not less
than (i) $500,000 or a greater integral multiple of $100,000 (if a
Base Rate Loan), or (ii) $5,000,000 or a greater integral multiple
of $1,000,000 (if a Eurodollar Loan); and
(c) When determined, (i) the Facility C Principal Debt may
not exceed the Facility C Commitment, (ii) no Lender's Pro Rata
Part of the Facility C Principal Debt may exceed such Lender's
Commitment for Facility C, and (iii) the Facility C Principal Debt,
when aggregated with the Facility A Commitment Usage and the
Facility B Principal Debt, may not exceed the Total Commitment.
2.2 Loan Procedure. The following procedures apply to Loans:
(a) Borrower may request a Loan by submitting to Agent a Loan
Request. The Loan Request must be received by Agent no later than 12:00
noon on (i) the third Business Day preceding the Loan Date for any
Eurodollar Loan or (ii) the Business Day preceding the Loan Date for
any Base Rate Loan. Agent shall promptly notify each Lender of its
receipt of any Loan Request and its contents. A Loan Request is
irrevocable and binding on Borrower.
(b) By 11:00 a.m. on the applicable Loan Date, each Lender shall
remit its Pro Rata Part of each requested Loan by wire transfer to
Agent pursuant to Agent's wire transfer instructions on SCHEDULE 1 (or
as otherwise directed by Agent) in funds that are available for
immediate use by Agent. Subject to receipt of such funds, Agent shall
make such funds available to Borrower as directed in the Loan Request
(unless it has actual knowledge that any applicable condition precedent
either has not been satisfied by Borrower or has been waived by
Determining Lenders).
(c) Absent contrary written notice from a Lender, Agent may assume
that each Lender has made its Pro Rata Part of the requested Loan
available to Agent on the applicable Loan Date, and Agent may, in
reliance upon such assumption (but is not required to), make available
to Borrower a corresponding amount. If a Lender fails to make its Pro
Rata Part of any requested Loan available to Agent on the applicable
Loan Date, Agent may recover the applicable amount on demand (i) from
that Lender, together with interest at the Federal Funds Rate for the
period commencing on the date the amount was made available to Borrower
by Agent and ending on (but excluding) the date Agent recovers the
amount from that Lender, or (ii), if that Lender fails to pay its
amount upon demand, then from Borrower, together with interest at an
annual interest rate equal to the rate applicable to the requested Loan
for the period commencing on the Loan Date and ending on (but
excluding) the date Agent recovers the amount from Borrower. No Lender
is responsible for the failure of any other Lender to make its Pro Rata
Part of any Loan.
2.3 LC Subfacility.
(a) Subject to the terms and conditions of this Agreement and
applicable Law, Agent agrees to issue LCs under Facility A upon
Borrower's delivery of an LC Request and a duly executed LC Agreement,
each of which must be received by Agent no later than 10:00 a.m. on the
third Business Day before the requested LC is to be issued; provided
that the LC Exposure may not exceed $20,000,000 and the Facility A
Commitment Usage may not exceed the Facility A Commitment. Each LC must
expire no later than the earlier of 30 days before the Facility A
Termination Date and 13 months after such LC's issuance (provided that
LCs may be self-extending with up to 120 days cancellation notice by
Agent to beneficiary).
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(b) Immediately upon Agent's issuance of any LC (and as of the date
of the initial Loan, with respect to existing LCs issued by NationsBank
and included in the Existing Bank Debt), Agent shall be deemed to have
sold and transferred to each other Lender, and each other Lender shall
be deemed irrevocably and unconditionally to have purchased and
received from Agent, without recourse or warranty, an undivided
interest and participation (to the extent of such Lender's Pro Rata
Part of the Facility A Commitment) in the LC and all applicable Rights
of Agent in the LC (other than Rights to receive certain fees provided
for in Section 4.3). Agent agrees to provide a copy of each LC to each
other Lender upon request. However, Agent's failure to send a copy of
an issued LC shall not affect the rights and obligations of Agent and
Lenders under this Agreement.
(c) To induce Agent to issue and maintain LCs, and to induce
Lenders to participate in issued LCs, Borrower agrees to pay or
reimburse Agent (i) within one (1) Business Day after Borrower receives
notice from Agent that any draft or draw request has been properly
presented under any LC, or, if the draft or draw request is for payment
at a future date, within one (1) Business Day before the payment date
specified in the draw request, the amount paid or to be paid by Agent
and (ii) promptly, upon demand, the amount of any additional fees Agent
customarily charges for confirming, negotiating or amending LC
Agreements, for honoring drafts and draw requests, and taking similar
action in connection with letters of credit. Borrower hereby requests
and irrevocably authorizes Agent to fund Borrower's reimbursement
obligations as a Base Rate Loan under Facility A, and the proceeds of
the Facility A Base Rate Loan shall be advanced directly to Agent to
pay Borrower's unpaid reimbursement obligations. If funds cannot be
advanced under Facility A, then Borrower's reimbursement obligation
shall constitute a demand obligation. Borrower's reimbursement
obligations shall accrue interest (x) at the Base Rate plus the
Applicable Margin from the date Agent pays the applicable draft or draw
request through the date Agent is paid or reimbursed by Borrower and,
(y) if funds are not advanced under Facility A, at the Default Rate
from the date Agent pays the applicable draft or draw request through
the date Agent is paid or reimbursed by Borrower. Borrower's
obligations under this Section 2.3(c) are absolute and unconditional
under any and all circumstances and irrespective of any setoff,
counterclaim or defense to payment that Borrower may have at any time
against Agent or any other Person. Agent shall promptly distribute
reimbursement payments received from Borrower to all Lenders according
to their Pro Rata Part of the Facility A Commitment.
(d) Agent shall promptly notify Borrower of the date and amount of
any draft or draw request presented for honor under any LC (but failure
to give notice will not affect Borrower's obligations under this
Agreement). Agent shall pay the requested amount upon presentment of a
draft or draw request unless presentment on its face does not comply
with the terms of the applicable LC. When making payment, Agent may
disregard (i) any default or potential default that exists under any
other agreement and (ii) obligations under any other agreement that
have or have not been performed by the beneficiary or any other Person
(and Agent is not liable for any of those obligations). Borrower's
reimbursement obligations to Agent and Lenders, and each Lender's
obligations to Agent, under this Section 2.3 are absolute and
unconditional irrespective of, (1) the validity, enforceability,
sufficiency, accuracy or genuineness of documents or endorsements (even
if they are in any respect invalid, unenforceable, insufficient,
inaccurate, fraudulent or forged), (2) any dispute by any Company with
or any Company's claims, setoffs, defenses, counterclaims or other
Rights against Agent, any Lender or any other Person, or (3) the
occurrence of any Potential Default or Default.
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(e) If Borrower fails to reimburse Agent as provided in SECTION
2.3(c) and funds are not advanced under Facility A to satisfy the
reimbursement obligations, Agent shall promptly notify each Lender of
Borrower's failure, of the date and amount paid, and of each Lender's
Pro Rata Part of the unreimbursed amount. Each Lender shall promptly
and unconditionally make available to Agent in immediately available
funds its Pro Rata Part of the unpaid reimbursement obligation. Such
funds are due and payable to Agent before the close of business on (i)
the Business Day Agent gives notice to each Lender of Borrower's
reimbursement failure if the notice is received by a Lender before 2:00
p.m. in the time zone where such Lender's Applicable Lending Office is
located, or (ii) on the next succeeding Business Day after the Business
Day Agent gives notice to each Lender of Borrower's reimbursement
failure, if notice is received after 2:00 p.m. in the time zone where
such Lender's Applicable Lending Office is located. All amounts payable
by any Lender accrue interest at the Federal Funds Rate from the day
the applicable draft or draw is paid by Agent to (but not including)
the date the amount is paid by the Lender to Agent.
(f) Borrower acknowledges that each LC is deemed issued upon
delivery to the beneficiary or Borrower. If Borrower requests any LC be
delivered to Borrower rather than the beneficiary, and Borrower
subsequently cancels that LC, Borrower agrees to return it to Agent
together with Borrower's written certification that it has never been
delivered to the beneficiary. If any LC is delivered to the beneficiary
under Borrower's instructions, Borrower's cancellation is ineffective
without Agent's receipt of the LC and the beneficiary's written consent
to the cancellation.
(g) Agent will examine all documents with reasonable care to
ascertain that they appear on their face to be in accordance with the
terms and conditions of the LC. Each Lender and Borrower agree that, in
paying any draft or draw under any LC, Agent has no responsibility to
obtain any document (other than any documents expressly required by the
respective LC) or to ascertain or inquire as to any document's
validity, enforceability, sufficiency, accuracy or genuineness or the
authority of any Person delivering it. Neither Agent nor its
Representatives will be liable to any Lender or any Company for any
LC's use or for any beneficiary's acts or omissions. Any action,
inaction, error, delay or omission taken or suffered by Agent or any of
its Representatives in connection with any LC, applicable draws, drafts
or documents, or the transmission, dispatch or delivery of any related
message or advice, if in conformity with applicable Laws and in
accordance with the standards of care specified in the Uniform Customs
and Practice for Documentary Credits (International Chamber of Commerce
Publication 500), is binding upon the Companies and Lenders. Agent is
not liable to any Company or any Lender for any action taken or omitted
by Agent or its Representative in connection with any LC in the absence
of gross negligence or willful misconduct.
(h) On the Facility A Termination Date, upon a termination under
SECTION 2.4, during the continuance of a Default under SECTION 11.3, or
upon any demand by Agent during the continuance of any other Default,
Borrower shall provide to Agent, for the benefit of Lenders, cash
collateral in an amount equal to the then-existing LC Exposure. Any
cash collateral provided by Borrower to Agent in accordance with this
SECTION 2.3(h) shall be deposited by Agent in an interest bearing cash
collateral account maintained with Agent at the office of Agent and
invested in obligations issued or guaranteed by the U.S. and, upon the
surrender of any LC, Agent shall deliver the appropriate funds on
deposit in such collateral account to Borrower together with interest
accrued on such funds.
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(i) BORROWER SHALL PROTECT, INDEMNIFY, PAY, AND SAVE AGENT, EACH
LENDER AND THEIR RESPECTIVE REPRESENTATIVES HARMLESS FROM AND AGAINST
ANY AND ALL CLAIMS, DEMANDS, LIABILITIES, DAMAGES, LOSSES, COSTS,
CHARGES AND EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEES) WHICH ANY
OF THEM MAY INCUR OR BE SUBJECT TO AS A CONSEQUENCE OF THE ISSUANCE OF
ANY LC, ANY DISPUTE ABOUT IT, ANY CANCELLATION OF ANY LC BY BORROWER,
OR THE FAILURE OF AGENT TO HONOR A DRAFT OR DRAW REQUEST UNDER ANY LC
AS A RESULT OF ANY ACT OR OMISSION (WHETHER RIGHT OR WRONG) OF ANY
PRESENT OR FUTURE TRIBUNAL. HOWEVER, NO PERSON IS ENTITLED TO INDEMNITY
UNDER THE FOREGOING FOR ITS OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
(j) Although referenced in any LC, terms of any particular
agreement or other obligation to the beneficiary are not incorporated
into this Agreement in any manner. The fees and other amounts payable
with respect to each LC are as provided in this Agreement, drafts and
draws under each LC are part of the Obligation, and the terms of this
Agreement control any conflict between the terms of this Agreement and
any LC Agreement.
2.4 Termination of Revolving Facilities. Without premium or penalty,
and upon giving at least 10 Business Days prior written and irrevocable notice
to Agent, Borrower may terminate all or part of the unused portion of the
Facility A Commitment or the Facility C Commitment. Each partial termination
must be in an amount of not less than $5,000,000 or a greater integral multiple
of $1,000,000, and shall be Pro Rata among all Lenders. Once all or a portion of
the Facility A Commitment or the Facility C Commitment is terminated, it may not
be increased or reinstated.
SECTION 3 TERMS OF PAYMENT.
3.1 Notes and Payments.
(a) (i) The Facility A Principal Debt shall be evidenced by the
Facility A Notes, one payable to each Lender in the stated
principal amount of its Commitment for Facility A.
(ii) The Facility B Principal Debt shall be evidenced by the
Facility B Notes, one payable to each Lender in the stated
principal amount of its Commitment for Facility B.
(iii) The Facility C Principal Debt shall be evidenced by the
Facility C Notes, one payable to each Lender in the stated
principal amount of its Commitment for Facility C.
(b) Borrower must make each payment and prepayment on the
Obligation, without offset, counterclaim, or deduction, to Agent's
principal office in Dallas, Texas, in funds that will be available for
immediate use by Agent by 12:00 noon on the day due. Payments received
after such time shall be deemed received on the next Business Day.
Agent shall pay to each Lender any payment to which that Lender is
entitled on the same day Agent receives the funds from Borrower, if
Agent receives the payment or prepayment before 12:00 noon, and
otherwise before 12:00 noon on the following Business Day. If and to
the extent that Agent does not make payments to Lenders when due,
unpaid amounts due by Agent to such Lender shall accrue interest at the
Federal Funds Rate from the due date until (but not including) the
payment date.
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3.2 Interest and Principal Payments.
(a) Interest Payments. Accrued interest on each Eurodollar Loan is
due and payable on the last day of its respective Interest Period. If
any Interest Period with respect to a Eurodollar Loan is a period
greater than three months, then accrued interest is also due and
payable on the date three months after the commencement of the Interest
Period. Accrued interest on each Base Rate Loan is due and payable on
the last day of each fiscal quarter of Borrower (commencing July 31,
1998) and on the relevant Termination Date.
(b) Principal Payments.
(i) The Facility A Principal Debt is due and payable on the
Facility A Termination Date.
(ii) Principal payments on the Facility B Principal Debt are
due and payable in quarterly installments commencing October 31,
1998, and continuing on the last day of each fiscal quarter of
Borrower thereafter until the Facility B Maturity Date when the
outstanding Facility B Principal Debt shall be due and payable, as
follows:
<TABLE>
<S> <C> <C> <C> <C> <C>
October 31, 1998 - $7,500,000 April 30, 2001 - $10,000,000
January 31, 1999 - $7,500,000 July 31, 2001 - $10,000,000
April 30, 1999 - $7,500,000 October 31, 2001 - $11,250,000
July 31, 1999 - $7,500,000 January 31, 2002 - $11,250,000
October 31, 1999 - $8,750,000 April 30, 2002 - $11,250,000
January 31, 2000 - $8,750,000 July 31, 2002 - $11,250,000
April 30, 2000 - $8,750,000 October 31, 2002 - $12,500,000
July 31, 2000 - $8,750,000 January 31, 2003 - $12,500,000
October 31, 2000 - $10,000,000 April 30, 2003 - $12,500,000
January 31, 2001 - $10,000,000 July 1, 2003 - $12,500,000
</TABLE>
(iii) The Facility C Principal Debt owed to each Lender is due
and payable on the Facility C Termination Date for such Lender.
(c) Mandatory Prepayment. The Principal Debt is subject to
mandatory prepayment from time to time as follows:
(i) If the Facility A Commitment Usage ever exceeds the
Facility A Commitment, or if the Facility C Principal Debt ever
exceeds the Facility C Commitment, or if the sum of the Facility A
Principal Debt, the Facility B Principal Debt and the Facility C
Principal Debt, together with the LC Exposure, ever exceeds the
Total Commitment, then Borrower shall immediately prepay the
Principal Debt in the amount of that excess.
(ii) Borrower shall prepay the Principal Debt in the amount of
100% of the cash proceeds (after selling expenses and taxes related
thereto to the extent paid and any reserves for retained
liabilities until such liabilities are extinguished) received by
any Company from the disposition of any asset (including proceeds
from the disposition of the stock of Subsidiaries and proceeds
received as a result of any casualty (other than proceeds used by
such Company to repair or replace such casualty in a like-kind
manner) and including
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<PAGE> 24
installment payments under promissory notes or other non-cash
consideration received by any Company for such asset), other than
proceeds of dispositions permitted by SECTIONS 9.10(a), (b), (c),
(d), (e) and (g), within three Business Days after receipt of such
proceeds.
(iii) Borrower shall prepay the Principal Debt in the amount
of 100% of any Funded Debt incurred by any Company after the date
hereof (net of underwriting discounts and commissions and other
costs associated therewith), other than inter-Company Loans and
Capital Lease obligations, simultaneously with the incurrence of
such Debt.
(iv) Borrower shall prepay the Principal Debt in the amount of
100% (if the ratio of Funded Debt, after giving effect to such
prepayment, to EBITDA for the 12-month period ending on the last
day of the immediately preceding month was greater than or equal to
3.50 to 1.00) or 50% (if such ratio was less than 3.50 to 1.00) of
the cash proceeds (net of underwriting discounts and commissions
and other costs associated therewith) received by any Company from
the issuance and sale of equity securities (other than sales of
Borrower's common stock to employees as a result of the exercise of
any options with regard thereto) simultaneous with the receipt of
such proceeds.
Each prepayment under this SECTION 3.2(c) shall be accompanied by
payment of any resulting Funding Loss and all accrued and unpaid
interest on the principal amount prepaid. Subject to the provisions of
SECTION 3.11, mandatory prepayments under this SECTION 3.2(c) shall be
applied in the following order: first to the Facility C Principal Debt
(and a matching reduction of the Facility C Commitment); second to
installments of principal due under Facility B in the inverse order of
maturity; and third to the Facility A Principal Debt (and a matching
reduction of the Facility A Commitment).
(d) Voluntary Prepayment. Borrower may voluntarily repay or
prepay all or any part of the Principal Debt at any time without
premium or penalty, subject to the following conditions:
(i) Agent must receive Borrower's written payment notice by
noon on (A) the third Business Day preceding the date of payment of
a Eurodollar Loan and (B) the Business Day preceding the date of
payment of a Base Rate Loan which shall specify the payment date,
the facility or the subfacility under this Agreement being paid and
the Type and amount of the Loan(s) to be paid, and which shall
constitute an irrevocable and binding obligation of Borrower to
make a repayment or prepayment on the designated date;
(ii) each partial repayment or prepayment must be in a minimum
amount of at least $5,000,000 or a greater integral multiple of
$500,000 (if a Eurodollar Loan) and $500,000 or a greater integral
multiple of $100,000 (if a Base Rate Loan); and
(iii) each prepayment under this SECTION 3.2(d) shall be
accompanied by payment of any resulting Funding Loss and all
accrued and unpaid interest on the principal amount prepaid.
3.3 Interest Options. Except as specifically otherwise provided, Loans
bear interest at an annual rate equal to the lesser of (a) the Base Rate plus
the Applicable Margin or the Eurodollar Rate plus the Applicable Margin (in each
case as designated or deemed designated by Borrower and, in the case of
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<PAGE> 25
Eurodollar Loans, for the Interest Period designated by Borrower), as the case
may be, and (b) the Maximum Rate. Each change in the Base Rate and Maximum Rate
is effective, without notice to Borrower or any other Person, upon the date of
change.
3.4 Quotation of Rates. A Responsible Officer of Borrower may call
Agent before delivering a Loan Request to receive an indication of the interest
rates then in effect, but the indicated rates do not bind Agent or Lenders or
affect the interest rate that is actually in effect when Borrower delivers its
Loan Request or on the Loan Date.
3.5 Default Rate. If permitted by Law, all past-due Principal Debt,
Borrower's past-due payment and reimbursement obligations in connection with
LCs, and past-due interest accruing on any of the foregoing, bears interest from
the date due (stated or by acceleration) at the Default Rate until paid,
regardless whether payment is made before or after entry of a judgment.
3.6 Interest Recapture. If the designated interest rate applicable to
any Loan exceeds the Maximum Rate, the interest rate on that Loan is limited to
the Maximum Rate, but any subsequent reductions in the designated rate shall not
reduce the interest rate thereon below the Maximum Rate until the total amount
of accrued interest equals the amount of interest that would have accrued if
that designated rate had always been in effect. If at maturity (stated or by
acceleration), or at final payment of the Notes, the total interest paid or
accrued is less than the interest that would have accrued if the designated
rates had always been in effect, then, at that time and to the extent permitted
by applicable Law, Borrower shall pay an amount equal to the difference between
(a) the lesser of the amount of interest that would have accrued if the
designated rates had always been in effect and the amount of interest that would
have accrued if the Maximum Rate had always been in effect, and (b) the amount
of interest actually paid or accrued on the Notes.
3.7 Interest Calculations.
(a) Interest will be calculated on the basis of actual number
of days elapsed (including the first day but excluding the last day)
but computed as if each calendar year consisted of 360 days for
Eurodollar Loans (unless the calculation would result in an interest
rate greater than the Maximum Rate, in which event interest will be
calculated on the basis of a year of 365 or 366 days, as the case may
be), and 365 or 366 days, as the case may be, for Base Rate Loans. All
interest rate determinations and calculations by Agent are conclusive
and binding absent manifest error.
(b) The provisions of this Agreement relating to calculation
of the Base Rate and the Eurodollar Rate are included only for the
purpose of determining the rate of interest or other amounts to be paid
under this Agreement that are based upon those rates. Each Lender may
fund and maintain its funding of all or any part of each Loan as it
selects.
3.8 Maximum Rate. Regardless of any provision contained in any Loan
Document or any document related thereto, it is the intent of the parties to
this Agreement that neither Agent nor any Lender contract for, charge, take,
reserve, receive or apply, as interest on all or any part of the Obligation any
amount in excess of the Maximum Rate or the Maximum Amount or receive any
unearned interest in violation of any applicable Law, and, if Lenders ever do
so, then any excess shall be treated as a partial repayment or prepayment of
principal and any remaining excess shall be refunded to Borrower. In determining
if the interest paid or payable exceeds the Maximum Rate, Borrower and Lenders
shall, to the maximum extent permitted under applicable Law, (a) treat all Loans
as but a single extension of credit (and Lenders and
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<PAGE> 26
Borrower agree that is the case and that provision in this Agreement for
multiple Loans is for convenience only), (b) characterize any nonprincipal
payment as an expense, fee or premium rather than as interest, (c) exclude
voluntary repayments or prepayments and their effects, and (d) amortize,
prorate, allocate and spread the total amount of interest throughout the entire
contemplated term of the Obligation. However, if the Obligation is paid in full
before the end of its full contemplated term, and if the interest received for
its actual period of existence exceeds the Maximum Amount, Lenders shall refund
any excess (and Lenders may not, to the extent permitted by Law, be subject to
any penalties provided by any Laws for contracting for, charging, taking,
reserving or receiving interest in excess of the Maximum Amount). If the Laws of
the State of Texas are applicable for purposes of determining the "Maximum Rate"
or the "Maximum Amount," then such terms refer to the "revised ceiling or
bracket" from time to time in effect under V.T.C.A., Finance Code Section 1.001
et seq (West 1997). Borrower agrees that V.T.C.A., Finance Code Chapter 346
(which regulates certain revolving credit loan accounts and revolving tri-party
accounts), does not apply to the Obligation, other than Section 346.004.
3.9 Interest Periods. When Borrower requests any Eurodollar Loan,
Borrower may elect the applicable interest period (each an "INTEREST PERIOD"),
which may be, at Borrower's option, and one, two, three or six months for
Eurodollar Loans, subject to the following conditions: (a) the initial Interest
Period for a Eurodollar Loan commences on the applicable Loan Date or Conversion
date, and each subsequent Interest Period applicable to any Loan commences on
the day when the next preceding applicable Interest Period expires; (b) if any
Interest Period for a Eurodollar Loan begins on a day for which there exists no
numerically corresponding Business Day in the calendar month at the end of the
Interest Period ("ENDING CALENDAR MONTH"), then the Interest Period ends on the
next succeeding Business Day of the Ending Calendar Month, unless there is no
succeeding Business Day in the Ending Calendar Month in which case the Interest
Period ends on the next preceding Business Day of the Ending Calendar Month; (c)
no Interest Period for any portion of Principal Debt may extend beyond the
scheduled repayment date for that portion of Principal Debt; and (d) there may
not be in effect at any one time more than (i) 10 Interest Periods for the
Eurodollar Loan portion of Facility A, (ii) one Interest Period for the
Eurodollar Loan portion of Facility B, and (iii) 10 Interest Periods for the
Eurodollar Loan portion of Facility C.
3.10 Conversions. Borrower may (a) on the last day of the applicable
Interest Period Convert all or part of a Eurodollar Loan to a Base Rate Loan,
(b) at any time Convert all or part of a Base Rate Loan to a Eurodollar Loan,
and (c) elect a new Interest Period for a Eurodollar Loan. Any such Conversion
is subject to the dollar limits and denominations of SECTION 2.1 and may be
accomplished by delivering a Conversion Request to Agent no later than 10:00
a.m. (i) on the third Business Day before the Conversion date for Conversion to
a Eurodollar Loan and the last day of the Interest Period, for the election of a
new Interest Period, and (ii) one Business Day before the last day of the
Interest Period for Conversion to a Base Rate Loan. Absent Borrower's notice of
Conversion or election of a new Interest Period, a Eurodollar Loan shall be
Converted to a Base Rate Loan when the applicable Interest Period expires.
3.11 Order of Application.
(a) If no Default or Potential Default exists, any payment
shall be applied to the Obligation in the order and manner as provided
in this Agreement.
(b) If a Default or Potential Default exists, any payment
(including proceeds from the exercise of any Rights) shall be applied
in the following order: (i) to all fees and expenses for which Agent or
Lenders have not been paid or reimbursed in accordance with the Loan
Documents (and if such payment is less than all unpaid or unreimbursed
fees and expenses, then the payment shall
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<PAGE> 27
be paid against unpaid and unreimbursed fees and expenses in the order
of incurrence or due date); (ii) to accrued interest on the Principal
Debt; (iii) to any LC reimbursement obligations that are due and
payable and that remain unfunded by any Loan under Facility A; (iv) to
the remaining Obligation in the order and manner Determining Lenders
deem appropriate; and (v) as a deposit with Agent, for the benefit of
Lenders, as security for and payment of any subsequent LC reimbursement
obligations.
3.12 Right of Set-off. Upon the occurrence and during the continuance
of any Default, each Lender (and each of its Affiliates) is hereby authorized at
any time and from time to time, to the fullest extent permitted by Law, to set
off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by such Lender (or any of its Affiliates) to or for the credit or the account of
Borrower against any and all of the obligations of Borrower now or hereafter
existing under this Agreement and any Note held by such Lender, irrespective of
whether such Lender shall have made any demand under this Agreement or such Note
and although such obligations may be unmatured. Each Lender agrees promptly to
notify Borrower after any such set-off and application made by such Lender;
provided, however, that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Lender under this
SECTION 3.12 are in addition to other rights and remedies (including, without
limitation, other rights of set-off) that such Lender may have.
3.13 Adjustments. If any Lender (a "BENEFITTED LENDER") shall at any
time receive any payment of all or part of the Loans owing to it, or interest
thereon, or receive any Collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, or otherwise), in a greater proportion than any such
payment to or Collateral received by any other Lender, if any, in respect of
such other Lender's Loans owing to it, or interest thereon, such benefitted
Lender shall purchase for cash from the other Lenders a participating interest
in such portion of each such other Lender's Loans owing to it, or shall provide
such other Lenders with the benefits of any such Collateral, or the proceeds
thereof, as shall be necessary to cause such benefitted Lender to share the
excess payment or benefits of such Collateral or proceeds ratably with each of
the Lenders; provided, however, that if all or any portion of such excess
payment or benefits is thereafter recovered from such benefitted Lender, such
purchase shall be rescinded, and the purchase price and benefits returned, to
the extent of such recovery, but without interest. Borrower agrees that any
Lender so purchasing a participation from a Lender pursuant to this SECTION 3.13
may, to the fullest extent permitted by Law, exercise all of its rights of
payment (including the right of set-off) with respect to such participation as
fully as if such Person were the direct creditor of Borrower in the amount of
such participation.
3.14 Booking Loans. To the extent permitted by Law, any Lender may
make, carry or transfer its Loans at, to, or for the account of any of its
branch offices or the office of any of its Affiliates. However, no Affiliate is
entitled to receive any greater payment under SECTION 3.15 than the transferor
Lender would have been entitled to receive with respect to those Loans.
3.15 Increased Cost and Reduced Return.
(a) If, after the date hereof, the adoption of any applicable
Law, or any change in any applicable Law, or any change in the
interpretation or administration thereof by any Tribunal charged with
the interpretation or administration thereof, or compliance by any
Lender (or its Applicable Lending Office) with any request or directive
(whether or not having the force of law) of any such Tribunal:
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<PAGE> 28
(i) shall subject such Lender (or its Applicable Lending
Office) to any tax, duty, or other charge with respect to any
Eurodollar Loan, or any Note, or its obligation to make Eurodollar
Loans, or change the basis of taxation of any amounts payable to
such Lender (or its Applicable Lending Office) under this
Agreement or any Note in respect of any Eurodollar Loans (other
than Taxes imposed on the overall net income of such Lender by the
jurisdiction in which such Lender has its principal office or such
Applicable Lending Office);
(ii) shall impose, modify, or deem applicable any reserve,
special deposit, assessment, or similar requirement (other than
the Reserve Requirement utilized in the determination of the
Adjusted Eurodollar Rate) relating to any extensions of credit or
other assets of, or any deposits with or other liabilities or
commitments of, such Lender (or its Applicable Lending Office),
including the Commitment of such Lender hereunder; or
(iii) shall impose on such Lender (or its Applicable Lending
Office) or on the London interbank market any other condition
affecting this Agreement or any Note or any of such extensions of
credit or liabilities or commitments;
and the result of any of the foregoing is to increase the cost to such
Lender (or its Applicable Lending Office) of making, Converting into,
Continuing, or maintaining any Eurodollar Loan or to reduce any sum
received or receivable by such Lender (or its Applicable Lending
Office) under this Agreement or any Note with respect to any Eurodollar
Loan, then Borrower shall pay to such Lender on demand such amount or
amounts as will compensate such Lender for any such increased cost or
reduction incurred not more than 180 days prior to such demand. If any
Lender requests compensation by Borrower under this SECTION 3.15(a),
Borrower may, by notice to such Lender (with a copy to Agent), suspend
the obligation of such Lender to make or Continue Loans of the Type
with respect to which such compensation is requested, or to Convert
Loans of any other Type into Loans of such Type, until the event or
condition giving rise to such request ceases to be in effect (in which
case the provisions of SECTION 3.18 shall be applicable); provided that
such suspension shall not affect the right of such Lender to receive
the compensation so requested.
(b) If, after the date hereof, any Lender shall have determined
that the adoption of any applicable Law regarding capital adequacy or
any change therein or in the interpretation or administration thereof
by any Tribunal charged with the interpretation or administration
thereof, or any request or directive regarding capital adequacy
(whether or not having the force of law) of any such Tribunal, has or
would have the effect of reducing the rate of return on the capital of
such Lender or any corporation controlling such Lender as a consequence
of such Lender's obligations hereunder to a level below that which such
Lender or such corporation could have achieved but for such adoption,
change, request, or directive (taking into consideration its policies
with respect to capital adequacy), then from time to time upon demand
Borrower shall pay to such Lender such additional amount or amounts as
will compensate such Lender for any such reduction incurred not more
than 180 days prior to such demand.
(c) Each Lender shall promptly notify Borrower and Agent of any
event of which it has knowledge, occurring after the date hereof, which
will entitle such Lender to compensation pursuant to this SECTION 3.15
and will designate a different Applicable Lending Office if such
designation will avoid the need for, or reduce the amount of, such
compensation and will not, in the judgment of such Lender, be otherwise
disadvantageous to it. Any Lender claiming compensation under this
Section
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<PAGE> 29
shall furnish to Borrower and Agent a statement setting forth the
additional amount or amounts to be paid to it hereunder which shall be
conclusive in the absence of manifest error. In determining such
amount, such Lender may use any reasonable averaging and attribution
methods.
3.16 Limitation on Types of Loans. If on or prior to the first day of
any Interest Period for any Eurodollar Loan:
(a) Agent determines (which determination shall be conclusive)
that by reason of circumstances affecting the relevant market, adequate
and reasonable means do not exist for ascertaining the Eurodollar Rate
for such Interest Period; or
(b) Determining Lenders determine (which determination shall
be conclusive) and notify Agent that the Adjusted Eurodollar Rate will
not adequately and fairly reflect the cost to Lenders of funding
Eurodollar Loans for such Interest Period;
then Agent shall give Borrower prompt notice thereof specifying the relevant
Type of Loans and the relevant amounts or periods, and so long as such condition
remains in effect, Lenders shall be under no obligation to make additional Loans
of such Type, Continue Loans of such Type, or to Convert Loans of any other Type
into such Type and Borrower shall, on the last day(s) of the then current
Interest Period(s) for the outstanding Loans of the affected Type, either prepay
them or Convert them into another Type in accordance with the terms of this
Agreement.
3.17 Illegality. Notwithstanding any other provision of this Agreement,
in the event that it becomes unlawful for any Lender or its Applicable Lending
Office to make, maintain, or fund Eurodollar Loans hereunder, then such Lender
shall promptly notify Borrower thereof and such Lender's obligation to make or
Continue Eurodollar Loans and to Convert other Types of Loans into Eurodollar
Loans shall be suspended until such time as such Lender may again make,
maintain, and fund Eurodollar Loans (in which case the provisions of SECTION
3.18 shall be applicable).
3.18 Treatment of Affected Loans. If the obligation of any Lender to
make a particular Type of Loan or to Continue, or to Convert Loans of any other
Type into, Loans of a particular Type shall be suspended pursuant to SECTION
3.15 or 3.17 (Loans of such Type being herein called "AFFECTED LOANS" and such
Type being herein called the "AFFECTED TYPE"), such Lender's Affected Loans
shall be automatically Converted into Base Rate Loans on the last day(s) of the
then current Interest Period(s) for Affected Loans (or, in the case of a
Conversion required by SECTION 3.17, on such earlier date as such Lender may
specify to Borrower with a copy to Agent) and, unless and until such Lender
gives notice as provided below that the circumstances specified in SECTION 3.15
or 3.17 that gave rise to such Conversion no longer exist:
(a) to the extent that such Lender's Affected Loans have been
so Converted, all payments and prepayments of principal that would
otherwise be applied to such Lender's Affected Loans shall be applied
instead to its Base Rate Loans; and
(b) all Loans that would otherwise be made or Continued by
such Lender as Loans of the Affected Type shall be made or Continued
instead as Base Rate Loans, and all Loans of such Lender that would
otherwise be Converted into Loans of the Affected Type shall be
Converted instead into (or shall remain as) Base Rate Loans.
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<PAGE> 30
If such Lender gives notice to Borrower (with a copy to the Agent) that the
circumstances specified in SECTION 3.15 or 3.17 that gave rise to the Conversion
of such Lender's Affected Loans pursuant to this SECTION 3.18 no longer exist
(which such Lender agrees to do promptly upon such circumstances ceasing to
exist) at a time when Loans of the Affected Type made by other Lenders are
outstanding, such Lender's Base Rate Loans shall be automatically Converted, on
the first day(s) of the next succeeding Interest Period(s) for such outstanding
Loans of the Affected Type, to the extent necessary so that, after giving effect
thereto, all Loans held by Lenders holding Loans of the Affected Type and by
such Lender are held pro rata (as to principal amounts, Types, and Interest
Periods) in accordance with their respective Commitments.
3.19 Compensation. Upon the request of any Lender, Borrower shall pay
to such Lender such amount or amounts as shall be sufficient (in the reasonable
opinion of such Lender) to compensate it for any loss, cost, or expense
(including loss of anticipated profits) incurred by it as a result of:
(a) any payment, prepayment, Conversion of a Eurodollar Loan
for any reason (including, without limitation, the acceleration of the
Loans pursuant to SECTION 12 or any syndication of one or more of the
Facilities, if such syndication occurs on or before December 31, 1998)
on a date other than the last day of the Interest Period for such Loan;
or
(b) any failure by Borrower for any reason (including, without
limitation, the failure of any condition precedent specified in SECTION
6 to be satisfied) to borrow, Convert, Continue, or prepay a Eurodollar
Loan on the date for such borrowing, Conversion, Continuation, or
prepayment specified in the relevant notice of borrowing, prepayment,
Continuation, or Conversion under this Agreement.
3.20 Taxes.
(a) Any and all payments by Borrower to or for the account of
any Lender or Agent hereunder or under any other Loan Document shall be
made free and clear of and without deduction for any and all present or
future Taxes, duties, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, in
the case of each Lender and Agent, Taxes imposed on its income, and
franchise taxes imposed on it, by the jurisdiction under the laws of
which such Lender (or its Applicable Lending Office) or Agent (as the
case may be) is organized or any political subdivision thereof (all
such non-excluded Taxes, duties, levies, imposts, deductions, charges,
withholdings, and liabilities being hereinafter referred to as "PAYMENT
TAXES"). If Borrower shall be required by law to deduct any Payment
Taxes from or in respect of any sum payable under this Agreement or any
other Loan Document to any Lender or Agent, (i) the sum payable shall
be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this
SECTION 3.20) such Lender or Agent receives an amount equal to the sum
it would have received had no such deductions been made, (ii) Borrower
shall make such deductions, (iii) Borrower shall pay the full amount
deducted to the relevant taxation authority or other authority in
accordance with applicable Law, and (iv) Borrower shall furnish to
Agent, at its address referred to in SECTION 14.3, the original or a
certified copy of a receipt evidencing payment thereof.
(b) In addition, Borrower agrees to pay any and all present or
future stamp or documentary taxes and any other excise or property
taxes or charges or similar levies which arise from any payment made
under any Loan Document or from the execution or delivery of, or
otherwise with respect to, any Loan Document (hereinafter referred to
as "OTHER TAXES").
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(c) BORROWER AGREES TO INDEMNIFY EACH LENDER AND AGENT FOR THE
FULL AMOUNT OF PAYMENT TAXES AND OTHER TAXES (INCLUDING, WITHOUT
LIMITATION, ANY PAYMENT TAXES OR OTHER TAXES IMPOSED OR ASSERTED BY ANY
JURISDICTION ON AMOUNTS PAYABLE UNDER THIS SECTION 3.20) PAID BY SUCH
LENDER OR AGENT (AS THE CASE MAY BE) AND ANY LIABILITY (INCLUDING
PENALTIES, INTEREST, AND EXPENSES) ARISING THEREFROM OR WITH RESPECT
THERETO.
(d) Each Lender organized under the laws of a jurisdiction outside
the U.S., on or prior to the date of its execution and delivery of this
Agreement in the case of each Lender listed on the signature pages
hereof and on or prior to the date on which it becomes a Lender in the
case of each other Lender, and from time to time thereafter if
requested in writing by Borrower or Agent (but only so long as such
Lender remains lawfully able to do so), shall provide Borrower and
Agent with (i) Internal Revenue Service Form 1001 or 4224, as
appropriate, or any successor form prescribed by the Internal Revenue
Service, certifying that such Lender is entitled to benefits under an
income tax treaty to which the U.S. is a party which reduces the rate
of withholding tax on payments of interest or certifying that the
income receivable pursuant to this Agreement is effectively connected
with the conduct of a trade or business in the U.S., (ii) Internal
Revenue Service Form W-8 or W-9, as appropriate, or any successor form
prescribed by the Internal Revenue Service, and (iii) any other form or
certificate required by any taxing authority (including any certificate
required by SECTIONS 871(h) and 881(c) of the Internal Revenue Code),
certifying that such Lender is entitled to an exemption from or a
reduced rate of tax on payments pursuant to any of the Loan Documents.
(e) For any period with respect to which a Lender has failed to
provide Borrower and Agent with the appropriate form pursuant to
SECTION 3.20(d) (unless such failure is due to a change in Law
occurring subsequent to the date on which a form originally was
required to be provided), such Lender shall not be entitled to
indemnification under SECTION 3.20(a) or 3.20(b) with respect to Taxes
imposed by the U.S.; provided, however, that should a Lender, which is
otherwise exempt from or subject to a reduced rate of withholding tax,
become subject to Taxes because of its failure to deliver a form
required hereunder, Borrower shall take such steps as such Lender shall
reasonably request to assist such Lender to recover such Taxes.
(f) If Borrower is required to pay additional amounts to or for
the account of any Lender pursuant to this SECTION 3.20, then such
Lender will agree to use reasonable efforts to change the jurisdiction
of its Applicable Lending Office so as to eliminate or reduce any such
additional payment which may thereafter accrue if such change, in the
judgment of such Lender, is not otherwise disadvantageous to such
Lender.
(g) Within 30 days after the date of any payment of Taxes,
Borrower shall furnish to Agent the original or a certified copy of a
receipt evidencing such payment.
(h) Without prejudice to the survival of any other agreement of
Borrower hereunder, the agreements and obligations of Borrower
contained in this SECTION 3.20 shall survive the termination of the
Commitments and the payment in full of the Notes.
3.21 Extensions and Conversions of Facility C Termination Date.
(a) If no Default or Potential Default exists, Borrower may
request 364-day extensions of the then-existing Facility C Termination
Date by making such request to Agent and each Lender
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not earlier than 60 days preceding the then-existing Termination Date
for such Lender. The then-existing Termination Date shall be extended
for 364 days with respect to each Lender only if such Lender consents
in writing to such extension within 30 days following Borrower's
request, with a failure to respond by any Lender being deemed a denial
of such consent by such party;
(b) If any 364-day period with respect to Facility C has not been
extended under SECTION 3.21(a) with respect to any Lender's Facility C
Commitment (whether due to Borrower's failure to timely request an
extension or such Lender's failure to timely consent to such
extension), and if no Default or Potential Default exists, then
Borrower may elect to convert such Lender's Loans under Facility C to a
term Loan maturing on the third anniversary of the last day of such
364- day period but in no event later than July 1, 2003. Principal and
interest on any such term Loan shall be payable in accordance with
SECTION 3.2.
3.22 Replacement Lender. In the event any Lender invokes SECTION 3.16
or 3.17 or Borrower becomes obligated to pay any additional amounts to any
Lender pursuant to SECTION 3.15, then, unless such Lender has removed or cured
the conditions actuating SECTION 3.15, 3.16, or 3.17, Borrower may designate a
substitute lender reasonably acceptable to Agent (such lender referred to in
this Agreement as a "REPLACEMENT LENDER") to purchase such Lender's rights and
obligations with respect to its entire Pro Rata Part under this Agreement. Any
such purchase shall be without recourse to or warranty by, or expense to, the
Lender in accordance with SECTION 14.12, and shall have a purchase price equal
to the outstanding principal amounts payable to the Lender with respect to its
entire Pro Rata Part under this Agreement, plus any accrued and unpaid interest,
fees and charges in respect of such Lender's Pro Rata Part, and on other terms
reasonably satisfactory to Agent. Upon such purchase by the Replacement Lender
and payment of all other amounts owing to the Lender being replaced, such
exiting Lender shall no longer be a party to this Agreement or have any rights
or obligations under this Agreement and the Replacement Lender shall succeed to
the Rights and obligations of the exiting Lender with respect to the exiting
Lender's Pro Rata Part and Commitments under this Agreement.
SECTION 4 FEES.
4.1 Treatment of Fees. The fees described in this SECTION 4 (a) are not
compensation for the use, detention, or forbearance of money, (b) are in
addition to, and not in lieu of, interest and expenses otherwise described in
this Agreement, (c) are payable in accordance with SECTION 3.1, (d) are
non-refundable, (e) to the fullest extent permitted by Law, bear interest, if
not paid when due, at the Default Rate, and (f) are calculated on the basis of
actual number of days (including the first day but excluding the last day)
elapsed, but computed as if each calendar year consisted of 360 days, unless
computation would result in an interest rate in excess of the Maximum Rate in
which event the computation is made on the basis of a year of 365 or 366 days,
as the case may be. The fees described in this SECTION 4 are in all events
subject to the provisions of SECTION 3.8 of this Agreement.
4.2 Underwriting and Administrative Fees. Borrower shall pay the
underwriting and administrative fees previously agreed to by Borrower and Agent
in the letter agreement dated March 13, 1998, and the letter agreement dated
March 25, 1998.
4.3 LC Fees. Borrower shall pay Agent, for its own account, a fronting
fee for the issuance of each LC equal to 0.125% per annum on the face amount of
such LC. Such fee shall be payable on the last day of the fiscal quarter of
Borrower in which such LC is issued. In addition, Borrower shall pay Agent
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quarterly, in arrears, on the last day of each fiscal quarter of Borrower during
which such LC is outstanding, a fee equal to the Applicable Margin for
Eurodollar Loans per annum on the face amount of the LC, provided that the
amount of such fee (as calculated on a per annum basis) shall not be less than
$350. Such fee shall be calculated on the basis of actual days elapsed, but
computed as if each calendar year consisted of 360 days. Borrower also agrees to
pay on demand and solely for the account Agent, any and all additional customary
LC fees described in SECTION 2.3(c).
4.4 Commitment Fee. Borrower shall pay to Agent for the ratable account
of Lenders a commitment fee, payable as it accrues on the last day of each
fiscal quarter of Borrower (commencing July 31, 1998) and on the Facility A
Termination Date, and with respect to each Lender, on the Facility C Termination
Date, equal to the Applicable Percentage per annum on the sum of (a) amount by
which the Facility A Commitment exceeds the average daily Facility A Commitment
Usage, in each case during the fiscal quarter ending on such date (or, in the
case of the first such payment, during the period from the date of the
Acquisition through July 31, 1998), plus (b) the amount by which the Facility C
Commitment exceeds the average daily Facility C Principal Debt, in each case
during the fiscal quarter ending on such date (or, in the case of the first such
payment, during the period from the date of the Acquisition through July 31,
1998).
SECTION 5 SECURITY.
5.1 Guaranty. Full and complete payment of the Obligation (a) is
guaranteed in accordance with the Guaranty of even date herewith executed by
each current Guarantor, and (b) shall be guaranteed through the execution and
delivery of a Guaranty by each future domestic direct or indirect Subsidiary of
Borrower.
5.2 Collateral. Full and complete payment of the Obligation shall be
secured through the execution and delivery of Pledge Agreements and Assignments
of Partnership Interests with respect to all capital stock, partnership
interests or other equity interests of any Company in any domestic direct or
indirect Subsidiaries (together with proceeds thereof and any additional
collateral ever furnished under SECTIONS 2.3(h), 3.11(b) or 5.3, the
"COLLATERAL").
5.3 Additional Security and Guaranties. Agent may, without notice or
demand and without affecting any Person's obligations under the Loan Documents,
from time to time (a) receive and hold additional collateral from any Person for
the payment of all or any part of the Obligation and exchange, enforce or
release all or any part of that collateral and (b) accept and hold any
endorsement or guaranty of payment of all or any part of the Obligation and
release any endorser or guarantor, or any Person who has given any other
security for the payment of all or any part of the Obligation, or any other
Person in any way obligated to pay all or any part of the Obligation.
SECTION 6 CONDITIONS PRECEDENT.
6.1 General.
Lenders will not be obligated to fund the initial Loan on the date of
the Acquisition unless: (a) Agent has timely received a Loan Request and all of
the items described on SCHEDULE 6; (b) no circumstance or event exists that,
individually or collectively with other circumstances or events, has had a
material and adverse effect on the financial condition of Borrower or MBCI
(individually) or Borrower, Amatek and their respective Subsidiaries (as a
whole) as represented in the Financial Statements of Borrower dated as of
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October 31, 1997, and the financial statements of MBCI dated as of December 31,
1997; and (c) the funding of the Loan is permitted by Law.
After the Acquisition, Lenders will not be obligated to fund (as
opposed to Continue or Convert) any Loan, and Agent will not be obligated to
issue any LC unless on the applicable Loan Date, issue date, or creation date
(and after giving effect to the requested Loan or LC, as the case may be): (i)
Agent shall have timely received a Loan Request or LC Request (together with the
applicable duly executed LC Agreement); (ii) all of the representations and
warranties of the Companies in the Loan Documents are true and correct in all
material respects (unless they speak to a specific date or are based on facts
which have changed by transactions contemplated or permitted by this Agreement);
(iii) no Material Adverse Event, Default or Potential Default exists; and (iv)
the funding of the Loan or issuance of the LC, as the case may be, is permitted
by Law.
Upon Agent's request, Borrower shall deliver to Agent evidence
substantiating any of the matters in the Loan Documents that are necessary to
enable Borrower to qualify for the Loan or LC, as the case may be. Each
condition precedent in this Agreement (including, without limitation, those on
SCHEDULE 6) is material to the transactions contemplated by this Agreement, and
time is of the essence with respect to each condition precedent. Subject to the
prior approval of Determining Lenders, Lenders may fund any Loan, and Agent may
issue any LC, without all conditions being satisfied, but, to the extent
permitted by Law, that funding and issuance shall not be deemed to be a waiver
of the requirement that each condition precedent be satisfied as a prerequisite
for any subsequent funding or issuance, unless Determining Lenders specifically
waive each item in writing.
6.2 Supplements to Schedules. Borrower may, from time to time but in no
event less than five Business Days prior to delivery of any Loan Request or LC
Request, amend or supplement the Schedules to this Agreement by delivering
(effective upon receipt) to Agent and each Lender a copy of such revised
Schedule or Schedules, which shall (i) be dated the date of delivery, (ii) be
certified by a Responsible Officer as true, complete and correct as of such date
and as delivered in replacement for the corresponding Schedule or Schedules
previously in effect, and (iii) show in reasonable detail (by blacklining or
other appropriate graphic means) the changes from each such corresponding
predecessor Schedule. Notwithstanding anything to the contrary contained herein
or in any of the other Loan Documents, in the event that Determining Lenders
determine based upon such revised Schedules (whether individually or in the
aggregate or cumulatively) that a Material Adverse Event has occurred, Lenders
shall have no further obligation to make Loans or continue or convert any Loan
previously made and Agent shall have no further obligation to issue LCs or to
renew or extend existing LCs.
SECTION 7 REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants
to Agent and Lenders as follows:
7.1 Purpose of Credit Facility. Borrower will use the proceeds of the
initial Loans to consummate the Acquisition and to repay and cancel the Existing
Bank Debt. Borrower will use all other proceeds of the Loans and LCs for working
capital and general corporate purposes of the Companies. No Company is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any "margin stock" within the
meaning of Regulation U of the Board of Governors of the Federal Reserve System,
as amended. No part of the proceeds of any LC draft or drawing or Loan will be
used, directly or indirectly, for a purpose that violates any Law, including
without limitation, the provisions of Regulation U.
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7.2 Corporate Existence, Good Standing, Authority and Compliance. Each
Company is duly organized, validly existing and in good standing under the Laws
of the jurisdiction in which it is incorporated or organized as identified on
SCHEDULE 7.2. Except where failure is not a Material Adverse Event, each Company
(a) is duly qualified to transact business and is in good standing as a foreign
corporation or other entity in each jurisdiction where the nature and extent of
its business and properties require due qualification and good standing (those
jurisdictions being identified on SCHEDULE 7.2), (b) possesses all requisite
authority, permits and power to conduct its business as is now being, or is
contemplated by this Agreement to be, conducted, and (c) is in compliance with
all applicable Laws.
7.3 Subsidiaries. As of the date of this Agreement, Borrower has no
Subsidiaries except as disclosed on SCHEDULE 7.3. All of the outstanding shares
of capital stock (or similar voting interests) of those Subsidiaries are duly
authorized, validly issued, fully paid and nonassessable and together with the
partnership interests pledged pursuant to SECTION 5.2 hereof are owned of record
and beneficially as set forth thereon, free and clear of any Liens,
restrictions, claims or Rights of another Person (other than Lender Liens and,
with respect to partnership interests, any Liens, restrictions, claims or Rights
contained in the relevant partnership agreement), and are not subject to any
warrant, option or other acquisition Right of any Person or subject to any
transfer restriction (other than restrictions imposed by securities Laws and
general corporate Laws and, with respect to partnership interests, any
restrictions contained in the relevant partnership agreement).
7.4 Authorization and Contravention. The execution and delivery by each
Company of each Loan Document or related document to which it is a party and the
performance by it of its obligations thereunder (a) are within its corporate
power, (b) have been duly authorized by all necessary corporate action, (c)
require no action by or filing with any Tribunal (other than any action or
filing that has been taken or made on or before the date of this Agreement), (d)
do not violate any provision of its charter or bylaws, (e) do not violate any
provision of Law or order of any Tribunal applicable to it, other than
violations that individually or collectively are not a Material Adverse Event,
(f) do not violate any Material Agreements to which it is a party, or (g) do not
result in the creation or imposition of any Lien (other than the Lender Liens)
on any asset of any Company.
7.5 Binding Effect. Upon execution and delivery by all parties thereto,
each Loan Document will constitute a legal and binding obligation of each
Company party thereto, enforceable against it in accordance with its terms,
except as enforceability may be limited by applicable Debtor Relief Laws and
general principles of equity.
7.6 Financial Statements; Fiscal Year. The Current Financials were
prepared in accordance with GAAP and present fairly, in all material respects,
the consolidated financial condition, results of operations, and cash flows of
the Companies as of, and for the portion of the fiscal year ending on the date
or dates thereof (subject only to normal year-end adjustments). All material
liabilities of the Companies as of the date or dates of the Current Financials
are reflected therein or in the notes thereto. Except for transactions directly
related to, or specifically contemplated by, the Loan Documents, no subsequent
material adverse changes have occurred in the consolidated financial condition
of the Companies from that shown in the Current Financials, nor has any Company
incurred any subsequent material liability. All financial projections concerning
the Companies that have been or are hereafter made available to Agent or Lenders
by Borrower have been or will be prepared in good faith based upon assumptions
Borrower believes to be reasonable. The fiscal year of each Company ends on
October 31.
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7.7 Litigation. Except as disclosed on SCHEDULE 7.7, no Company is
subject to, or aware of the threat of, any Litigation that is reasonably likely
to be determined adversely to any Company and, if so adversely determined, is a
Material Adverse Event. Except as permitted under SECTION 11.4, no outstanding
and unpaid judgments against any Company exist.
7.8 Taxes. All Tax returns of each Company required to be filed have
been filed (or extensions have been granted) before delinquency, except for
returns for which the failure to file is not a Material Adverse Event, and all
Taxes imposed upon each Company that are due and payable have been paid before
delinquency, other than (a) Taxes which are being contested in good faith by
lawful proceedings diligently conducted, against which reserve or other
provision required by GAAP has been made, and in respect of which levy and
execution of any Lien have been and continue to be stayed, and (b) state and
local Taxes (except income Taxes) which are immaterial in amount and in respect
of which levy and execution of any Lien have been and continue to be stayed.
7.9 Environmental Matters. Except as disclosed on SCHEDULE 7.9, (a)
each Company is, and within the period of all applicable statutes of limitations
has been, in substantial compliance with all applicable Environmental Laws and
with all permits required thereunder; (b) no Materials of Environmental Concern
are present at, on, under, in or about any real property now or formerly owned,
leased, operated or used by any Company (including, without limitation, any
location to which any Materials of Environmental Concern have been sent for
reuse or recycling or for treatment, storage or disposal) which could reasonably
be expected to give rise to material liability of any Company under any
applicable Environmental Law, materially interfere with the continued operations
of any Company, or materially impair the fair saleable value of any real
property owned or leased by any Company; (c) except for violations or alleged
violations which have been fully and finally resolved or have been barred by the
applicable statute of limitations, no Company has received any notice or report,
or has knowledge, of any Company's violation or alleged violation of any
Environmental Law; (d) no Company is under any obligation to fund or conduct
remediation of any property; (e) no Company knows of any environmental condition
or circumstances materially adversely affecting any Company's properties or
operations; (f) there are no pending or, to the Companies' knowledge,
threatened, judicial, administrative, or arbitral proceedings under or relating
to any Environmental Law to which any Company is, or to Company's knowledge is
threatened to be, named as a party; (g) no Company has received any written
request for information or been notified that it is a potentially responsible
party under any Environmental Law; and (h) no Company has assumed or retained,
by contract or operation of law, any material liabilities of any kind under or
relating to any Environmental Law. Each Company has taken prudent steps to
determine that its properties and operations do not violate any Environmental
Law, other than violations that are not, individually or in the aggregate, a
Material Adverse Event.
7.10 Employee Plans. Except where occurrence or existence is not a
Material Adverse Event, (a) no Employee Plan has incurred an "accumulated
funding deficiency" (as defined in section 302 of ERISA or section 412 of the
Code), (b) no Company has incurred liability under ERISA to the PBGC in
connection with any Employee Plan (other than required insurance premiums, all
of which have been paid), (c) no Company has withdrawn in whole or in part from
participation in a Multiemployer Plan, (d) no Company has engaged in any
"prohibited transaction" (as defined in section 406 of ERISA or section 4975 of
the Code), and (e) no "reportable event" (as defined in section 4043 of ERISA)
has occurred, excluding events for which the notice requirement is waived under
applicable PBGC regulations.
7.11 Properties; Liens. Each Company has good and indefeasible title to
all its property reflected on the Current Financials (except for property that
is obsolete or that has been disposed in the ordinary
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course of business or, after the date of this Agreement, as otherwise permitted
by SECTION 9.10 or SECTION 9.11). Except for Permitted Liens, no Lien exists on
any property of any Company, and the execution, delivery, performance or
observance of the Loan Documents will not require or result in the creation of
any Lien (other than Lender Liens) on any Company's property.
7.12 Location. Each Company's chief executive office is located at the
address on SCHEDULE 7.12.
7.13 Government Regulations. No Company is subject to regulation under
the Investment Company Act of 1940, as amended, or the Public Utility Holding
Company Act of 1935, as amended.
7.14 Transactions with Affiliates. Except as disclosed on SCHEDULE
7.14. no Company is a party to a material transaction with any of its Affiliates
(excluding other Companies), other than transactions in the ordinary course of
business and upon fair and reasonable terms not materially less favorable than
it could obtain or could become entitled to in an arm's-length transaction with
a Person that was not its Affiliate. For purposes of this SECTION 7.14, a
transaction is "material" if it requires any Company to pay more than $5,000,000
during the term of the governing agreement.
7.15 Debt. No Company is an obligor on any Debt, other than Permitted
Debt.
7.16 Material Agreements. All Material Agreements of the Companies are
in full force and effect, and no default or potential default exists on the part
of any Company thereunder that is a Material Adverse Event.
7.17 Insurance. Each Company maintains with financially sound,
responsible, and reputable insurance companies or associations (or, as to
workers' compensation or similar insurance, with an insurance fund or by
self-insurance authorized by the jurisdictions in which it operates) insurance
concerning its properties and businesses against casualties and contingencies
and of types and in amounts (and with co-insurance and deductibles) as is
customary in the case of similar businesses.
7.18 Labor Matters. No actual or, to the Companies' knowledge,
threatened strikes, labor disputes, slow downs, walkouts, or other concerted
interruptions of operations by the employees of any Company that are a Material
Adverse Event exist. Hours worked by and payment made to employees of the
Companies have not been in violation of the Fair Labor Standards Act or any
other applicable Law dealing with labor matters, other than any violations,
individually or collectively, that are not a Material Adverse Event. All
payments due from any Company for employee health and welfare insurance have
been paid or accrued as a liability on its books, other than any nonpayments
that are not, individually or collectively, a Material Adverse Event.
7.19 Solvency. On each Loan Date, each Company is, and after giving
effect to the requested Loan will be, Solvent.
7.20 Trade Names. No Company has used or transacted business under any
other corporate or trade name in the five-year period preceding the initial Loan
Date, except as disclosed on SCHEDULE 7.20.
7.21 Intellectual Property. Each Company owns or has the right to use
all material licenses, patents, patent applications, copyrights, service marks,
trademarks, trademark applications and trade names necessary to continue to
conduct its businesses as presently conducted by it and proposed to be conducted
by it immediately after the date of this Agreement. Each Company is conducting
its business without
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infringement or claim of infringement of any license, patent, copyright, service
mark, trademark, trade name, trade secret or other intellectual property right
of others, other than any infringements or claims that, if successfully asserted
against or determined adversely to any Company, would not, individually or
collectively, constitute a Material Adverse Event. To the knowledge of any
Company, no infringement or claim of infringement by others of any material
license, patent, copyright, service mark, trademark, trade name, trade secret or
other intellectual property of any Company exists.
7.22 Full Disclosure. Each material fact or condition relating to the
Loan Documents or the financial condition, business or property of any Company
has been disclosed in writing to Agent. All information previously furnished,
furnished on the date of this Agreement, and furnished in the future, by any
Company to Agent in connection with the Loan Documents (a) was, is, and will be,
true and accurate in all material respects or, in the case of projections, was
based on reasonable estimates on the date the information is stated or
certified, and (b) (i) in the case of projections, was not based on unreasonable
estimates as of the date the information is stated or certified, or (ii) in the
case of all other information, did not, does not, and will not, fail to state
any fact the omission of which would otherwise make any such information
materially misleading.
7.23 Acquisition. Prior to, or simultaneously with, the funding of the
initial Loan (a) the Acquisition has been consummated in accordance with the
Purchase Agreement and all applicable Laws for a total cost (excluding fees and
expenses, but including assumed indebtedness for borrowed money) of not more
than $570,000,000 plus up to 700,000 shares of Borrower's common stock, (b) all
consents and approvals of, and filings and registrations with, and all other
actions in respect of, all Tribunals required to consummate the Acquisition have
been obtained, given, filed, taken or waived and are in full force and effect,
(c) all applicable waiting periods with respect thereto have expired without any
action being taken by any Tribunal to restrain, prevent or impose material
adverse conditions upon the Acquisition, and (d) no judgment, order or
injunction exists which prohibits or imposes any material adverse condition upon
the Acquisition or the performance of any Company of its obligations in
connection therewith. No Company or any Affiliate of any Company is entering
into the Acquisition with the intent to hinder, delay or defraud any creditor of
any Company.
SECTION 8 AFFIRMATIVE COVENANTS. So long as Lenders are committed to fund any
Loans and Agent is committed to issue LCs under this Agreement, and thereafter
until the Obligation is paid in full, Borrower covenants and agrees as follows:
8.1 Items to be Furnished. Borrower shall cause the following to be
furnished to Agent:
(a) Promptly after preparation, and no later than 120 days
after the last day of each fiscal year of Borrower, Financial
Statements showing the consolidated financial condition and results of
operations of the Companies as of, and for the year ended on, that last
day, accompanied by:
(i) the unqualified opinion of a firm of nationally-recognized
independent certified public accountants, based on an audit using
generally accepted auditing standards, that the Financial
Statements were prepared in accordance with GAAP and present
fairly, in all material respects, the consolidated financial
condition and results of operations of the Companies,
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(ii) any management letter prepared by the accounting firm
delivered in connection with its audit, and
(iii) a Compliance Certificate with respect to the Financial
Statements.
(b) Promptly after preparation, and no later than 45 days after the
last day of each fiscal quarter of Borrower, Financial Statements
showing the consolidated financial condition and results of operations
of the Companies for the fiscal quarter and for the period from the
beginning of the current fiscal year to the last day of the fiscal
quarter, accompanied by a Compliance Certificate with respect to the
Financial Statements.
(c) Promptly after receipt, a copy of each interim or special audit
report and management letter issued by independent accountants with
respect to any Company or its financial records.
(d) Notice, promptly (and, in any event, within five Business Days)
after Borrower knows or has reason to know, of (i) the existence and
status of any Litigation that, if determined adversely to any Company,
would be a Material Adverse Event, (ii) any change in any material fact
or circumstance represented or warranted by any Company in any Loan
Document, (iii) the receipt by any Company of notice of any violation
or alleged violation of ERISA or any Environmental Law or of any
condition which, under any applicable Environmental Law, could give
rise to liability or impair the saleable value of any real property now
or previously owned, leased or used by any Company, or (iv) a Default,
Potential Default or Material Adverse Event, in each case specifying
the nature thereof and what action the Companies have taken, are
taking, or propose to take.
(e) Promptly (and, in any event, within 10 days) after filing or
sending, copies of all material reports or filings filed by or on
behalf of any Company with any Tribunal (including, without limitation,
copies of each Form 10-K, Form 10-Q and Form S-8 filed by or on behalf
of any Company with the Securities and Exchange Commission) or sent to
its stockholders.
(f) Promptly after preparation, and no later than 30 days after the
last day of each fiscal quarter of Borrower, copies of all Phase I
Environmental Site Assessment Reports obtained by the Companies in
connection with acquisitions of interests in real property (or
acquisitions of Persons owning interests in real property) closed
during such fiscal quarter.
(g) Promptly upon reasonable request by Agent or Determining
Lenders (through Agent), information (not otherwise required to be
furnished under the Loan Documents) respecting the business affairs,
assets and liabilities of the Companies and opinions, certifications
and documents in addition to those mentioned in this Agreement.
8.2 Use of Proceeds. Borrower shall use the proceeds of Loans only for
the purposes represented in this Agreement.
8.3 Books and Records. The Companies will maintain books, records and
accounts necessary to prepare financial statements in accordance with GAAP.
8.4 Inspections. Upon three Business Days notice, each Company will
allow Agent or any Lender (or their Representatives) to inspect any of its
properties, to review reports, files and other records
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and to make and take away copies, to conduct tests or investigations, and to
discuss any of its affairs, conditions and finances with such Company's other
creditors, directors, officers, employees or representatives from time to time,
during reasonable business hours.
8.5 Taxes. The Companies will promptly pay when due any and all Taxes,
other than (a) Taxes which are being contested in good faith by lawful
proceedings diligently conducted, against which reserve or other provision
required by GAAP has been made, and in respect of which levy and execution of
any Lien have been and continue to be stayed, and (b) state and local Taxes
(except income Taxes) which are immaterial in amount and in respect of which
levy and execution of any Lien have been and continue to be stayed. No Company
shall use any proceeds of Loans hereunder to pay the wages of employees unless a
timely payment to or deposit with the U.S. of all amounts of tax required to be
deducted or withheld with respect to such wages is also made.
8.6 Payment of Obligations. Each Company will promptly pay (or renew
and extend) all of its material obligations as they become due (unless the
obligations are being contested in good faith by appropriate proceedings).
8.7 Expenses; Indemnification.
(a) Borrower agrees to pay on demand all costs and expenses of
Agent in connection with the preparation, due diligence, execution,
delivery, administration, syndication, modification, and amendment of
the Loan Documents and the other documents to be delivered hereunder,
including, without limitation, the reasonable fees and expenses of
counsel for Agent (including the cost of internal counsel) with respect
thereto and with respect to advising Agent as to its rights and
responsibilities under the Loan Documents. Borrower further agrees to
pay on demand all costs and expenses of Agent and Lenders, if any
(including, without limitation, reasonable attorneys' fees and expenses
and the cost of internal counsel), in connection with the enforcement
(whether through negotiations, legal proceedings, or otherwise) of the
Loan Documents and the other documents to be delivered hereunder.
(b) BORROWER AGREES TO INDEMNIFY AND HOLD HARMLESS AGENT AND
EACH LENDER AND EACH OF THEIR AFFILIATES AND THEIR RESPECTIVE OFFICERS,
DIRECTORS, EMPLOYEES, AGENTS, AND ADVISORS (EACH, AN "INDEMNIFIED
PARTY") FROM AND AGAINST ANY AND ALL CLAIMS, DAMAGES, LOSSES,
LIABILITIES, COSTS, AND EXPENSES (INCLUDING, WITHOUT LIMITATION,
REASONABLE ATTORNEYS' FEES) THAT MAY BE INCURRED BY OR ASSERTED OR
AWARDED AGAINST ANY INDEMNIFIED PARTY, IN EACH CASE ARISING OUT OF OR
IN CONNECTION WITH OR BY REASON OF (INCLUDING, WITHOUT LIMITATION, IN
CONNECTION WITH ANY INVESTIGATION, LITIGATION, OR PROCEEDING OR
PREPARATION OF DEFENSE IN CONNECTION THEREWITH) THE LOAN DOCUMENTS, ANY
OF THE TRANSACTIONS CONTEMPLATED HEREIN OR THE ACTUAL OR PROPOSED USE
OF THE PROCEEDS OF THE LOANS (INCLUDING ANY OF THE FOREGOING ARISING
FROM THE NEGLIGENCE OF THE INDEMNIFIED PARTY), EXCEPT TO THE EXTENT
SUCH CLAIM, DAMAGE, LOSS, LIABILITY, COST, OR EXPENSE IS FOUND IN A
FINAL, NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO
HAVE RESULTED FROM SUCH INDEMNIFIED PARTY'S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT. IN THE CASE OF AN INVESTIGATION, LITIGATION OR OTHER
PROCEEDING TO WHICH THE INDEMNITY IN THIS SECTION 8.7(B) APPLIES, SUCH
INDEMNITY SHALL BE EFFECTIVE WHETHER OR NOT SUCH INVESTIGATION,
LITIGATION OR PROCEEDING IS BROUGHT BY BORROWER, ITS DIRECTORS,
SHAREHOLDERS OR CREDITORS OR AN INDEMNIFIED PARTY OR ANY OTHER PERSON
OR ANY
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INDEMNIFIED PARTY IS OTHERWISE A PARTY THERETO AND WHETHER OR NOT THE
TRANSACTIONS CONTEMPLATED HEREBY ARE CONSUMMATED; SUBJECT, HOWEVER, TO
THE LIMITATION AS TO GROSS NEGLIGENCE OR WILLFUL MISCONDUCT CONTAINED
IN THE PRECEDING SENTENCE. BORROWER AGREES NOT TO ASSERT ANY CLAIM
AGAINST ANY INDEMNIFIED PARTY, ON ANY THEORY OF LIABILITY, FOR SPECIAL,
INDIRECT, CONSEQUENTIAL, OR PUNITIVE DAMAGES ARISING OUT OF OR
OTHERWISE RELATING TO THE LOAN DOCUMENTS, ANY OF THE TRANSACTIONS
CONTEMPLATED HEREIN OR THE ACTUAL OR PROPOSED USE OF THE PROCEEDS OF
THE LOANS. SO LONG AS NO DEFAULT EXISTS, NO CLAIM FOR WHICH INDEMNITY
IS CLAIMED HEREUNDER SHALL BE COMPROMISED OR SETTLED BY AN INDEMNIFIED
PARTY WITHOUT THE PRIOR WRITTEN CONSENT OF BORROWER. NOTHING CONTAINED
HEREIN SHALL PREVENT BORROWER FROM BRINGING A SEPARATE ACTION AGAINST
ANY PARTY HERETO FOR BREACH OF ANY CONTRACTUAL OBLIGATION CONTAINED IN
THE LOAN DOCUMENTS, NOR SHALL THE PROVISIONS OF THIS SECTION 8.7(B) BE
APPLICABLE WITH RESPECT TO ANY ACTION BETWEEN BORROWER AND ANY OTHER
PARTY FOR BREACH OF CONTRACTUAL OBLIGATION CONTAINED IN THE LOAN
DOCUMENTS IN WHICH BORROWER IS THE PREVAILING PARTY.
(c) Without prejudice to the survival of any other agreement
of Borrower hereunder, the agreements and obligations of Borrower
contained in this SECTION 8.7 shall survive the payment in full of the
Loans and all other amounts payable under this Agreement.
(d) Amounts payable under this SECTION 8.7 shall be a part of
the Obligation and, if not paid upon demand, shall bear interest at the
Default Rate until paid.
8.8 Maintenance of Existence, Assets, and Business. Except as otherwise
permitted by SECTION 9.11, each Company will (a) maintain its corporate
existence and good standing in its state of incorporation and its authority to
transact business in all other states where failure to maintain its authority to
transact business is a Material Adverse Event; (b) maintain all licenses,
permits and franchises necessary for its business where failure to do so is a
Material Adverse Event; (c) keep all of its assets that are useful in and
necessary to its business in good working order and condition (ordinary wear and
tear excepted) and make all necessary repairs and replacements. No Company will
relocate its chief executive office unless prior thereto it gives Agent 30 days
prior written notice of such proposed location (such notice to include, without
limitation, the name of the county or parish and state of such location).
8.9 Insurance. The Companies will maintain with financially sound,
responsible and reputable insurance companies or associations (or, as to
workers' compensation or similar insurance, with an insurance fund or by
self-insurance authorized by the jurisdictions in which they operate) insurance
concerning their properties and businesses against casualties and contingencies
and of types and in amounts (and with co-insurance and deductibles) as is
customary in the case of similar businesses.
8.10 Preservation and Protection of Rights. The Companies will perform
the acts and duly authorize, execute, acknowledge, deliver, file and record any
Security Documents, financing statements, stock powers and other writings as
Agent or Determining Lenders may reasonably deem necessary or appropriate to
perfect and maintain the Lender Liens and preserve and protect the Rights of
Agent and Lenders under any Loan Document, and will pay all costs of any related
filings or recordations and any Lien searches.
8.11 Environmental Laws. The Companies will (a) conduct their business
so as to comply with all applicable Environmental Laws and shall promptly take
corrective action to remedy any non-compliance
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with any Environmental Law, except where failure to comply or take action would
not be a Material Adverse Event, and (b) establish and maintain a management
system designed to ensure compliance with applicable Environmental Laws and
minimize financial and other risks to each Company arising under applicable
Environmental Laws or as the result of environmentally related injuries to
Persons or property. Borrower shall deliver reasonable evidence of compliance
with the foregoing covenant to Agent within 30 days after any request from
Determining Lenders.
8.12 Subsidiaries. The Companies will pledge to Agent for the benefit
of Lenders all stock or partnership interests of each Person that becomes a
domestic direct or indirect Subsidiary of Borrower after the date of this
Agreement (whether as a result of acquisition, creation or otherwise) and shall
cause each such new Subsidiary to execute and deliver a Guaranty, an Officer's
Certificate (concerning articles of incorporation, bylaws, resolutions and
incumbency) and an opinion of counsel (addressing points 4(a), (b), (c), (d) and
(e) of EXHIBIT L with respect to such Subsidiary), in each case within 10
Business Days after becoming a Subsidiary of Borrower.
SECTION 9 NEGATIVE COVENANTS. So long as Lenders are committed to fund Loans and
Agent is committed to issue LCs under this Agreement, and thereafter until the
Obligation is paid in full, Borrower covenants and agrees as follows:
9.1 Taxes. No Company may use any portion of the proceeds of any Loan
to pay the wages of employees, unless a timely payment to or deposit with the
U.S. of all amounts of Tax required to be deducted and withheld with respect to
such wages is also made.
9.2 Payment of Obligations. No Company may voluntarily prepay principal
of, or interest on, any Debt, other than the Obligation, if a Default or
Potential Default exists.
9.3 Employee Plans. Except where a Material Adverse Event would not
result, no Company may permit any of the events or circumstances described in
SECTION 7.10 to exist or occur.
9.4 Debt. No Company may create, incur or suffer to exist any Funded
Debt, other than Permitted Debt.
9.5 Liens. No Company may (a) create, incur or suffer or permit to be
created or incurred or to exist any Lien upon any of its assets, other than
Permitted Liens, or (b) enter into or permit to exist any arrangement or
agreement that directly or indirectly prohibits any Company from creating or
incurring any Lien on any of its assets, other than the Loan Documents, leases
that place a Lien prohibition on only the leased property and transactions which
result in purchase money debt.
9.6 Transactions with Affiliates. Except as disclosed on SCHEDULE 7.14
(if the disclosures are approved by Determining Lenders), no Company may enter
into any material transaction with any of its Affiliates (excluding other
Companies), other than transactions in the ordinary course of business and upon
fair and reasonable terms not materially less favorable than it could obtain or
could become entitled to in an arm's-length transaction with a Person that was
not its Affiliate. For purposes of this SECTION 9.6, a transaction is "material"
if it requires any Company to pay more than $5,000,000 during the term of the
agreement governing such transaction.
9.7 Compliance with Laws and Documents. No Company may (a) violate the
provisions of any Laws applicable to it or of any Material Agreement to which it
is a party if that violation alone, or when
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aggregated with all other violations, would be a Material Adverse Event (unless
such Company disagrees that a violation has occurred, is contesting the
allegation of a violation in good faith by lawful proceedings diligently
conducted, has made any reserve or other provision against such alleged
violation required by GAAP, and has stayed any levy or execution of Lien
relating to such alleged violation), (b) violate the provisions of its charter
or bylaws, or (c) repeal, replace or amend any provision of its charter or
bylaws if that action would be a Material Adverse Event.
9.8 Loans, Advances and Investments. Except as permitted by SECTION 9.9
or SECTION 9.11, no Company may make any loan, advance, extension of credit or
capital contribution to, make any investment in, or purchase or commit to
purchase any stock or other securities or evidences of Debt of, or interests in,
any other Person, other than (a) expense accounts for and other advances to its
directors, officers and employees in the ordinary course of business; (b)
marketable obligations issued or unconditionally guaranteed by the U.S.
Government or issued by any of its agencies and backed by the full faith and
credit of the U. S., in each case maturing within one year from the date of
acquisition (and investments in mutual funds investing primarily in those
obligations); (c) short-term investment grade domestic and eurodollar
certificates of deposit or time deposits that are fully insured by the Federal
Deposit Insurance Corporation or are issued by commercial banks having combined
capital, surplus, and undivided profits of not less than $100,000,000 (as shown
on its most recently published statement of condition); (d) commercial paper and
similar obligations rated "P-1" by Moody's Investors Service, Inc., or "A-1" by
Standard & Poor's Ratings Group (a division of McGraw Hill, Inc.); (e)
inter-Company loans and advances; (f) readily marketable tax-free municipal
bonds of a domestic issuer rated "Aaa" by Moody's Investors Service, Inc., or
"AAA" by Standard & Poors Ratings Group (a division of McGraw Hill, Inc.), and
maturing within one year from the date of issuance (and investments in mutual
funds investing primarily in those bonds); (g) demand deposit accounts
maintained in the ordinary course of business; (h) other investments existing on
the initial Loan Date and described on SCHEDULE 9.8 (and, with respect to Amatek
and its Subsidiaries, existing on the date of Acquisition); (i) extensions of
credit in connection with trade receivables and overpayments of trade payables,
in each case resulting from transactions in the ordinary course of business; and
(j) as long as no Default or Potential Default exists, other loans, advances,
and investments aggregating no more than 5% of the Companies' Net Worth at any
time.
9.9 Dividends and Distributions. No Company may declare, make or pay
any Distribution, other than Distributions declared, made or paid by (a)
Borrower wholly in the form of its capital stock and (b) any other Company to
Borrower. No Company shall enter into any arrangement or agreement (other than
this Agreement) that prohibits it from paying dividends or other distributions
to its shareholders.
9.10 Sale of Assets. No Company may sell, assign, lease, transfer or
otherwise dispose of any of its assets, other than (a) sales of inventory in the
ordinary course of business, (b) the sale, discount or transfer of delinquent
accounts receivable in the ordinary course of business for purposes of
collection, (c) occasional sales, leases or other dispositions of immaterial
assets for consideration not less than fair market value, (d) sales, leases or
other dispositions of assets that are obsolete or have negligible fair market
value, (e) sales of equipment for a fair and adequate consideration (but the
seller must promptly replace the sold equipment), (f) sales for which the cash
proceeds thereof (after selling expenses and taxes related thereto to the extent
paid and any reserves for retained liabilities until such liabilities are
extinguished) are applied in prepayment of the Principal Debt in accordance with
SECTION 3.2(c), and (g) other sales of assets which do not exceed $500,000 in
the aggregate annually.
9.11 Mergers and Dissolutions. No Company may acquire all or any
substantial portion of stock issued by, interest in, or assets of any other
Person (the "ACQUIREE"), unless (a) immediately after the
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acquisition no Default or Potential Default exists and a Responsible Officer
represents to Agent and Lenders in writing that the acquisition will not
reasonably be expected to cause any Default or Potential Default then or within
the one-year period thereafter, (b) the Acquiree has consented to the
acquisition, and (c) the Acquiree is in the same or similar business as the
Companies (or a reasonably related business). Borrower may not, and may not
permit any Subsidiary to, merge or consolidate with any other Person, unless
immediately thereafter no Default or Potential Default exists and (i) Borrower,
if a party thereto, is the surviving corporation or (ii) if Borrower is not a
party thereto, the surviving corporation has either previously executed a
Guaranty or assumes, in writing, the non-surviving corporation's obligations
created by any Guaranty executed by the non-surviving corporation. Except as a
result of a transaction permitted by this SECTION 9.11, no Company will
liquidate, wind up, or dissolve (or suffer any liquidation or dissolution).
9.12 Assignment. No Company may assign or transfer any of its Rights,
duties, or obligations under any of the Loan Documents, except if any Company
merges with another Company as permitted by SECTION 9.11, the assignment or
transfer of the Rights, duties, and obligations of the non-surviving Company is
permitted if the surviving Company assumes in writing all Rights, duties, and
obligations of the non- surviving Company under the Loan Documents.
9.13 Fiscal Year and Accounting Methods. No Company may change its
fiscal year or its method of accounting (other than immaterial changes in
methods or as required by GAAP).
9.14 New Businesses. No Company may engage in any business except the
businesses in which they are presently engaged and any other reasonably related
business.
9.15 Government Regulations. No Company may conduct its business in a
way that it becomes regulated under the Investment Company Act of 1940, as
amended, or the Public Utility Holding Company Act of 1935, as amended.
9.16 Tax Sharing Agreements. The Companies shall not enter into any tax
sharing arrangements which obligate them to pay more Taxes collectively than
they would otherwise pay absent such arrangements.
SECTION 10 FINANCIAL COVENANTS. So long as Lenders are committed to fund Loans
and Agent is committed to issue LCs under this Agreement, and thereafter until
the Obligation is paid and performed in full, Borrower covenants and agrees as
follows:
10.1 Minimum Net Worth. Borrower shall not permit Net Worth, as of the
last day of any fiscal quarter of Borrower, commencing with October 31, 1998, to
be less than the sum of (a) $150,000,000, plus (b) an amount equal to the
greater of zero (0) and 75% of the consolidated net earnings after taxes of the
Companies determined in accordance with GAAP for the period (taken as a single
accounting period) from and including August 1, 1998, to and including such day,
plus (c) an amount equal to 100% of any cash proceeds (net of underwriting
discounts and commissions and other costs associated therewith) received by the
Companies from the issuance and sale of equity securities for the period (taken
as a single accounting period) from and including August 1, 1998, to and
including such day.
10.2 Maximum Leverage Ratio. Borrower shall not permit the ratio, as of
the last day of each fiscal quarter of Borrower listed below, of Funded Debt as
of such date to EBITDA for the four fiscal quarters ended on such date to exceed
the ratio set forth below opposite such day:
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<TABLE>
<S> <C>
October 31, 1998 4.50 to 1.00
January 31, 1999 4.50 to 1.00
April 30, 1999 4.50 to 1.00
July 31, 1999 4.50 to 1.00
October 31, 1999 4.25 to 1.00
January 31, 2000 4.25 to 1.00
April 30, 2000 4.25 to 1.00
July 31, 2000 4.25 to 1.00
October 31, 2000 4.00 to 1.00
January 31, 2001 4.00 to 1.00
April 30, 2001 4.00 to 1.00
July 31, 2001 4.00 to 1.00
Thereafter 3.50 to 1.00
</TABLE>
10.3 Maximum Senior Debt Ratio. Effective upon the incurrence by any
Company of Funded Debt in the amount of $100,000,000 or more which is
contractually subordinated or junior in right of payment to the Obligation,
Borrower shall not permit the ratio, as of the last day of each fiscal quarter
of Borrower listed below, of Senior Debt as of such date to EBITDA for the four
fiscal quarters ended on such date to exceed the ratio set forth below opposite
such day:
<TABLE>
<S> <C>
October 31, 1998 4.50 to 1.00
January 31, 1999 3.25 to 1.00
April 30, 1999 3.25 to 1.00
July 31, 1999 3.25 to 1.00
October 31, 1999 3.25 to 1.00
January 31, 2000 3.00 to 1.00
April 30, 2000 3.00 to 1.00
July 31, 2000 3.00 to 1.00
October 31, 2000 3.00 to 1.00
January 31, 2001 2.75 to 1.00
April 30, 2001 2.75 to 1.00
July 31, 2001 2.75 to 1.00
October 31, 2001 2.75 to 1.00
Thereafter 2.50 to 1.00
</TABLE>
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10.4 Minimum Fixed Charge Coverage Ratio. Borrower shall not permit the
ratio, as of the last day of any fiscal quarter of Borrower, of (a) the sum of
EBITDA, minus cash taxes paid with respect to income, in each case for the four
fiscal quarters ended on such date to (b) the sum of interest expenses plus
current maturities of the Companies' long-term Funded Debt, plus cash dividends
paid by Borrower, plus repurchases by any Company of its own capital stock or
other equity securities (whether or not permitted under Section 9.9), in each
case during the four fiscal quarters ended on such date to be less than the
ratio set forth opposite such day:
<TABLE>
<S> <C>
October 31, 1998 1.25 to 1.00
January 31, 1999 1.25 to 1.00
April 30, 1999 1.25 to 1.00
July 31, 1999 1.25 to 1.00
October 31, 1999 1.30 to 1.00
January 31, 2000 1.30 to 1.00
April 30, 2000 1.30 to 1.00
July 31, 2000 1.30 to 1.00
Thereafter 1.35 to 1.00
</TABLE>
SECTION 11 DEFAULT. The term "DEFAULT" means the occurrence of any one or more
of the following events:
11.1 Payment of Obligation.
(a) The failure of any Company to make any principal payment
on any Note or to pay or reimburse Agent with respect to any draft or
draw request under any LC after it becomes due and payable under the
Loan Documents; or
(b) The failure of any Company to pay any other portion of the
Obligation within three Business Days after it becomes due and payable
under the Loan Documents.
11.2 Covenants. The failure of Borrower (and, if applicable, any other
Company) to punctually and properly perform, observe and comply with:
(a) Any covenant or agreement contained in SECTIONS 2.3(h), 8.1,
8.4 or 9; or
(b) Any other covenant or agreement contained in any Loan
Document (other than the covenants to pay the Obligation and the
covenants in clause (a) above), unless, if such breach is curable, such
breach is cured within 30 days after Borrower knows of such failure.
11.3 Debtor Relief. Any Company (a) is not Solvent, (b) fails to pay
its Debts generally as they become due, (c) voluntarily seeks, consents to, or
acquiesces in the benefit of any Debtor Relief Law, or (d) becomes a party to or
is made the subject of any proceeding provided for by any Debtor Relief Law,
other than as a creditor or claimant, that could suspend or otherwise adversely
affect the Rights of Agent or any
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Lender granted in the Loan Documents (unless, if the proceeding is involuntary,
the applicable petition is dismissed within 60 days after its filing).
11.4 Judgments and Attachments. Any Company fails, within 60 days after
entry, to pay, bond or otherwise discharge any judgment or order for the payment
of money in excess of $1,000,000 (individually or collectively) or any warrant
of attachment, sequestration or similar proceeding against any Company's assets
having a value (individually or collectively) of $1,000,000, which is neither
(a) stayed on appeal nor (b) diligently contested in good faith by appropriate
proceedings and adequate reserves have been set aside on its books in accordance
with GAAP.
11.5 Government Action. (a) A final non-appealable order is issued by
any Tribunal (including, but not limited to, the U.S. Justice Department)
seeking to cause any Company to divest a significant portion of its assets under
any antitrust, restraint of trade, unfair competition, industry regulation or
similar Laws, or (b) any Tribunal condemns, seizes or otherwise appropriates, or
takes custody or control of all or any substantial portion of the assets of any
Company.
11.6 Misrepresentation. Any material representation or warranty made by
any Company contained in any Loan Document at any time proves to have been
materially incorrect when made.
11.7 Ownership of Other Companies. Borrower fails to own, beneficially
and of record, with power to vote, 100% of the issued and outstanding shares of
capital stock of any other Company that has executed a Loan Document (except as
a result of a transaction permitted by this Agreement), or NCI Operating Corp.
and NCI Holding Corp. fail to own the partnership interests described in
SCHEDULE 7.3.
11.8 Default Under Other Agreements. (a) Any Company fails to pay when
due (after lapse of any applicable grace period) any Debt in excess
(individually or collectively) of $1,000,000; (b) any default exists (and is not
waived or cured) under any agreement to which a Company is a party, the effect
of which is to cause, or to permit any Person (other than a Company) to cause,
an amount in excess (individually or collectively) of $1,000,000 to become due
and payable by any Company before its stated maturity; or (c) any Debt in excess
(individually or collectively) of $1,000,000 is declared to be due and payable
(unless such declaration is rescinded) or required to be prepaid by any Company
before its stated maturity.
11.9 LCs. Agent is served with, or becomes subject to, a court order,
injunction, or other process or decree restraining or seeking to restrain it
from paying any amount under any LC and either (a) a drawing has occurred under
the LC and Borrower has refused to reimburse Agent for payment or (b) the
expiration date of the LC has occurred but the right of any beneficiary
thereunder to draw under the LC has been extended past the expiration date in
connection with the pendency of the related court action or proceeding and
Borrower has failed to deposit with Agent cash collateral in an amount equal to
Agent's maximum exposure under the LC.
11.10 Validity and Enforceability of Loan Documents. Except in
accordance with its terms or as otherwise expressly permitted by this Agreement,
any Loan Document at any time after its execution and delivery ceases to be in
full force and effect in any material respect or is declared by a Tribunal to be
null and void or its validity or enforceability is contested by any Company
party thereto or any Company denies that it has any further liability or
obligations under any Loan Document to which it is a party.
11.11 Change of Control. The acquisition by any Person, or two or more
Persons acting in concert (other than any Person or Persons who own, prior to
that acquisition, 20% or more of the outstanding shares
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of Borrower's voting stock), of beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under the Securities Exchange
Act of 1934) of 20% or more of the outstanding shares of Borrower's voting
stock.
SECTION 12 RIGHTS AND REMEDIES.
12.1 Remedies Upon Default.
(a) If a Default (i) occurs under SECTION 11.3(c) or (ii)
occurs and is continuing under SECTION 11.3(a), (b) or (d), the
commitment to extend credit under this Agreement automatically
terminates, the entire unpaid balance of the Obligation automatically
becomes due and payable without any action of any kind whatsoever, and
Borrower must provide cash collateral in an amount equal to the
then-existing LC Exposure.
(b) If a Default occurs and is continuing, Agent may (with the
consent of, and must, upon the request of, Determining Lenders), do any
one or more of the following: (i) if the maturity of the Obligation has
not already been accelerated under SECTION 12.1(a), declare the entire
unpaid balance of all or any part of the Obligation immediately due and
payable, whereupon it is due and payable; (ii) terminate the
commitments of Lenders to extend credit under this Agreement; (iii)
reduce any claim to judgment; (iv) to the extent permitted by Law,
exercise (or request each Lender to, and each Lender is entitled to,
exercise) the Rights of offset or banker's Lien against the interest of
any Company in and to every account and other property of any Company
that are in the possession of Agent or any Lender to the extent of the
full amount of the Obligation (and to the extent permitted by Law, each
Company is deemed directly obligated to each Lender in the full amount
of the Obligation for this purpose); (v) demand Borrower to provide
cash collateral in an amount equal to the LC Exposure then existing;
and (vi) exercise any and all other legal or equitable Rights afforded
by the Loan Documents, the Laws of the State of Texas, or any other
applicable jurisdiction.
(c) If Agent refuses to take any action under SECTION 12.1(b)
at the request of Determining Lenders, then Determining Lenders may
take that action.
12.2 Company Waivers. To the extent permitted by Law, each Company
waives presentment and demand for payment, protest, notice of intention to
accelerate, notice of acceleration and notice of protest and nonpayment, and
agrees that its liability with respect to all or any part of the Obligation is
not affected by any renewal or extension in the time of payment of all or any
part of the Obligation, by any indulgence, or by any release or change in any
security for the payment of all or any part of the Obligation.
12.3 Performance by Agent. If any covenant, duty or agreement of any
Company is not performed in accordance with the terms of the Loan Documents,
Agent may, while a Default exists, at its option (but subject to the approval of
Determining Lenders), perform or attempt to perform that covenant, duty or
agreement on behalf of that Company (and any amount expended by Agent in its
performance or attempted performance is payable by the Companies, jointly and
severally, to Agent on demand, becomes part of the Obligation, and bears
interest at the Default Rate from the date of Agent's expenditure until paid).
However, neither Agent nor any Lender assumes or shall have, except by its
express written consent, any liability or responsibility for the performance of
any covenant, duty or agreement of any Company.
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12.4 Not in Control. None of the covenants or other provisions
contained in any Loan Document shall, or shall be deemed to, give Agent or
Lenders the Right to exercise control over the assets (including, without
limitation, real property), affairs, or management of any Company; the power of
Agent and Lenders is limited to the Right to exercise the remedies provided in
this SECTION 12.
12.5 Course of Dealing. The acceptance by Agent or Lenders of any
partial payment on the Obligation shall not be deemed to be a waiver of any
Default then existing. No waiver by Agent, Determining Lenders or Lenders of any
Default shall be deemed to be a waiver of any other then-existing or subsequent
Default. No delay or omission by Agent, Determining Lenders or Lenders in
exercising any Right under the Loan Documents will impair that Right or be
construed as a waiver thereof or any acquiescence therein, nor will any single
or partial exercise of any Right preclude other or further exercise thereof or
the exercise of any other Right under the Loan Documents or otherwise.
12.6 Cumulative Rights. All Rights available to Agent, Determining
Lenders, and Lenders under the Loan Documents are cumulative of and in addition
to all other Rights granted to Agent, Determining Lenders, and Lenders at law or
in equity, whether or not the Obligation is due and payable and whether or not
Agent, Determining Lenders, or Lenders have instituted any suit for collection,
foreclosure, or other action in connection with the Loan Documents.
12.7 Application of Proceeds. Any and all proceeds ever received by
Agent or Lenders from the exercise of any Rights pertaining to the Obligation
shall be applied to the Obligation according to SECTION 3.11.
12.8 Diminution in Value of Collateral. Neither Agent nor any Lender
has any liability or responsibility whatsoever for any diminution in or loss of
value of any collateral now or hereafter securing payment or performance of all
or any part of the Obligation (other than diminution in or loss of value caused
by its gross negligence or willful misconduct).
12.9 Certain Proceedings. Borrower will promptly execute and deliver,
or cause the execution and delivery of, all applications, certificates,
instruments, registration statements and all other documents and papers Agent or
Determining Lenders reasonably request in connection with the obtaining of any
consent, approval, registration, qualification, permit, license or authorization
of any Tribunal or other Person necessary or appropriate for the effective
exercise of any Rights under the Loan Documents. Because Borrower agrees that
Agent's and Determining Lenders' remedies at Law for failure of Borrower to
comply with the provisions of this paragraph would be inadequate and that
failure would not be adequately compensable in damages, Borrower agrees that the
covenants of this paragraph may be specifically enforced.
SECTION 13 AGREEMENT AMONG LENDERS.
13.1 Appointment, Powers, and Immunities of Agent. Each Lender hereby
irrevocably appoints and authorizes Agent to act as its agent under the Loan
Documents with such powers and discretion as are specifically delegated to Agent
by the terms of the Loan Documents, together with such other powers as are
reasonably incidental thereto. Agent (which term as used in this sentence and in
SECTION 13.5 and the first sentence of SECTION 13.6 shall include its Affiliates
and its own and its Affiliates' officers, directors, employees, and agents): (a)
shall not have any duties or responsibilities except those expressly set forth
in this Agreement and shall not be a trustee or fiduciary for any Lender; (b)
shall not be responsible to Lenders for any recital, statement, representation,
or warranty (whether written or oral) made in or in connection with any Loan
Document or any certificate or other document referred to or provided for in, or
received by any
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of them under, any Loan Document, or for the value, validity, effectiveness,
genuineness, enforceability, or sufficiency of any Loan Document, or any other
document referred to or provided for therein or for any failure by any Company
or any other Person to perform any of its obligations thereunder; (c) shall not
be responsible for or have any duty to ascertain, inquire into, or verify the
performance or observance of any covenants or agreements by any Company or the
satisfaction of any condition or to inspect the property (including the books
and records) of any Company; (d) shall not be required to initiate or conduct
any litigation or collection proceedings under any Loan Document; and (e) shall
not be responsible for any action taken or omitted to be taken by it under or in
connection with any Loan Document, except for its own gross negligence or
willful misconduct. Agent may employ agents and attorneys-in-fact and shall not
be responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care.
13.2 Reliance by Agent. Agent shall be entitled to rely upon any
certification, notice, instrument, writing, or other communication (including,
without limitation, any thereof by telephone or telecopy) believed by it to be
genuine and correct and to have been signed, sent or made by or on behalf of the
proper Person or Persons, and upon advice and statements of legal counsel
(including counsel for any Company), independent accountants, and other experts
selected by Agent. Agent may deem and treat the payee of any Note as the holder
thereof for all purposes hereof unless and until Agent receives and accepts an
Assignment and Acceptance executed in accordance with SECTION 14.12. As to any
matters not expressly provided for by this Agreement, Agent shall not be
required to exercise any discretion or take any action, but shall be required to
act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of Determining Lenders, and such
instructions shall be binding on all Lenders; provided, however, that Agent
shall not be required to take any action that exposes Agent to personal
liability or that is contrary to any Loan Document or applicable Law or unless
it shall first be indemnified to its satisfaction by Lenders against any and all
liability and expense which may be incurred by it by reason of taking any such
action.
13.3 Defaults. Agent shall not be deemed to have knowledge or notice of
the occurrence of a Default or Potential Default unless Agent has received
written notice from a Lender or Borrower specifying such Default or Potential
Default and stating that such notice is a "Notice of Default". In the event that
Agent receives such a notice of the occurrence of a Default or Potential
Default, Agent shall give prompt notice thereof to Lenders. Agent shall (subject
to SECTION 13.2) take such action with respect to such Default or Potential
Default as shall reasonably be directed by Determining Lenders, provided that,
unless and until Agent shall have received such directions, Agent may (but shall
not be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Potential Default as it shall deem advisable in the
best interest of Lenders.
13.4 Rights as Lender. With respect to its Commitments and the Loans
made by it, NationsBank (and any successor acting as Agent) in its capacity as a
Lender hereunder shall have the same rights and powers hereunder as any other
Lender and may exercise the same as though it were not acting as Agent, and the
term "Lender" or "Lenders" shall, unless the context otherwise indicates,
include Agent in its individual capacity. NationsBank (and any successor acting
as Agent) and its Affiliates may (without having to account therefor to any
Lender) accept deposits from, lend money to, make investments in, provide
services to, and generally engage in any kind of lending, trust, or other
business with any Company as if it were not acting as Agent, and NationsBank
(and any successor acting as Agent) and its Affiliates may accept fees and other
consideration from any Company for services in connection with this Agreement or
otherwise without having to account for the same to Lenders.
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13.5 Indemnification. LENDERS AGREE TO INDEMNIFY AGENT (TO THE EXTENT
NOT REIMBURSED UNDER SECTION 14.12, BUT WITHOUT LIMITING THE OBLIGATIONS OF
BORROWER UNDER SUCH SECTION) RATABLY IN ACCORDANCE WITH THEIR RESPECTIVE
COMMITMENTS, FOR ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES,
PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES (INCLUDING ATTORNEYS'
FEES), OR DISBURSEMENTS OF ANY KIND AND NATURE WHATSOEVER THAT MAY BE IMPOSED
ON, INCURRED BY OR ASSERTED AGAINST AGENT (INCLUDING BY ANY LENDER) IN ANY WAY
RELATING TO OR ARISING OUT OF ANY LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
THEREBY OR ANY ACTION TAKEN OR OMITTED BY AGENT UNDER ANY LOAN DOCUMENT
(INCLUDING ANY OF THE FOREGOING ARISING FROM THE NEGLIGENCE OF AGENT); PROVIDED
THAT NO LENDER SHALL BE LIABLE FOR ANY OF THE FOREGOING TO THE EXTENT THEY ARISE
FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE PERSON TO BE INDEMNIFIED.
WITHOUT LIMITATION OF THE FOREGOING, EACH LENDER AGREES TO REIMBURSE AGENT
PROMPTLY UPON DEMAND FOR ITS RATABLE SHARE OF ANY COSTS OR EXPENSES PAYABLE BY
BORROWER UNDER SECTION 8.7, TO THE EXTENT THAT AGENT IS NOT PROMPTLY REIMBURSED
FOR SUCH COSTS AND EXPENSES BY BORROWER. THE AGREEMENTS CONTAINED IN THIS
SECTION 13.5 SHALL SURVIVE PAYMENT IN FULL OF THE LOANS AND ALL OTHER AMOUNTS
PAYABLE UNDER THIS AGREEMENT.
13.6 Non-Reliance on Agent and Other Lenders. Each Lender agrees that
it has, independently and without reliance on Agent or any other Lender, and
based on such documents and information as it has deemed appropriate, made its
own credit analysis of the Companies and decision to enter into this Agreement
and that it will, independently and without reliance upon Agent or any other
Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own analysis and decisions in taking or not
taking action under the Loan Documents. Except for notices, reports, and other
documents and information expressly required to be furnished to Lenders by Agent
hereunder, Agent shall not have any duty or responsibility to provide any Lender
with any credit or other information concerning the affairs, financial
condition, or business of any Company that may come into the possession of Agent
or any of its Affiliates.
13.7 Resignation of Agent. Agent may resign at any time by giving
notice thereof to Lenders and Borrower. Upon any such resignation, Determining
Lenders shall have the right to appoint a successor Agent with the consent of
Borrower (which consent shall not unreasonably be withheld). If no successor
Agent shall have been so appointed by Determining Lenders and shall have
accepted such appointment within 30 days after the retiring Agent's giving of
notice of resignation, then the retiring Agent may, on behalf of Lenders,
appoint a successor Agent which shall be a commercial bank organized under the
laws of the U.S. having combined capital and surplus of at least $100,000,000.
Upon the acceptance of any appointment as Agent hereunder by a successor, such
successor shall thereupon succeed to and become vested with all the rights,
powers, discretion, privileges, and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations hereunder.
After any retiring Agent's resignation hereunder as Agent, the provisions of
this SECTION 13 shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as Agent.
13.8 Relationship of Lenders. The Loan Documents, and the documents
delivered in connection therewith, do not create a partnership or joint venture
among Agent and Lenders or among Lenders.
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13.9 Collateral Matters.
(a) Each Lender authorizes and directs Agent to enter into the
Security Documents for the ratable benefit of Lenders. Each Lender
agrees that any action taken by Agent concerning any Collateral with
the consent of, or at the request of, Determining Lenders in accordance
with the provisions of this Agreement, the Security Documents or the
other Loan Documents, and the exercise by Agent (with the consent of,
or at the request of, Determining Lenders) of powers concerning the
Collateral set forth in any Loan Document, together with other
reasonably incidental powers, shall be authorized and binding upon all
Lenders.
(b) Agent is authorized on behalf of all Lenders, without the
necessity of any notice to or further consent from any Lender, from
time to time before a Default or Potential Default, to take any action
with respect to any Collateral or Security Documents that may be
necessary to perfect and maintain perfected the Lender Liens upon the
Collateral granted by the Security Documents.
(c) Agent has no obligation whatsoever to any Lender or to any
other Person to assure that the Collateral exists or is owned by any
Company or is cared for, protected or insured or has been encumbered or
that the Liens granted to Agent for the benefit of Lenders under the
Security Documents have been properly or sufficiently or lawfully
created, perfected, protected or enforced, or are entitled to any
particular priority.
(d) Agent shall exercise the same care and prudent judgment with
respect to the Collateral and the Security Documents as it normally and
customarily exercises in respect of similar collateral and security
documents.
(e) Lenders irrevocably authorize Agent, at its option and in its
discretion, to release any Lender Lien upon any Collateral (i) upon
full payment of the Obligation; (ii) constituting property being sold
or disposed of as permitted under SECTION 9.10, if Agent determines
that the property being sold or disposed is being sold or disposed in
accordance with the requirements and limitations of SECTION 9.10 and
Agent concurrently receives all mandatory prepayments with respect
thereto, if any, in accordance with SECTION 9.10; or (iii) if approved,
authorized or ratified in writing by Determining Lenders, subject to
SECTION 14.10(a)(v). Upon request by Agent at any time, Lenders will
confirm in writing Agent's authority to release particular types or
items of Collateral under this SECTION 13.9(e).
13.10 Benefits of Agreement. None of the provisions of this SECTION 13
inure to the benefit of any Company or any other Person other than Agent and
Lenders; consequently, no Company or any other Person is entitled to rely upon,
or to raise as a defense, in any manner whatsoever, the failure of Agent or any
Lender to comply with these provisions.
SECTION 14 MISCELLANEOUS.
14.1 Headings. The headings, captions and arrangements used in any of
the Loan Documents are, unless specified otherwise, for convenience only and
shall not be deemed to limit, amplify or modify the terms of the Loan Documents,
nor affect the meaning thereof.
14.2 Nonbusiness Days; Time. Any payment or action that is due under
any Loan Document on a non-Business Day may be delayed until the next-succeeding
Business Day (but interest shall continue to
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accrue on any applicable payment until payment is in fact made) unless the
payment concerns a Eurodollar Loan, in which case if the next-succeeding
Business Day is in the next calendar month, then such payment shall be made on
the next-preceding Business Day. Unless otherwise indicated, all time references
(e.g., 10:00 a.m.) are to Dallas, Texas time.
14.3 Communications. Unless otherwise specifically provided, whenever
any Loan Document requires or permits any consent, approval, notice, request,
demand or other communication from one party to another, communication must be
in writing (which may be by telex or telecopy) to be effective and shall be
deemed to have been given (a) if by telex, when transmitted to the appropriate
telex number and the appropriate answerback is received, (b) if by telecopy,
when transmitted to the appropriate telecopy number (and all communications sent
by telecopy must be confirmed promptly thereafter by telephone; but any
requirement in this parenthetical shall not affect the date when the telecopy
shall be deemed to have been delivered), (c) if by mail, on the third Business
Day after it is enclosed in an envelope and properly addressed, stamped, sealed,
certified mail, return receipt requested, and deposited in the appropriate
official postal service, or (d) if by any other means, when actually delivered.
Until changed by notice pursuant to this Agreement, the address (and telecopy
number) for Agent, Borrower and each Guarantor is set forth on SCHEDULE 1.
14.4 Form and Number of Documents. The form, substance, and number of
counterparts of each writing to be furnished under this Agreement must be
satisfactory to Agent and its counsel.
14.5 Exceptions to Covenants. Borrower may not and may not permit any
Company to take or fail to take any action that is permitted as an exception to
any of the covenants contained in this Agreement if that action or omission
would result in the breach of any other covenant contained in this Agreement.
14.6 Survival. All covenants, agreements, undertakings, representations
and warranties made in any of the Loan Documents survive all closings under the
Loan Documents and, except as otherwise indicated, are not affected by any
investigation made by any party.
14.7 Governing Law. Except as expressly provided in a Loan Document,
the Laws (other than conflict-of-laws provisions) of the State of Texas and of
the U.S. govern the Rights and duties of the parties to the Loan Documents and
the validity, construction, enforcement and interpretation of the Loan
Documents.
14.8 Invalid Provisions. Any provision in any Loan Document held to be
illegal, invalid or unenforceable is fully severable; the appropriate Loan
Document shall be construed and enforced as if that provision had never been
included; and the remaining provisions shall remain in full force and effect and
shall not be affected by the severed provision. Agent, Lenders, and each Company
party to the affected Loan Document agree to negotiate, in good faith, the terms
of a replacement provision as similar to the severed provision as may be
possible and be legal, valid and enforceable. However, if the provision held to
be illegal, invalid or unenforceable is a material part of this Agreement, such
invalid, illegal or unenforceable provision shall be, to the extent permitted by
Law, replaced by a clause or provision judicially construed and interpreted to
be as similar in substance and content to the original terms of such illegal,
invalid or unenforceable clause or provision as the context thereof would
reasonably allow, so that such clause or provision would thereafter be legal,
valid and enforceable.
14.9 Venue; Service of Process; Jury Trial. EACH PARTY TO ANY LOAN
DOCUMENT, IN EACH CASE FOR ITSELF, ITS SUCCESSORS AND ASSIGNS (AND IN THE CASE
OF BORROWER,
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FOR EACH OTHER COMPANY), (a) IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE
JURISDICTION OF THE STATE AND FEDERAL COURTS OF THE STATE OF TEXAS, (b)
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION THAT
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY LITIGATION ARISING
OUT OF OR IN CONNECTION WITH THE LOAN DOCUMENTS AND THE OBLIGATION BROUGHT IN
DISTRICT COURTS OF DALLAS OR HARRIS COUNTY, TEXAS, OR IN THE U.S. DISTRICT COURT
FOR THE NORTHERN OR SOUTHERN DISTRICT OF TEXAS, DALLAS OR HOUSTON DIVISION, (c)
IRREVOCABLY WAIVES ANY CLAIMS THAT ANY LITIGATION BROUGHT IN ANY OF THE
AFOREMENTIONED COURTS HAS BEEN BROUGHT IN AN INCONVENIENT FORUM, (d) IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THOSE COURTS IN ANY LITIGATION
BY THE MAILING OF COPIES THEREOF BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED,
POSTAGE PREPAID, BY HAND-DELIVERY, OR BY DELIVERY BY A NATIONALLY RECOGNIZED
COURIER SERVICE, AND SERVICE SHALL BE DEEMED COMPLETE UPON DELIVERY OF THE LEGAL
PROCESS AT ITS ADDRESS SET FORTH IN THIS AGREEMENT, (e) IRREVOCABLY AGREES THAT
ANY LEGAL PROCEEDING AGAINST ANY PARTY TO ANY LOAN DOCUMENT ARISING OUT OF OR IN
CONNECTION WITH THE LOAN DOCUMENTS OR THE OBLIGATION MAY BE BROUGHT IN ONE OF
THE AFOREMENTIONED COURTS, AND (f) IRREVOCABLY WAIVES TO THE FULLEST EXTENT
PERMITTED BY LAW, ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF ANY LOAN DOCUMENT. The scope of each of the
foregoing waivers is intended to be all-encompassing of any and all disputes
that may be filed in any court and that relate to the subject matter of this
transaction, including, without limitation, contract claims, tort claims, breach
of duty claims, and all other common law and statutory claims. Borrower (for
itself and on behalf of each other Company) acknowledges that these waivers are
a material inducement to Agent's and each Lender's agreement to enter into a
business relationship, that Agent and each Lender has already relied on these
waivers in entering into this Agreement, and that Agent and each Lender will
continue to rely on each of these waivers in related future dealings. Borrower
(for itself and on behalf of each other Company) further warrants and represents
that it has reviewed these waivers with its legal counsel, and that it knowingly
and voluntarily agrees to each waiver following consultation with legal counsel.
THE WAIVERS IN THIS SECTION 14.9 ARE IRREVOCABLE, MEANING THAT THEY MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING, AND THESE WAIVERS SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, SUPPLEMENTS, OR REPLACEMENTS TO OR OF THIS OR ANY OTHER
LOAN DOCUMENT. In the event of Litigation, this Agreement may be filed as a
written consent to a trial by the court.
14.10 Amendments, Consents, Conflicts and Waivers.
(a) Any provision of any Loan Document may be amended or
waived if, but only if, such amendment or waiver is in writing and is
signed by Borrower and Determining Lenders (and, if SECTION 13 or the
rights or duties of Agent are affected thereby, by Agent); provided
that no such amendment or waiver shall, unless signed by all Lenders,
(i) increase the Commitments, (ii) reduce the principal of or rate of
interest on any Loan or any fees or other amounts payable hereunder,
(iii) postpone any date fixed for the payment of any scheduled
installment of principal of or interest on any Loan or any fees or
other amounts payable hereunder or for termination of any Commitment,
(iv) change the percentage of the Commitments or of the unpaid
principal amount of the Notes, or the number of Lenders, which shall be
required for Lenders or any of them to take any action under this
SECTION 14.10 or any other provision of this Agreement or (v) release
any Guarantor or all or substantially all of the Collateral.
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(b) Any conflict or ambiguity between the terms and provisions
of this Agreement and terms and provisions in any other Loan Document
is controlled by the terms and provisions of this Agreement.
(c) No course of dealing or any failure or delay by Agent, any
Lender, or any of their respective Representatives with respect to
exercising any Right of Agent or any Lender under this Agreement
operates as a waiver thereof. A waiver must be in writing and signed by
Agent and Lenders (or Determining Lenders, if permitted under this
Agreement) to be effective, and a waiver will be effective only in the
specific instance and for the specific purpose for which it is given.
14.11 Multiple Counterparts. Any Loan Document may be executed in a
number of identical counterparts, each of which shall be deemed an original for
all purposes and all of which constitute, collectively, one agreement; but, in
making proof of thereof, it shall not be necessary to produce or account for
more than one counterpart. Each Lender need not execute the same counterpart of
this Agreement so long as identical counterparts are executed by Borrower, each
Lender, and Agent. This Agreement shall become effective when counterparts of
this Agreement have been executed and delivered to Agent by each Lender, Agent
and Borrower, or, in the case only of Lenders, when Agent has received
telecopied, telexed or other evidence satisfactory to it that each Lender has
executed and is delivering to Agent a counterpart of this Agreement.
14.12 Successors and Assigns; Assignments and Participations.
(a) Each Loan Document binds and inures to the benefit of the
parties thereto, any intended beneficiary thereof, and each of their
respective successors and permitted assigns. No Lender may transfer,
pledge, assign, sell any participation in, or otherwise encumber its
portion of the Obligation except as permitted by this SECTION 14.12.
(b) Each Lender may assign to one or more financial institutions
approved by Borrower and Agent (which approval shall not be
unreasonably withheld) (each a "PURCHASER") all or a portion of its
rights and obligations under this Agreement (including, without
limitation, all or a portion of its Loans, its Notes, and its
Commitments); provided, however, that
(i) except in the case of an assignment to another Lender
or an assignment of all of a Lender's rights and obligations
under this Agreement, any such partial assignment shall be in an
amount at least equal to $10,000,000 or an integral multiple of
$1,000,000 in excess thereof;
(ii) each such assignment by a Lender shall be of a
constant, and not varying, percentage of all of its rights and
obligations under this Agreement and the Notes; and
(iii) the parties to such assignment shall execute and
deliver to Agent for its acceptance an Assignment and Acceptance
in the form of EXHIBIT I, together with any Note subject to such
assignment and a processing fee of $3,500.
Upon execution, delivery, and acceptance of such Assignment and
Acceptance, the assignee thereunder shall be a party hereto and, to the
extent of such assignment, have the obligations, rights, and benefits
of a Lender hereunder and the assigning Lender shall, to the extent of
such assignment, relinquish its rights and be released from its
obligations under this Agreement. Upon the
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consummation of any assignment pursuant to this SECTION 14.12(b), the
assignor, Agent and Borrower shall make appropriate arrangements so
that, if required, new Notes are issued to the assignor and the
assignee. If the assignee is not incorporated under the laws of the
U.S. or a state thereof, it shall deliver to Borrower and Agent
certification as to exemption from deduction or withholding of Taxes in
accordance with SECTION 3.20.
(c) Agent shall maintain at its address referred to in SECTION
14.3 a copy of each Assignment and Acceptance delivered to and accepted
by it and a register for the recordation of the names and addresses of
Lenders and the Commitments of, and principal amount of the Loans owing
to, each Lender from time to time (the "REGISTER"). The entries in the
Register shall be conclusive and binding for all purposes, absent
manifest error, and Borrower, Agent and Lenders may treat each Person
whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for
inspection by Borrower or any Lender at any reasonable time and from
time to time upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed by
the parties thereto, together with any Note subject to such assignment
and payment of the processing fee, Agent shall, if such Assignment and
Acceptance has been completed and is in substantially the form of
EXHIBIT I, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt
notice thereof to the parties thereto.
(e) Each Lender may sell participations to one or more Persons in
all or a portion of its rights, obligations or rights and obligations
under this Agreement (including all or a portion of its Commitments or
its Loans); provided, however, that (i) such Lender's obligations under
this Agreement shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of
such obligations, (iii) the Participant shall be entitled to the
benefit of the yield protection provisions contained in SECTIONS 3.15
through 3.20 (however, no Participant is entitled to receive any
greater payment than the transferor Lender would have been entitled to
receive) and the right of set-off contained in SECTION 3.12, and (iv)
Borrower shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this
Agreement, and such Lender shall retain the sole right to enforce the
obligations of Borrower relating to its Loans and its Notes and to
approve any amendment, modification, or waiver of any provision of this
Agreement (other than amendments, modifications, or waivers decreasing
the amount of principal of or the rate at which interest is payable on
such Loans or Notes, extending any scheduled principal payment date or
date fixed for the payment of interest on such Loans or Notes, or
extending its Commitments).
(f) Notwithstanding any other provision set forth in this
Agreement, any Lender may at any time assign and pledge all or any
portion of its Loans and its Notes to any Federal Reserve Bank as
collateral security pursuant to Regulation A and any Operating Circular
issued by such Federal Reserve Bank. No such assignment shall release
the assigning Lender from its obligations hereunder.
(g) Any Lender may furnish any information concerning Borrower
or any of its Subsidiaries in the possession of such Lender from time
to time to Purchasers and Participants (including prospective
Purchasers and Participants).
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14.13 Discharge Only Upon Payment in Full; Reinstatement in Certain
Circumstances. Each Company's obligations under the Loan Documents remain in
full force and effect until the Total Commitment is terminated and the
Obligation is paid in full (except for provisions under the Loan Documents which
by their terms expressly survive payment of the Obligation and termination of
the Loan Documents). If at any time any payment of the principal of or interest
on any Note or any other amount payable by Borrower or any other obligor on the
Obligation under any Loan Document is rescinded or must be restored or returned
upon the insolvency, bankruptcy or reorganization of Borrower or otherwise, the
obligations of each Company under the Loan Documents with respect to that
payment shall be reinstated as though the payment had been due but not made at
that time.
14.14 ENTIRETY. THIS AGREEMENT AND THE OTHER WRITTEN LOAN DOCUMENTS
(EACH AS AMENDED IN WRITING FROM TIME TO TIME) EXECUTED BY ANY COMPANY, ANY
LENDER OR AGENT REPRESENT THE FINAL AGREEMENT AMONG THE COMPANIES, LENDERS AND
AGENT AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS AMONG THE PARTIES.
EXECUTED as of the day and year first mentioned.
NCI BUILDING SYSTEMS, INC.
as Borrower
By: /s/ Robert J. Medlock
--------------------------------------
Robert J. Medlock
Vice President and Chief Financial Officer
51
<PAGE> 58
NATIONSBANK OF TEXAS, N.A.,
as Administrative Agent and a Lender
By: /s/ Richard L. Nichols, Jr.
----------------------------------------
Richard L. Nichols, Jr.
Vice President
52
<PAGE> 59
NATIONSBANC MONTGOMERY SECURITIES
LLC, as Arranger and Syndication Agent
By: /s/ Gary L. Kahn
-----------------------------------------
Gary L. Kahn
Managing Director
53
<PAGE> 60
SWISS BANK CORPORATION,
STAMFORD BRANCH
as Documentation Agent and a Lender
By: /s/ Dorothy McKinley
-----------------------------------------
Name: Dorothy McKinley
Title: Associate Director Loan Portfolio Support, US
By: /s/ Rett Jenal
-----------------------------------------
Name: Rett Jenal
Title: Director, Banking Finance
54
<PAGE> 1
EXHIBIT 4.4
As of May 1, 1998
NCI Building Systems, Inc.
7301 Fairview
Houston, Texas 77041
Attn: Robert J. Medlock
Chief Financial Officer
Re: First Amendment to Credit Agreement
Ladies and Gentlemen:
Reference is made to the Credit Agreement dated as of March 25, 1998
(the "CREDIT AGREEMENT"), among NCI Building Systems ("BORROWER"), NationsBank
of Texas, N.A., as Administrative Agent ("AGENT"), NationsBanc Montgomery
Securities LLC, as Syndication Agent, Swiss Bank Corporation, as Documentation
Agent, and the financial institutions named therein (collectively, "LENDERS").
Unless otherwise indicated, all capitalized terms herein are used as defined in
the Credit Agreement.
For good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, Borrower, Guarantors, Agent and Lenders agree as
follows:
1. Certain Definitions.
(a) The definition of "APPLICABLE MARGIN" in SECTION 1.1 of
the Credit Agreement is hereby amended by replacing the table therein
with the following table:
<TABLE>
<CAPTION>
=============================================================================================================
RATIO OF FUNDED DEBT APPLICABLE MARGIN FOR APPLICABLE MARGIN FOR
TO EBITDA BASE RATE LOANS EURODOLLAR LOANS
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Equal to or greater than 4.0 to 1.0 0.500% 2.000%
- -------------------------------------------------------------------------------------------------------------
Less than 4.0 to 1.0, but greater than 3.75 0.500% 2.000%
to 1.0 (0.250% if Subordinated Debt (1.750% if Subordinated
equals or exceeds Debt equals or exceeds
$200,000,000) $200,000,000)
=============================================================================================================
</TABLE>
<PAGE> 2
<TABLE>
<CAPTION>
=============================================================================================================
RATIO OF FUNDED DEBT APPLICABLE MARGIN FOR APPLICABLE MARGIN FOR
TO EBITDA BASE RATE LOANS EURODOLLAR LOANS
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Less than or equal to 3.75 to 1.0, but 0.250% 1.750%
greater than 3.25 to 1.0 (0% if Subordinated Debt (1.500% if Subordinated
equals or exceeds Debt equals or exceeds
$200,000,000) $200,000,000)
- -------------------------------------------------------------------------------------------------------------
Less than or equal to 3.25 to 1.0, but 0% 1.375%
greater than 2.5 to 1.0
- -------------------------------------------------------------------------------------------------------------
Less than or equal to 2.5 to 1.0, but 0% 1.000%
greater than 2.0 to 1.0
- -------------------------------------------------------------------------------------------------------------
Less than or equal to 2.0 to 1.0 0% 0.750%
=============================================================================================================
</TABLE>
(b) The definition of "EBITDA" in SECTION 1.1 of the Credit
Agreement is hereby amended to read in its entirety as follows:
EBITDA means, in respect of any period, the
following (calculated on a consolidated basis for the
Companies in accordance with GAAP, and using pro forma
combined information for the Companies and Amatek and its
Subsidiaries for any fiscal period (or portion thereof) of
Borrower prior to the Acquisition, including amounts
expended by Amatek and its Subsidiaries for corporate
overhead and executive employee compensation): the sum of
(a) net income before interest expenses, Taxes, non-cash
operating charges (such as depreciation and amortization
expense), non-cash charges in respect of pension and
retiree benefits, and extraordinary gains and losses; plus
(b) expenses incurred by Borrower in connection with the
Acquisition during the fiscal quarters of Borrower ending
on April 30, 1998, and July 31, 1998, up to an aggregate
maximum amount for both quarters of $5,000,000; plus (c)
for each of the following fiscal periods, the following
amounts (without duplication): $10,000,000 for the four
fiscal quarters of Borrower ending on July 31, 1998;
$7,500,000 for the four fiscal quarters of Borrower ending
on October 31, 1998, $5,000,000 for the four fiscal
quarters of Borrower ending on January 31, 1999; and
$2,500,000 for the four fiscal quarters of Borrower ending
on April 30, 1999.
(c) The definition of "GUARANTORS" in SECTION 1.1 of the
Credit Agreement is hereby amended by changing the name "A&S Building Interests,
Inc." to "A&S Business Interests, Inc."
(d) Section 1.1 of the Credit Agreement is hereby further
amended by adding the following new definition (in proper alphabetical order):
2
<PAGE> 3
SUBORDINATED DEBT means Funded Debt which is
contractually subordinated or junior in right of
payment to the Obligation on terms satisfactory to
Determining Lenders.
2. Security. SECTION 5.2 of the Credit Agreement is hereby amended by
adding the underlined language shown below, so that the entire section shall
read as follows:
5.2 Collateral. Full and complete payment of the
Obligation shall be secured through the execution and delivery of
Pledge Agreements and Assignments of Partnership Interests with
respect to (a) all capital stock, partnership interests or other
equity interests of any Company in any domestic direct or indirect
Subsidiaries, and (b) the capital stock, partnership interests or
other equity interests of any Company in any foreign direct or
indirect Subsidiaries (other than Building Systems de Mexico, S.A.
de C.V.), up to a maximum of 65% of total combined voting power of
all classes of equity interests in such subsidiary which are
entitled to vote (together with proceeds thereof and any additional
collateral ever furnished under SECTIONS 2.3(H), 3.11(B) OR 5.3, the
"COLLATERAL").
3. Debt. SECTION 9.4 of the Credit Agreement is hereby amended by
changing the words "Funded Debt" to "Debt," so that such section shall read as
follows:
9.4 Debt. No Company may create, incur or suffer to
exist any Debt, other than Permitted Debt.
4. Dividends and Distributions. The first sentence of SECTION 9.9 of
the Credit Agreement is hereby amended, so that the entire section shall read as
follows:
9.9 Dividends and Distributions. Borrower may not
declare, make or pay any Distribution, other than Distributions
declared, made or paid by Borrower wholly in the form of its capital
stock. No Company shall enter into any arrangement or agreement
(other than this Agreement) that prohibits it from paying dividends
or other distributions to its shareholders (other than prohibitions
with respect to Borrower contained in the Indenture governing
Borrower's proposed issuance of up to $200,000,000 of Subordinated
Debt).
5. Minimum Net Worth. SECTION 10.1 of the Credit Agreement is hereby
amended by changing the date "October 31, 1998" to "July 31, 1998."
6. Maximum Leverage Ratio. SECTION 10.2 of the Credit Agreement is
hereby amended by inserting the following line at the beginning of the table set
forth therein:
July 31, 1998 4.50 to 1.00
7. Maximum Debt Ratio. SECTION 10.3 of the Credit Agreement is hereby
amended by inserting the following line at the beginning of the table set forth
therein:
July 31, 1998 4.50 to 1.00
3
<PAGE> 4
8. Minimum Fixed Charge Coverage Ratio. SECTION 10.4 of the Credit
Agreement is hereby amended by inserting the following line at the beginning of
the table set forth therein:
July 31, 1998 1.25 to 1.00
9. Conditions Precedent to Future Advances. Lenders will not be
obligated to make any further Advances, and this instrument shall not become
effective, unless and until Agent receives (a) counterparts of this instrument
executed by Borrower, each Guarantor and each Lender, and (b) such other items
related to the transactions contemplated by this instrument as Agent may
reasonably request.
10. Representations and Warranties. Borrower represents and warrants
that it possesses all requisite power and authority to execute, deliver and
comply with the terms of this instrument, which has been duly authorized and
approved by all necessary corporate action and for which no consent of any
person is required, and agrees to furnish Agent with evidence of such
authorization and approval upon request.
11. Fees and Expenses. Borrower agrees to pay the reasonable fees and
expenses of counsel to Agent for services rendered in connection with the
preparation, negotiation and execution of this instrument.
12. Loan Document; Effect. This instrument is a Loan Document and,
therefor, is subject to the applicable provisions of SECTION 14 of the Credit
Agreement, all of which are incorporated herein by reference the same as if set
forth herein verbatim. Except as amended in this instrument, the Loan Documents
are and shall be unchanged and shall remain in full force and effect. In the
event of any inconsistency between the terms of the Credit Agreement as hereby
modified (the "AMENDED AGREEMENT") and any other Loan Documents, the terms of
the Amended Agreement shall control and such other document shall be deemed to
be amended hereby to conform to the terms of the Amended Agreement. Borrower
hereby releases Agent and Lenders from any liability for actions or failures to
act in connection with the Loan Documents prior to the date hereof.
13. No Waiver of Defaults. This instrument does not constitute a waiver
of, or a consent to any present or future violation of or default under, any
provision of the Loan Documents, or a waiver of Lenders' right to insist upon
future compliance with each term, covenant, condition and provision of the Loan
Documents, and the Loan Documents shall continue to be binding upon, and inure
to the benefit of, Borrower, Guarantors, Agent and Lenders and their respective
successors and assigns.
14. Form. Each agreement, document, instrument or other writing to be
furnished Agent or Lenders under any provision of this instrument must be in
form and substance satisfactory to Agent and its counsel.
15. Multiple Counterparts. This instrument may be executed in more than
one counterpart, each of which shall be deemed an original, and all of which
constitute, collectively, one instrument; but, in making proof of this
instrument, it shall not be necessary to produce or account for more than one
such counterpart. It shall not be necessary for Borrower, Guarantors, Agent and
all Lenders to execute the same counterpart hereof so long as Borrower, each
Guarantor, Agent and each Lender execute a counterpart hereof.
16. Final Agreement. THE LOAN DOCUMENTS, AS AMENDED HEREBY,
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
4
<PAGE> 5
AGREEMENTS OF THE PARTIES. THERE ARE NO ORAL AGREEMENTS BETWEEN THE
PARTIES.
If the foregoing terms and conditions are acceptable to Borrower and
Guarantors, Borrower and Guarantors should indicate its acceptance by signing in
the space provided below, whereupon this letter shall become an agreement
binding upon and inuring to the benefit of Agent, Lenders, Borrower and
Guarantors and their respective successors and assigns.
Very truly yours,
NATIONSBANK OF TEXAS, N.A.
as Administrative Agent and a Lender
By: /s/ Richard L. Nichols, Jr.
-------------------------------------------------
Name: Richard L. Nichols, Jr.
------------------------------------------------
Title: Vice President
----------------------------------------------
SWISS BANK CORPORATION,
STAMFORD BRANCH,
as Documentation Agent and a Lender
By: /s/ Gary Riddell
-------------------------------------------------
Name: Gary Riddell
-----------------------------------------------
Title: Executive Director, Credit Risk Management
---------------------------------------------
By: /s/ Dorothy McKinley
------------------------------------------------
Name: Dorothy McKinley
----------------------------------------------
Title: Associate Director Loan Portfolio Support, US
---------------------------------------------
5
<PAGE> 6
Accepted and agreed to as of the day and year first set forth in the
foregoing letter.
NCI BUILDING SYSTEMS, INC.
By: /s/ Robert J. Medlock
---------------------------------------------------
Name: Robert J. Medlock
-------------------------------------------------
Title: Vice President and Chief Financial Officer
------------------------------------------------
GUARANTORS' CONSENT AND AGREEMENT
As an inducement to Agent and Lenders to execute, and in consideration
of Agent's and Lenders' execution of the foregoing, the undersigned hereby
consent thereto and agree that the same shall in no way release, diminish,
impair, reduce or otherwise adversely affect the respective obligations and
liabilities of each of the undersigned under the Guaranty dated as of May 1,
1998, executed by the undersigned, or any agreements, documents or instruments
executed by any of the undersigned to create liens, security interests or
charges to secure the Obligation. This consent and agreement shall be binding
upon the undersigned, and the respective successors and assigns of each, and
shall inure to the benefit of Agent and Lenders, and respective successors and
assigns of each.
A & S BUSINESS INTERESTS, INC.
By: /s/ Robert J. Medlock
-------------------------------------------------
Name: Robert J. Medlock
----------------------------------------------
Title: Vice President and Chief Financial Officer
---------------------------------------------
A & S BUILDING SYSTEMS, L.P.
By: NCI OPERATING CORP.,
as General Partner
By: /s/ Robert J. Medlock
------------------------------------------------
Name: Robert J. Medlock
----------------------------------------------
Title: Vice President and Chief Financial Officer
---------------------------------------------
6
<PAGE> 7
NCI BUILDING SYSTEMS, L.P.
By: NCI OPERATING CORP.,
as General Partner
By: /s/ Robert J. Medlock
-----------------------------------------------
Name: Robert J. Medlock
---------------------------------------------
Title: Vice President and Chief Financial Officer
--------------------------------------------
NCI HOLDING CORP.
By: /s/ Robert J. Medlock
------------------------------------------------
Name: Robert J. Medlock
---------------------------------------------
Title: Vice President and Treasurer
--------------------------------------------
NCI OPERATING CORP.
By: /s/ Robert J. Medlock
------------------------------------------------
Name: Robert J. Medlock
---------------------------------------------
Title: Vice President and Chief Financial Officer
--------------------------------------------
METAL BUILDING COMPONENTS HOLDING,
INC.
By: /s/ Robert J. Medlock
-----------------------------------------------
Name: Robert J. Medlock
---------------------------------------------
Title: Vice President and Treasurer
--------------------------------------------
7
<PAGE> 8
METAL COATERS HOLDING, INC.
By: /s/ Robert J. Medlock
-----------------------------------------------
Name: Robert J. Medlock
---------------------------------------------
Title: Vice President and Treasurer
--------------------------------------------
MBCI OPERATING, L.P.
By: NCI Operating Corp., as General Partner
By: /s/ Robert J. Medlock
------------------------------------------------
Name: Robert J. Medlock
---------------------------------------------
Title: Vice President
--------------------------------------------
METAL COATERS OPERATING, L.P.
By: NCI Operating Corp., as General Partner
By: /s/ Robert J. Medlock
-----------------------------------------------
Name: Robert J. Medlock
---------------------------------------------
Title: Vice President
--------------------------------------------
8
<PAGE> 1
EXHIBIT 4.5
As of May 5, 1998
NCI Building Systems, Inc.
7301 Fairview
Houston, Texas 77041
Attn: Robert J. Medlock
Chief Financial Officer
Re: Second Amendment to Credit Agreement
Ladies and Gentlemen:
Reference is made to the Credit Agreement dated as of March 25, 1998
(as amended by the First Amendment dated as of May 1, 1998, the "CREDIT
AGREEMENT"), among NCI Building Systems ("BORROWER"), NationsBank of Texas,
N.A., as Administrative Agent ("AGENT"), NationsBanc Montgomery Securities LLC,
as Syndication Agent, Swiss Bank Corporation, as Documentation Agent, and the
financial institutions named therein (collectively, "LENDERS"). Unless otherwise
indicated, all capitalized terms herein are used as defined in the Credit
Agreement.
For good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, Borrower, Guarantors, Agent and Lenders agree as
follows:
1. Base Rate. A typographical error in the definition of "BASE RATE" in
SECTION 1.1 of the Credit Agreement is hereby corrected by deleting the words
"the sum of (a)."
2. Pro Rata Part. The definitions of "PRO RATA" and "PRO RATA PART" in
SECTION 1.1 of the Credit Agreement are hereby amended to read in their entirety
as follows:
PRO RATA and PRO RATA PART mean, when determined for any Lender:
(a) with respect to Facility A, (i) if there is no Facility A
Principal Debt or LC Exposure, the proportion (stated as a percentage)
that such Lender's portion of the Facility A Commitment bears to the
total Facility A Commitment, or (ii) if any Facility A Principal Debt
or LC Exposure is outstanding, the proportion (stated as a percentage)
that the Facility A Principal Debt owed to such Lender and (without
duplication) the LC Exposure of such Lender bears to the Facility A
Commitment Usage;
(b) with respect to Facility B, the proportion (stated as a
percentage) that the Facility B Principal Debt owed to such Lender
bears to the total Facility B Principal Debt;
(c) with respect to Facility C, (i) if there is no Facility C
Principal Debt, the proportion (stated as a percentage) that such
Lender's portion of the Facility C Commitment bears to the total
<PAGE> 2
Facility C Commitment, or (ii) if any Facility C Principal Debt is
outstanding, the proportion (stated as a percentage) that the Facility
C Principal Debt owed to such Lender bears to the total Facility C
Principal Debt; and
(d) with respect to the Facility as a whole, (i) if there is
no Principal Debt or LC Exposure, the proportion (stated as a
percentage) that such Lender's Commitment bears to the Total
Commitment, or (ii) if there is any Principal Debt or LC Exposure, the
proportion (stated as a percentage) that the Principal Debt owed to
such Lender and (without duplication) the LC Exposure of such Lender
bears to the aggregate Principal Debt and (without duplication) LC
Exposure.
3. Purchase Agreement. A typographical error in the definition of
"PURCHASE AGREEMENT" in SECTION 1.1 of the Credit Agreement is hereby corrected
by replacing the word "Australian" with the word "Australia."
4. Interest Options. A typographical error in the first sentence of
SECTION 3.3 of the Credit Agreement is hereby corrected by adding the word
"Adjusted" before the words "Eurodollar Rate."
5. LC Fees. A typographical error in the third sentence of SECTION 4.3
of the Credit Agreement is hereby corrected by adding the phrase "for the
ratable account of Lenders" after the word "Agent."
6. Commitment Fees. SECTION 4.4 of the Credit Agreement is hereby
amended to read in its entirety as follows:
4.4 Commitment Fees. Borrower shall pay to Agent for the
ratable account of all Lenders with Commitments for Facility A a
commitment fee, payable as it accrues on the last day of each fiscal
quarter of Borrower (commencing July 31, 1998) and on the Facility A
Termination Date, equal to the Applicable Percentage per annum on the
amount by which the Facility A Commitment exceeds the average daily
Facility A Commitment Usage, in each case during the fiscal quarter
ending on such date (or, in the case of the first such payment, during
the period from the date of the Acquisition through July 31, 1998).
Borrower shall also pay to Agent for the ratable account of all Lenders
with Commitments for Facility C a commitment fee, payable as it accrues
on the last day of each fiscal quarter of Borrower (commencing July 31,
1998) and on the Facility C Termination Date for each such Lender,
equal to the Applicable Percentage per annum on the amount by which
Facility C exceeds the average daily Facility C Principal Debt, in each
case during the fiscal quarter ending on such date (or, in the case of
the first such payment, during the period from the date of the
Acquisition through July 31, 1998).
7. Items to be Furnished. A typographical error in SECTION 8.1(e) of
the Credit Agreement is hereby corrected by replacing the reference to "Form
S-8" with a reference to "Form 8-K."
8. Debtor Relief. SECTION 11.3 of the Credit Agreement is hereby
amended by deleting the phrase ", that could suspend or otherwise adversely
affect the Rights of Agent or any Lender granted in the Loan Documents."
9. Remedies Upon Default. SECTION 12.1(a) of the Credit Agreement is
hereby amended by replacing the phrase "If a Default (i) occurs under SECTION
11.3(c) or (ii) occurs and is continuing under SECTION 11.3(a), (b) or (d),"
with the phrase "If a Default (i) occurs under SECTION 11.3(c) or (d), or (ii)
occurs and is continuing under SECTION 11.3(a) or (b)."
2
<PAGE> 3
10. Defaults. SECTION 13.3 of the Credit Agreement is hereby amended by
adding the following phrase at the end thereof:
"(except to the extent that this Agreement expressly requires that such
action may only be taken with, or may not be taken without, the consent
of the Determining Lenders)."
11. Indemnification. A typographical error in SECTION 13.5 of the
Credit Agreement is hereby corrected by replacing the reference to "SECTION
14.12" with a reference to "SECTION 8.7."
12. Assignments.
(a) SECTION 14.12(b) of the Credit Agreement is hereby amended
by adding the phrase "(if no Default exists)" at the end of the first
line thereof after the word "Borrower."
(b) SECTION 14.12(b) of the Credit Agreement is hereby further
amended by inserting the word "and" at the end of clause (i), deleting
clause (ii), and redesignating clause (iii) as clause (ii).
(c) EXHIBIT I to the Credit Agreement is hereby replaced with
EXHIBIT I attached hereto.
13. Participations. SECTION 14.12(e) of the Credit Agreement is hereby
amended by restating the parenthetical clause at the end of such section to read
as follows:
"(other than amendments, modifications or waivers decreasing the amount
of principal or the rate at which interest or any commitment fee is
payable on such Loans or Notes, extending any scheduled principal
payment date or date fixed for the payment of interest or any
commitment fee on such Loans or Notes, extending its Commitments,
releasing any Guarantor, or releasing all or substantially all of the
Collateral)."
14. Loan Request. EXHIBIT E to the Credit Agreement is hereby amended
by restating Paragraph 3 to read in its entirety as follows:
3. The requested Loan will not cause (a) the Facility A
Commitment Usage to exceed the Facility A Commitment, (b) the Facility
B Principal Debt to exceed the Facility B Commitment, (c) the Facility
C Principal Debt to exceed the Facility C Commitment, or (d) the
Principal Debt and LC Exposure to exceed the Total Commitment.
15. Conditions Precedent to Future Advances. Lenders will not be
obligated to make any further Advances, and this instrument shall not become
effective, unless and until Agent receives (a) counterparts of this instrument
executed by Borrower, each Guarantor and each Lender, and (b) such other items
related to the transactions contemplated by this instrument as Agent may
reasonably request.
16. Covenants; Representations and Warranties. Borrower hereby
covenants to pledge and deliver to Agent for the benefit of Lenders that certain
Promissory Note in the face amount of $550,000,000 made by NCI Holding Corp. on
or before May 11, 1998. Borrower represents and warrants that it possesses all
requisite power and authority to execute, deliver and comply with the terms of
this instrument, which has been duly authorized and approved by all necessary
corporate action and for which no consent of any person is required, and agrees
to furnish Agent with evidence of such authorization and approval upon request.
17. Fees and Expenses. Borrower agrees to pay the reasonable fees and
expenses of counsel to Agent for services rendered in connection with the
preparation, negotiation and execution of this instrument.
18. Loan Document; Effect. This instrument is a Loan Document and,
therefor, is subject to the applicable provisions of SECTION 14 of the Credit
Agreement, all of which are incorporated herein by reference the same as if set
forth herein verbatim. Except as amended in this instrument, the Loan
3
<PAGE> 4
Documents are and shall be unchanged and shall remain in full force and effect.
In the event of any inconsistency between the terms of the Credit Agreement as
hereby modified (the "AMENDED AGREEMENT") and any other Loan Documents, the
terms of the Amended Agreement shall control and such other document shall be
deemed to be amended hereby to conform to the terms of the Amended Agreement.
Borrower hereby releases Agent and Lenders from any liability for actions or
failures to act in connection with the Loan Documents prior to the date hereof.
19. No Waiver of Defaults. This instrument does not constitute a waiver
of, or a consent to any present or future violation of or default under, any
provision of the Loan Documents, or a waiver of Lenders' right to insist upon
future compliance with each term, covenant, condition and provision of the Loan
Documents, and the Loan Documents shall continue to be binding upon, and inure
to the benefit of, Borrower, Guarantors, Agent and Lenders and their respective
successors and assigns.
20. Form. Each agreement, document, instrument or other writing to be
furnished Agent or Lenders under any provision of this instrument must be in
form and substance satisfactory to Agent and its counsel.
21. Multiple Counterparts. This instrument may be executed in more than
one counterpart, each of which shall be deemed an original, and all of which
constitute, collectively, one instrument; but, in making proof of this
instrument, it shall not be necessary to produce or account for more than one
such counterpart. It shall not be necessary for Borrower, Guarantors, Agent and
all Lenders to execute the same counterpart hereof so long as Borrower, each
Guarantor, Agent and each Lender execute a counterpart hereof.
22. Final Agreement. THE LOAN DOCUMENTS, AS AMENDED HEREBY, REPRESENT
THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE
ARE NO ORAL AGREEMENTS BETWEEN THE PARTIES.
If the foregoing terms and conditions are acceptable to Borrower and
Guarantors, Borrower and Guarantors should indicate its acceptance by signing in
the space provided below, whereupon this letter shall become an agreement
binding upon and inuring to the benefit of Agent, Lenders, Borrower and
Guarantors and their respective successors and assigns.
Very truly yours,
NATIONSBANK OF TEXAS, N.A.
as Administrative Agent and a Lender
By: /s/ Richard L. Nichols, Jr.
--------------------------------
Name: Richard L. Nichols, Jr.
--------------------------------
Title: Vice President
--------------------------------
4
<PAGE> 5
SWISS BANK CORPORATION,
STAMFORD BRANCH,
as Documentation Agent and a Lender
By: /s/ Gary Riddell
-------------------------------------------------
Name: Gary Riddell
-----------------------------------------------
Title: Executive Director, Credit Risk Management
-----------------------------------------------
By: /s/ Dorothy McKinley
-------------------------------------------------
Name: Dorothy McKinley
-----------------------------------------------
Title: Associate Director Loan Portfolio Support, US
----------------------------------------------
Accepted and agreed to as of the day and year first set forth in the
foregoing letter.
NCI BUILDING SYSTEMS, INC.
By: /s/ Robert J. Medlock
-------------------------------------------------
Name: Robert J. Medlock
-----------------------------------------------
Title: Vice President and Chief Financial Officer
-----------------------------------------------
5
<PAGE> 6
GUARANTORS' CONSENT AND AGREEMENT
As an inducement to Agent and Lenders to execute, and in consideration
of Agent's and Lenders' execution of the foregoing, the undersigned hereby
consent thereto and agree that the same shall in no way release, diminish,
impair, reduce or otherwise adversely affect the respective obligations and
liabilities of each of the undersigned under the Guaranty dated as of May 1,
1998, executed by the undersigned, or any agreements, documents or instruments
executed by any of the undersigned to create liens, security interests or
charges to secure the Obligation. This consent and agreement shall be binding
upon the undersigned, and the respective successors and assigns of each, and
shall inure to the benefit of Agent and Lenders, and respective successors and
assigns of each.
A & S BUSINESS INTERESTS, INC.
NCI HOLDING CORP.
NCI OPERATING CORP.
METAL BUILDING COMPONENTS HOLDING, INC.
METAL COATERS HOLDING, INC.
By: /s/ Robert J. Medlock
----------------------------------------------
Name: Robert J. Medlock
--------------------------------------------
Title: Vice President
-------------------------------------------
A & S BUILDING SYSTEMS, L.P.
NCI BUILDING SYSTEMS, L.P.
MBCI OPERATING, L.P.
METAL COATERS OPERATING, L.P.
By: NCI OPERATING CORP.,
as General Partner
By: /s/ Robert J. Medlock
----------------------------------------------
Name: Robert J. Medlock
--------------------------------------------
Title: Vice President and Chief Financial Officer
-------------------------------------------
6
<PAGE> 7
EXHIBIT I
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement dated as of March 25, 1998
(as amended, the "CREDIT AGREEMENT") among NCI Building Systems, Inc., a
Delaware corporation ("BORROWER"), the Lenders (as defined in the Credit
Agreement), the other parties to such Credit Agreement and NationsBank of Texas,
N.A., as Administrative Agent for the Lenders ("AGENT"). Terms defined in the
Credit Agreement are used herein with the same meaning.
The "ASSIGNOR" and the "ASSIGNEE" referred to on SCHEDULE 1 agree as
follows:
23. The Assignor hereby sells and assigns to the Assignee, without
recourse and without representation or warranty except as expressly set forth
herein, and the Assignee hereby purchases and assumes from the Assignor, an
interest in and to the Assignor's rights and obligations under the Loan
Documents as of the date hereof equal to the percentage interest specified on
SCHEDULE 1 of all outstanding rights and obligations under each Facility
designated on SCHEDULE 1. After giving effect to such sale and assignment, the
Commitments of the Assignee and any remaining Commitments of the Assignor and
the amount of the Loans owing to the Assignee and Assignor (if applicable) will
be as set forth on SCHEDULE 1.
24. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Loan Documents
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Loan Documents; (iii) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of any Company
or the performance or observance by any Company of any of its obligations under
the Loan Documents; and (iv) attaches the relevant Note or Notes held by the
Assignor and requests that Agent exchange such Note or Notes for new Notes
payable to the order of the Assignee in an amount equal to the Commitments
assumed by the Assignee pursuant hereto and to the Assignor in an amount equal
to the Commitments retained by the Assignor, if any, as specified on SCHEDULE 1.
25. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
SECTION 8.1 thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance; (ii) agrees that it will, independently and without
reliance upon Agent, the Assignor or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement; (iii) appoints and authorizes Agent to take such action as agent on
its behalf and to exercise such powers and discretion under the Credit Agreement
as are delegated to Agent by the terms thereof, together with such powers and
discretion as are reasonably incidental thereto; (iv) agrees that it will
perform in accordance with their terms all of the obligations that by the terms
of the Credit Agreement are required to be performed by it as a Lender; and (v)
attaches any U.S. Internal Revenue Service or other forms required under SECTION
3.20(d).
26. Following the execution of this Assignment and Acceptance, it will
be delivered to Agent for acceptance and recording by Agent. The effective date
for this Assignment and Acceptance (the "EFFECTIVE DATE") shall be the date of
acceptance hereof by Agent, unless otherwise specified on SCHEDULE 1.
27. Upon such acceptance and recording by Agent, as of the Effective
Date, (i) the Assignee shall be a party to the Credit Agreement and, to the
extent provided in this Assignment and Acceptance, have
7
<PAGE> 8
the rights and obligations of a Lender thereunder and (ii) the Assignor shall,
to the extent provided in this Assignment and Acceptance and in the Credit
Agreement, relinquish its rights and be released from its obligations under the
Credit Agreement.
28. Upon such acceptance and recording by Agent, from and after the
Effective Date, Agent shall make all payments under the Credit Agreement and the
Notes in respect of the interest assigned hereby (including, without limitation,
all payments of principal, interest and commitment fees with respect thereto) to
the Assignee. The Assignor and Assignee shall make all appropriate adjustments
in payments under the Credit Agreement and the Notes for periods prior to the
Effective Date directly between themselves.
29. This Assignment and Acceptance shall be governed by, and construed
in accordance with, the laws of the State of Texas.
30. This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of SCHEDULE 1 to this Assignment and Acceptance by telecopier shall
be effective as delivery of a manually executed counterpart of this Assignment
and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused SCHEDULE
1 to this Assignment and Acceptance to be executed by their officers thereunto
duly authorized as of the date specified thereon.
8
<PAGE> 9
SCHEDULE 1
TO
ASSIGNMENT AND ACCEPTANCE
<TABLE>
<S> <C>
%
Percentage interest assigned: ---------
Facility: ---------
$
Assignee's Commitment for such Facility: ---------
$
Aggregate outstanding principal amount of Loans under such Facility assigned: ---------
$
Assignor's remaining Commitment under such Facility, if any ---------
$
Principal amount of Note payable to Assignee for such Facility: ---------
$
Principal amount of Note payable to Assignor for such Facility: ---------
[If percentages in more than one Facility are being assigned, repeat above
information for each other relevant Facility.]
*
Effective Date (if other than date of acceptance by Agent): -----,---
</TABLE>
[NAME OF ASSIGNOR], as Assignor
By:
--------------------------------------
Name:
------------------------------------
Title:
------------------------------------
[NAME OF ASSIGNEE], as Assignee
By:
--------------------------------------
Name:
------------------------------------
Title:
----------------------------------
* This date should be no earlier than five Business Days after the
delivery of this Assignment and Acceptance to Agent.
9
<PAGE> 10
Accepted and Approved
this ___ day of ___________, __
NATIONSBANK OF TEXAS, N.A.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
Approved this ____ day
of ____________, __
NCI BUILDING SYSTEMS, INC.
By:
----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
10
<PAGE> 1
EXHIBIT 4.6
MASTER ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement dated as of March 25, 1998
(as amended by that CERTAIN First Amendment dated as of May 1, 1998 and by that
certain Second Amendment dated as of May 5, 1998 and as hereinafter amended from
time to time, the "CREDIT AGREEMENT") among NCI Building Systems, Inc., a
Delaware corporation ("BORROWER"), the Lenders (as defined in the Credit
Agreement), the other parties to such Credit Agreement and NationsBank of Texas,
N.A., as Administrative Agent for the Lenders ("AGENT"). Terms defined in the
Credit Agreement are used herein with the same meaning.
The "ASSIGNORS" and the "ASSIGNEES" referred to on SCHEDULE 1 agree as
follows:
1. The Assignors hereby sell and assign to the Assignees, without
recourse and without representation or warranty except as expressly set forth
herein, and the Assignees hereby purchase and assume from the Assignors,
interests in and to the Assignors' rights and obligations under the Loan
Documents as of the date hereof equal to the percentage interests specified on
SCHEDULE I of all outstanding rights and obligations under the Loan Documents.
After giving effect to such sales and assignments, the Commitments of the
Assignees and the remaining Commitments of the Assignors and the amounts of the
Loans owing to the Assignees and Assignors will be as set forth on SCHEDULE 1.
2. Each Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interests being assigned by it hereunder and that such
interests are free and clear of any adverse claim; (ii) makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Loan Documents
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Loan Documents; (iii) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of any Company
or the performance or observance by any Company of any of its obligations under
the Loan Documents; and (iv) attaches the Note held by the Assignor and requests
that Agent exchange such Note for new Notes payable to the order of each
Assignee in an amount equal to the Commitments assumed by such Assignee pursuant
hereto and to such Assignor in an amount equal to the Commitments retained by
such Assignor as specified on SCHEDULE 1.
3. Each Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
SECTION 8.1 thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance; (ii) agrees that it will, independently and without
reliance upon Agent, the Assignors or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement; (iii) appoints and authorizes Agent to take such action as agent on
its behalf and to exercise such powers and discretion under the Credit Agreement
as are delegated to Agent by the terms thereof, together with such powers and
discretion as are reasonably incidental thereto; (iv) agrees that it will
perform in accordance with their terms all of the obligations that by the terms
of the Credit Agreement are required to be performed by it as a Lender; and (v)
attaches any U.S. Internal Revenue Service or other forms required under SECTION
3.20(d) of the Credit Agreement.
<PAGE> 2
4. Following the execution of this Assignment and Acceptance, it will
be delivered to Agent for acceptance and recording by Agent. The effective date
for this Assignment and Acceptance (the "Effective Date") shall be the date
specified on SCHEDULE 1.
5. Upon such acceptance and recording by Agent, as of the Effective
Date, (i) each Assignee shall be a parry to the Credit Agreement and, to the
extent provided in this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and (ii) each Assignor shall, to the extent
provided in this Assignment and Acceptance and in the Credit Agreement,
relinquish its rights and be released from its obligations under the Credit
Agreement.
6. Upon such acceptance and recording by Agent, from and after the
Effective Date, Agent shall make all payments under the Credit Agreement and the
Notes in respect of the interest assigned hereby (including, without limitation,
all payments of principal, interest and commitment fees with respect thereto) to
the Assignees. The Assignors and Assignees shall make all appropriate
adjustments in payments under the Credit Agreement and the Notes for periods
prior to the Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and construed
in accordance with, the laws of the State of Texas.
8. This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of SCHEDULE 1 to this Assignment and Acceptance by telecopier shall
be effective as delivery of a manually executed counterpart of this Assignment
and Acceptance.
IN WITNESS WHEREOF, the Assignors and the Assignees have caused
Schedule I to this Assignment and Acceptance to be executed by their officers
thereunto duly authorized as of the date specified thereon.
2
<PAGE> 3
SCHEDULE 1
to
ASSIGNMENT AND ACCEPTANCE
<TABLE>
<CAPTION>
FACILITY A COMMITMENT AND FACILITY B COMMITMENT AND
LENDER PERCENTAGE PERCENTAGE
- ----------------------------------------- -------------------------- -------------------------
<S> <C> <C> <C> <C>
NationsBank of Texas, N.A $ 15,250,000 7.625% $ 15,250,000 7.625%
------------ ------- ------------ -------
Swiss Bank Corporation $ 13,000,000 6.50% $ 13,000,000 6.50%
------------ ------- ------------ -------
First Union National Bank $ 13,000,000 6.50% $ 13,000,000 6.50%
------------ ------- ------------ -------
The Bank of Nova Scotia $ 11,250,000 5.625% $ 11,250,000 5.625%
------------ ------- ------------ -------
Compagnie Financiere de CIC et de L'Union
Europeenne $ 11,250,000 5.625% $ 11,250,000 5.625%
------------ ------- ------------ -------
Comerica Bank $ 11,250,000 5.625% $ 11,250,000 5.625%
------------ ------- ------------ -------
Credit Lyonnais New York Branch $ 11,250,000 5.625% $ 11,250,000 5.625%
------------ ------- ------------ -------
Creditanstalt Corporate Finance, Inc. $ 11,250,000 5.625% $ 11,250,000 5.625%
------------ ------- ------------ -------
General Electric Capital Corporation $ 11,250,000 5.625% $ 11,250,000 5.625%
------------ ------- ------------ -------
Societe Generale $ 11,250,000 5.625% $ 11,250,000 5.625%
------------ ------- ------------ -------
The Sumitomo Bank, Limited $ 11,250,000 5.625% $ 11,250,000 5.625%
------------ ------- ------------ -------
Wachovia Bank, N.A $ 11,250,000 5.625% $ 11,250,000 5.625%
------------ ------- ------------ -------
CIBC, Inc. $ 7,500,000 3.75% $ 7,500,000 3.75%
------------ ------- ------------ -------
Credit Agricole Indosuez $ 7,500,000 3.75% $ 7,500,000 3.75%
------------ ------- ------------ -------
The Fuji Bank, Limited - Houston Agency $ 7,500,000 3.75% $ 7,500,000 3.75%
------------ ------- ------------ -------
Imperial Bank, a California Banking Corp. $ 7,500,000 3.75% $ 7,500,000 3.75%
------------ ------- ------------ -------
The Industrial Bank of Japan, Limited $ 7,500,000 3.75% $ 7,500,000 3.75%
------------ ------- ------------ -------
The Long-Term Credit Bank of Japan, Limited $ 7,500,000 3.75% $ 7,500,000 3.75%
------------ ------- ------------ -------
Union Bank of California, N.A $ 7,500,000 3.75% $ 7,500,000 3.75%
------------ ------- ------------ -------
Southwest Bank of Texas N.A $ 5,000,000 2.50% $ 5,000,000 2.50%
------------ ------- ------------ -------
------------ ------- ------------ -------
TOTAL $200,000,000 100% $200,000,000 100%
------------ ------- ------------ -------
<CAPTION>
FACILITY C COMMITMENT AND TOTAL COMMITMENT AND
LENDER PERCENTAGE PERCENTAGE
- ----------------------------------------- ------------------------------ ------------------------
<S> <C> <C> <C> <C>
NationsBank of Texas, N.A $140,000,000 70% $170,500,000 28.42%
------------ ------------ ------------ ------
Swiss Bank Corporation $ 60,000,000 30% $ 86,500,000 14.33%
------------ ------------ ------------ ------
First Union National Bank $ 0 0% $ 26,000,000 4.33%
------------ ------------ ------------ ------
The Bank of Nova Scotia $ 0 0% $ 22,500,000 3.75%
------------ ------------ ------------ ------
Compagnie Financiere de CIC et de L'Union
Europeenne $ 0 0% $ 22,500,000 3.75%
------------ ------------ ------------ ------
Comerica Bank $ 0 0% $ 22,500,000 3.75%
------------ ------------ ------------ ------
Credit Lyonnais New York Branch $ 0 0% $ 22,500,000 3.75%
------------ ------------ ------------ ------
Creditanstalt Corporate Finance, Inc. $ 0 0% $ 22,500,000 3.75%
------------ ------------ ------------ ------
General Electric Capital Corporation $ 0 0% $ 22,500,000 3.75%
------------ ------------ ------------ ------
Societe Generale $ 0 0% $ 22,500,000 3.75%
------------ ------------ ------------ ------
The Sumitomo Bank, Limited $ 0 0% $ 22,500,000 3.75%
------------ ------------ ------------ ------
Wachovia Bank, N.A $ 0 0% $ 22,500,000 3.75%
------------ ------------ ------------ ------
CIBC, Inc. $ 0 0% $ 15,000,000 2.50%
------------ ------------ ------------ ------
Credit Agricole Indosuez $ 0 0% $ 15,000,000 2.50%
------------ ------------ ------------ ------
The Fuji Bank, Limited - Houston Agency $ 0 0% $ 15,000,000 2.50%
------------ ------------ ------------ ------
Imperial Bank, a California Banking Corp. $ 0 0% $ 15,000,000 2.50%
------------ ------------ ------------ ------
The Industrial Bank of Japan, Limited $ 0 0% $ 15,000,000 2.50%
------------ ------------ ------------ ------
The Long-Term Credit Bank of Japan, Limited $ 0 0% $ 15,000,000 2.50%
------------ ------------ ------------ ------
Union Bank of California, N.A $ 0 0% $ 15,000,000 2.50%
------------ ------------ ------------ ------
Southwest Bank of Texas N.A $ 0 0% $ 10,000,000 1.67%
------------ ------------ ------------ ------
------------ ------------ ------------ ------
TOTAL $200,000,000 100% $600,000,000 100%
------------ ------------ ------------ ------
</TABLE>
3
<PAGE> 4
Effective Date: May 6, 1998
ASSIGNORS
---------
NATIONSBANK OF TEXAS, N.A.
By: /s/ Richard L. Nichols, Jr.
------------------------------------------------
Richard L. Nichols, Jr.
Vice President
SWISS BANK CORPORATION,
STAMFORD BRANCH
Re: /s/ Dorothy McKinley
------------------------------------------------
Dorothy McKinley
Associate Director Loan Portfolio Support, US
By: /s/ Denise M. Clerkin
------------------------------------------------
Denise M. Clerkin
Associate Director Loan Portfolio Support, US
ASSIGNEES
FIRST UNION NATIONAL BANK
By: /s/ Braxton B. Comer
------------------------------------------------
Braxton B. Comer
Senior Vice President
THE BANK OF NOVA SCOTIA
By: /s/ F.C. H. Ashby
------------------------------------------------
F.C.H. Ashby
Senior Manager Loan Operations
4
<PAGE> 5
COMPAGNIE FINANCIERE DE CIC ET DE
L'UNION EUROPEENNE
By: /s/ Anthony Rock /s/ Brian O'Leary
-------------------------------------------------
Anthony Rock Brian O'Leary
Vice Presidents
COMERICA BANK
By: /s/ Reginald M. Goldsmith, III
------------------------------------------------
Reginald M. Goldsmith, III
Vice President
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ Robert Ivosevich
-------------------------------------------------
Robert Ivosevich
Senior Vice President
CREDITANSTALT CORPORATE FINANCE, INC.
By: /s/ Carl G. Drake
------------------------------------------------
Carl G. Drake
Vice President
By: /s/ Stephen W. Hipp
------------------------------------------------
Stephen W. Hipp
Associate
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ Janet K. Williams
------------------------------------------------
Janet K. Williams
Duly Authorized Signatory
SOCIETE GENERALE
By: /s/ Thierry Namuroy
------------------------------------------------
Thierry Namuroy
Vice President
5
<PAGE> 6
THE SUMITOMO BANK, LIMITED
By: /s/ William R. McKown, III
-------------------------------------------------
William R. McKown, III
Vice President and Manager
WACHOVIA BANK, N.A.
By: /s/ Paige D. Mesaros
-------------------------------------------------
Paige D. Mesaros
Vice President
CIBC, INC.
By: /s/ Elizabeth Fischer
-------------------------------------------------
Elizabeth Fischer
Executive Director
CIBC Oppenheimer Corp., AS AGENT
CREDIT AGRICOLE INDOSUEZ
By: /s/ David Bouhl
-------------------------------------------------
David Bouhl, E.V.P.
Head of Corporate Banking - Chicago
By: /s/ W. Leroy Startz
-------------------------------------------------
W. Leroy Startz
First Vice President
THE FUJIBANK, LIMITED - HOUSTON AGENCY
By: /s/ Philip C. Lauinger III
-------------------------------------------------
Philip C. Lauinger III
Vice President and Manager
IMPERIAL BANK, A CALIFORNIA BANKING
CORPORATION
By: /s/ Ray Vadalma
-------------------------------------------------
Ray Valdalma
Senior Vice President
THE INDUSTRIAL BANK OF JAPAN, LIMITED
By: /s/ Takuya Honjo
-------------------------------------------------
Takuya Honjo
Senior Vice President
6
<PAGE> 7
THE LONG-TERM CREDIT BANK OF JAPAN,
LIMITED
By: /s/ Sadao Muraoka
------------------------------------------------
Sadao Muraoka
Head of Southwest Region
UNION BANK OF CALIFORNIA, N.A.
By: /s/ Albert W. Kelley
-------------------------------------------------
Albert W. Kelley
Vice President
SOUTHWEST BANK OF TEXAS, N.A.
By: /s/ Gary Tolbert
-------------------------------------------------
Gary Tolbert
Senior Vice President
Accepted and Approved as of May 6, 1998
- --------------------------------------------------
NATIONSBANK OF TEXAS, N.A.,
As Administrative Agent
By: /s/ Richard L. Nichols, Jr.
----------------------------------------------
Richard L. Nichols, Jr.
Vice President
Approved as of May 6, 1998
NCI BUILDING SYSTEMS, INC.
By: /s/ Robert J. Medlock
----------------------------------------------
Robert J. Medlock
Vice President and Chief Financial Officer
7
<PAGE> 1
EXHIBIT 4.7
FACILITY A NOTE
(Revolving Credit)
$15,250,000 Houston, Texas As of May 6, 1998
FOR VALUE RECEIVED, NCI BUILDING SYSTEMS, INC., a Delaware corporation
("MAKER"), hereby promises to pay to the order of NATIONSBANK OF TEXAS, N.A.
("PAYEE") on or before the Facility A Termination Date, the principal amount of
FIFTEEN MILLION TWO HUNDRED FIFTY THOUSAND DOLLARS or so much thereof as may be
disbursed and outstanding as the Facility A Principal Debt under this note,
together with interest, as described below.
This note has been executed and delivered under, and is subject to the
terms of, the Credit Agreement dated as of March 25, 1998 (as amended,
supplemented or restated, the "CREDIT AGREEMENT"), among Maker, NationsBank of
Texas, N.A., as Administrative Agent, and the Lenders and other parties named in
the Credit Agreement (including, without limitation, Payee) and is one of the
Facility A Notes referred to in the Credit Agreement. Unless defined in this
note, or the context requires otherwise, capitalized terms used in this note
have the meanings given to such terms in the Credit Agreement. Reference is made
to the Credit Agreement for provisions affecting this note regarding applicable
interest rates, principal and interest payment dates, final maturity, voluntary
and mandatory prepayments, acceleration of maturity, exercise of Rights, payment
of attorneys' fees, court costs and other costs of collection, certain waivers
by Maker and others now or hereafter obligated for payment of any sums due under
this note, and security for the payment of this note. This note is a Loan
Document and, therefore, is subject to the applicable provisions of SECTION 14
of the Credit Agreement, all of which applicable provisions are incorporated
into this note by reference as if set forth in this note verbatim.
Specific reference is made to SECTION 3.8 of the Credit Agreement for
usury savings provisions.
This note is being executed and delivered, and is intended to be
performed, in the State of Texas, and the Laws of such State and of the United
States of America shall govern the Rights and duties of Maker and Payee and the
validity, construction, enforcement and interpretation of this note.
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE DETERMINED
SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND ANY PRIOR ORAL
AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED INTO SUCH WRITINGS.
THIS NOTE, THE CREDIT AGREEMENT (AS AMENDED IN WRITING FROM TIME TO TIME) AND
THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY THE MAKER AND THE PAYEE (OR BY THE
MAKER FOR THE BENEFIT OF THE PAYEE) REPRESENT THE FINAL AGREEMENT BETWEEN THE
MAKER AND THE PAYEE AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
NCI BUILDING SYSTEMS, INC.
By: /s/ Robert J Medlock
---------------------------------------------
Name: Robert J. Medlock
-------------------------------------------
Title: Vice President and Chief Financial Officer
------------------------------------------
<PAGE> 2
FACILITY A NOTE
(Revolving Credit)
$13,000,000 Houston, Texas As of May 6, 1998
FOR VALUE RECEIVED, NCI BUILDING SYSTEMS, INC., a Delaware corporation
("MAKER"), hereby promises to pay to the order of SWISS BANK CORPORATION
("PAYEE") on or before the Facility A Termination Date, the principal amount of
THIRTEEN MILLION DOLLARS or so much thereof as may be disbursed and outstanding
as the Facility A Principal Debt under this note, together with interest, as
described below.
This note has been executed and delivered under, and is subject to the
terms of, the Credit Agreement dated as of March 25, 1998 (as amended,
supplemented or restated, the "CREDIT AGREEMENT"), among Maker, NationsBank of
Texas, N.A., as Administrative Agent, and the Lenders and other parties named in
the Credit Agreement (including, without limitation, Payee) and is one of the
Facility A Notes referred to in the Credit Agreement. Unless defined in this
note, or the context requires otherwise, capitalized terms used in this note
have the meanings given to such terms in the Credit Agreement. Reference is made
to the Credit Agreement for provisions affecting this note regarding applicable
interest rates, principal and interest payment dates, final maturity, voluntary
and mandatory prepayments, acceleration of maturity, exercise of Rights, payment
of attorneys' fees, court costs and other costs of collection, certain waivers
by Maker and others now or hereafter obligated for payment of any sums due under
this note, and security for the payment of this note. This note is a Loan
Document and, therefore, is subject to the applicable provisions of SECTION 14
of the Credit Agreement, all of which applicable provisions are incorporated
into this note by reference as if set forth in this note verbatim.
Specific reference is made to SECTION 3.8 of the Credit Agreement for
usury savings provisions.
This note is being executed and delivered, and is intended to be
performed, in the State of Texas, and the Laws of such State and of the United
States of America shall govern the Rights and duties of Maker and Payee and the
validity, construction, enforcement and interpretation of this note.
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE DETERMINED
SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND ANY PRIOR ORAL
AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED INTO SUCH WRITINGS.
THIS NOTE, THE CREDIT AGREEMENT (AS AMENDED IN WRITING FROM TIME TO TIME) AND
THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY THE MAKER AND THE PAYEE (OR BY THE
MAKER FOR THE BENEFIT OF THE PAYEE) REPRESENT THE FINAL AGREEMENT BETWEEN THE
MAKER AND THE PAYEE AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
NCI BUILDING SYSTEMS, INC.
By: /s/ Robert J Medlock
---------------------------------------------
Name: Robert J. Medlock
-------------------------------------------
Title: Vice President and Chief Financial Officer
------------------------------------------
<PAGE> 3
FACILITY A NOTE
(Revolving Credit)
$13,000,000 Houston, Texas As of May 6, 1998
FOR VALUE RECEIVED, NCI BUILDING SYSTEMS, INC., a Delaware corporation
("MAKER"), hereby promises to pay to the order of FIRST UNION NATIONAL BANK
("PAYEE") on or before the Facility A Termination Date, the principal amount of
THIRTEEN MILLION DOLLARS or so much thereof as may be disbursed and outstanding
as the Facility A Principal Debt under this note, together with interest, as
described below.
This note has been executed and delivered under, and is subject to the
terms of, the Credit Agreement dated as of March 25, 1998 (as amended,
supplemented or restated, the "CREDIT AGREEMENT"), among Maker, NationsBank of
Texas, N.A., as Administrative Agent, and the Lenders and other parties named in
the Credit Agreement (including, without limitation, Payee) and is one of the
Facility A Notes referred to in the Credit Agreement. Unless defined in this
note, or the context requires otherwise, capitalized terms used in this note
have the meanings given to such terms in the Credit Agreement. Reference is made
to the Credit Agreement for provisions affecting this note regarding applicable
interest rates, principal and interest payment dates, final maturity, voluntary
and mandatory prepayments, acceleration of maturity, exercise of Rights, payment
of attorneys' fees, court costs and other costs of collection, certain waivers
by Maker and others now or hereafter obligated for payment of any sums due under
this note, and security for the payment of this note. This note is a Loan
Document and, therefore, is subject to the applicable provisions of SECTION 14
of the Credit Agreement, all of which applicable provisions are incorporated
into this note by reference as if set forth in this note verbatim.
Specific reference is made to SECTION 3.8 of the Credit Agreement for
usury savings provisions.
This note is being executed and delivered, and is intended to be
performed, in the State of Texas, and the Laws of such State and of the United
States of America shall govern the Rights and duties of Maker and Payee and the
validity, construction, enforcement and interpretation of this note.
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE DETERMINED
SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND ANY PRIOR ORAL
AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED INTO SUCH WRITINGS.
THIS NOTE, THE CREDIT AGREEMENT (AS AMENDED IN WRITING FROM TIME TO TIME) AND
THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY THE MAKER AND THE PAYEE (OR BY THE
MAKER FOR THE BENEFIT OF THE PAYEE) REPRESENT THE FINAL AGREEMENT BETWEEN THE
MAKER AND THE PAYEE AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
NCI BUILDING SYSTEMS, INC.
By: /s/ Robert J Medlock
---------------------------------------------
Name: Robert J. Medlock
-------------------------------------------
Title: Vice President and Chief Financial Officer
------------------------------------------
<PAGE> 4
FACILITY A NOTE
(Revolving Credit)
$11,250,000 Houston, Texas As of May 6, 1998
FOR VALUE RECEIVED, NCI BUILDING SYSTEMS, INC., a Delaware corporation
("MAKER"), hereby promises to pay to the order of THE BANK OF NOVA SCOTIA
("PAYEE") on or before the Facility A Termination Date, the principal amount of
ELEVEN MILLION TWO HUNDRED FIFTY THOUSAND DOLLARS or so much thereof as may be
disbursed and outstanding as the Facility A Principal Debt under this note,
together with interest, as described below.
This note has been executed and delivered under, and is subject to the
terms of, the Credit Agreement dated as of March 25, 1998 (as amended,
supplemented or restated, the "CREDIT AGREEMENT"), among Maker, NationsBank of
Texas, N.A., as Administrative Agent, and the Lenders and other parties named in
the Credit Agreement (including, without limitation, Payee) and is one of the
Facility A Notes referred to in the Credit Agreement. Unless defined in this
note, or the context requires otherwise, capitalized terms used in this note
have the meanings given to such terms in the Credit Agreement. Reference is made
to the Credit Agreement for provisions affecting this note regarding applicable
interest rates, principal and interest payment dates, final maturity, voluntary
and mandatory prepayments, acceleration of maturity, exercise of Rights, payment
of attorneys' fees, court costs and other costs of collection, certain waivers
by Maker and others now or hereafter obligated for payment of any sums due under
this note, and security for the payment of this note. This note is a Loan
Document and, therefore, is subject to the applicable provisions of SECTION 14
of the Credit Agreement, all of which applicable provisions are incorporated
into this note by reference as if set forth in this note verbatim.
Specific reference is made to SECTION 3.8 of the Credit Agreement for
usury savings provisions.
This note is being executed and delivered, and is intended to be
performed, in the State of Texas, and the Laws of such State and of the United
States of America shall govern the Rights and duties of Maker and Payee and the
validity, construction, enforcement and interpretation of this note.
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE DETERMINED
SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND ANY PRIOR ORAL
AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED INTO SUCH WRITINGS.
THIS NOTE, THE CREDIT AGREEMENT (AS AMENDED IN WRITING FROM TIME TO TIME) AND
THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY THE MAKER AND THE PAYEE (OR BY THE
MAKER FOR THE BENEFIT OF THE PAYEE) REPRESENT THE FINAL AGREEMENT BETWEEN THE
MAKER AND THE PAYEE AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
NCI BUILDING SYSTEMS, INC.
By: /s/ Robert J Medlock
---------------------------------------------
Name: Robert J. Medlock
-------------------------------------------
Title: Vice President and Chief Financial Officer
------------------------------------------
<PAGE> 5
FACILITY A NOTE
(Revolving Credit)
$11,250,000 Houston, Texas As of May 6, 1998
FOR VALUE RECEIVED, NCI BUILDING SYSTEMS, INC., a Delaware corporation
("MAKER"), hereby promises to pay to the order of COMPAGNIE FINANCIERE DE CIC ET
DE L'UNION EUROPEENNE ("PAYEE") on or before the Facility A Termination Date,
the principal amount of ELEVEN MILLION TWO HUNDRED FIFTY THOUSAND DOLLARS or so
much thereof as may be disbursed and outstanding as the Facility A Principal
Debt under this note, together with interest, as described below.
This note has been executed and delivered under, and is subject to the
terms of, the Credit Agreement dated as of March 25, 1998 (as amended,
supplemented or restated, the "CREDIT AGREEMENT"), among Maker, NationsBank of
Texas, N.A., as Administrative Agent, and the Lenders and other parties named in
the Credit Agreement (including, without limitation, Payee) and is one of the
Facility A Notes referred to in the Credit Agreement. Unless defined in this
note, or the context requires otherwise, capitalized terms used in this note
have the meanings given to such terms in the Credit Agreement. Reference is made
to the Credit Agreement for provisions affecting this note regarding applicable
interest rates, principal and interest payment dates, final maturity, voluntary
and mandatory prepayments, acceleration of maturity, exercise of Rights, payment
of attorneys' fees, court costs and other costs of collection, certain waivers
by Maker and others now or hereafter obligated for payment of any sums due under
this note, and security for the payment of this note. This note is a Loan
Document and, therefore, is subject to the applicable provisions of SECTION 14
of the Credit Agreement, all of which applicable provisions are incorporated
into this note by reference as if set forth in this note verbatim.
Specific reference is made to SECTION 3.8 of the Credit Agreement for
usury savings provisions.
This note is being executed and delivered, and is intended to be
performed, in the State of Texas, and the Laws of such State and of the United
States of America shall govern the Rights and duties of Maker and Payee and the
validity, construction, enforcement and interpretation of this note.
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE DETERMINED
SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND ANY PRIOR ORAL
AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED INTO SUCH WRITINGS.
THIS NOTE, THE CREDIT AGREEMENT (AS AMENDED IN WRITING FROM TIME TO TIME) AND
THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY THE MAKER AND THE PAYEE (OR BY THE
MAKER FOR THE BENEFIT OF THE PAYEE) REPRESENT THE FINAL AGREEMENT BETWEEN THE
MAKER AND THE PAYEE AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
NCI BUILDING SYSTEMS, INC.
By: /s/ Robert J Medlock
---------------------------------------------
Name: Robert J. Medlock
-------------------------------------------
Title: Vice President and Chief Financial Officer
------------------------------------------
<PAGE> 6
FACILITY A NOTE
(Revolving Credit)
$11,250,000 Houston, Texas As of May 6, 1998
FOR VALUE RECEIVED, NCI BUILDING SYSTEMS, INC., a Delaware corporation
("MAKER"), hereby promises to pay to the order of COMERICA BANK ("PAYEE") on or
before the Facility A Termination Date, the principal amount of ELEVEN MILLION
TWO HUNDRED FIFTY THOUSAND DOLLARS or so much thereof as may be disbursed and
outstanding as the Facility A Principal Debt under this note, together with
interest, as described below.
This note has been executed and delivered under, and is subject to the
terms of, the Credit Agreement dated as of March 25, 1998 (as amended,
supplemented or restated, the "CREDIT AGREEMENT"), among Maker, NationsBank of
Texas, N.A., as Administrative Agent, and the Lenders and other parties named in
the Credit Agreement (including, without limitation, Payee) and is one of the
Facility A Notes referred to in the Credit Agreement. Unless defined in this
note, or the context requires otherwise, capitalized terms used in this note
have the meanings given to such terms in the Credit Agreement. Reference is made
to the Credit Agreement for provisions affecting this note regarding applicable
interest rates, principal and interest payment dates, final maturity, voluntary
and mandatory prepayments, acceleration of maturity, exercise of Rights, payment
of attorneys' fees, court costs and other costs of collection, certain waivers
by Maker and others now or hereafter obligated for payment of any sums due under
this note, and security for the payment of this note. This note is a Loan
Document and, therefore, is subject to the applicable provisions of SECTION 14
of the Credit Agreement, all of which applicable provisions are incorporated
into this note by reference as if set forth in this note verbatim.
Specific reference is made to SECTION 3.8 of the Credit Agreement for
usury savings provisions.
This note is being executed and delivered, and is intended to be
performed, in the State of Texas, and the Laws of such State and of the United
States of America shall govern the Rights and duties of Maker and Payee and the
validity, construction, enforcement and interpretation of this note.
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE DETERMINED
SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND ANY PRIOR ORAL
AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED INTO SUCH WRITINGS.
THIS NOTE, THE CREDIT AGREEMENT (AS AMENDED IN WRITING FROM TIME TO TIME) AND
THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY THE MAKER AND THE PAYEE (OR BY THE
MAKER FOR THE BENEFIT OF THE PAYEE) REPRESENT THE FINAL AGREEMENT BETWEEN THE
MAKER AND THE PAYEE AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
NCI BUILDING SYSTEMS, INC.
By: /s/ Robert J Medlock
---------------------------------------------
Name: Robert J. Medlock
-------------------------------------------
Title: Vice President and Chief Financial Officer
------------------------------------------
<PAGE> 7
FACILITY A NOTE
(Revolving Credit)
$11,250,000 Houston, Texas As of May 6, 1998
FOR VALUE RECEIVED, NCI BUILDING SYSTEMS, INC., a Delaware corporation
("MAKER"), hereby promises to pay to the order of CREDIT LYONNAIS NEW YORK
BRANCH ("PAYEE") on or before the Facility A Termination Date, the principal
amount of ELEVEN MILLION TWO HUNDRED FIFTY THOUSAND DOLLARS or so much thereof
as may be disbursed and outstanding as the Facility A Principal Debt under this
note, together with interest, as described below.
This note has been executed and delivered under, and is subject to the
terms of, the Credit Agreement dated as of March 25, 1998 (as amended,
supplemented or restated, the "CREDIT AGREEMENT"), among Maker, NationsBank of
Texas, N.A., as Administrative Agent, and the Lenders and other parties named in
the Credit Agreement (including, without limitation, Payee) and is one of the
Facility A Notes referred to in the Credit Agreement. Unless defined in this
note, or the context requires otherwise, capitalized terms used in this note
have the meanings given to such terms in the Credit Agreement. Reference is made
to the Credit Agreement for provisions affecting this note regarding applicable
interest rates, principal and interest payment dates, final maturity, voluntary
and mandatory prepayments, acceleration of maturity, exercise of Rights, payment
of attorneys' fees, court costs and other costs of collection, certain waivers
by Maker and others now or hereafter obligated for payment of any sums due under
this note, and security for the payment of this note. This note is a Loan
Document and, therefore, is subject to the applicable provisions of SECTION 14
of the Credit Agreement, all of which applicable provisions are incorporated
into this note by reference as if set forth in this note verbatim.
Specific reference is made to SECTION 3.8 of the Credit Agreement for
usury savings provisions.
This note is being executed and delivered, and is intended to be
performed, in the State of Texas, and the Laws of such State and of the United
States of America shall govern the Rights and duties of Maker and Payee and the
validity, construction, enforcement and interpretation of this note.
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE DETERMINED
SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND ANY PRIOR ORAL
AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED INTO SUCH WRITINGS.
THIS NOTE, THE CREDIT AGREEMENT (AS AMENDED IN WRITING FROM TIME TO TIME) AND
THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY THE MAKER AND THE PAYEE (OR BY THE
MAKER FOR THE BENEFIT OF THE PAYEE) REPRESENT THE FINAL AGREEMENT BETWEEN THE
MAKER AND THE PAYEE AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
NCI BUILDING SYSTEMS, INC.
By: /s/ Robert J Medlock
---------------------------------------------
Name: Robert J. Medlock
-------------------------------------------
Title: Vice President and Chief Financial Officer
------------------------------------------
<PAGE> 8
FACILITY A NOTE
(Revolving Credit)
$11,250,000 Houston, Texas As of May 6, 1998
FOR VALUE RECEIVED, NCI BUILDING SYSTEMS, INC., a Delaware corporation
("MAKER"), hereby promises to pay to the order of CREDITANSTALT CORPORATE
FINANCE, INC. ("PAYEE") on or before the Facility A Termination Date, the
principal amount of ELEVEN MILLION TWO HUNDRED FIFTY THOUSAND DOLLARS or so much
thereof as may be disbursed and outstanding as the Facility A Principal Debt
under this note, together with interest, as described below.
This note has been executed and delivered under, and is subject to the
terms of, the Credit Agreement dated as of March 25, 1998 (as amended,
supplemented or restated, the "CREDIT AGREEMENT"), among Maker, NationsBank of
Texas, N.A., as Administrative Agent, and the Lenders and other parties named in
the Credit Agreement (including, without limitation, Payee) and is one of the
Facility A Notes referred to in the Credit Agreement. Unless defined in this
note, or the context requires otherwise, capitalized terms used in this note
have the meanings given to such terms in the Credit Agreement. Reference is made
to the Credit Agreement for provisions affecting this note regarding applicable
interest rates, principal and interest payment dates, final maturity, voluntary
and mandatory prepayments, acceleration of maturity, exercise of Rights, payment
of attorneys' fees, court costs and other costs of collection, certain waivers
by Maker and others now or hereafter obligated for payment of any sums due under
this note, and security for the payment of this note. This note is a Loan
Document and, therefore, is subject to the applicable provisions of SECTION 14
of the Credit Agreement, all of which applicable provisions are incorporated
into this note by reference as if set forth in this note verbatim.
Specific reference is made to SECTION 3.8 of the Credit Agreement for
usury savings provisions.
This note is being executed and delivered, and is intended to be
performed, in the State of Texas, and the Laws of such State and of the United
States of America shall govern the Rights and duties of Maker and Payee and the
validity, construction, enforcement and interpretation of this note.
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE DETERMINED
SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND ANY PRIOR ORAL
AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED INTO SUCH WRITINGS.
THIS NOTE, THE CREDIT AGREEMENT (AS AMENDED IN WRITING FROM TIME TO TIME) AND
THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY THE MAKER AND THE PAYEE (OR BY THE
MAKER FOR THE BENEFIT OF THE PAYEE) REPRESENT THE FINAL AGREEMENT BETWEEN THE
MAKER AND THE PAYEE AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
NCI BUILDING SYSTEMS, INC.
By: /s/ Robert J Medlock
---------------------------------------------
Name: Robert J. Medlock
-------------------------------------------
Title: Vice President and Chief Financial Officer
------------------------------------------
<PAGE> 9
FACILITY A NOTE
(Revolving Credit)
$11,250,000 Houston, Texas As of May 6, 1998
FOR VALUE RECEIVED, NCI BUILDING SYSTEMS, INC., a Delaware corporation
("MAKER"), hereby promises to pay to the order of GENERAL ELECTRIC CAPITAL
CORPORATION ("PAYEE") on or before the Facility A Termination Date, the
principal amount of ELEVEN MILLION TWO HUNDRED FIFTY THOUSAND DOLLARS or so much
thereof as may be disbursed and outstanding as the Facility A Principal Debt
under this note, together with interest, as described below.
This note has been executed and delivered under, and is subject to the
terms of, the Credit Agreement dated as of March 25, 1998 (as amended,
supplemented or restated, the "CREDIT AGREEMENT"), among Maker, NationsBank of
Texas, N.A., as Administrative Agent, and the Lenders and other parties named in
the Credit Agreement (including, without limitation, Payee) and is one of the
Facility A Notes referred to in the Credit Agreement. Unless defined in this
note, or the context requires otherwise, capitalized terms used in this note
have the meanings given to such terms in the Credit Agreement. Reference is made
to the Credit Agreement for provisions affecting this note regarding applicable
interest rates, principal and interest payment dates, final maturity, voluntary
and mandatory prepayments, acceleration of maturity, exercise of Rights, payment
of attorneys' fees, court costs and other costs of collection, certain waivers
by Maker and others now or hereafter obligated for payment of any sums due under
this note, and security for the payment of this note. This note is a Loan
Document and, therefore, is subject to the applicable provisions of SECTION 14
of the Credit Agreement, all of which applicable provisions are incorporated
into this note by reference as if set forth in this note verbatim.
Specific reference is made to SECTION 3.8 of the Credit Agreement for
usury savings provisions.
This note is being executed and delivered, and is intended to be
performed, in the State of Texas, and the Laws of such State and of the United
States of America shall govern the Rights and duties of Maker and Payee and the
validity, construction, enforcement and interpretation of this note.
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE DETERMINED
SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND ANY PRIOR ORAL
AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED INTO SUCH WRITINGS.
THIS NOTE, THE CREDIT AGREEMENT (AS AMENDED IN WRITING FROM TIME TO TIME) AND
THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY THE MAKER AND THE PAYEE (OR BY THE
MAKER FOR THE BENEFIT OF THE PAYEE) REPRESENT THE FINAL AGREEMENT BETWEEN THE
MAKER AND THE PAYEE AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
NCI BUILDING SYSTEMS, INC.
By: /s/ Robert J Medlock
---------------------------------------------
Name: Robert J. Medlock
-------------------------------------------
Title: Vice President and Chief Financial Officer
------------------------------------------
<PAGE> 10
FACILITY A NOTE
(Revolving Credit)
$11,250,000 Houston, Texas As of May 6, 1998
FOR VALUE RECEIVED, NCI BUILDING SYSTEMS, INC., a Delaware corporation
("MAKER"), hereby promises to pay to the order of SOCIETE GENERALE ("PAYEE") on
or before the Facility A Termination Date, the principal amount of ELEVEN
MILLION TWO HUNDRED FIFTY THOUSAND DOLLARS or so much thereof as may be
disbursed and outstanding as the Facility A Principal Debt under this note,
together with interest, as described below.
This note has been executed and delivered under, and is subject to the
terms of, the Credit Agreement dated as of March 25, 1998 (as amended,
supplemented or restated, the "CREDIT AGREEMENT"), among Maker, NationsBank of
Texas, N.A., as Administrative Agent, and the Lenders and other parties named in
the Credit Agreement (including, without limitation, Payee) and is one of the
Facility A Notes referred to in the Credit Agreement. Unless defined in this
note, or the context requires otherwise, capitalized terms used in this note
have the meanings given to such terms in the Credit Agreement. Reference is made
to the Credit Agreement for provisions affecting this note regarding applicable
interest rates, principal and interest payment dates, final maturity, voluntary
and mandatory prepayments, acceleration of maturity, exercise of Rights, payment
of attorneys' fees, court costs and other costs of collection, certain waivers
by Maker and others now or hereafter obligated for payment of any sums due under
this note, and security for the payment of this note. This note is a Loan
Document and, therefore, is subject to the applicable provisions of SECTION 14
of the Credit Agreement, all of which applicable provisions are incorporated
into this note by reference as if set forth in this note verbatim.
Specific reference is made to SECTION 3.8 of the Credit Agreement for
usury savings provisions.
This note is being executed and delivered, and is intended to be
performed, in the State of Texas, and the Laws of such State and of the United
States of America shall govern the Rights and duties of Maker and Payee and the
validity, construction, enforcement and interpretation of this note.
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE DETERMINED
SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND ANY PRIOR ORAL
AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED INTO SUCH WRITINGS.
THIS NOTE, THE CREDIT AGREEMENT (AS AMENDED IN WRITING FROM TIME TO TIME) AND
THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY THE MAKER AND THE PAYEE (OR BY THE
MAKER FOR THE BENEFIT OF THE PAYEE) REPRESENT THE FINAL AGREEMENT BETWEEN THE
MAKER AND THE PAYEE AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
NCI BUILDING SYSTEMS, INC.
By: /s/ Robert J Medlock
---------------------------------------------
Name: Robert J. Medlock
-------------------------------------------
Title: Vice President and Chief Financial Officer
------------------------------------------
<PAGE> 11
FACILITY A NOTE
(Revolving Credit)
$6,250,000 Houston, Texas As of June 30, 1998
FOR VALUE RECEIVED, NCI BUILDING SYSTEMS, INC., a Delaware corporation
("MAKER"), hereby promises to pay to the order of THE SUMITOMO BANK, LIMITED
("PAYEE") on or before the Facility A Termination Date, the principal amount of
SIX MILLION TWO HUNDRED FIFTY THOUSAND DOLLARS or so much thereof as may be
disbursed and outstanding as the Facility A Principal Debt under this note,
together with interest, as described below.
This note has been executed and delivered under, and is subject to the
terms of, the Credit Agreement dated as of March 25, 1998 (as amended,
supplemented or restated, the "CREDIT AGREEMENT"), among Maker, NationsBank of
Texas, N.A., as Administrative Agent, and the Lenders and other parties named in
the Credit Agreement (including, without limitation, Payee) and is one of the
Facility A Notes referred to in the Credit Agreement. Unless defined in this
note, or the context requires otherwise, capitalized terms used in this note
have the meanings given to such terms in the Credit Agreement. Reference is made
to the Credit Agreement for provisions affecting this note regarding applicable
interest rates, principal and interest payment dates, final maturity, voluntary
and mandatory prepayments, acceleration of maturity, exercise of Rights, payment
of attorneys' fees, court costs and other costs of collection, certain waivers
by Maker and others now or hereafter obligated for payment of any sums due under
this note, and security for the payment of this note. This note is a Loan
Document and, therefore, is subject to the applicable provisions of SECTION 14
of the Credit Agreement, all of which applicable provisions are incorporated
into this note by reference as if set forth in this note verbatim.
Specific reference is made to SECTION 3.8 of the Credit Agreement for
usury savings provisions.
This note is being executed and delivered, and is intended to be
performed, in the State of Texas, and the Laws of such State and of the United
States of America shall govern the Rights and duties of Maker and Payee and the
validity, construction, enforcement and interpretation of this note.
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE DETERMINED
SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND ANY PRIOR ORAL
AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED INTO SUCH WRITINGS.
THIS NOTE, THE CREDIT AGREEMENT (AS AMENDED IN WRITING FROM TIME TO TIME) AND
THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY THE MAKER AND THE PAYEE (OR BY THE
MAKER FOR THE BENEFIT OF THE PAYEE) REPRESENT THE FINAL AGREEMENT BETWEEN THE
MAKER AND THE PAYEE AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
NCI BUILDING SYSTEMS, INC.
By: /s/ Robert J Medlock
---------------------------------------------
Name: Robert J. Medlock
-------------------------------------------
Title: Vice President and Chief Financial Officer
------------------------------------------
<PAGE> 12
FACILITY A NOTE
(Revolving Credit)
$5,000,000 Houston, Texas As of June 30, 1998
FOR VALUE RECEIVED, NCI BUILDING SYSTEMS, INC., a Delaware corporation
("MAKER"), hereby promises to pay to the order of CITY NATIONAL BANK ("PAYEE")
on or before the Facility A Termination Date, the principal amount of FIVE
MILLION DOLLARS or so much thereof as may be disbursed and outstanding as the
Facility A Principal Debt under this note, together with interest, as described
below.
This note has been executed and delivered under, and is subject to the
terms of, the Credit Agreement dated as of March 25, 1998 (as amended,
supplemented or restated, the "CREDIT AGREEMENT"), among Maker, NationsBank of
Texas, N.A., as Administrative Agent, and the Lenders and other parties named in
the Credit Agreement (including, without limitation, Payee) and is one of the
Facility A Notes referred to in the Credit Agreement. Unless defined in this
note, or the context requires otherwise, capitalized terms used in this note
have the meanings given to such terms in the Credit Agreement. Reference is made
to the Credit Agreement for provisions affecting this note regarding applicable
interest rates, principal and interest payment dates, final maturity, voluntary
and mandatory prepayments, acceleration of maturity, exercise of Rights, payment
of attorneys' fees, court costs and other costs of collection, certain waivers
by Maker and others now or hereafter obligated for payment of any sums due under
this note, and security for the payment of this note. This note is a Loan
Document and, therefore, is subject to the applicable provisions of SECTION 14
of the Credit Agreement, all of which applicable provisions are incorporated
into this note by reference as if set forth in this note verbatim.
Specific reference is made to SECTION 3.8 of the Credit Agreement for
usury savings provisions.
This note is being executed and delivered, and is intended to be
performed, in the State of Texas, and the Laws of such State and of the United
States of America shall govern the Rights and duties of Maker and Payee and the
validity, construction, enforcement and interpretation of this note.
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE DETERMINED
SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND ANY PRIOR ORAL
AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED INTO SUCH WRITINGS.
THIS NOTE, THE CREDIT AGREEMENT (AS AMENDED IN WRITING FROM TIME TO TIME) AND
THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY THE MAKER AND THE PAYEE (OR BY THE
MAKER FOR THE BENEFIT OF THE PAYEE) REPRESENT THE FINAL AGREEMENT BETWEEN THE
MAKER AND THE PAYEE AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
NCI BUILDING SYSTEMS, INC.
By: /s/ Robert J Medlock
---------------------------------------------
Name: Robert J. Medlock
-------------------------------------------
Title: Vice President and Chief Financial Officer
------------------------------------------
<PAGE> 13
FACILITY A NOTE
(Revolving Credit)
$11,250,000 Houston, Texas As of May 6, 1998
FOR VALUE RECEIVED, NCI BUILDING SYSTEMS, INC., a Delaware corporation
("MAKER"), hereby promises to pay to the order of WACHOVIA BANK, N.A. ("PAYEE")
on or before the Facility A Termination Date, the principal amount of ELEVEN
MILLION TWO HUNDRED FIFTY THOUSAND DOLLARS or so much thereof as may be
disbursed and outstanding as the Facility A Principal Debt under this note,
together with interest, as described below.
This note has been executed and delivered under, and is subject to the
terms of, the Credit Agreement dated as of March 25, 1998 (as amended,
supplemented or restated, the "CREDIT AGREEMENT"), among Maker, NationsBank of
Texas, N.A., as Administrative Agent, and the Lenders and other parties named in
the Credit Agreement (including, without limitation, Payee) and is one of the
Facility A Notes referred to in the Credit Agreement. Unless defined in this
note, or the context requires otherwise, capitalized terms used in this note
have the meanings given to such terms in the Credit Agreement. Reference is made
to the Credit Agreement for provisions affecting this note regarding applicable
interest rates, principal and interest payment dates, final maturity, voluntary
and mandatory prepayments, acceleration of maturity, exercise of Rights, payment
of attorneys' fees, court costs and other costs of collection, certain waivers
by Maker and others now or hereafter obligated for payment of any sums due under
this note, and security for the payment of this note. This note is a Loan
Document and, therefore, is subject to the applicable provisions of SECTION 14
of the Credit Agreement, all of which applicable provisions are incorporated
into this note by reference as if set forth in this note verbatim.
Specific reference is made to SECTION 3.8 of the Credit Agreement for
usury savings provisions.
This note is being executed and delivered, and is intended to be
performed, in the State of Texas, and the Laws of such State and of the United
States of America shall govern the Rights and duties of Maker and Payee and the
validity, construction, enforcement and interpretation of this note.
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE DETERMINED
SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND ANY PRIOR ORAL
AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED INTO SUCH WRITINGS.
THIS NOTE, THE CREDIT AGREEMENT (AS AMENDED IN WRITING FROM TIME TO TIME) AND
THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY THE MAKER AND THE PAYEE (OR BY THE
MAKER FOR THE BENEFIT OF THE PAYEE) REPRESENT THE FINAL AGREEMENT BETWEEN THE
MAKER AND THE PAYEE AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
NCI BUILDING SYSTEMS, INC.
By: /s/ Robert J Medlock
---------------------------------------------
Name: Robert J. Medlock
-------------------------------------------
Title: Vice President and Chief Financial Officer
------------------------------------------
<PAGE> 14
FACILITY A NOTE
(Revolving Credit)
$7,500,000 Houston, Texas As of May 6, 1998
FOR VALUE RECEIVED, NCI BUILDING SYSTEMS, INC., a Delaware corporation
("MAKER"), hereby promises to pay to the order of CIBC, INC. ("PAYEE") on or
before the Facility A Termination Date, the principal amount of SEVEN MILLION
FIVE HUNDRED THOUSAND DOLLARS or so much thereof as may be disbursed and
outstanding as the Facility A Principal Debt under this note, together with
interest, as described below.
This note has been executed and delivered under, and is subject to the
terms of, the Credit Agreement dated as of March 25, 1998 (as amended,
supplemented or restated, the "CREDIT AGREEMENT"), among Maker, NationsBank of
Texas, N.A., as Administrative Agent, and the Lenders and other parties named in
the Credit Agreement (including, without limitation, Payee) and is one of the
Facility A Notes referred to in the Credit Agreement. Unless defined in this
note, or the context requires otherwise, capitalized terms used in this note
have the meanings given to such terms in the Credit Agreement. Reference is made
to the Credit Agreement for provisions affecting this note regarding applicable
interest rates, principal and interest payment dates, final maturity, voluntary
and mandatory prepayments, acceleration of maturity, exercise of Rights, payment
of attorneys' fees, court costs and other costs of collection, certain waivers
by Maker and others now or hereafter obligated for payment of any sums due under
this note, and security for the payment of this note. This note is a Loan
Document and, therefore, is subject to the applicable provisions of SECTION 14
of the Credit Agreement, all of which applicable provisions are incorporated
into this note by reference as if set forth in this note verbatim.
Specific reference is made to SECTION 3.8 of the Credit Agreement for
usury savings provisions.
This note is being executed and delivered, and is intended to be
performed, in the State of Texas, and the Laws of such State and of the United
States of America shall govern the Rights and duties of Maker and Payee and the
validity, construction, enforcement and interpretation of this note.
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE DETERMINED
SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND ANY PRIOR ORAL
AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED INTO SUCH WRITINGS.
THIS NOTE, THE CREDIT AGREEMENT (AS AMENDED IN WRITING FROM TIME TO TIME) AND
THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY THE MAKER AND THE PAYEE (OR BY THE
MAKER FOR THE BENEFIT OF THE PAYEE) REPRESENT THE FINAL AGREEMENT BETWEEN THE
MAKER AND THE PAYEE AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
NCI BUILDING SYSTEMS, INC.
By: /s/ Robert J Medlock
---------------------------------------------
Name: Robert J. Medlock
-------------------------------------------
Title: Vice President and Chief Financial Officer
------------------------------------------
<PAGE> 15
FACILITY A NOTE
(Revolving Credit)
$7,500,000 Houston, Texas As of May 6, 1998
FOR VALUE RECEIVED, NCI BUILDING SYSTEMS, INC., a Delaware corporation
("MAKER"), hereby promises to pay to the order of CREDIT AGRICOLE INDOSUEZ
("PAYEE") on or before the Facility A Termination Date, the principal amount of
SEVEN MILLION FIVE HUNDRED THOUSAND DOLLARS or so much thereof as may be
disbursed and outstanding as the Facility A Principal Debt under this note,
together with interest, as described below.
This note has been executed and delivered under, and is subject to the
terms of, the Credit Agreement dated as of March 25, 1998 (as amended,
supplemented or restated, the "CREDIT AGREEMENT"), among Maker, NationsBank of
Texas, N.A., as Administrative Agent, and the Lenders and other parties named in
the Credit Agreement (including, without limitation, Payee) and is one of the
Facility A Notes referred to in the Credit Agreement. Unless defined in this
note, or the context requires otherwise, capitalized terms used in this note
have the meanings given to such terms in the Credit Agreement. Reference is made
to the Credit Agreement for provisions affecting this note regarding applicable
interest rates, principal and interest payment dates, final maturity, voluntary
and mandatory prepayments, acceleration of maturity, exercise of Rights, payment
of attorneys' fees, court costs and other costs of collection, certain waivers
by Maker and others now or hereafter obligated for payment of any sums due under
this note, and security for the payment of this note. This note is a Loan
Document and, therefore, is subject to the applicable provisions of SECTION 14
of the Credit Agreement, all of which applicable provisions are incorporated
into this note by reference as if set forth in this note verbatim.
Specific reference is made to SECTION 3.8 of the Credit Agreement for
usury savings provisions.
This note is being executed and delivered, and is intended to be
performed, in the State of Texas, and the Laws of such State and of the United
States of America shall govern the Rights and duties of Maker and Payee and the
validity, construction, enforcement and interpretation of this note.
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE DETERMINED
SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND ANY PRIOR ORAL
AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED INTO SUCH WRITINGS.
THIS NOTE, THE CREDIT AGREEMENT (AS AMENDED IN WRITING FROM TIME TO TIME) AND
THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY THE MAKER AND THE PAYEE (OR BY THE
MAKER FOR THE BENEFIT OF THE PAYEE) REPRESENT THE FINAL AGREEMENT BETWEEN THE
MAKER AND THE PAYEE AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
NCI BUILDING SYSTEMS, INC.
By: /s/ Robert J Medlock
---------------------------------------------
Name: Robert J. Medlock
-------------------------------------------
Title: Vice President and Chief Financial Officer
------------------------------------------
<PAGE> 16
FACILITY A NOTE
(Revolving Credit)
$7,500,000 Houston, Texas As of May 6, 1998
FOR VALUE RECEIVED, NCI BUILDING SYSTEMS, INC., a Delaware corporation
("MAKER"), hereby promises to pay to the order of THE FUJI BANK, LIMITED -
HOUSTON AGENCY ("PAYEE") on or before the Facility A Termination Date, the
principal amount of SEVEN MILLION FIVE HUNDRED THOUSAND DOLLARS or so much
thereof as may be disbursed and outstanding as the Facility A Principal Debt
under this note, together with interest, as described below.
This note has been executed and delivered under, and is subject to the
terms of, the Credit Agreement dated as of March 25, 1998 (as amended,
supplemented or restated, the "CREDIT AGREEMENT"), among Maker, NationsBank of
Texas, N.A., as Administrative Agent, and the Lenders and other parties named in
the Credit Agreement (including, without limitation, Payee) and is one of the
Facility A Notes referred to in the Credit Agreement. Unless defined in this
note, or the context requires otherwise, capitalized terms used in this note
have the meanings given to such terms in the Credit Agreement. Reference is made
to the Credit Agreement for provisions affecting this note regarding applicable
interest rates, principal and interest payment dates, final maturity, voluntary
and mandatory prepayments, acceleration of maturity, exercise of Rights, payment
of attorneys' fees, court costs and other costs of collection, certain waivers
by Maker and others now or hereafter obligated for payment of any sums due under
this note, and security for the payment of this note. This note is a Loan
Document and, therefore, is subject to the applicable provisions of SECTION 14
of the Credit Agreement, all of which applicable provisions are incorporated
into this note by reference as if set forth in this note verbatim.
Specific reference is made to SECTION 3.8 of the Credit Agreement for
usury savings provisions.
This note is being executed and delivered, and is intended to be
performed, in the State of Texas, and the Laws of such State and of the United
States of America shall govern the Rights and duties of Maker and Payee and the
validity, construction, enforcement and interpretation of this note.
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE DETERMINED
SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND ANY PRIOR ORAL
AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED INTO SUCH WRITINGS.
THIS NOTE, THE CREDIT AGREEMENT (AS AMENDED IN WRITING FROM TIME TO TIME) AND
THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY THE MAKER AND THE PAYEE (OR BY THE
MAKER FOR THE BENEFIT OF THE PAYEE) REPRESENT THE FINAL AGREEMENT BETWEEN THE
MAKER AND THE PAYEE AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
NCI BUILDING SYSTEMS, INC.
By: /s/ Robert J Medlock
---------------------------------------------
Name: Robert J. Medlock
-------------------------------------------
Title: Vice President and Chief Financial Officer
------------------------------------------
<PAGE> 17
FACILITY A NOTE
(Revolving Credit)
$7,500,000 Houston, Texas As of May 6, 1998
FOR VALUE RECEIVED, NCI BUILDING SYSTEMS, INC., a Delaware corporation
("MAKER"), hereby promises to pay to the order of IMPERIAL BANK, a California
banking corporation ("PAYEE") on or before the Facility A Termination Date, the
principal amount of SEVEN MILLION FIVE HUNDRED THOUSAND DOLLARS or so much
thereof as may be disbursed and outstanding as the Facility A Principal Debt
under this note, together with interest, as described below.
This note has been executed and delivered under, and is subject to the
terms of, the Credit Agreement dated as of March 25, 1998 (as amended,
supplemented or restated, the "CREDIT AGREEMENT"), among Maker, NationsBank of
Texas, N.A., as Administrative Agent, and the Lenders and other parties named in
the Credit Agreement (including, without limitation, Payee) and is one of the
Facility A Notes referred to in the Credit Agreement. Unless defined in this
note, or the context requires otherwise, capitalized terms used in this note
have the meanings given to such terms in the Credit Agreement. Reference is made
to the Credit Agreement for provisions affecting this note regarding applicable
interest rates, principal and interest payment dates, final maturity, voluntary
and mandatory prepayments, acceleration of maturity, exercise of Rights, payment
of attorneys' fees, court costs and other costs of collection, certain waivers
by Maker and others now or hereafter obligated for payment of any sums due under
this note, and security for the payment of this note. This note is a Loan
Document and, therefore, is subject to the applicable provisions of SECTION 14
of the Credit Agreement, all of which applicable provisions are incorporated
into this note by reference as if set forth in this note verbatim.
Specific reference is made to SECTION 3.8 of the Credit Agreement for
usury savings provisions.
This note is being executed and delivered, and is intended to be
performed, in the State of Texas, and the Laws of such State and of the United
States of America shall govern the Rights and duties of Maker and Payee and the
validity, construction, enforcement and interpretation of this note.
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE DETERMINED
SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND ANY PRIOR ORAL
AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED INTO SUCH WRITINGS.
THIS NOTE, THE CREDIT AGREEMENT (AS AMENDED IN WRITING FROM TIME TO TIME) AND
THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY THE MAKER AND THE PAYEE (OR BY THE
MAKER FOR THE BENEFIT OF THE PAYEE) REPRESENT THE FINAL AGREEMENT BETWEEN THE
MAKER AND THE PAYEE AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
NCI BUILDING SYSTEMS, INC.
By: /s/ Robert J Medlock
---------------------------------------------
Name: Robert J. Medlock
-------------------------------------------
Title: Vice President and Chief Financial Officer
------------------------------------------
<PAGE> 18
FACILITY A NOTE
(Revolving Credit)
$7,500,000 Houston, Texas As of May 6, 1998
FOR VALUE RECEIVED, NCI BUILDING SYSTEMS, INC., a Delaware corporation
("MAKER"), hereby promises to pay to the order of THE INDUSTRIAL BANK OF JAPAN,
LIMITED ("PAYEE") on or before the Facility A Termination Date, the principal
amount of SEVEN MILLION FIVE HUNDRED THOUSAND DOLLARS or so much thereof as may
be disbursed and outstanding as the Facility A Principal Debt under this note,
together with interest, as described below.
This note has been executed and delivered under, and is subject to the
terms of, the Credit Agreement dated as of March 25, 1998 (as amended,
supplemented or restated, the "CREDIT AGREEMENT"), among Maker, NationsBank of
Texas, N.A., as Administrative Agent, and the Lenders and other parties named in
the Credit Agreement (including, without limitation, Payee) and is one of the
Facility A Notes referred to in the Credit Agreement. Unless defined in this
note, or the context requires otherwise, capitalized terms used in this note
have the meanings given to such terms in the Credit Agreement. Reference is made
to the Credit Agreement for provisions affecting this note regarding applicable
interest rates, principal and interest payment dates, final maturity, voluntary
and mandatory prepayments, acceleration of maturity, exercise of Rights, payment
of attorneys' fees, court costs and other costs of collection, certain waivers
by Maker and others now or hereafter obligated for payment of any sums due under
this note, and security for the payment of this note. This note is a Loan
Document and, therefore, is subject to the applicable provisions of SECTION 14
of the Credit Agreement, all of which applicable provisions are incorporated
into this note by reference as if set forth in this note verbatim.
Specific reference is made to SECTION 3.8 of the Credit Agreement for
usury savings provisions.
This note is being executed and delivered, and is intended to be
performed, in the State of Texas, and the Laws of such State and of the United
States of America shall govern the Rights and duties of Maker and Payee and the
validity, construction, enforcement and interpretation of this note.
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE DETERMINED
SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND ANY PRIOR ORAL
AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED INTO SUCH WRITINGS.
THIS NOTE, THE CREDIT AGREEMENT (AS AMENDED IN WRITING FROM TIME TO TIME) AND
THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY THE MAKER AND THE PAYEE (OR BY THE
MAKER FOR THE BENEFIT OF THE PAYEE) REPRESENT THE FINAL AGREEMENT BETWEEN THE
MAKER AND THE PAYEE AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
NCI BUILDING SYSTEMS, INC.
By: /s/ Robert J Medlock
---------------------------------------------
Name: Robert J. Medlock
-------------------------------------------
Title: Vice President and Chief Financial Officer
------------------------------------------
<PAGE> 19
FACILITY A NOTE
(Revolving Credit)
$7,500,000 Houston, Texas As of May 6, 1998
FOR VALUE RECEIVED, NCI BUILDING SYSTEMS, INC., a Delaware corporation
("MAKER"), hereby promises to pay to the order of THE LONG-TERM CREDIT BANK OF
JAPAN, LIMITED ("PAYEE") on or before the Facility A Termination Date, the
principal amount of SEVEN MILLION FIVE HUNDRED THOUSAND DOLLARS or so much
thereof as may be disbursed and outstanding as the Facility A Principal Debt
under this note, together with interest, as described below.
This note has been executed and delivered under, and is subject to the
terms of, the Credit Agreement dated as of March 25, 1998 (as amended,
supplemented or restated, the "CREDIT AGREEMENT"), among Maker, NationsBank of
Texas, N.A., as Administrative Agent, and the Lenders and other parties named in
the Credit Agreement (including, without limitation, Payee) and is one of the
Facility A Notes referred to in the Credit Agreement. Unless defined in this
note, or the context requires otherwise, capitalized terms used in this note
have the meanings given to such terms in the Credit Agreement. Reference is made
to the Credit Agreement for provisions affecting this note regarding applicable
interest rates, principal and interest payment dates, final maturity, voluntary
and mandatory prepayments, acceleration of maturity, exercise of Rights, payment
of attorneys' fees, court costs and other costs of collection, certain waivers
by Maker and others now or hereafter obligated for payment of any sums due under
this note, and security for the payment of this note. This note is a Loan
Document and, therefore, is subject to the applicable provisions of SECTION 14
of the Credit Agreement, all of which applicable provisions are incorporated
into this note by reference as if set forth in this note verbatim.
Specific reference is made to SECTION 3.8 of the Credit Agreement for
usury savings provisions.
This note is being executed and delivered, and is intended to be
performed, in the State of Texas, and the Laws of such State and of the United
States of America shall govern the Rights and duties of Maker and Payee and the
validity, construction, enforcement and interpretation of this note.
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE DETERMINED
SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND ANY PRIOR ORAL
AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED INTO SUCH WRITINGS.
THIS NOTE, THE CREDIT AGREEMENT (AS AMENDED IN WRITING FROM TIME TO TIME) AND
THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY THE MAKER AND THE PAYEE (OR BY THE
MAKER FOR THE BENEFIT OF THE PAYEE) REPRESENT THE FINAL AGREEMENT BETWEEN THE
MAKER AND THE PAYEE AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
NCI BUILDING SYSTEMS, INC.
By: /s/ Robert J Medlock
---------------------------------------------
Name: Robert J. Medlock
-------------------------------------------
Title: Vice President and Chief Financial Officer
------------------------------------------
<PAGE> 20
FACILITY A NOTE
(Revolving Credit)
$7,500,000 Houston, Texas As of May 6, 1998
FOR VALUE RECEIVED, NCI BUILDING SYSTEMS, INC., a Delaware corporation
("MAKER"), hereby promises to pay to the order of UNION BANK OF CALIFORNIA, N.A.
("PAYEE") on or before the Facility A Termination Date, the principal amount of
SEVEN MILLION FIVE HUNDRED THOUSAND DOLLARS or so much thereof as may be
disbursed and outstanding as the Facility A Principal Debt under this note,
together with interest, as described below.
This note has been executed and delivered under, and is subject to the
terms of, the Credit Agreement dated as of March 25, 1998 (as amended,
supplemented or restated, the "CREDIT AGREEMENT"), among Maker, NationsBank of
Texas, N.A., as Administrative Agent, and the Lenders and other parties named in
the Credit Agreement (including, without limitation, Payee) and is one of the
Facility A Notes referred to in the Credit Agreement. Unless defined in this
note, or the context requires otherwise, capitalized terms used in this note
have the meanings given to such terms in the Credit Agreement. Reference is made
to the Credit Agreement for provisions affecting this note regarding applicable
interest rates, principal and interest payment dates, final maturity, voluntary
and mandatory prepayments, acceleration of maturity, exercise of Rights, payment
of attorneys' fees, court costs and other costs of collection, certain waivers
by Maker and others now or hereafter obligated for payment of any sums due under
this note, and security for the payment of this note. This note is a Loan
Document and, therefore, is subject to the applicable provisions of SECTION 14
of the Credit Agreement, all of which applicable provisions are incorporated
into this note by reference as if set forth in this note verbatim.
Specific reference is made to SECTION 3.8 of the Credit Agreement for
usury savings provisions.
This note is being executed and delivered, and is intended to be
performed, in the State of Texas, and the Laws of such State and of the United
States of America shall govern the Rights and duties of Maker and Payee and the
validity, construction, enforcement and interpretation of this note.
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE DETERMINED
SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND ANY PRIOR ORAL
AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED INTO SUCH WRITINGS.
THIS NOTE, THE CREDIT AGREEMENT (AS AMENDED IN WRITING FROM TIME TO TIME) AND
THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY THE MAKER AND THE PAYEE (OR BY THE
MAKER FOR THE BENEFIT OF THE PAYEE) REPRESENT THE FINAL AGREEMENT BETWEEN THE
MAKER AND THE PAYEE AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
NCI BUILDING SYSTEMS, INC.
By: /s/ Robert J Medlock
---------------------------------------------
Name: Robert J. Medlock
-------------------------------------------
Title: Vice President and Chief Financial Officer
------------------------------------------
<PAGE> 21
FACILITY A NOTE
(Revolving Credit)
$5,000,000 Houston, Texas As of May 6, 1998
FOR VALUE RECEIVED, NCI BUILDING SYSTEMS, INC., a Delaware corporation
("MAKER"), hereby promises to pay to the order of SOUTHWEST BANK OF TEXAS, N.A.
("PAYEE") on or before the Facility A Termination Date, the principal amount of
FIVE MILLION DOLLARS or so much thereof as may be disbursed and outstanding as
the Facility A Principal Debt under this note, together with interest, as
described below.
This note has been executed and delivered under, and is subject to the
terms of, the Credit Agreement dated as of March 25, 1998 (as amended,
supplemented or restated, the "CREDIT AGREEMENT"), among Maker, NationsBank of
Texas, N.A., as Administrative Agent, and the Lenders and other parties named in
the Credit Agreement (including, without limitation, Payee) and is one of the
Facility A Notes referred to in the Credit Agreement. Unless defined in this
note, or the context requires otherwise, capitalized terms used in this note
have the meanings given to such terms in the Credit Agreement. Reference is made
to the Credit Agreement for provisions affecting this note regarding applicable
interest rates, principal and interest payment dates, final maturity, voluntary
and mandatory prepayments, acceleration of maturity, exercise of Rights, payment
of attorneys' fees, court costs and other costs of collection, certain waivers
by Maker and others now or hereafter obligated for payment of any sums due under
this note, and security for the payment of this note. This note is a Loan
Document and, therefore, is subject to the applicable provisions of SECTION 14
of the Credit Agreement, all of which applicable provisions are incorporated
into this note by reference as if set forth in this note verbatim.
Specific reference is made to SECTION 3.8 of the Credit Agreement for
usury savings provisions.
This note is being executed and delivered, and is intended to be
performed, in the State of Texas, and the Laws of such State and of the United
States of America shall govern the Rights and duties of Maker and Payee and the
validity, construction, enforcement and interpretation of this note.
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE DETERMINED
SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND ANY PRIOR ORAL
AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED INTO SUCH WRITINGS.
THIS NOTE, THE CREDIT AGREEMENT (AS AMENDED IN WRITING FROM TIME TO TIME) AND
THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY THE MAKER AND THE PAYEE (OR BY THE
MAKER FOR THE BENEFIT OF THE PAYEE) REPRESENT THE FINAL AGREEMENT BETWEEN THE
MAKER AND THE PAYEE AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
NCI BUILDING SYSTEMS, INC.
By: /s/ Robert J Medlock
---------------------------------------------
Name: Robert J. Medlock
-------------------------------------------
Title: Vice President and Chief Financial Officer
------------------------------------------
<PAGE> 1
EXHIBIT 4.8
FACILITY B NOTE
(Term Loan)
$15,250,000 Houston, Texas As of May 6, 1998
FOR VALUE RECEIVED, NCI BUILDING SYSTEMS, INC., a Delaware corporation
("MAKER"), hereby promises to pay to the order of NATIONSBANK OF TEXAS, N.A.
("PAYEE") on or before the Facility B Termination Date, the principal amount of
FIFTEEN MILLION TWO HUNDRED FIFTY THOUSAND DOLLARS or so much thereof as may
then be outstanding as the Facility B Principal Debt under this note, together
with interest, as described below.
This note has been executed and delivered under, and is subject to the
terms of, the Credit Agreement dated as of March 25, 1998 (as amended,
supplemented or restated, the "CREDIT AGREEMENT"), among Maker, NationsBank of
Texas, N.A., as Administrative Agent, and the Lenders and other parties named in
the Credit Agreement (including, without limitation, Payee) and is one of the
Facility B Notes referred to in the Credit Agreement. Unless defined in this
note, or the context requires otherwise, capitalized terms used in this note
have the meanings given to such terms in the Credit Agreement. Reference is made
to the Credit Agreement for provisions affecting this note regarding applicable
interest rates, principal and interest payment dates, final maturity, voluntary
and mandatory prepayments, acceleration of maturity, exercise of Rights, payment
of attorneys' fees, court costs and other costs of collection, certain waivers
by Maker and others now or hereafter obligated for payment of any sums due under
this note, and security for the payment of this note. This note is a Loan
Document and, therefore, is subject to the applicable provisions of SECTION 14
of the Credit Agreement, all of which applicable provisions are incorporated
into this note by reference as if set forth in this note verbatim.
Specific reference is made to SECTION 3.8 of the Credit Agreement for
usury savings provisions.
This note is being executed and delivered, and is intended to be
performed, in the State of Texas, and the Laws of such State and of the United
States of America shall govern the Rights and duties of Maker and Payee and the
validity, construction, enforcement and interpretation of this note.
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE DETERMINED
SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND ANY PRIOR ORAL
AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED INTO SUCH WRITINGS.
THIS NOTE, THE CREDIT AGREEMENT (AS AMENDED IN WRITING FROM TIME TO TIME) AND
THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY THE MAKER AND THE PAYEE (OR BY THE
MAKER FOR THE BENEFIT OF THE PAYEE) REPRESENT THE FINAL AGREEMENT BETWEEN THE
MAKER AND THE PAYEE AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
NCI BUILDING SYSTEMS, INC.
By: /s/ Robert J Medlock
---------------------------------------------
Name: Robert J. Medlock
-------------------------------------------
Title: Vice President and Chief Financial Officer
------------------------------------------
<PAGE> 2
FACILITY B NOTE
(Term Loan)
$13,000,000 Houston, Texas As of May 6, 1998
FOR VALUE RECEIVED, NCI BUILDING SYSTEMS, INC., a Delaware corporation
("MAKER"), hereby promises to pay to the order of SWISS BANK CORPORATION
("PAYEE") on or before the Facility B Termination Date, the principal amount of
THIRTEEN MILLION DOLLARS or so much thereof as may then be outstanding as the
Facility B Principal Debt under this note, together with interest, as described
below.
This note has been executed and delivered under, and is subject to the
terms of, the Credit Agreement dated as of March 25, 1998 (as amended,
supplemented or restated, the "CREDIT AGREEMENT"), among Maker, NationsBank of
Texas, N.A., as Administrative Agent, and the Lenders and other parties named in
the Credit Agreement (including, without limitation, Payee) and is one of the
Facility B Notes referred to in the Credit Agreement. Unless defined in this
note, or the context requires otherwise, capitalized terms used in this note
have the meanings given to such terms in the Credit Agreement. Reference is made
to the Credit Agreement for provisions affecting this note regarding applicable
interest rates, principal and interest payment dates, final maturity, voluntary
and mandatory prepayments, acceleration of maturity, exercise of Rights, payment
of attorneys' fees, court costs and other costs of collection, certain waivers
by Maker and others now or hereafter obligated for payment of any sums due under
this note, and security for the payment of this note. This note is a Loan
Document and, therefore, is subject to the applicable provisions of SECTION 14
of the Credit Agreement, all of which applicable provisions are incorporated
into this note by reference as if set forth in this note verbatim.
Specific reference is made to SECTION 3.8 of the Credit Agreement for
usury savings provisions.
This note is being executed and delivered, and is intended to be
performed, in the State of Texas, and the Laws of such State and of the United
States of America shall govern the Rights and duties of Maker and Payee and the
validity, construction, enforcement and interpretation of this note.
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE DETERMINED
SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND ANY PRIOR ORAL
AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED INTO SUCH WRITINGS.
THIS NOTE, THE CREDIT AGREEMENT (AS AMENDED IN WRITING FROM TIME TO TIME) AND
THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY THE MAKER AND THE PAYEE (OR BY THE
MAKER FOR THE BENEFIT OF THE PAYEE) REPRESENT THE FINAL AGREEMENT BETWEEN THE
MAKER AND THE PAYEE AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
NCI BUILDING SYSTEMS, INC.
By: /s/ Robert J Medlock
---------------------------------------------
Name: Robert J. Medlock
-------------------------------------------
Title: Vice President and Chief Financial Officer
------------------------------------------
<PAGE> 3
FACILITY B NOTE
(Term Loan)
$13,000,000 Houston, Texas As of May 6, 1998
FOR VALUE RECEIVED, NCI BUILDING SYSTEMS, INC., a Delaware corporation
("MAKER"), hereby promises to pay to the order of FIRST UNION NATIONAL BANK
("PAYEE") on or before the Facility B Termination Date, the principal amount of
THIRTEEN MILLION DOLLARS or so much thereof as may then be outstanding as the
Facility B Principal Debt under this note, together with interest, as described
below.
This note has been executed and delivered under, and is subject to the
terms of, the Credit Agreement dated as of March 25, 1998 (as amended,
supplemented or restated, the "CREDIT AGREEMENT"), among Maker, NationsBank of
Texas, N.A., as Administrative Agent, and the Lenders and other parties named in
the Credit Agreement (including, without limitation, Payee) and is one of the
Facility B Notes referred to in the Credit Agreement. Unless defined in this
note, or the context requires otherwise, capitalized terms used in this note
have the meanings given to such terms in the Credit Agreement. Reference is made
to the Credit Agreement for provisions affecting this note regarding applicable
interest rates, principal and interest payment dates, final maturity, voluntary
and mandatory prepayments, acceleration of maturity, exercise of Rights, payment
of attorneys' fees, court costs and other costs of collection, certain waivers
by Maker and others now or hereafter obligated for payment of any sums due under
this note, and security for the payment of this note. This note is a Loan
Document and, therefore, is subject to the applicable provisions of SECTION 14
of the Credit Agreement, all of which applicable provisions are incorporated
into this note by reference as if set forth in this note verbatim.
Specific reference is made to SECTION 3.8 of the Credit Agreement for
usury savings provisions.
This note is being executed and delivered, and is intended to be
performed, in the State of Texas, and the Laws of such State and of the United
States of America shall govern the Rights and duties of Maker and Payee and the
validity, construction, enforcement and interpretation of this note.
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE DETERMINED
SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND ANY PRIOR ORAL
AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED INTO SUCH WRITINGS.
THIS NOTE, THE CREDIT AGREEMENT (AS AMENDED IN WRITING FROM TIME TO TIME) AND
THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY THE MAKER AND THE PAYEE (OR BY THE
MAKER FOR THE BENEFIT OF THE PAYEE) REPRESENT THE FINAL AGREEMENT BETWEEN THE
MAKER AND THE PAYEE AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
NCI BUILDING SYSTEMS, INC.
By: /s/ Robert J Medlock
---------------------------------------------
Name: Robert J. Medlock
-------------------------------------------
Title: Vice President and Chief Financial Officer
------------------------------------------
<PAGE> 4
FACILITY B NOTE
(Term Loan)
$11,250,000 Houston, Texas As of May 6, 1998
FOR VALUE RECEIVED, NCI BUILDING SYSTEMS, INC., a Delaware corporation
("MAKER"), hereby promises to pay to the order of THE BANK OF NOVA SCOTIA
("PAYEE") on or before the Facility B Termination Date, the principal amount of
ELEVEN MILLION TWO HUNDRED FIFTY THOUSAND DOLLARS or so much thereof as may then
be outstanding as the Facility B Principal Debt under this note, together with
interest, as described below.
This note has been executed and delivered under, and is subject to the
terms of, the Credit Agreement dated as of March 25, 1998 (as amended,
supplemented or restated, the "CREDIT AGREEMENT"), among Maker, NationsBank of
Texas, N.A., as Administrative Agent, and the Lenders and other parties named in
the Credit Agreement (including, without limitation, Payee) and is one of the
Facility B Notes referred to in the Credit Agreement. Unless defined in this
note, or the context requires otherwise, capitalized terms used in this note
have the meanings given to such terms in the Credit Agreement. Reference is made
to the Credit Agreement for provisions affecting this note regarding applicable
interest rates, principal and interest payment dates, final maturity, voluntary
and mandatory prepayments, acceleration of maturity, exercise of Rights, payment
of attorneys' fees, court costs and other costs of collection, certain waivers
by Maker and others now or hereafter obligated for payment of any sums due under
this note, and security for the payment of this note. This note is a Loan
Document and, therefore, is subject to the applicable provisions of SECTION 14
of the Credit Agreement, all of which applicable provisions are incorporated
into this note by reference as if set forth in this note verbatim.
Specific reference is made to SECTION 3.8 of the Credit Agreement for
usury savings provisions.
This note is being executed and delivered, and is intended to be
performed, in the State of Texas, and the Laws of such State and of the United
States of America shall govern the Rights and duties of Maker and Payee and the
validity, construction, enforcement and interpretation of this note.
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE DETERMINED
SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND ANY PRIOR ORAL
AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED INTO SUCH WRITINGS.
THIS NOTE, THE CREDIT AGREEMENT (AS AMENDED IN WRITING FROM TIME TO TIME) AND
THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY THE MAKER AND THE PAYEE (OR BY THE
MAKER FOR THE BENEFIT OF THE PAYEE) REPRESENT THE FINAL AGREEMENT BETWEEN THE
MAKER AND THE PAYEE AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
NCI BUILDING SYSTEMS, INC.
By: /s/ Robert J Medlock
---------------------------------------------
Name: Robert J. Medlock
-------------------------------------------
Title: Vice President and Chief Financial Officer
------------------------------------------
<PAGE> 5
FACILITY B NOTE
(Term Loan)
$11,250,000 Houston, Texas As of May 6, 1998
FOR VALUE RECEIVED, NCI BUILDING SYSTEMS, INC., a Delaware corporation
("MAKER"), hereby promises to pay to the order of COMPAGNIE FINANCIERE DE CIC ET
DE L'UNION EUROPEENE ("PAYEE") on or before the Facility B Termination Date, the
principal amount of ELEVEN MILLION TWO HUNDRED FIFTY THOUSAND DOLLARS or so much
thereof as may then be outstanding as the Facility B Principal Debt under this
note, together with interest, as described below.
This note has been executed and delivered under, and is subject to the
terms of, the Credit Agreement dated as of March 25, 1998 (as amended,
supplemented or restated, the "CREDIT AGREEMENT"), among Maker, NationsBank of
Texas, N.A., as Administrative Agent, and the Lenders and other parties named in
the Credit Agreement (including, without limitation, Payee) and is one of the
Facility B Notes referred to in the Credit Agreement. Unless defined in this
note, or the context requires otherwise, capitalized terms used in this note
have the meanings given to such terms in the Credit Agreement. Reference is made
to the Credit Agreement for provisions affecting this note regarding applicable
interest rates, principal and interest payment dates, final maturity, voluntary
and mandatory prepayments, acceleration of maturity, exercise of Rights, payment
of attorneys' fees, court costs and other costs of collection, certain waivers
by Maker and others now or hereafter obligated for payment of any sums due under
this note, and security for the payment of this note. This note is a Loan
Document and, therefore, is subject to the applicable provisions of SECTION 14
of the Credit Agreement, all of which applicable provisions are incorporated
into this note by reference as if set forth in this note verbatim.
Specific reference is made to SECTION 3.8 of the Credit Agreement for
usury savings provisions.
This note is being executed and delivered, and is intended to be
performed, in the State of Texas, and the Laws of such State and of the United
States of America shall govern the Rights and duties of Maker and Payee and the
validity, construction, enforcement and interpretation of this note.
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE DETERMINED
SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND ANY PRIOR ORAL
AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED INTO SUCH WRITINGS.
THIS NOTE, THE CREDIT AGREEMENT (AS AMENDED IN WRITING FROM TIME TO TIME) AND
THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY THE MAKER AND THE PAYEE (OR BY THE
MAKER FOR THE BENEFIT OF THE PAYEE) REPRESENT THE FINAL AGREEMENT BETWEEN THE
MAKER AND THE PAYEE AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
NCI BUILDING SYSTEMS, INC.
By: /s/ Robert J Medlock
---------------------------------------------
Name: Robert J. Medlock
-------------------------------------------
Title: Vice President and Chief Financial Officer
------------------------------------------
<PAGE> 6
FACILITY B NOTE
(Term Loan)
$11,250,000 Houston, Texas As of May 6, 1998
FOR VALUE RECEIVED, NCI BUILDING SYSTEMS, INC., a Delaware corporation
("MAKER"), hereby promises to pay to the order of COMERICA BANK ("PAYEE") on or
before the Facility B Termination Date, the principal amount of ELEVEN MILLION
TWO HUNDRED FIFTY THOUSAND DOLLARS or so much thereof as may then be outstanding
as the Facility B Principal Debt under this note, together with interest, as
described below.
This note has been executed and delivered under, and is subject to the
terms of, the Credit Agreement dated as of March 25, 1998 (as amended,
supplemented or restated, the "CREDIT AGREEMENT"), among Maker, NationsBank of
Texas, N.A., as Administrative Agent, and the Lenders and other parties named in
the Credit Agreement (including, without limitation, Payee) and is one of the
Facility B Notes referred to in the Credit Agreement. Unless defined in this
note, or the context requires otherwise, capitalized terms used in this note
have the meanings given to such terms in the Credit Agreement. Reference is made
to the Credit Agreement for provisions affecting this note regarding applicable
interest rates, principal and interest payment dates, final maturity, voluntary
and mandatory prepayments, acceleration of maturity, exercise of Rights, payment
of attorneys' fees, court costs and other costs of collection, certain waivers
by Maker and others now or hereafter obligated for payment of any sums due under
this note, and security for the payment of this note. This note is a Loan
Document and, therefore, is subject to the applicable provisions of SECTION 14
of the Credit Agreement, all of which applicable provisions are incorporated
into this note by reference as if set forth in this note verbatim.
Specific reference is made to SECTION 3.8 of the Credit Agreement for
usury savings provisions.
This note is being executed and delivered, and is intended to be
performed, in the State of Texas, and the Laws of such State and of the United
States of America shall govern the Rights and duties of Maker and Payee and the
validity, construction, enforcement and interpretation of this note.
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE DETERMINED
SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND ANY PRIOR ORAL
AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED INTO SUCH WRITINGS.
THIS NOTE, THE CREDIT AGREEMENT (AS AMENDED IN WRITING FROM TIME TO TIME) AND
THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY THE MAKER AND THE PAYEE (OR BY THE
MAKER FOR THE BENEFIT OF THE PAYEE) REPRESENT THE FINAL AGREEMENT BETWEEN THE
MAKER AND THE PAYEE AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
NCI BUILDING SYSTEMS, INC.
By: /s/ Robert J Medlock
---------------------------------------------
Name: Robert J. Medlock
-------------------------------------------
Title: Vice President and Chief Financial Officer
------------------------------------------
<PAGE> 7
FACILITY B NOTE
(Term Loan)
$11,250,000 Houston, Texas As of May 6, 1998
FOR VALUE RECEIVED, NCI BUILDING SYSTEMS, INC., a Delaware corporation
("MAKER"), hereby promises to pay to the order of CREDIT LYONNAIS NEW YORK
BRANCH ("PAYEE") on or before the Facility B Termination Date, the principal
amount of ELEVEN MILLION TWO HUNDRED FIFTY THOUSAND DOLLARS or so much thereof
as may then be outstanding as the Facility B Principal Debt under this note,
together with interest, as described below.
This note has been executed and delivered under, and is subject to the
terms of, the Credit Agreement dated as of March 25, 1998 (as amended,
supplemented or restated, the "CREDIT AGREEMENT"), among Maker, NationsBank of
Texas, N.A., as Administrative Agent, and the Lenders and other parties named in
the Credit Agreement (including, without limitation, Payee) and is one of the
Facility B Notes referred to in the Credit Agreement. Unless defined in this
note, or the context requires otherwise, capitalized terms used in this note
have the meanings given to such terms in the Credit Agreement. Reference is made
to the Credit Agreement for provisions affecting this note regarding applicable
interest rates, principal and interest payment dates, final maturity, voluntary
and mandatory prepayments, acceleration of maturity, exercise of Rights, payment
of attorneys' fees, court costs and other costs of collection, certain waivers
by Maker and others now or hereafter obligated for payment of any sums due under
this note, and security for the payment of this note. This note is a Loan
Document and, therefore, is subject to the applicable provisions of SECTION 14
of the Credit Agreement, all of which applicable provisions are incorporated
into this note by reference as if set forth in this note verbatim.
Specific reference is made to SECTION 3.8 of the Credit Agreement for
usury savings provisions.
This note is being executed and delivered, and is intended to be
performed, in the State of Texas, and the Laws of such State and of the United
States of America shall govern the Rights and duties of Maker and Payee and the
validity, construction, enforcement and interpretation of this note.
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE DETERMINED
SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND ANY PRIOR ORAL
AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED INTO SUCH WRITINGS.
THIS NOTE, THE CREDIT AGREEMENT (AS AMENDED IN WRITING FROM TIME TO TIME) AND
THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY THE MAKER AND THE PAYEE (OR BY THE
MAKER FOR THE BENEFIT OF THE PAYEE) REPRESENT THE FINAL AGREEMENT BETWEEN THE
MAKER AND THE PAYEE AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
NCI BUILDING SYSTEMS, INC.
By: /s/ Robert J Medlock
---------------------------------------------
Name: Robert J. Medlock
-------------------------------------------
Title: Vice President and Chief Financial Officer
------------------------------------------
<PAGE> 8
FACILITY B NOTE
(Term Loan)
$11,250,000 Houston, Texas As of May 6, 1998
FOR VALUE RECEIVED, NCI BUILDING SYSTEMS, INC., a Delaware corporation
("MAKER"), hereby promises to pay to the order of CREDITANSTALT CORPORATE
FINANCE, INC. ("PAYEE") on or before the Facility B Termination Date, the
principal amount of ELEVEN MILLION TWO HUNDRED FIFTY THOUSAND DOLLARS or so much
thereof as may then be outstanding as the Facility B Principal Debt under this
note, together with interest, as described below.
This note has been executed and delivered under, and is subject to the
terms of, the Credit Agreement dated as of March 25, 1998 (as amended,
supplemented or restated, the "CREDIT AGREEMENT"), among Maker, NationsBank of
Texas, N.A., as Administrative Agent, and the Lenders and other parties named in
the Credit Agreement (including, without limitation, Payee) and is one of the
Facility B Notes referred to in the Credit Agreement. Unless defined in this
note, or the context requires otherwise, capitalized terms used in this note
have the meanings given to such terms in the Credit Agreement. Reference is made
to the Credit Agreement for provisions affecting this note regarding applicable
interest rates, principal and interest payment dates, final maturity, voluntary
and mandatory prepayments, acceleration of maturity, exercise of Rights, payment
of attorneys' fees, court costs and other costs of collection, certain waivers
by Maker and others now or hereafter obligated for payment of any sums due under
this note, and security for the payment of this note. This note is a Loan
Document and, therefore, is subject to the applicable provisions of SECTION 14
of the Credit Agreement, all of which applicable provisions are incorporated
into this note by reference as if set forth in this note verbatim.
Specific reference is made to SECTION 3.8 of the Credit Agreement for
usury savings provisions.
This note is being executed and delivered, and is intended to be
performed, in the State of Texas, and the Laws of such State and of the United
States of America shall govern the Rights and duties of Maker and Payee and the
validity, construction, enforcement and interpretation of this note.
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE DETERMINED
SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND ANY PRIOR ORAL
AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED INTO SUCH WRITINGS.
THIS NOTE, THE CREDIT AGREEMENT (AS AMENDED IN WRITING FROM TIME TO TIME) AND
THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY THE MAKER AND THE PAYEE (OR BY THE
MAKER FOR THE BENEFIT OF THE PAYEE) REPRESENT THE FINAL AGREEMENT BETWEEN THE
MAKER AND THE PAYEE AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
NCI BUILDING SYSTEMS, INC.
By: /s/ Robert J Medlock
---------------------------------------------
Name: Robert J. Medlock
-------------------------------------------
Title: Vice President and Chief Financial Officer
------------------------------------------
<PAGE> 9
FACILITY B NOTE
(Term Loan)
$11,250,000 Houston, Texas As of May 6, 1998
FOR VALUE RECEIVED, NCI BUILDING SYSTEMS, INC., a Delaware corporation
("MAKER"), hereby promises to pay to the order of GENERAL ELECTRIC CAPITAL
CORPORATION ("PAYEE") on or before the Facility B Termination Date, the
principal amount of ELEVEN MILLION TWO HUNDRED FIFTY THOUSAND DOLLARS or so much
thereof as may then be outstanding as the Facility B Principal Debt under this
note, together with interest, as described below.
This note has been executed and delivered under, and is subject to the
terms of, the Credit Agreement dated as of March 25, 1998 (as amended,
supplemented or restated, the "CREDIT AGREEMENT"), among Maker, NationsBank of
Texas, N.A., as Administrative Agent, and the Lenders and other parties named in
the Credit Agreement (including, without limitation, Payee) and is one of the
Facility B Notes referred to in the Credit Agreement. Unless defined in this
note, or the context requires otherwise, capitalized terms used in this note
have the meanings given to such terms in the Credit Agreement. Reference is made
to the Credit Agreement for provisions affecting this note regarding applicable
interest rates, principal and interest payment dates, final maturity, voluntary
and mandatory prepayments, acceleration of maturity, exercise of Rights, payment
of attorneys' fees, court costs and other costs of collection, certain waivers
by Maker and others now or hereafter obligated for payment of any sums due under
this note, and security for the payment of this note. This note is a Loan
Document and, therefore, is subject to the applicable provisions of SECTION 14
of the Credit Agreement, all of which applicable provisions are incorporated
into this note by reference as if set forth in this note verbatim.
Specific reference is made to SECTION 3.8 of the Credit Agreement for
usury savings provisions.
This note is being executed and delivered, and is intended to be
performed, in the State of Texas, and the Laws of such State and of the United
States of America shall govern the Rights and duties of Maker and Payee and the
validity, construction, enforcement and interpretation of this note.
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE DETERMINED
SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND ANY PRIOR ORAL
AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED INTO SUCH WRITINGS.
THIS NOTE, THE CREDIT AGREEMENT (AS AMENDED IN WRITING FROM TIME TO TIME) AND
THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY THE MAKER AND THE PAYEE (OR BY THE
MAKER FOR THE BENEFIT OF THE PAYEE) REPRESENT THE FINAL AGREEMENT BETWEEN THE
MAKER AND THE PAYEE AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
NCI BUILDING SYSTEMS, INC.
By: /s/ Robert J Medlock
---------------------------------------------
Name: Robert J. Medlock
-------------------------------------------
Title: Vice President and Chief Financial Officer
------------------------------------------
<PAGE> 10
FACILITY B NOTE
(Term Loan)
$11,250,000 Houston, Texas As of May 6, 1998
FOR VALUE RECEIVED, NCI BUILDING SYSTEMS, INC., a Delaware corporation
("MAKER"), hereby promises to pay to the order of SOCIETE GENERALE ("PAYEE") on
or before the Facility B Termination Date, the principal amount of ELEVEN
MILLION TWO HUNDRED FIFTY THOUSAND DOLLARS or so much thereof as may then be
outstanding as the Facility B Principal Debt under this note, together with
interest, as described below.
This note has been executed and delivered under, and is subject to the
terms of, the Credit Agreement dated as of March 25, 1998 (as amended,
supplemented or restated, the "CREDIT AGREEMENT"), among Maker, NationsBank of
Texas, N.A., as Administrative Agent, and the Lenders and other parties named in
the Credit Agreement (including, without limitation, Payee) and is one of the
Facility B Notes referred to in the Credit Agreement. Unless defined in this
note, or the context requires otherwise, capitalized terms used in this note
have the meanings given to such terms in the Credit Agreement. Reference is made
to the Credit Agreement for provisions affecting this note regarding applicable
interest rates, principal and interest payment dates, final maturity, voluntary
and mandatory prepayments, acceleration of maturity, exercise of Rights, payment
of attorneys' fees, court costs and other costs of collection, certain waivers
by Maker and others now or hereafter obligated for payment of any sums due under
this note, and security for the payment of this note. This note is a Loan
Document and, therefore, is subject to the applicable provisions of SECTION 14
of the Credit Agreement, all of which applicable provisions are incorporated
into this note by reference as if set forth in this note verbatim.
Specific reference is made to SECTION 3.8 of the Credit Agreement for
usury savings provisions.
This note is being executed and delivered, and is intended to be
performed, in the State of Texas, and the Laws of such State and of the United
States of America shall govern the Rights and duties of Maker and Payee and the
validity, construction, enforcement and interpretation of this note.
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE DETERMINED
SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND ANY PRIOR ORAL
AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED INTO SUCH WRITINGS.
THIS NOTE, THE CREDIT AGREEMENT (AS AMENDED IN WRITING FROM TIME TO TIME) AND
THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY THE MAKER AND THE PAYEE (OR BY THE
MAKER FOR THE BENEFIT OF THE PAYEE) REPRESENT THE FINAL AGREEMENT BETWEEN THE
MAKER AND THE PAYEE AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
NCI BUILDING SYSTEMS, INC.
By: /s/ Robert J Medlock
---------------------------------------------
Name: Robert J. Medlock
-------------------------------------------
Title: Vice President and Chief Financial Officer
------------------------------------------
<PAGE> 11
FACILITY B NOTE
(Term Loan)
$6,250,000 Houston, Texas As of June 30, 1998
FOR VALUE RECEIVED, NCI BUILDING SYSTEMS, INC., a Delaware corporation
("MAKER"), hereby promises to pay to the order of THE SUMITOMO BANK, LIMITED
("PAYEE") on or before the Facility B Termination Date, the principal amount of
SIX MILLION TWO HUNDRED FIFTY THOUSAND DOLLARS or so much thereof as may then be
outstanding as the Facility B Principal Debt under this note, together with
interest, as described below.
This note has been executed and delivered under, and is subject to the
terms of, the Credit Agreement dated as of March 25, 1998 (as amended,
supplemented or restated, the "CREDIT AGREEMENT"), among Maker, NationsBank of
Texas, N.A., as Administrative Agent, and the Lenders and other parties named in
the Credit Agreement (including, without limitation, Payee) and is one of the
Facility B Notes referred to in the Credit Agreement. Unless defined in this
note, or the context requires otherwise, capitalized terms used in this note
have the meanings given to such terms in the Credit Agreement. Reference is made
to the Credit Agreement for provisions affecting this note regarding applicable
interest rates, principal and interest payment dates, final maturity, voluntary
and mandatory prepayments, acceleration of maturity, exercise of Rights, payment
of attorneys' fees, court costs and other costs of collection, certain waivers
by Maker and others now or hereafter obligated for payment of any sums due under
this note, and security for the payment of this note. This note is a Loan
Document and, therefore, is subject to the applicable provisions of SECTION 14
of the Credit Agreement, all of which applicable provisions are incorporated
into this note by reference as if set forth in this note verbatim.
Specific reference is made to SECTION 3.8 of the Credit Agreement for
usury savings provisions.
This note is being executed and delivered, and is intended to be
performed, in the State of Texas, and the Laws of such State and of the United
States of America shall govern the Rights and duties of Maker and Payee and the
validity, construction, enforcement and interpretation of this note.
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE DETERMINED
SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND ANY PRIOR ORAL
AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED INTO SUCH WRITINGS.
THIS NOTE, THE CREDIT AGREEMENT (AS AMENDED IN WRITING FROM TIME TO TIME) AND
THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY THE MAKER AND THE PAYEE (OR BY THE
MAKER FOR THE BENEFIT OF THE PAYEE) REPRESENT THE FINAL AGREEMENT BETWEEN THE
MAKER AND THE PAYEE AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
NCI BUILDING SYSTEMS, INC.
By: /s/ Robert J Medlock
---------------------------------------------
Name: Robert J. Medlock
-------------------------------------------
Title: Vice President and Chief Financial Officer
------------------------------------------
<PAGE> 12
FACILITY B NOTE
(Term Loan)
$5,000,000 Houston, Texas As of June 30, 1998
FOR VALUE RECEIVED, NCI BUILDING SYSTEMS, INC., a Delaware corporation
("MAKER"), hereby promises to pay to the order of CITY NATIONAL BANK ("PAYEE")
on or before the Facility B Termination Date, the principal amount of FIVE
MILLION DOLLARS or so much thereof as may then be outstanding as the Facility B
Principal Debt under this note, together with interest, as described below.
This note has been executed and delivered under, and is subject to the
terms of, the Credit Agreement dated as of March 25, 1998 (as amended,
supplemented or restated, the "CREDIT AGREEMENT"), among Maker, NationsBank of
Texas, N.A., as Administrative Agent, and the Lenders and other parties named in
the Credit Agreement (including, without limitation, Payee) and is one of the
Facility B Notes referred to in the Credit Agreement. Unless defined in this
note, or the context requires otherwise, capitalized terms used in this note
have the meanings given to such terms in the Credit Agreement. Reference is made
to the Credit Agreement for provisions affecting this note regarding applicable
interest rates, principal and interest payment dates, final maturity, voluntary
and mandatory prepayments, acceleration of maturity, exercise of Rights, payment
of attorneys' fees, court costs and other costs of collection, certain waivers
by Maker and others now or hereafter obligated for payment of any sums due under
this note, and security for the payment of this note. This note is a Loan
Document and, therefore, is subject to the applicable provisions of SECTION 14
of the Credit Agreement, all of which applicable provisions are incorporated
into this note by reference as if set forth in this note verbatim.
Specific reference is made to SECTION 3.8 of the Credit Agreement for
usury savings provisions.
This note is being executed and delivered, and is intended to be
performed, in the State of Texas, and the Laws of such State and of the United
States of America shall govern the Rights and duties of Maker and Payee and the
validity, construction, enforcement and interpretation of this note.
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE DETERMINED
SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND ANY PRIOR ORAL
AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED INTO SUCH WRITINGS.
THIS NOTE, THE CREDIT AGREEMENT (AS AMENDED IN WRITING FROM TIME TO TIME) AND
THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY THE MAKER AND THE PAYEE (OR BY THE
MAKER FOR THE BENEFIT OF THE PAYEE) REPRESENT THE FINAL AGREEMENT BETWEEN THE
MAKER AND THE PAYEE AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
NCI BUILDING SYSTEMS, INC.
By: /s/ Robert J Medlock
---------------------------------------------
Name: Robert J. Medlock
-------------------------------------------
Title: Vice President and Chief Financial Officer
------------------------------------------
<PAGE> 13
FACILITY B NOTE
(Term Loan)
$11,250,000 Houston, Texas As of May 6, 1998
FOR VALUE RECEIVED, NCI BUILDING SYSTEMS, INC., a Delaware corporation
("MAKER"), hereby promises to pay to the order of WACHOVIA BANK, N.A. ("PAYEE")
on or before the Facility B Termination Date, the principal amount of ELEVEN
MILLION TWO HUNDRED FIFTY THOUSAND DOLLARS or so much thereof as may then be
outstanding as the Facility B Principal Debt under this note, together with
interest, as described below.
This note has been executed and delivered under, and is subject to the
terms of, the Credit Agreement dated as of March 25, 1998 (as amended,
supplemented or restated, the "CREDIT AGREEMENT"), among Maker, NationsBank of
Texas, N.A., as Administrative Agent, and the Lenders and other parties named in
the Credit Agreement (including, without limitation, Payee) and is one of the
Facility B Notes referred to in the Credit Agreement. Unless defined in this
note, or the context requires otherwise, capitalized terms used in this note
have the meanings given to such terms in the Credit Agreement. Reference is made
to the Credit Agreement for provisions affecting this note regarding applicable
interest rates, principal and interest payment dates, final maturity, voluntary
and mandatory prepayments, acceleration of maturity, exercise of Rights, payment
of attorneys' fees, court costs and other costs of collection, certain waivers
by Maker and others now or hereafter obligated for payment of any sums due under
this note, and security for the payment of this note. This note is a Loan
Document and, therefore, is subject to the applicable provisions of SECTION 14
of the Credit Agreement, all of which applicable provisions are incorporated
into this note by reference as if set forth in this note verbatim.
Specific reference is made to SECTION 3.8 of the Credit Agreement for
usury savings provisions.
This note is being executed and delivered, and is intended to be
performed, in the State of Texas, and the Laws of such State and of the United
States of America shall govern the Rights and duties of Maker and Payee and the
validity, construction, enforcement and interpretation of this note.
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE DETERMINED
SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND ANY PRIOR ORAL
AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED INTO SUCH WRITINGS.
THIS NOTE, THE CREDIT AGREEMENT (AS AMENDED IN WRITING FROM TIME TO TIME) AND
THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY THE MAKER AND THE PAYEE (OR BY THE
MAKER FOR THE BENEFIT OF THE PAYEE) REPRESENT THE FINAL AGREEMENT BETWEEN THE
MAKER AND THE PAYEE AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
NCI BUILDING SYSTEMS, INC.
By: /s/ Robert J Medlock
---------------------------------------------
Name: Robert J. Medlock
-------------------------------------------
Title: Vice President and Chief Financial Officer
------------------------------------------
<PAGE> 14
FACILITY B NOTE
(Term Loan)
$7,500,000 Houston, Texas As of May 6, 1998
FOR VALUE RECEIVED, NCI BUILDING SYSTEMS, INC., a Delaware corporation
("MAKER"), hereby promises to pay to the order of CIBC, INC. ("PAYEE") on or
before the Facility B Termination Date, the principal amount of SEVEN MILLION
FIVE HUNDRED THOUSAND DOLLARS or so much thereof as may then be outstanding as
the Facility B Principal Debt under this note, together with interest, as
described below.
This note has been executed and delivered under, and is subject to the
terms of, the Credit Agreement dated as of March 25, 1998 (as amended,
supplemented or restated, the "CREDIT AGREEMENT"), among Maker, NationsBank of
Texas, N.A., as Administrative Agent, and the Lenders and other parties named in
the Credit Agreement (including, without limitation, Payee) and is one of the
Facility B Notes referred to in the Credit Agreement. Unless defined in this
note, or the context requires otherwise, capitalized terms used in this note
have the meanings given to such terms in the Credit Agreement. Reference is made
to the Credit Agreement for provisions affecting this note regarding applicable
interest rates, principal and interest payment dates, final maturity, voluntary
and mandatory prepayments, acceleration of maturity, exercise of Rights, payment
of attorneys' fees, court costs and other costs of collection, certain waivers
by Maker and others now or hereafter obligated for payment of any sums due under
this note, and security for the payment of this note. This note is a Loan
Document and, therefore, is subject to the applicable provisions of SECTION 14
of the Credit Agreement, all of which applicable provisions are incorporated
into this note by reference as if set forth in this note verbatim.
Specific reference is made to SECTION 3.8 of the Credit Agreement for
usury savings provisions.
This note is being executed and delivered, and is intended to be
performed, in the State of Texas, and the Laws of such State and of the United
States of America shall govern the Rights and duties of Maker and Payee and the
validity, construction, enforcement and interpretation of this note.
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE DETERMINED
SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND ANY PRIOR ORAL
AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED INTO SUCH WRITINGS.
THIS NOTE, THE CREDIT AGREEMENT (AS AMENDED IN WRITING FROM TIME TO TIME) AND
THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY THE MAKER AND THE PAYEE (OR BY THE
MAKER FOR THE BENEFIT OF THE PAYEE) REPRESENT THE FINAL AGREEMENT BETWEEN THE
MAKER AND THE PAYEE AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
NCI BUILDING SYSTEMS, INC.
By: /s/ Robert J Medlock
---------------------------------------------
Name: Robert J. Medlock
-------------------------------------------
Title: Vice President and Chief Financial Officer
------------------------------------------
<PAGE> 15
FACILITY B NOTE
(Term Loan)
$7,500,000 Houston, Texas As of May 6, 1998
FOR VALUE RECEIVED, NCI BUILDING SYSTEMS, INC., a Delaware corporation
("MAKER"), hereby promises to pay to the order of CREDIT AGRICOLE INDOSUEZ
("PAYEE") on or before the Facility B Termination Date, the principal amount of
SEVEN MILLION FIVE HUNDRED THOUSAND DOLLARS or so much thereof as may then be
outstanding as the Facility B Principal Debt under this note, together with
interest, as described below.
This note has been executed and delivered under, and is subject to the
terms of, the Credit Agreement dated as of March 25, 1998 (as amended,
supplemented or restated, the "CREDIT AGREEMENT"), among Maker, NationsBank of
Texas, N.A., as Administrative Agent, and the Lenders and other parties named in
the Credit Agreement (including, without limitation, Payee) and is one of the
Facility B Notes referred to in the Credit Agreement. Unless defined in this
note, or the context requires otherwise, capitalized terms used in this note
have the meanings given to such terms in the Credit Agreement. Reference is made
to the Credit Agreement for provisions affecting this note regarding applicable
interest rates, principal and interest payment dates, final maturity, voluntary
and mandatory prepayments, acceleration of maturity, exercise of Rights, payment
of attorneys' fees, court costs and other costs of collection, certain waivers
by Maker and others now or hereafter obligated for payment of any sums due under
this note, and security for the payment of this note. This note is a Loan
Document and, therefore, is subject to the applicable provisions of SECTION 14
of the Credit Agreement, all of which applicable provisions are incorporated
into this note by reference as if set forth in this note verbatim.
Specific reference is made to SECTION 3.8 of the Credit Agreement for
usury savings provisions.
This note is being executed and delivered, and is intended to be
performed, in the State of Texas, and the Laws of such State and of the United
States of America shall govern the Rights and duties of Maker and Payee and the
validity, construction, enforcement and interpretation of this note.
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE DETERMINED
SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND ANY PRIOR ORAL
AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED INTO SUCH WRITINGS.
THIS NOTE, THE CREDIT AGREEMENT (AS AMENDED IN WRITING FROM TIME TO TIME) AND
THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY THE MAKER AND THE PAYEE (OR BY THE
MAKER FOR THE BENEFIT OF THE PAYEE) REPRESENT THE FINAL AGREEMENT BETWEEN THE
MAKER AND THE PAYEE AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
NCI BUILDING SYSTEMS, INC.
By: /s/ Robert J Medlock
---------------------------------------------
Name: Robert J. Medlock
-------------------------------------------
Title: Vice President and Chief Financial Officer
------------------------------------------
<PAGE> 16
FACILITY B NOTE
(Term Loan)
$7,500,000 Houston, Texas As of May 6, 1998
FOR VALUE RECEIVED, NCI BUILDING SYSTEMS, INC., a Delaware corporation
("MAKER"), hereby promises to pay to the order of THE FUJI BANK LIMITED -
HOUSTON AGENCY ("PAYEE") on or before the Facility B Termination Date, the
principal amount of SEVEN MILLION FIVE HUNDRED THOUSAND DOLLARS or so much
thereof as may then be outstanding as the Facility B Principal Debt under this
note, together with interest, as described below.
This note has been executed and delivered under, and is subject to the
terms of, the Credit Agreement dated as of March 25, 1998 (as amended,
supplemented or restated, the "CREDIT AGREEMENT"), among Maker, NationsBank of
Texas, N.A., as Administrative Agent, and the Lenders and other parties named in
the Credit Agreement (including, without limitation, Payee) and is one of the
Facility B Notes referred to in the Credit Agreement. Unless defined in this
note, or the context requires otherwise, capitalized terms used in this note
have the meanings given to such terms in the Credit Agreement. Reference is made
to the Credit Agreement for provisions affecting this note regarding applicable
interest rates, principal and interest payment dates, final maturity, voluntary
and mandatory prepayments, acceleration of maturity, exercise of Rights, payment
of attorneys' fees, court costs and other costs of collection, certain waivers
by Maker and others now or hereafter obligated for payment of any sums due under
this note, and security for the payment of this note. This note is a Loan
Document and, therefore, is subject to the applicable provisions of SECTION 14
of the Credit Agreement, all of which applicable provisions are incorporated
into this note by reference as if set forth in this note verbatim.
Specific reference is made to SECTION 3.8 of the Credit Agreement for
usury savings provisions.
This note is being executed and delivered, and is intended to be
performed, in the State of Texas, and the Laws of such State and of the United
States of America shall govern the Rights and duties of Maker and Payee and the
validity, construction, enforcement and interpretation of this note.
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE DETERMINED
SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND ANY PRIOR ORAL
AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED INTO SUCH WRITINGS.
THIS NOTE, THE CREDIT AGREEMENT (AS AMENDED IN WRITING FROM TIME TO TIME) AND
THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY THE MAKER AND THE PAYEE (OR BY THE
MAKER FOR THE BENEFIT OF THE PAYEE) REPRESENT THE FINAL AGREEMENT BETWEEN THE
MAKER AND THE PAYEE AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
NCI BUILDING SYSTEMS, INC.
By: /s/ Robert J Medlock
---------------------------------------------
Name: Robert J. Medlock
-------------------------------------------
Title: Vice President and Chief Financial Officer
------------------------------------------
<PAGE> 17
FACILITY B NOTE
(Term Loan)
$7,500,000 Houston, Texas As of May 6, 1998
FOR VALUE RECEIVED, NCI BUILDING SYSTEMS, INC., a Delaware corporation
("MAKER"), hereby promises to pay to the order of IMPERIAL BANK, a California
banking corporation ("PAYEE") on or before the Facility B Termination Date, the
principal amount of SEVEN MILLION FIVE HUNDRED THOUSAND DOLLARS or so much
thereof as may then be outstanding as the Facility B Principal Debt under this
note, together with interest, as described below.
This note has been executed and delivered under, and is subject to the
terms of, the Credit Agreement dated as of March 25, 1998 (as amended,
supplemented or restated, the "CREDIT AGREEMENT"), among Maker, NationsBank of
Texas, N.A., as Administrative Agent, and the Lenders and other parties named in
the Credit Agreement (including, without limitation, Payee) and is one of the
Facility B Notes referred to in the Credit Agreement. Unless defined in this
note, or the context requires otherwise, capitalized terms used in this note
have the meanings given to such terms in the Credit Agreement. Reference is made
to the Credit Agreement for provisions affecting this note regarding applicable
interest rates, principal and interest payment dates, final maturity, voluntary
and mandatory prepayments, acceleration of maturity, exercise of Rights, payment
of attorneys' fees, court costs and other costs of collection, certain waivers
by Maker and others now or hereafter obligated for payment of any sums due under
this note, and security for the payment of this note. This note is a Loan
Document and, therefore, is subject to the applicable provisions of SECTION 14
of the Credit Agreement, all of which applicable provisions are incorporated
into this note by reference as if set forth in this note verbatim.
Specific reference is made to SECTION 3.8 of the Credit Agreement for
usury savings provisions.
This note is being executed and delivered, and is intended to be
performed, in the State of Texas, and the Laws of such State and of the United
States of America shall govern the Rights and duties of Maker and Payee and the
validity, construction, enforcement and interpretation of this note.
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE DETERMINED
SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND ANY PRIOR ORAL
AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED INTO SUCH WRITINGS.
THIS NOTE, THE CREDIT AGREEMENT (AS AMENDED IN WRITING FROM TIME TO TIME) AND
THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY THE MAKER AND THE PAYEE (OR BY THE
MAKER FOR THE BENEFIT OF THE PAYEE) REPRESENT THE FINAL AGREEMENT BETWEEN THE
MAKER AND THE PAYEE AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
NCI BUILDING SYSTEMS, INC.
By: /s/ Robert J Medlock
---------------------------------------------
Name: Robert J. Medlock
-------------------------------------------
Title: Vice President and Chief Financial Officer
------------------------------------------
<PAGE> 18
FACILITY B NOTE
(Term Loan)
$7,500,000 Houston, Texas As of May 6, 1998
FOR VALUE RECEIVED, NCI BUILDING SYSTEMS, INC., a Delaware corporation
("MAKER"), hereby promises to pay to the order of THE INDUSTRIAL BANK OF JAPAN,
LIMITED ("PAYEE") on or before the Facility B Termination Date, the principal
amount of SEVEN MILLION FIVE HUNDRED THOUSAND DOLLARS or so much thereof as may
then be outstanding as the Facility B Principal Debt under this note, together
with interest, as described below.
This note has been executed and delivered under, and is subject to the
terms of, the Credit Agreement dated as of March 25, 1998 (as amended,
supplemented or restated, the "CREDIT AGREEMENT"), among Maker, NationsBank of
Texas, N.A., as Administrative Agent, and the Lenders and other parties named in
the Credit Agreement (including, without limitation, Payee) and is one of the
Facility B Notes referred to in the Credit Agreement. Unless defined in this
note, or the context requires otherwise, capitalized terms used in this note
have the meanings given to such terms in the Credit Agreement. Reference is made
to the Credit Agreement for provisions affecting this note regarding applicable
interest rates, principal and interest payment dates, final maturity, voluntary
and mandatory prepayments, acceleration of maturity, exercise of Rights, payment
of attorneys' fees, court costs and other costs of collection, certain waivers
by Maker and others now or hereafter obligated for payment of any sums due under
this note, and security for the payment of this note. This note is a Loan
Document and, therefore, is subject to the applicable provisions of SECTION 14
of the Credit Agreement, all of which applicable provisions are incorporated
into this note by reference as if set forth in this note verbatim.
Specific reference is made to SECTION 3.8 of the Credit Agreement for
usury savings provisions.
This note is being executed and delivered, and is intended to be
performed, in the State of Texas, and the Laws of such State and of the United
States of America shall govern the Rights and duties of Maker and Payee and the
validity, construction, enforcement and interpretation of this note.
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE DETERMINED
SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND ANY PRIOR ORAL
AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED INTO SUCH WRITINGS.
THIS NOTE, THE CREDIT AGREEMENT (AS AMENDED IN WRITING FROM TIME TO TIME) AND
THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY THE MAKER AND THE PAYEE (OR BY THE
MAKER FOR THE BENEFIT OF THE PAYEE) REPRESENT THE FINAL AGREEMENT BETWEEN THE
MAKER AND THE PAYEE AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
<PAGE> 19
FACILITY B NOTE
(Term Loan)
$7,500,000 Houston, Texas As of May 6, 1998
FOR VALUE RECEIVED, NCI BUILDING SYSTEMS, INC., a Delaware corporation
("MAKER"), hereby promises to pay to the order of THE LONG-TERM CREDIT BANK OF
JAPAN, LIMITED ("PAYEE") on or before the Facility B Termination Date, the
principal amount of SEVEN MILLION FIVE HUNDRED THOUSAND DOLLARS or so much
thereof as may then be outstanding as the Facility B Principal Debt under this
note, together with interest, as described below.
This note has been executed and delivered under, and is subject to the
terms of, the Credit Agreement dated as of March 25, 1998 (as amended,
supplemented or restated, the "CREDIT AGREEMENT"), among Maker, NationsBank of
Texas, N.A., as Administrative Agent, and the Lenders and other parties named in
the Credit Agreement (including, without limitation, Payee) and is one of the
Facility B Notes referred to in the Credit Agreement. Unless defined in this
note, or the context requires otherwise, capitalized terms used in this note
have the meanings given to such terms in the Credit Agreement. Reference is made
to the Credit Agreement for provisions affecting this note regarding applicable
interest rates, principal and interest payment dates, final maturity, voluntary
and mandatory prepayments, acceleration of maturity, exercise of Rights, payment
of attorneys' fees, court costs and other costs of collection, certain waivers
by Maker and others now or hereafter obligated for payment of any sums due under
this note, and security for the payment of this note. This note is a Loan
Document and, therefore, is subject to the applicable provisions of SECTION 14
of the Credit Agreement, all of which applicable provisions are incorporated
into this note by reference as if set forth in this note verbatim.
Specific reference is made to SECTION 3.8 of the Credit Agreement for
usury savings provisions.
This note is being executed and delivered, and is intended to be
performed, in the State of Texas, and the Laws of such State and of the United
States of America shall govern the Rights and duties of Maker and Payee and the
validity, construction, enforcement and interpretation of this note.
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE DETERMINED
SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND ANY PRIOR ORAL
AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED INTO SUCH WRITINGS.
THIS NOTE, THE CREDIT AGREEMENT (AS AMENDED IN WRITING FROM TIME TO TIME) AND
THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY THE MAKER AND THE PAYEE (OR BY THE
MAKER FOR THE BENEFIT OF THE PAYEE) REPRESENT THE FINAL AGREEMENT BETWEEN THE
MAKER AND THE PAYEE AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
NCI BUILDING SYSTEMS, INC.
By: /s/ Robert J Medlock
---------------------------------------------
Name: Robert J. Medlock
-------------------------------------------
Title: Vice President and Chief Financial Officer
------------------------------------------
<PAGE> 20
FACILITY B NOTE
(Term Loan)
$7,500,000 Houston, Texas As of May 6, 1998
FOR VALUE RECEIVED, NCI BUILDING SYSTEMS, INC., a Delaware corporation
("MAKER"), hereby promises to pay to the order of UNION BANK OF CALIFORNIA, N.A.
("PAYEE") on or before the Facility B Termination Date, the principal amount of
SEVEN MILLION FIVE HUNDRED THOUSAND DOLLARS or so much thereof as may then be
outstanding as the Facility B Principal Debt under this note, together with
interest, as described below.
This note has been executed and delivered under, and is subject to the
terms of, the Credit Agreement dated as of March 25, 1998 (as amended,
supplemented or restated, the "CREDIT AGREEMENT"), among Maker, NationsBank of
Texas, N.A., as Administrative Agent, and the Lenders and other parties named in
the Credit Agreement (including, without limitation, Payee) and is one of the
Facility B Notes referred to in the Credit Agreement. Unless defined in this
note, or the context requires otherwise, capitalized terms used in this note
have the meanings given to such terms in the Credit Agreement. Reference is made
to the Credit Agreement for provisions affecting this note regarding applicable
interest rates, principal and interest payment dates, final maturity, voluntary
and mandatory prepayments, acceleration of maturity, exercise of Rights, payment
of attorneys' fees, court costs and other costs of collection, certain waivers
by Maker and others now or hereafter obligated for payment of any sums due under
this note, and security for the payment of this note. This note is a Loan
Document and, therefore, is subject to the applicable provisions of SECTION 14
of the Credit Agreement, all of which applicable provisions are incorporated
into this note by reference as if set forth in this note verbatim.
Specific reference is made to SECTION 3.8 of the Credit Agreement for
usury savings provisions.
This note is being executed and delivered, and is intended to be
performed, in the State of Texas, and the Laws of such State and of the United
States of America shall govern the Rights and duties of Maker and Payee and the
validity, construction, enforcement and interpretation of this note.
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE DETERMINED
SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND ANY PRIOR ORAL
AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED INTO SUCH WRITINGS.
THIS NOTE, THE CREDIT AGREEMENT (AS AMENDED IN WRITING FROM TIME TO TIME) AND
THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY THE MAKER AND THE PAYEE (OR BY THE
MAKER FOR THE BENEFIT OF THE PAYEE) REPRESENT THE FINAL AGREEMENT BETWEEN THE
MAKER AND THE PAYEE AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
NCI BUILDING SYSTEMS, INC.
By: /s/ Robert J Medlock
---------------------------------------------
Name: Robert J. Medlock
-------------------------------------------
Title: Vice President and Chief Financial Officer
------------------------------------------
<PAGE> 21
FACILITY B NOTE
(Term Loan)
$5,000,000 Houston, Texas As of May 6, 1998
FOR VALUE RECEIVED, NCI BUILDING SYSTEMS, INC., a Delaware corporation
("MAKER"), hereby promises to pay to the order of SOUTHWEST BANK OF TEXAS, N.A.
("PAYEE") on or before the Facility B Termination Date, the principal amount of
FIVE MILLION DOLLARS or so much thereof as may then be outstanding as the
Facility B Principal Debt under this note, together with interest, as described
below.
This note has been executed and delivered under, and is subject to the
terms of, the Credit Agreement dated as of March 25, 1998 (as amended,
supplemented or restated, the "CREDIT AGREEMENT"), among Maker, NationsBank of
Texas, N.A., as Administrative Agent, and the Lenders and other parties named in
the Credit Agreement (including, without limitation, Payee) and is one of the
Facility B Notes referred to in the Credit Agreement. Unless defined in this
note, or the context requires otherwise, capitalized terms used in this note
have the meanings given to such terms in the Credit Agreement. Reference is made
to the Credit Agreement for provisions affecting this note regarding applicable
interest rates, principal and interest payment dates, final maturity, voluntary
and mandatory prepayments, acceleration of maturity, exercise of Rights, payment
of attorneys' fees, court costs and other costs of collection, certain waivers
by Maker and others now or hereafter obligated for payment of any sums due under
this note, and security for the payment of this note. This note is a Loan
Document and, therefore, is subject to the applicable provisions of SECTION 14
of the Credit Agreement, all of which applicable provisions are incorporated
into this note by reference as if set forth in this note verbatim.
Specific reference is made to SECTION 3.8 of the Credit Agreement for
usury savings provisions.
This note is being executed and delivered, and is intended to be
performed, in the State of Texas, and the Laws of such State and of the United
States of America shall govern the Rights and duties of Maker and Payee and the
validity, construction, enforcement and interpretation of this note.
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE DETERMINED
SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND ANY PRIOR ORAL
AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED INTO SUCH WRITINGS.
THIS NOTE, THE CREDIT AGREEMENT (AS AMENDED IN WRITING FROM TIME TO TIME) AND
THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY THE MAKER AND THE PAYEE (OR BY THE
MAKER FOR THE BENEFIT OF THE PAYEE) REPRESENT THE FINAL AGREEMENT BETWEEN THE
MAKER AND THE PAYEE AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
NCI BUILDING SYSTEMS, INC.
By: /s/ Robert J Medlock
---------------------------------------------
Name: Robert J. Medlock
-------------------------------------------
Title: Vice President and Chief Financial Officer
------------------------------------------
<PAGE> 1
EXHIBIT 4.9
FACILITY C NOTE
(364-day Revolving Facility)
$129,500,000 Houston, Texas As of July 31, 1998
FOR VALUE RECEIVED, NCI BUILDING SYSTEMS, INC., a Delaware corporation
("MAKER"), hereby promises to pay to the order of NATIONSBANK, N.A. ("PAYEE") on
or before the Facility C Termination Date, the principal amount of ONE HUNDRED
TWENTY-NINE MILLION FIVE HUNDRED THOUSAND DOLLARS or so much thereof as may be
disbursed and outstanding as the Facility C Principal Debt under this note,
together with interest, as described below.
This note has been executed and delivered under, and is subject to the
terms of, the Credit Agreement dated as of March 25, 1998 (as amended,
supplemented or restated, the "CREDIT AGREEMENT"), among Maker, NationsBank of
Texas, N.A., as Administrative Agent, and the Lenders and other parties named in
the Credit Agreement (including, without limitation, Payee) and is one of the
Facility C Notes referred to in the Credit Agreement. Unless defined in this
note, or the context requires otherwise, capitalized terms used in this note
have the meanings given to such terms in the Credit Agreement. Reference is made
to the Credit Agreement for provisions affecting this note regarding applicable
interest rates, principal and interest payment dates, final maturity, voluntary
and mandatory prepayments, acceleration of maturity, exercise of Rights, payment
of attorneys' fees, court costs and other costs of collection, certain waivers
by Maker and others now or hereafter obligated for payment of any sums due under
this note, and security for the payment of this note. This note is a Loan
Document and, therefore, is subject to the applicable provisions of SECTION 14
of the Credit Agreement, all of which applicable provisions are incorporated
into this note by reference as if set forth in this note verbatim.
Specific reference is made to SECTION 3.8 of the Credit Agreement for
usury savings provisions.
This note is being executed and delivered, and is intended to be
performed, in the State of Texas, and the Laws of such State and of the United
States of America shall govern the Rights and duties of Maker and Payee and the
validity, construction, enforcement and interpretation of this note.
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE DETERMINED
SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND ANY PRIOR ORAL
AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED INTO SUCH WRITINGS.
THIS NOTE, THE CREDIT AGREEMENT (AS AMENDED IN WRITING FROM TIME TO TIME) AND
THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY THE MAKER AND THE PAYEE (OR BY THE
MAKER FOR THE BENEFIT OF THE PAYEE) REPRESENT THE FINAL AGREEMENT BETWEEN THE
MAKER AND THE PAYEE AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
NCI BUILDING SYSTEMS, INC.
By: /s/ Robert J. Medlock
--------------------------------
Name: Robert J. Medlock
-----------------------------
Title: Vice President and Chief
Financial Officer
-----------------------------
<PAGE> 2
FACILITY C NOTE
(364-day Revolving Facility)
$55,500,000 Houston, Texas As of July 31, 1998
FOR VALUE RECEIVED, NCI BUILDING SYSTEMS, INC., a Delaware corporation
("MAKER"), hereby promises to pay to the order of UBS AG, STAMFORD BRANCH
("PAYEE") on or before the Facility C Termination Date, the principal amount of
FIFTY-FIVE MILLION FIVE HUNDRED THOUSAND DOLLARS or so much thereof as may be
disbursed and outstanding as the Facility C Principal Debt under this note,
together with interest, as described below.
This note has been executed and delivered under, and is subject to the
terms of, the Credit Agreement dated as of March 25, 1998 (as amended,
supplemented or restated, the "CREDIT AGREEMENT"), among Maker, NationsBank of
Texas, N.A., as Administrative Agent, and the Lenders and other parties named in
the Credit Agreement (including, without limitation, Payee) and is one of the
Facility C Notes referred to in the Credit Agreement. Unless defined in this
note, or the context requires otherwise, capitalized terms used in this note
have the meanings given to such terms in the Credit Agreement. Reference is made
to the Credit Agreement for provisions affecting this note regarding applicable
interest rates, principal and interest payment dates, final maturity, voluntary
and mandatory prepayments, acceleration of maturity, exercise of Rights, payment
of attorneys' fees, court costs and other costs of collection, certain waivers
by Maker and others now or hereafter obligated for payment of any sums due under
this note, and security for the payment of this note. This note is a Loan
Document and, therefore, is subject to the applicable provisions of SECTION 14
of the Credit Agreement, all of which applicable provisions are incorporated
into this note by reference as if set forth in this note verbatim.
Specific reference is made to SECTION 3.8 of the Credit Agreement for
usury savings provisions.
This note is being executed and delivered, and is intended to be
performed, in the State of Texas, and the Laws of such State and of the United
States of America shall govern the Rights and duties of Maker and Payee and the
validity, construction, enforcement and interpretation of this note.
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE DETERMINED
SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND ANY PRIOR ORAL
AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED INTO SUCH WRITINGS.
THIS NOTE, THE CREDIT AGREEMENT (AS AMENDED IN WRITING FROM TIME TO TIME) AND
THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY THE MAKER AND THE PAYEE (OR BY THE
MAKER FOR THE BENEFIT OF THE PAYEE) REPRESENT THE FINAL AGREEMENT BETWEEN THE
MAKER AND THE PAYEE AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
NCI BUILDING SYSTEMS, INC.
By: /s/ Robert J. Medlock
--------------------------------
Name: Robert J. Medlock
-----------------------------
Title: Vice President and Chief
Financial Officer
-----------------------------
<PAGE> 3
FACILITY C NOTE
(364-day Revolving Facility)
$15,000,000 Houston, Texas As of July 31, 1998
FOR VALUE RECEIVED, NCI BUILDING SYSTEMS, INC., a Delaware corporation
("MAKER"), hereby promises to pay to the order of THE BANK OF NOVA SCOTIA
("PAYEE") on or before the Facility C Termination Date, the principal amount of
FIFTEEN MILLION DOLLARS or so much thereof as may be disbursed and outstanding
as the Facility C Principal Debt under this note, together with interest, as
described below.
This note has been executed and delivered under, and is subject to the
terms of, the Credit Agreement dated as of March 25, 1998 (as amended,
supplemented or restated, the "CREDIT AGREEMENT"), among Maker, NationsBank of
Texas, N.A., as Administrative Agent, and the Lenders and other parties named in
the Credit Agreement (including, without limitation, Payee) and is one of the
Facility C Notes referred to in the Credit Agreement. Unless defined in this
note, or the context requires otherwise, capitalized terms used in this note
have the meanings given to such terms in the Credit Agreement. Reference is made
to the Credit Agreement for provisions affecting this note regarding applicable
interest rates, principal and interest payment dates, final maturity, voluntary
and mandatory prepayments, acceleration of maturity, exercise of Rights, payment
of attorneys' fees, court costs and other costs of collection, certain waivers
by Maker and others now or hereafter obligated for payment of any sums due under
this note, and security for the payment of this note. This note is a Loan
Document and, therefore, is subject to the applicable provisions of SECTION 14
of the Credit Agreement, all of which applicable provisions are incorporated
into this note by reference as if set forth in this note verbatim.
Specific reference is made to SECTION 3.8 of the Credit Agreement for
usury savings provisions.
This note is being executed and delivered, and is intended to be
performed, in the State of Texas, and the Laws of such State and of the United
States of America shall govern the Rights and duties of Maker and Payee and the
validity, construction, enforcement and interpretation of this note.
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE DETERMINED
SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND ANY PRIOR ORAL
AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED INTO SUCH WRITINGS.
THIS NOTE, THE CREDIT AGREEMENT (AS AMENDED IN WRITING FROM TIME TO TIME) AND
THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY THE MAKER AND THE PAYEE (OR BY THE
MAKER FOR THE BENEFIT OF THE PAYEE) REPRESENT THE FINAL AGREEMENT BETWEEN THE
MAKER AND THE PAYEE AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
NCI BUILDING SYSTEMS, INC.
By: /s/ Robert J. Medlock
--------------------------------
Name: Robert J. Medlock
-----------------------------
Title: Vice President and Chief
Financial Officer
-----------------------------
<PAGE> 1
EXHIBIT 4.10
GUARANTY
THIS GUARANTY (as amended, this "GUARANTY") is executed as of May 1,
1998, by the undersigned ("GUARANTOR") in favor of NationsBank of Texas, N.A.
("AGENT"), as Agent for the benefit of the Lenders ("LENDERS") now or hereafter
party to the Credit Agreement (as defined below).
RECITALS
A. NCI Building Systems, Inc., a Delaware corporation ("BORROWER"),
Agent and Lenders have executed a Credit Agreement dated March 25, 1998 (as
amended, supplemented or restated, the "CREDIT AGREEMENT"), together with
certain other Loan Documents.
B. Guarantor is a Subsidiary of Borrower and, because of its ownership
by Borrower, expects to continue to receive business opportunities, financial
support and management support from Borrower. Guarantor has agreed to enter into
this Guaranty so that Borrower can receive the benefits of the Guaranteed Debt
(as defined below) and continue to provide these services to Guarantor.
C. Guarantor's board of directors has determined that Guarantor may
benefit directly or indirectly from Borrower's execution of the Credit Agreement
as Guarantor may be the indirect recipient of funds advanced by Lenders to
Borrower under the Credit Agreement or the account party of LCs issued by Agent
pursuant to the Credit Agreement, and as such the value of the consideration
received and to be received by it under the Loan Documents is reasonably worth
at least as much as its liability and obligation under this Guaranty.
D. It is expressly understood among Borrower, Guarantor, Agent and
Lenders that the execution and delivery of this Guaranty is a condition
precedent to Lenders' obligations to extend credit under the Credit Agreement
and Agent's obligation to issue LCs under the Credit Agreement.
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which are hereby acknowledged, Guarantor guarantees to Lenders the prompt
payment at maturity (by acceleration or otherwise), and at all times thereafter,
of the Guaranteed Debt, as follows:
1. Definitions. UNLESS OTHERWISE DEFINED IN THIS GUARANTY, ANY
CAPITALIZED TERM USED IN THIS GUARANTY SHALL HAVE THE MEANING GIVEN THAT TERM IN
THE CREDIT AGREEMENT. The following terms shall have the following meanings as
used in this Guaranty:
1.1 "BORROWER" includes, without limitation, Borrower as a
debtor-in-possession, and any receiver, trustee, liquidator,
conservator, custodian, or similar party hereafter appointed for
Borrower or all or substantially all of Borrower's assets pursuant to
any liquidation, conservatorship, bankruptcy, moratorium,
rearrangement, receivership, insolvency, reorganization, or similar
Debtor Relief Law from time to time in effect affecting the Rights of
creditors generally.
1.2 "GUARANTEED DEBT" means the Obligation as defined in the
Credit Agreement (including, without limitation, amounts that would
become due but for operation of any applicable provision of Title 11 of
the U.S. Code (including, without limitation, 11 U.S.C. Sections 502
and 506)), together with all pre- and post-maturity interest thereon
(including, without limitation, all post-petition
<PAGE> 2
interest if Borrower or any Subsidiary voluntarily or involuntarily
files for bankruptcy protection) and any and all costs, attorneys' fees
and expenses reasonably incurred by Agent or any Lender to enforce
Borrower's, Guarantor's, or any other obligor's, payment of any of the
foregoing indebtedness.
1.3 "SUBORDINATED DEBT" means all obligations of Borrower to
Guarantor, whether direct, indirect, fixed, contingent, liquidated,
unliquidated, joint, several, or joint and several, now or hereafter
existing, due or to become due to Guarantor, or held or to be held by
Guarantor, whether created directly or acquired by assignment or
otherwise, and whether or not evidenced by written instrument.
2. Guaranty. This is an absolute, irrevocable and continuing guaranty
of payment of the Guaranteed Debt which will remain in effect until the
Guaranteed Debt is completely paid and all commitments to lend under the Credit
Agreement have terminated. The circumstance that at any time or from time to
time all or any portion of the Guaranteed Debt may be paid in full shall not
affect the Guarantor's obligation with respect to the Guaranteed Debt of
Borrower to Agent and Lenders thereafter incurred. The Guarantor may not rescind
or revoke its obligations to Agent and Lenders with respect to the Guaranteed
Debt.
3. Amount of Guaranty. In consummating the transactions contemplated by
the Credit Agreement, Guarantor does not intend to disturb, delay, hinder, or
defraud either its present or future creditors. Guarantor is familiar with, and
has independently reviewed books and records regarding, the financial condition
of Borrower and is familiar with the value of the security and support for the
payment and performance of the Guaranteed Debt. Based upon such examination, and
taking into account the fairly discounted value of Guarantor's contingent
obligations under this Guaranty and the limitation of liability set forth in
Section 4 hereof and the value of the subrogation and contribution claims
Guarantor could make in connection with this Guaranty, and assuming each of the
transaction contemplated by the Credit Agreement is consummated and Borrower
makes full use of the credit facilities thereunder, the present realizable fair
market value of the assets of Guarantor exceeds the total obligations of
Guarantor, and Guarantor is able to realize upon its assets and pay its
obligations as such obligations mature in the normal course of business.
4. Limit of Liability. The obligations of Guarantor hereunder shall be
limited to an aggregate amount equal to the largest amount that would not render
its obligations hereunder subject to avoidance under Section 548 of the U.S.
Bankruptcy Code or any comparable provisions of any applicable state Law.
5. Liability for Other Indebtedness of Borrower. If Guarantor becomes
liable for any indebtedness owing by Borrower to Agent or any Lender, by
endorsement or otherwise, other than under this Guaranty, such liability shall
not be, in any manner, impaired or affected hereby, and the Rights of Agent or
Lenders under this Guaranty shall be cumulative of any and all other Rights that
Agent or Lenders may ever have against Guarantor. The exercise by Agent or
Lenders of any Right or remedy under this Guaranty under the Loan Documents, or
other instrument, or at Law or in equity, shall not preclude the concurrent or
subsequent exercise of any other Right or remedy.
6. Default by Borrower. If a Default exists, Guarantor shall pay the
amount of the Guaranteed Debt then due and payable to Agent and Lenders on
demand and without (a) further notice of dishonor, to Guarantor, (b) any prior
notice to Guarantor of the acceptance by Agent or Lenders of this Guaranty, (c)
any notice having been given to Guarantor prior to such demand of the creating
or incurring of such indebtedness,
2
<PAGE> 3
or (d) notice of intent to accelerate or notice of acceleration to Guarantor or
Borrower. To enforce such payment by Guarantor it shall not be necessary for
Agent or Lenders to first or contemporaneously institute suit or exhaust
remedies against Borrower or others liable on such indebtedness, or to enforce
Rights against any security or collateral ever given to secure such
indebtedness.
7. Subordination. All Subordinated Debt shall be expressly subordinated
to the final payment in full of the Guaranteed Debt. Guarantor agrees not to
receive or accept any payment from Borrower with respect to the Subordinated
Debt at any time a Default exists; and, in the event Guarantor receives any
payment on the Subordinated Debt in violation of the foregoing, Guarantor shall
hold any such payment in trust for Agent and Lenders and promptly turn it over
to Agent, in the form received (with any necessary endorsements), to be applied
to the Guaranteed Debt.
8. Subrogation. Guarantor agrees that it will not assert, enforce, or
otherwise exercise (a) any right of subrogation to any of the rights or liens of
Agent or any Lender or any other beneficiary against Borrower or any other
obligor on the Guaranteed Debt or any Collateral or other security, or (b) any
right of recourse, reimbursement, subrogation, contribution, indemnification, or
similar right against Borrower or any other obligor or other guarantor on all or
any part of the Guaranteed Debt or any guarantor thereof (whether such rights in
clause (a) or clause (b) arise in equity, under contract, by statute, under
common law, or otherwise).
9. No Release. Guarantor hereby agrees that its obligations under the
terms of this Guaranty shall not be released, diminished, impaired, reduced or
affected by the occurrence of any one or more of the following events:
(a) Agent's or Lenders' taking or accepting of any other
security or guaranty for any or all of the Guaranteed Debt;
(b) any release, surrender, exchange, subordination or loss of
any security at any time existing in connection with any or all of the
Guaranteed Debt;
(c) any full or partial release of the liability of any other
obligor on the Obligation;
(d) the insolvency, becoming subject to any Debtor Relief Law,
or lack of corporate power of Borrower, any of the undersigned, or any
party at any time liable for the payment of any or all of the
Guaranteed Debt, whether now existing or hereafter occurring;
(e) any renewal, extension or rearrangement of the payment of
any or all of the Guaranteed Debt, either with or without notice to or
consent of Guarantor, or any adjustment, indulgence, forbearance, or
compromise that may be granted or given by Agent or any Lender to
Borrower, Guarantor, or any other obligor on the Obligation;
(f) any neglect, delay, omission, failure or refusal of Agent
or any Lender to take or prosecute any action for the collection of all
or any part of the Guaranteed Debt or to foreclose or take or prosecute
any action in connection with any instrument or agreement evidencing or
securing any or all of the Guaranteed Debt;
3
<PAGE> 4
(g) any failure of Agent or any Lender to notify Guarantor of
any renewal, extension, or assignment of any or all of the Guaranteed
Debt, or the release of any security or of any other action taken or
refrained from being taken by Agent or any Lender against Borrower or
any new agreement between Agent, any Lender, and Borrower, it being
understood that neither Agent nor any Lender shall be required to give
Guarantor any notice of any kind under any circumstances whatsoever
with respect to or in connection with the Guaranteed Debt, other than
any notice required to be given to Guarantor elsewhere herein;
(h) the unenforceability of all or any part of the Guaranteed
Debt against Borrower by reason of the fact that the Guaranteed Debt
exceeds the amount permitted by Law, the act of creating the Guaranteed
Debt, or any part thereof, is ultra vires, or the officers creating
same exceeded their authority or violated their fiduciary duties in
connection therewith;
(i) any payment of the Obligation to Agent or Lenders is held
to constitute a preference under any Debtor Relief Law or if for any
other reason Agent or any Lender is required to refund such payment or
make payment to someone else (and in each such instance this Guaranty
shall be reinstated in an amount equal to such payment), or if there is
more than one person or entity signing this Guaranty or otherwise
guaranteeing payment of the Guaranteed Debt, the release of any one or
more of them hereunder; or
(j) any discharge, release, or other forgiveness of Borrower's
personal liability for the payment of the Guaranteed Debt.
10. Waiver. Guarantor hereby waives all rights by which it might be
entitled to require suit on an accrued right of action in respect of any of the
Guaranteed Debt or require suit against Borrower or others, whether arising
pursuant to Section 34.02 of the Texas Business and Commerce Code, as amended
(regarding Guarantor's right to require Agent or Lenders to sue Borrower on
accrued right of action following Guarantor's written notice to Agent or
Lenders), Section 17.001 of the Texas Civil Practice and Remedies Code, as
amended (allowing suit against Guarantor without suit against Borrower, but
precluding entry of judgment against Guarantor prior to entry of judgment
against Borrower), Rule 31 of the Texas Rules of Civil Procedure, as amended
(requiring Agent or Lenders to join Borrower in any suit against Guarantor
unless judgment has been previously entered against Borrower), or otherwise.
Guarantor waives notice of acceptance of this Guaranty, notice of any loan to
which it may apply, and waives presentment, demand for payment, protest, notice
of dishonor or nonpayment of any loan, notice of intent to accelerate, notice of
acceleration, and notice of any suit or notice of the taking of other action by
Lender against Borrower, Guarantor or any other person and any notice to any
party liable thereon (including Guarantor).
11. Reliance and Duty to Remain Informed. Guarantor confirms that it
has executed and delivered this Guaranty after reviewing the terms and
conditions of the Loan Documents and such other information as it has deemed
appropriate in order to make its own credit analysis and decision to execute and
deliver this Guaranty. Guarantor confirms that it has made its own independent
investigation with respect to Borrower's creditworthiness and is not executing
and delivering this Guaranty in reliance on any representation or warranty by
Agent or Lender as to such creditworthiness. Guarantor expressly assumes all
responsibilities to remain informed of the financial condition of Borrower and
any circumstances affecting (a) Borrower's ability to perform under the Loan
Documents to which Borrower is a party or (b) any collateral securing all or any
part of the Guaranteed Debt.
4
<PAGE> 5
12. Representations and Warranties. Guarantor acknowledges that certain
representations and warranties set forth in the Credit Agreement are in respect
of it, and Guarantor reaffirms that each such representation and warranty is
true and correct in all material respects. Furthermore, Guarantor represents and
warrants to Agent and Lenders that Guarantor's board of directors has determined
that its liability and obligation hereunder may reasonably be expected to
benefit it directly or indirectly.
13. Change in Guarantor's Status. Should Guarantor become insolvent, or
fail to pay its debts generally as they become due, or voluntarily seek, consent
to, or acquiesce in the benefit or benefits of any Debtor Relief Law or become a
party to (or be made the subject of) any proceeding provided for by any Debtor
Relief Law (other than as a creditor or claimant) that could suspend or
otherwise adversely affect the Rights of Agent or Lenders granted hereunder,
then, in any such event, the Guaranteed Debt shall be, as between Guarantor,
Agent and Lender, a fully matured, due, and payable obligation of Guarantor to
Agent or Lender (without regard to whether Borrower is then in Default or
whether the Guaranteed Debt, or any part thereof is then due and owing by
Borrower to Lender), payable in full by Guarantor to Agent or Lender upon
demand, which shall be the estimated amount owing in respect of the contingent
claim created hereunder.
14. Covenants. Guarantor acknowledges that certain covenants set forth
in the Credit Agreement are in respect of it or shall be imposed upon it, and
Guarantor covenants and agrees to promptly and properly perform, observe, and
comply with each such covenant. Furthermore, Guarantor shall, jointly and
severally, indemnify, protect, and hold Agent and Lenders and their respective
parents, subsidiaries, directors, officers, employees, representatives, agents,
successors, permitted assigns, and attorneys (collectively, the "INDEMNIFIED
PARTIES") harmless from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims, and proceedings
and all costs, expenses (including, without limitation, all reasonable
attorneys' fees and legal expenses whether or not suit is brought), and
reasonable disbursements of any kind or nature (the "INDEMNIFIED LIABILITIES")
that may at any time be imposed on, incurred by, or asserted against the
indemnified parties, in any way relating to or arising out of (a) the direct or
indirect result of the violation by any Company of any Environmental Law, (b)
any Company's generation, manufacture, production, storage, release, threatened
release, discharge, disposal, or presence in connection with its properties of a
Hazardous Substance (including, without limitation, (I) all damages from any
use, generation, manufacture, production, storage, release, threatened release,
discharge, disposal, or presence, or (ii) the costs of any environmental
investigation, monitoring, repair, cleanup, or detoxification and the
preparation and implementation of any closure, remedial, or other plans), or (c)
the Loan Documents or any of the transactions contemplated therein. However,
although each indemnified party has the Right to be indemnified under the Loan
Documents for its own ordinary negligence, no indemnified party has the Right to
be indemnified under the Loan Documents for its own fraud, gross negligence, or
willful misconduct. The provisions of and undertakings and indemnification set
forth in this paragraph shall survive the satisfaction and payment of the
Obligation and termination of this Guaranty.
15. Offset Claims. The Guaranteed Debt shall not be reduced, discharged
or released because or by reason of any existing or future offset, claim or
defense (except for the defense of complete and final payment of the Guaranteed
Debt) of Borrower or any other party against Agent or Lenders or against payment
of the Guaranteed Debt, whether such offset, claim, or defense arises in
connection with the Guaranteed Debt or otherwise. Such claims and defenses
include, without limitation, failure of consideration, breach of warranty,
fraud, statute of frauds, bankruptcy, infancy, statute of limitations, lender
liability, accord and satisfaction, and usury.
5
<PAGE> 6
16. Binding Agreement. This Guaranty is for the benefit of Agent and
Lenders and their respective successors and assigns. Guarantor acknowledges that
in the event of an assignment of the Guaranteed Debt or any part thereof in
accordance with the Credit Agreement, the rights and benefits under this
Guaranty, to the extent applicable to the indebtedness so assigned, may be
transferred with such indebtedness. This Guaranty is binding on Guarantor and
its successors and permitted assigns.
17. Loan Document. This Guaranty is a Loan Document and, therefore,
this Guaranty is subject to the applicable provisions of SECTION 14 of the
Credit Agreement, all of which applicable provisions are incorporated into this
Guaranty by reference as if set forth verbatim.
18. Notices. All notices required or permitted to be given under this
Guaranty, if any, must be in writing and shall or may, as the case may be, be
given in the same manner as notice is given under the Credit Agreement as
follows:
If to Agent:
NationsBank of Texas, N.A.
Corporate Finance Group
700 Louisiana Street, 8th Floor
P.O. Box 2518
Houston, Texas 77252-2518
Telephone No.: (713) 247-6258
Facsimile No.: (713) 247-6360
Attention: Richard L. Nichols, Jr.
Vice President
with a copy to:
Porter & Hedges, L.L.P.
700 Louisiana, 35th Floor
Houston, Texas 77002
Telephone No.: (713) 226-0681
Facsimile No.: (713) 226-0281
Attention: F. Walter Bistline, Jr.
If to Borrower:
NCI Building Systems, Inc.
7301 Fairview
Houston, Texas 77041
Telephone No.: (713) 466-7758
Facsimile No.: (713) 466-3368
Attention: Robert J. Medlock
Chief Financial Officer
6
<PAGE> 7
with a copy to:
Gardere & Wynne, L.L.P.
Thanksgiving Tower
1301 Elm Street, Suite 3000
Dallas, Texas 75201
Telephone No.: (214) 999-3000
Facsimile No.: (214) 999-4667
Attention: John K. Sterling
If to Guarantor:
A&S Building Systems, L.P.
7301 Fairview
Houston, Texas 77041
Telephone No.: (713) 466-7758
Facsimile No.: (713) 466-3368
Attention: Robert J. Medlock
Chief Financial Officer
with a copy to:
Gardere & Wynne, L.L.P.
Thanksgiving Tower
1301 Elm Street, Suite 3000
Dallas, Texas 75201
Telephone No.: (214) 999-3000
Facsimile No.: (214) 999-4667
Attention: John K. Sterling
Subject to the terms of the Credit Agreement, by giving at least 30 days written
notice, any party to this Guaranty shall have the right from time to time and at
any time while this Guaranty is in effect to change their respective addresses
or fax numbers and each shall have the right to specify a different address or
fax number within the United States of America. Nothing in this SECTION 18 shall
be construed to require any notice to Guarantor not otherwise expressly required
in this Guaranty.
19. GOVERNING LAW. THIS GUARANTY IS EXECUTED AND DELIVERED AS AN
INCIDENT TO A LENDING TRANSACTION NEGOTIATED, CONSUMMATED, AND PERFORMABLE IN
HARRIS COUNTY, TEXAS, AND SHALL BE CONSTRUED ACCORDING TO THE LAWS OF THE STATE
OF TEXAS AND, AS APPLICABLE, THE LAWS OF THE
UNITED STATES.
20. NO ORAL AGREEMENTS. THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HERETO SHALL BE DETERMINED SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND
INSTRUMENTS, AND ANY PRIOR ORAL AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY
AND MERGED INTO SUCH WRITINGS. THIS GUARANTY (AS AMENDED
7
<PAGE> 8
IN WRITING FROM TIME TO TIME) AND THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY
BORROWER, AGENT, LENDERS OR GUARANTOR (OR BY BORROWER OR GUARANTOR FOR THE
BENEFIT OF AGENT AND LENDERS) REPRESENT THE FINAL AGREEMENT BETWEEN BORROWER,
GUARANTOR, AND LENDER AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. THIS SECTION IS INCLUDED HEREIN
PURSUANT TO SECTION 26.02 OF THE TEXAS BUSINESS AND COMMERCE CODE, AS AMENDED
FROM TIME TO TIME.
This Guaranty is executed as of the date set forth above.
A&S BUILDING SYSTEMS, L.P.,
a Texas limited partnership
By: NCI Operating Corp.,
a Nevada corporation and its
general partner
By: /s/ Robert J. Medlock
------------------------------
Name: Robert J. Medlock
----------------------------
Title: Vice President and Chief
Financial Officer
----------------------------
8
<PAGE> 1
EXHIBIT 4.11
GUARANTY
THIS GUARANTY (as amended, this "GUARANTY") is executed as of May 1,
1998, by the undersigned ("GUARANTOR") in favor of NationsBank of Texas, N.A.
("AGENT"), as Agent for the benefit of the Lenders ("LENDERS") now or hereafter
party to the Credit Agreement (as defined below).
RECITALS
A. NCI Building Systems, Inc., a Delaware corporation ("BORROWER"),
Agent and Lenders have executed a Credit Agreement dated March 25, 1998 (as
amended, supplemented or restated, the "CREDIT AGREEMENT"), together with
certain other Loan Documents.
B. Guarantor is a Subsidiary of Borrower and, because of its ownership
by Borrower, expects to continue to receive business opportunities, financial
support and management support from Borrower. Guarantor has agreed to enter into
this Guaranty so that Borrower can receive the benefits of the Guaranteed Debt
(as defined below) and continue to provide these services to Guarantor.
C. Guarantor's board of directors has determined that Guarantor may
benefit directly or indirectly from Borrower's execution of the Credit Agreement
as Guarantor may be the indirect recipient of funds advanced by Lenders to
Borrower under the Credit Agreement or the account party of LCs issued by Agent
pursuant to the Credit Agreement, and as such the value of the consideration
received and to be received by it under the Loan Documents is reasonably worth
at least as much as its liability and obligation under this Guaranty.
D. It is expressly understood among Borrower, Guarantor, Agent and
Lenders that the execution and delivery of this Guaranty is a condition
precedent to Lenders' obligations to extend credit under the Credit Agreement
and Agent's obligation to issue LCs under the Credit Agreement.
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which are hereby acknowledged, Guarantor guarantees to Lenders the prompt
payment at maturity (by acceleration or otherwise), and at all times thereafter,
of the Guaranteed Debt, as follows:
1. Definitions. UNLESS OTHERWISE DEFINED IN THIS GUARANTY, ANY
CAPITALIZED TERM USED IN THIS GUARANTY SHALL HAVE THE MEANING GIVEN THAT TERM IN
THE CREDIT AGREEMENT. The following terms shall have the following meanings as
used in this Guaranty:
1.1 "BORROWER" includes, without limitation, Borrower as a
debtor-in-possession, and any receiver, trustee, liquidator,
conservator, custodian, or similar party hereafter appointed for
Borrower or all or substantially all of Borrower's assets pursuant to
any liquidation, conservatorship, bankruptcy, moratorium,
rearrangement, receivership, insolvency, reorganization, or similar
Debtor Relief Law from time to time in effect affecting the Rights of
creditors generally.
1.2 "GUARANTEED DEBT" means the Obligation as defined in the
Credit Agreement (including, without limitation, amounts that would
become due but for operation of any applicable provision of Title 11 of
the U.S. Code (including, without limitation, 11 U.S.C. Sections 502
and 506)), together with all pre- and post-maturity interest thereon
(including, without limitation, all post-
<PAGE> 2
petition interest if Borrower or any Subsidiary voluntarily or
involuntarily files for bankruptcy protection) and any and all costs,
attorneys' fees and expenses reasonably incurred by Agent or any Lender
to enforce Borrower's, Guarantor's, or any other obligor's, payment of
any of the foregoing indebtedness.
1.3 "SUBORDINATED DEBT" means all obligations of Borrower to
Guarantor, whether direct, indirect, fixed, contingent, liquidated,
unliquidated, joint, several, or joint and several, now or hereafter
existing, due or to become due to Guarantor, or held or to be held by
Guarantor, whether created directly or acquired by assignment or
otherwise, and whether or not evidenced by written instrument.
2. Guaranty. This is an absolute, irrevocable and continuing guaranty
of payment of the Guaranteed Debt which will remain in effect until the
Guaranteed Debt is completely paid and all commitments to lend under the Credit
Agreement have terminated. The circumstance that at any time or from time to
time all or any portion of the Guaranteed Debt may be paid in full shall not
affect the Guarantor's obligation with respect to the Guaranteed Debt of
Borrower to Agent and Lenders thereafter incurred. The Guarantor may not rescind
or revoke its obligations to Agent and Lenders with respect to the Guaranteed
Debt.
3. Amount of Guaranty. In consummating the transactions contemplated by
the Credit Agreement, Guarantor does not intend to disturb, delay, hinder, or
defraud either its present or future creditors. Guarantor is familiar with, and
has independently reviewed books and records regarding, the financial condition
of Borrower and is familiar with the value of the security and support for the
payment and performance of the Guaranteed Debt. Based upon such examination, and
taking into account the fairly discounted value of Guarantor's contingent
obligations under this Guaranty and the limitation of liability set forth in
Section 4 hereof and the value of the subrogation and contribution claims
Guarantor could make in connection with this Guaranty, and assuming each of the
transaction contemplated by the Credit Agreement is consummated and Borrower
makes full use of the credit facilities thereunder, the present realizable fair
market value of the assets of Guarantor exceeds the total obligations of
Guarantor, and Guarantor is able to realize upon its assets and pay its
obligations as such obligations mature in the normal course of business.
4. Limit of Liability. The obligations of Guarantor hereunder shall be
limited to an aggregate amount equal to the largest amount that would not render
its obligations hereunder subject to avoidance under Section 548 of the U.S.
Bankruptcy Code or any comparable provisions of any applicable state Law.
5. Liability for Other Indebtedness of Borrower. If Guarantor becomes
liable for any indebtedness owing by Borrower to Agent or any Lender, by
endorsement or otherwise, other than under this Guaranty, such liability shall
not be, in any manner, impaired or affected hereby, and the Rights of Agent or
Lenders under this Guaranty shall be cumulative of any and all other Rights that
Agent or Lenders may ever have against Guarantor. The exercise by Agent or
Lenders of any Right or remedy under this Guaranty under the Loan Documents, or
other instrument, or at Law or in equity, shall not preclude the concurrent or
subsequent exercise of any other Right or remedy.
6. Default by Borrower. If a Default exists, Guarantor shall pay the
amount of the Guaranteed Debt then due and payable to Agent and Lenders on
demand and without (a) further notice of dishonor, to Guarantor, (b) any prior
notice to Guarantor of the acceptance by Agent or Lenders of this Guaranty, (c)
any notice having been given to Guarantor prior to such demand of the creating
or incurring of such indebtedness,
2
<PAGE> 3
or (d) notice of intent to accelerate or notice of acceleration to Guarantor or
Borrower. To enforce such payment by Guarantor it shall not be necessary for
Agent or Lenders to first or contemporaneously institute suit or exhaust
remedies against Borrower or others liable on such indebtedness, or to enforce
Rights against any security or collateral ever given to secure such
indebtedness.
7. Subordination. All Subordinated Debt shall be expressly subordinated
to the final payment in full of the Guaranteed Debt. Guarantor agrees not to
receive or accept any payment from Borrower with respect to the Subordinated
Debt at any time a Default exists; and, in the event Guarantor receives any
payment on the Subordinated Debt in violation of the foregoing, Guarantor shall
hold any such payment in trust for Agent and Lenders and promptly turn it over
to Agent, in the form received (with any necessary endorsements), to be applied
to the Guaranteed Debt.
8. Subrogation. Guarantor agrees that it will not assert, enforce, or
otherwise exercise (a) any right of subrogation to any of the rights or liens of
Agent or any Lender or any other beneficiary against Borrower or any other
obligor on the Guaranteed Debt or any Collateral or other security, or (b) any
right of recourse, reimbursement, subrogation, contribution, indemnification, or
similar right against Borrower or any other obligor or other guarantor on all or
any part of the Guaranteed Debt or any guarantor thereof (whether such rights in
clause (a) or clause (b) arise in equity, under contract, by statute, under
common law, or otherwise).
9. No Release. Guarantor hereby agrees that its obligations under the
terms of this Guaranty shall not be released, diminished, impaired, reduced or
affected by the occurrence of any one or more of the following events:
(a) Agent's or Lenders' taking or accepting of any other
security or guaranty for any or all of the Guaranteed Debt;
(b) any release, surrender, exchange, subordination or loss of
any security at any time existing in connection with any or all of the
Guaranteed Debt;
(c) any full or partial release of the liability of any other
obligor on the Obligation;
(d) the insolvency, becoming subject to any Debtor Relief Law,
or lack of corporate power of Borrower, any of the undersigned, or any
party at any time liable for the payment of any or all of the
Guaranteed Debt, whether now existing or hereafter occurring;
(e) any renewal, extension or rearrangement of the payment of
any or all of the Guaranteed Debt, either with or without notice to or
consent of Guarantor, or any adjustment, indulgence, forbearance, or
compromise that may be granted or given by Agent or any Lender to
Borrower, Guarantor, or any other obligor on the Obligation;
(f) any neglect, delay, omission, failure or refusal of Agent
or any Lender to take or prosecute any action for the collection of all
or any part of the Guaranteed Debt or to foreclose or take or prosecute
any action in connection with any instrument or agreement evidencing or
securing any or all of the Guaranteed Debt;
3
<PAGE> 4
(g) any failure of Agent or any Lender to notify Guarantor of
any renewal, extension, or assignment of any or all of the Guaranteed
Debt, or the release of any security or of any other action taken or
refrained from being taken by Agent or any Lender against Borrower or
any new agreement between Agent, any Lender, and Borrower, it being
understood that neither Agent nor any Lender shall be required to give
Guarantor any notice of any kind under any circumstances whatsoever
with respect to or in connection with the Guaranteed Debt, other than
any notice required to be given to Guarantor elsewhere herein;
(h) the unenforceability of all or any part of the Guaranteed
Debt against Borrower by reason of the fact that the Guaranteed Debt
exceeds the amount permitted by Law, the act of creating the Guaranteed
Debt, or any part thereof, is ultra vires, or the officers creating
same exceeded their authority or violated their fiduciary duties in
connection therewith;
(i) any payment of the Obligation to Agent or Lenders is held
to constitute a preference under any Debtor Relief Law or if for any
other reason Agent or any Lender is required to refund such payment or
make payment to someone else (and in each such instance this Guaranty
shall be reinstated in an amount equal to such payment), or if there is
more than one person or entity signing this Guaranty or otherwise
guaranteeing payment of the Guaranteed Debt, the release of any one or
more of them hereunder; or
(j) any discharge, release, or other forgiveness of Borrower's
personal liability for the payment of the Guaranteed Debt.
10. Waiver. Guarantor hereby waives all rights by which it might be
entitled to require suit on an accrued right of action in respect of any of the
Guaranteed Debt or require suit against Borrower or others, whether arising
pursuant to Section 34.02 of the Texas Business and Commerce Code, as amended
(regarding Guarantor's right to require Agent or Lenders to sue Borrower on
accrued right of action following Guarantor's written notice to Agent or
Lenders), Section 17.001 of the Texas Civil Practice and Remedies Code, as
amended (allowing suit against Guarantor without suit against Borrower, but
precluding entry of judgment against Guarantor prior to entry of judgment
against Borrower), Rule 31 of the Texas Rules of Civil Procedure, as amended
(requiring Agent or Lenders to join Borrower in any suit against Guarantor
unless judgment has been previously entered against Borrower), or otherwise.
Guarantor waives notice of acceptance of this Guaranty, notice of any loan to
which it may apply, and waives presentment, demand for payment, protest, notice
of dishonor or nonpayment of any loan, notice of intent to accelerate, notice of
acceleration, and notice of any suit or notice of the taking of other action by
Lender against Borrower, Guarantor or any other person and any notice to any
party liable thereon (including Guarantor).
11. Reliance and Duty to Remain Informed. Guarantor confirms that it
has executed and delivered this Guaranty after reviewing the terms and
conditions of the Loan Documents and such other information as it has deemed
appropriate in order to make its own credit analysis and decision to execute and
deliver this Guaranty. Guarantor confirms that it has made its own independent
investigation with respect to Borrower's creditworthiness and is not executing
and delivering this Guaranty in reliance on any representation or warranty by
Agent or Lender as to such creditworthiness. Guarantor expressly assumes all
responsibilities to remain informed of the financial condition of Borrower and
any circumstances affecting (a) Borrower's ability to perform under the Loan
Documents to which Borrower is a party or (b) any collateral securing all or any
part of the Guaranteed Debt.
4
<PAGE> 5
12. Representations and Warranties. Guarantor acknowledges that certain
representations and warranties set forth in the Credit Agreement are in respect
of it, and Guarantor reaffirms that each such representation and warranty is
true and correct in all material respects. Furthermore, Guarantor represents and
warrants to Agent and Lenders that Guarantor's board of directors has determined
that its liability and obligation hereunder may reasonably be expected to
benefit it directly or indirectly.
13. Change in Guarantor's Status. Should Guarantor become insolvent, or
fail to pay its debts generally as they become due, or voluntarily seek, consent
to, or acquiesce in the benefit or benefits of any Debtor Relief Law or become a
party to (or be made the subject of) any proceeding provided for by any Debtor
Relief Law (other than as a creditor or claimant) that could suspend or
otherwise adversely affect the Rights of Agent or Lenders granted hereunder,
then, in any such event, the Guaranteed Debt shall be, as between Guarantor,
Agent and Lender, a fully matured, due, and payable obligation of Guarantor to
Agent or Lender (without regard to whether Borrower is then in Default or
whether the Guaranteed Debt, or any part thereof is then due and owing by
Borrower to Lender), payable in full by Guarantor to Agent or Lender upon
demand, which shall be the estimated amount owing in respect of the contingent
claim created hereunder.
14. Covenants. Guarantor acknowledges that certain covenants set forth
in the Credit Agreement are in respect of it or shall be imposed upon it, and
Guarantor covenants and agrees to promptly and properly perform, observe, and
comply with each such covenant. Furthermore, Guarantor shall, jointly and
severally, indemnify, protect, and hold Agent and Lenders and their respective
parents, subsidiaries, directors, officers, employees, representatives, agents,
successors, permitted assigns, and attorneys (collectively, the "INDEMNIFIED
PARTIES") harmless from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims, and proceedings
and all costs, expenses (including, without limitation, all reasonable
attorneys' fees and legal expenses whether or not suit is brought), and
reasonable disbursements of any kind or nature (the "INDEMNIFIED LIABILITIES")
that may at any time be imposed on, incurred by, or asserted against the
indemnified parties, in any way relating to or arising out of (a) the direct or
indirect result of the violation by any Company of any Environmental Law, (b)
any Company's generation, manufacture, production, storage, release, threatened
release, discharge, disposal, or presence in connection with its properties of a
Hazardous Substance (including, without limitation, (I) all damages from any
use, generation, manufacture, production, storage, release, threatened release,
discharge, disposal, or presence, or (ii) the costs of any environmental
investigation, monitoring, repair, cleanup, or detoxification and the
preparation and implementation of any closure, remedial, or other plans), or (c)
the Loan Documents or any of the transactions contemplated therein. However,
although each indemnified party has the Right to be indemnified under the Loan
Documents for its own ordinary negligence, no indemnified party has the Right to
be indemnified under the Loan Documents for its own fraud, gross negligence, or
willful misconduct. The provisions of and undertakings and indemnification set
forth in this paragraph shall survive the satisfaction and payment of the
Obligation and termination of this Guaranty.
15. Offset Claims. The Guaranteed Debt shall not be reduced, discharged
or released because or by reason of any existing or future offset, claim or
defense (except for the defense of complete and final payment of the Guaranteed
Debt) of Borrower or any other party against Agent or Lenders or against payment
of the Guaranteed Debt, whether such offset, claim, or defense arises in
connection with the Guaranteed Debt or otherwise. Such claims and defenses
include, without limitation, failure of consideration, breach of warranty,
fraud, statute of frauds, bankruptcy, infancy, statute of limitations, lender
liability, accord and satisfaction, and usury.
5
<PAGE> 6
16. Binding Agreement. This Guaranty is for the benefit of Agent and
Lenders and their respective successors and assigns. Guarantor acknowledges that
in the event of an assignment of the Guaranteed Debt or any part thereof in
accordance with the Credit Agreement, the rights and benefits under this
Guaranty, to the extent applicable to the indebtedness so assigned, may be
transferred with such indebtedness. This Guaranty is binding on Guarantor and
its successors and permitted assigns.
17. Loan Document. This Guaranty is a Loan Document and, therefore,
this Guaranty is subject to the applicable provisions of SECTION 14 of the
Credit Agreement, all of which applicable provisions are incorporated into this
Guaranty by reference as if set forth verbatim.
18. Notices. All notices required or permitted to be given under this
Guaranty, if any, must be in writing and shall or may, as the case may be, be
given in the same manner as notice is given under the Credit Agreement as
follows:
If to Agent:
NationsBank of Texas, N.A.
Corporate Finance Group
700 Louisiana Street, 8th Floor
P.O. Box 2518
Houston, Texas 77252-2518
Telephone No.: (713) 247-6258
Facsimile No.: (713) 247-6360
Attention: Richard L. Nichols, Jr.
Vice President
with a copy to:
Porter & Hedges, L.L.P.
700 Louisiana, 35th Floor
Houston, Texas 77002
Telephone No.: (713) 226-0681
Facsimile No.: (713) 226-0281
Attention: F. Walter Bistline, Jr.
If to Borrower:
NCI Building Systems, Inc.
7301 Fairview
Houston, Texas 77041
Telephone No.: (713) 466-7758
Facsimile No.: (713) 466-3368
Attention: Robert J. Medlock
Chief Financial Officer
6
<PAGE> 7
with a copy to:
Gardere & Wynne, L.L.P.
Thanksgiving Tower
1301 Elm Street, Suite 3000
Dallas, Texas 75201
Telephone No.: (214) 999-3000
Facsimile No.: (214) 999-4667
Attention: John K. Sterling
If to Guarantor:
NCI Building Systems, L.P.
7301 Fairview
Houston, Texas 77041
Telephone No.: (713) 466-7758
Facsimile No.: (713) 466-3368
Attention: Robert J. Medlock
Chief Financial Officer
with a copy to:
Gardere & Wynne, L.L.P.
Thanksgiving Tower
1301 Elm Street, Suite 3000
Dallas, Texas 75201
Telephone No.: (214) 999-3000
Facsimile No.: (214) 999-4667
Attention: John K. Sterling
Subject to the terms of the Credit Agreement, by giving at least 30 days written
notice, any party to this Guaranty shall have the right from time to time and at
any time while this Guaranty is in effect to change their respective addresses
or fax numbers and each shall have the right to specify a different address or
fax number within the United States of America. Nothing in this SECTION 18 shall
be construed to require any notice to Guarantor not otherwise expressly required
in this Guaranty.
19. GOVERNING LAW. THIS GUARANTY IS EXECUTED AND DELIVERED AS AN
INCIDENT TO A LENDING TRANSACTION NEGOTIATED, CONSUMMATED, AND PERFORMABLE IN
HARRIS COUNTY, TEXAS, AND SHALL BE CONSTRUED ACCORDING TO THE LAWS OF THE STATE
OF TEXAS AND, AS APPLICABLE, THE LAWS OF THE
UNITED STATES.
20. NO ORAL AGREEMENTS. THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HERETO SHALL BE DETERMINED SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND
INSTRUMENTS, AND ANY PRIOR ORAL AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY
AND MERGED INTO SUCH WRITINGS. THIS GUARANTY (AS AMENDED
7
<PAGE> 8
IN WRITING FROM TIME TO TIME) AND THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY
BORROWER, AGENT, LENDERS OR GUARANTOR (OR BY BORROWER OR GUARANTOR FOR THE
BENEFIT OF AGENT AND LENDERS) REPRESENT THE FINAL AGREEMENT BETWEEN BORROWER,
GUARANTOR, AND LENDER AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. THIS SECTION IS INCLUDED HEREIN
PURSUANT TO SECTION 26.02 OF THE TEXAS BUSINESS AND COMMERCE CODE, AS AMENDED
FROM TIME TO TIME.
This Guaranty is executed as of the date set forth above.
NCI BUILDING SYSTEMS, L.P.,
a Texas limited partnership
By: NCI Operating Corp.,
a Nevada corporation and its general
partner
By: /s/ Robert J. Medlock
-----------------------------------------------
Name: Robert J. Medlock
---------------------------------------------
Title: Vice President and Chief Financial Officer
--------------------------------------------
8
<PAGE> 1
EXHIBIT 4.12
GUARANTY
THIS GUARANTY (as amended, this "GUARANTY") is executed as of May 1,
1998, by the undersigned ("GUARANTOR") in favor of NationsBank of Texas, N.A.
("AGENT"), as Agent for the benefit of the Lenders ("LENDERS") now or hereafter
party to the Credit Agreement (as defined below).
RECITALS
A. NCI Building Systems, Inc., a Delaware corporation ("BORROWER"),
Agent and Lenders have executed a Credit Agreement dated March 25, 1998 (as
amended, supplemented or restated, the "CREDIT AGREEMENT"), together with
certain other Loan Documents.
B. Guarantor is a Subsidiary of Borrower and, because of its ownership
by Borrower, expects to continue to receive business opportunities, financial
support and management support from Borrower. Guarantor has agreed to enter into
this Guaranty so that Borrower can receive the benefits of the Guaranteed Debt
(as defined below) and continue to provide these services to Guarantor.
C. Guarantor's board of directors has determined that Guarantor may
benefit directly or indirectly from Borrower's execution of the Credit Agreement
as Guarantor may be the indirect recipient of funds advanced by Lenders to
Borrower under the Credit Agreement or the account party of LCs issued by Agent
pursuant to the Credit Agreement, and as such the value of the consideration
received and to be received by it under the Loan Documents is reasonably worth
at least as much as its liability and obligation under this Guaranty.
D. It is expressly understood among Borrower, Guarantor, Agent and
Lenders that the execution and delivery of this Guaranty is a condition
precedent to Lenders' obligations to extend credit under the Credit Agreement
and Agent's obligation to issue LCs under the Credit Agreement.
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which are hereby acknowledged, Guarantor guarantees to Lenders the prompt
payment at maturity (by acceleration or otherwise), and at all times thereafter,
of the Guaranteed Debt, as follows:
1. Definitions. UNLESS OTHERWISE DEFINED IN THIS GUARANTY, ANY
CAPITALIZED TERM USED IN THIS GUARANTY SHALL HAVE THE MEANING GIVEN THAT TERM IN
THE CREDIT AGREEMENT. The following terms shall have the following meanings as
used in this Guaranty:
1.1 "BORROWER" includes, without limitation, Borrower as a
debtor-in-possession, and any receiver, trustee, liquidator,
conservator, custodian, or similar party hereafter appointed for
Borrower or all or substantially all of Borrower's assets pursuant to
any liquidation, conservatorship, bankruptcy, moratorium,
rearrangement, receivership, insolvency, reorganization, or similar
Debtor Relief Law from time to time in effect affecting the Rights of
creditors generally.
1.2 "GUARANTEED DEBT" means the Obligation as defined in the
Credit Agreement (including, without limitation, amounts that would
become due but for operation of any applicable provision of Title 11 of
the U.S. Code (including, without limitation, 11 U.S.C. Sections 502
and 506)), together with all pre- and post-maturity interest thereon
(including, without limitation, all post-
<PAGE> 2
petition interest if Borrower or any Subsidiary voluntarily or
involuntarily files for bankruptcy protection) and any and all costs,
attorneys' fees and expenses reasonably incurred by Agent or any Lender
to enforce Borrower's, Guarantor's, or any other obligor's, payment of
any of the foregoing indebtedness.
1.3 "SUBORDINATED DEBT" means all obligations of Borrower to
Guarantor, whether direct, indirect, fixed, contingent, liquidated,
unliquidated, joint, several, or joint and several, now or hereafter
existing, due or to become due to Guarantor, or held or to be held by
Guarantor, whether created directly or acquired by assignment or
otherwise, and whether or not evidenced by written instrument.
2. Guaranty. This is an absolute, irrevocable and continuing guaranty
of payment of the Guaranteed Debt which will remain in effect until the
Guaranteed Debt is completely paid and all commitments to lend under the Credit
Agreement have terminated. The circumstance that at any time or from time to
time all or any portion of the Guaranteed Debt may be paid in full shall not
affect the Guarantor's obligation with respect to the Guaranteed Debt of
Borrower to Agent and Lenders thereafter incurred. The Guarantor may not rescind
or revoke its obligations to Agent and Lenders with respect to the Guaranteed
Debt.
3. Amount of Guaranty. In consummating the transactions contemplated by
the Credit Agreement, Guarantor does not intend to disturb, delay, hinder, or
defraud either its present or future creditors. Guarantor is familiar with, and
has independently reviewed books and records regarding, the financial condition
of Borrower and is familiar with the value of the security and support for the
payment and performance of the Guaranteed Debt. Based upon such examination, and
taking into account the fairly discounted value of Guarantor's contingent
obligations under this Guaranty and the limitation of liability set forth in
Section 4 hereof and the value of the subrogation and contribution claims
Guarantor could make in connection with this Guaranty, and assuming each of the
transaction contemplated by the Credit Agreement is consummated and Borrower
makes full use of the credit facilities thereunder, the present realizable fair
market value of the assets of Guarantor exceeds the total obligations of
Guarantor, and Guarantor is able to realize upon its assets and pay its
obligations as such obligations mature in the normal course of business.
4. Limit of Liability. The obligations of Guarantor hereunder shall be
limited to an aggregate amount equal to the largest amount that would not render
its obligations hereunder subject to avoidance under Section 548 of the U.S.
Bankruptcy Code or any comparable provisions of any applicable state Law.
5. Liability for Other Indebtedness of Borrower. If Guarantor becomes
liable for any indebtedness owing by Borrower to Agent or any Lender, by
endorsement or otherwise, other than under this Guaranty, such liability shall
not be, in any manner, impaired or affected hereby, and the Rights of Agent or
Lenders under this Guaranty shall be cumulative of any and all other Rights that
Agent or Lenders may ever have against Guarantor. The exercise by Agent or
Lenders of any Right or remedy under this Guaranty under the Loan Documents, or
other instrument, or at Law or in equity, shall not preclude the concurrent or
subsequent exercise of any other Right or remedy.
6. Default by Borrower. If a Default exists, Guarantor shall pay the
amount of the Guaranteed Debt then due and payable to Agent and Lenders on
demand and without (a) further notice of dishonor, to Guarantor, (b) any prior
notice to Guarantor of the acceptance by Agent or Lenders of this Guaranty, (c)
any notice having been given to Guarantor prior to such demand of the creating
or incurring of such indebtedness,
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<PAGE> 3
or (d) notice of intent to accelerate or notice of acceleration to Guarantor or
Borrower. To enforce such payment by Guarantor it shall not be necessary for
Agent or Lenders to first or contemporaneously institute suit or exhaust
remedies against Borrower or others liable on such indebtedness, or to enforce
Rights against any security or collateral ever given to secure such
indebtedness.
7. Subordination. All Subordinated Debt shall be expressly subordinated
to the final payment in full of the Guaranteed Debt. Guarantor agrees not to
receive or accept any payment from Borrower with respect to the Subordinated
Debt at any time a Default exists; and, in the event Guarantor receives any
payment on the Subordinated Debt in violation of the foregoing, Guarantor shall
hold any such payment in trust for Agent and Lenders and promptly turn it over
to Agent, in the form received (with any necessary endorsements), to be applied
to the Guaranteed Debt.
8. Subrogation. Guarantor agrees that it will not assert, enforce, or
otherwise exercise (a) any right of subrogation to any of the rights or liens of
Agent or any Lender or any other beneficiary against Borrower or any other
obligor on the Guaranteed Debt or any Collateral or other security, or (b) any
right of recourse, reimbursement, subrogation, contribution, indemnification, or
similar right against Borrower or any other obligor or other guarantor on all or
any part of the Guaranteed Debt or any guarantor thereof (whether such rights in
clause (a) or clause (b) arise in equity, under contract, by statute, under
common law, or otherwise).
9. No Release. Guarantor hereby agrees that its obligations under the
terms of this Guaranty shall not be released, diminished, impaired, reduced or
affected by the occurrence of any one or more of the following events:
(a) Agent's or Lenders' taking or accepting of any other
security or guaranty for any or all of the Guaranteed Debt;
(b) any release, surrender, exchange, subordination or loss of
any security at any time existing in connection with any or all of the
Guaranteed Debt;
(c) any full or partial release of the liability of any other
obligor on the Obligation;
(d) the insolvency, becoming subject to any Debtor Relief Law,
or lack of corporate power of Borrower, any of the undersigned, or any
party at any time liable for the payment of any or all of the
Guaranteed Debt, whether now existing or hereafter occurring;
(e) any renewal, extension or rearrangement of the payment of
any or all of the Guaranteed Debt, either with or without notice to or
consent of Guarantor, or any adjustment, indulgence, forbearance, or
compromise that may be granted or given by Agent or any Lender to
Borrower, Guarantor, or any other obligor on the Obligation;
(f) any neglect, delay, omission, failure or refusal of Agent
or any Lender to take or prosecute any action for the collection of all
or any part of the Guaranteed Debt or to foreclose or take or prosecute
any action in connection with any instrument or agreement evidencing or
securing any or all of the Guaranteed Debt;
3
<PAGE> 4
(g) any failure of Agent or any Lender to notify Guarantor of
any renewal, extension, or assignment of any or all of the Guaranteed
Debt, or the release of any security or of any other action taken or
refrained from being taken by Agent or any Lender against Borrower or
any new agreement between Agent, any Lender, and Borrower, it being
understood that neither Agent nor any Lender shall be required to give
Guarantor any notice of any kind under any circumstances whatsoever
with respect to or in connection with the Guaranteed Debt, other than
any notice required to be given to Guarantor elsewhere herein;
(h) the unenforceability of all or any part of the Guaranteed
Debt against Borrower by reason of the fact that the Guaranteed Debt
exceeds the amount permitted by Law, the act of creating the Guaranteed
Debt, or any part thereof, is ultra vires, or the officers creating
same exceeded their authority or violated their fiduciary duties in
connection therewith;
(i) any payment of the Obligation to Agent or Lenders is held
to constitute a preference under any Debtor Relief Law or if for any
other reason Agent or any Lender is required to refund such payment or
make payment to someone else (and in each such instance this Guaranty
shall be reinstated in an amount equal to such payment), or if there is
more than one person or entity signing this Guaranty or otherwise
guaranteeing payment of the Guaranteed Debt, the release of any one or
more of them hereunder; or
(j) any discharge, release, or other forgiveness of Borrower's
personal liability for the payment of the Guaranteed Debt.
10. Waiver. Guarantor hereby waives all rights by which it might be
entitled to require suit on an accrued right of action in respect of any of the
Guaranteed Debt or require suit against Borrower or others, whether arising
pursuant to Section 34.02 of the Texas Business and Commerce Code, as amended
(regarding Guarantor's right to require Agent or Lenders to sue Borrower on
accrued right of action following Guarantor's written notice to Agent or
Lenders), Section 17.001 of the Texas Civil Practice and Remedies Code, as
amended (allowing suit against Guarantor without suit against Borrower, but
precluding entry of judgment against Guarantor prior to entry of judgment
against Borrower), Rule 31 of the Texas Rules of Civil Procedure, as amended
(requiring Agent or Lenders to join Borrower in any suit against Guarantor
unless judgment has been previously entered against Borrower), or otherwise.
Guarantor waives notice of acceptance of this Guaranty, notice of any loan to
which it may apply, and waives presentment, demand for payment, protest, notice
of dishonor or nonpayment of any loan, notice of intent to accelerate, notice of
acceleration, and notice of any suit or notice of the taking of other action by
Lender against Borrower, Guarantor or any other person and any notice to any
party liable thereon (including Guarantor).
11. Reliance and Duty to Remain Informed. Guarantor confirms that it
has executed and delivered this Guaranty after reviewing the terms and
conditions of the Loan Documents and such other information as it has deemed
appropriate in order to make its own credit analysis and decision to execute and
deliver this Guaranty. Guarantor confirms that it has made its own independent
investigation with respect to Borrower's creditworthiness and is not executing
and delivering this Guaranty in reliance on any representation or warranty by
Agent or Lender as to such creditworthiness. Guarantor expressly assumes all
responsibilities to remain informed of the financial condition of Borrower and
any circumstances affecting (a) Borrower's ability to perform under the Loan
Documents to which Borrower is a party or (b) any collateral securing all or any
part of the Guaranteed Debt.
4
<PAGE> 5
12. Representations and Warranties. Guarantor acknowledges that certain
representations and warranties set forth in the Credit Agreement are in respect
of it, and Guarantor reaffirms that each such representation and warranty is
true and correct in all material respects. Furthermore, Guarantor represents and
warrants to Agent and Lenders that Guarantor's board of directors has determined
that its liability and obligation hereunder may reasonably be expected to
benefit it directly or indirectly.
13. Change in Guarantor's Status. Should Guarantor become insolvent, or
fail to pay its debts generally as they become due, or voluntarily seek, consent
to, or acquiesce in the benefit or benefits of any Debtor Relief Law or become a
party to (or be made the subject of) any proceeding provided for by any Debtor
Relief Law (other than as a creditor or claimant) that could suspend or
otherwise adversely affect the Rights of Agent or Lenders granted hereunder,
then, in any such event, the Guaranteed Debt shall be, as between Guarantor,
Agent and Lender, a fully matured, due, and payable obligation of Guarantor to
Agent or Lender (without regard to whether Borrower is then in Default or
whether the Guaranteed Debt, or any part thereof is then due and owing by
Borrower to Lender), payable in full by Guarantor to Agent or Lender upon
demand, which shall be the estimated amount owing in respect of the contingent
claim created hereunder.
14. Covenants. Guarantor acknowledges that certain covenants set forth
in the Credit Agreement are in respect of it or shall be imposed upon it, and
Guarantor covenants and agrees to promptly and properly perform, observe, and
comply with each such covenant. Furthermore, Guarantor shall, jointly and
severally, indemnify, protect, and hold Agent and Lenders and their respective
parents, subsidiaries, directors, officers, employees, representatives, agents,
successors, permitted assigns, and attorneys (collectively, the "INDEMNIFIED
PARTIES") harmless from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims, and proceedings
and all costs, expenses (including, without limitation, all reasonable
attorneys' fees and legal expenses whether or not suit is brought), and
reasonable disbursements of any kind or nature (the "INDEMNIFIED LIABILITIES")
that may at any time be imposed on, incurred by, or asserted against the
indemnified parties, in any way relating to or arising out of (a) the direct or
indirect result of the violation by any Company of any Environmental Law, (b)
any Company's generation, manufacture, production, storage, release, threatened
release, discharge, disposal, or presence in connection with its properties of a
Hazardous Substance (including, without limitation, (I) all damages from any
use, generation, manufacture, production, storage, release, threatened release,
discharge, disposal, or presence, or (ii) the costs of any environmental
investigation, monitoring, repair, cleanup, or detoxification and the
preparation and implementation of any closure, remedial, or other plans), or (c)
the Loan Documents or any of the transactions contemplated therein. However,
although each indemnified party has the Right to be indemnified under the Loan
Documents for its own ordinary negligence, no indemnified party has the Right to
be indemnified under the Loan Documents for its own fraud, gross negligence, or
willful misconduct. The provisions of and undertakings and indemnification set
forth in this paragraph shall survive the satisfaction and payment of the
Obligation and termination of this Guaranty.
15. Offset Claims. The Guaranteed Debt shall not be reduced, discharged
or released because or by reason of any existing or future offset, claim or
defense (except for the defense of complete and final payment of the Guaranteed
Debt) of Borrower or any other party against Agent or Lenders or against payment
of the Guaranteed Debt, whether such offset, claim, or defense arises in
connection with the Guaranteed Debt or otherwise. Such claims and defenses
include, without limitation, failure of consideration, breach of warranty,
fraud, statute of frauds, bankruptcy, infancy, statute of limitations, lender
liability, accord and satisfaction, and usury.
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<PAGE> 6
16. Binding Agreement. This Guaranty is for the benefit of Agent and
Lenders and their respective successors and assigns. Guarantor acknowledges that
in the event of an assignment of the Guaranteed Debt or any part thereof in
accordance with the Credit Agreement, the rights and benefits under this
Guaranty, to the extent applicable to the indebtedness so assigned, may be
transferred with such indebtedness. This Guaranty is binding on Guarantor and
its successors and permitted assigns.
17. Loan Document. This Guaranty is a Loan Document and, therefore,
this Guaranty is subject to the applicable provisions of SECTION 14 of the
Credit Agreement, all of which applicable provisions are incorporated into this
Guaranty by reference as if set forth verbatim.
18. Notices. All notices required or permitted to be given under this
Guaranty, if any, must be in writing and shall or may, as the case may be, be
given in the same manner as notice is given under the Credit Agreement as
follows:
If to Agent:
NationsBank of Texas, N.A.
Corporate Finance Group
700 Louisiana Street, 8th Floor
P.O. Box 2518
Houston, Texas 77252-2518
Telephone No.: (713) 247-6258
Facsimile No.: (713) 247-6360
Attention: Richard L. Nichols, Jr.
Vice President
with a copy to:
Porter & Hedges, L.L.P.
700 Louisiana, 35th Floor
Houston, Texas 77002
Telephone No.: (713) 226-0681
Facsimile No.: (713) 226-0281
Attention: F. Walter Bistline, Jr.
If to Borrower:
NCI Building Systems, Inc.
7301 Fairview
Houston, Texas 77041
Telephone No.: (713) 466-7758
Facsimile No.: (713) 466-3368
Attention: Robert J. Medlock
Chief Financial Officer
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<PAGE> 7
with a copy to:
Gardere & Wynne, L.L.P.
Thanksgiving Tower
1301 Elm Street, Suite 3000
Dallas, Texas 75201
Telephone No.: (214) 999-3000
Facsimile No.: (214) 999-4667
Attention: John K. Sterling
If to Guarantor:
NCI Holding Corp.
c/o Delaware Corporate Management, Inc.
1105 North Market Street, Suite 1300
P.O. Box 8985
Wilmington, Delaware 19899
Telephone No.: (302) 427-0803
Attention: David P. Fontello
with a copy to:
Gardere & Wynne, L.L.P.
Thanksgiving Tower
1301 Elm Street, Suite 3000
Dallas, Texas 75201
Telephone No.: (214) 999-3000
Facsimile No.: (214) 999-4667
Attention: John K. Sterling
Subject to the terms of the Credit Agreement, by giving at least 30 days written
notice, any party to this Guaranty shall have the right from time to time and at
any time while this Guaranty is in effect to change their respective addresses
or fax numbers and each shall have the right to specify a different address or
fax number within the United States of America. Nothing in this SECTION 18 shall
be construed to require any notice to Guarantor not otherwise expressly required
in this Guaranty.
19. GOVERNING LAW. THIS GUARANTY IS EXECUTED AND DELIVERED AS AN
INCIDENT TO A LENDING TRANSACTION NEGOTIATED, CONSUMMATED, AND PERFORMABLE IN
HARRIS COUNTY, TEXAS, AND SHALL BE CONSTRUED ACCORDING TO THE LAWS OF THE STATE
OF TEXAS AND, AS APPLICABLE, THE LAWS OF THE
UNITED STATES.
20. NO ORAL AGREEMENTS. THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HERETO SHALL BE DETERMINED SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND
INSTRUMENTS, AND ANY PRIOR ORAL AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY
AND MERGED INTO SUCH WRITINGS. THIS GUARANTY (AS AMENDED
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<PAGE> 8
IN WRITING FROM TIME TO TIME) AND THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY
BORROWER, AGENT, LENDERS OR GUARANTOR (OR BY BORROWER OR GUARANTOR FOR THE
BENEFIT OF AGENT AND LENDERS) REPRESENT THE FINAL AGREEMENT BETWEEN BORROWER,
GUARANTOR, AND LENDER AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. THIS SECTION IS INCLUDED HEREIN
PURSUANT TO SECTION 26.02 OF THE TEXAS BUSINESS AND COMMERCE CODE, AS AMENDED
FROM TIME TO TIME.
This Guaranty is executed as of the date set forth above.
NCI HOLDING CORP.,
a Delaware corporation
By: /s/ Robert J. Medlock
--------------------------------------
Name: Robert J. Medlock
------------------------------------
Title: Vice President and Treasurer
-----------------------------------
8
<PAGE> 1
EXHIBIT 4.13
GUARANTY
THIS GUARANTY (as amended, this "GUARANTY") is executed as of May 1,
1998, by the undersigned ("GUARANTOR") in favor of NationsBank of Texas, N.A.
("AGENT"), as Agent for the benefit of the Lenders ("LENDERS") now or hereafter
party to the Credit Agreement (as defined below).
RECITALS
A. NCI Building Systems, Inc., a Delaware corporation ("BORROWER"),
Agent and Lenders have executed a Credit Agreement dated March 25, 1998 (as
amended, supplemented or restated, the "CREDIT AGREEMENT"), together with
certain other Loan Documents.
B. Guarantor is a Subsidiary of Borrower and, because of its ownership
by Borrower, expects to continue to receive business opportunities, financial
support and management support from Borrower. Guarantor has agreed to enter into
this Guaranty so that Borrower can receive the benefits of the Guaranteed Debt
(as defined below) and continue to provide these services to Guarantor.
C. Guarantor's board of directors has determined that Guarantor may
benefit directly or indirectly from Borrower's execution of the Credit Agreement
as Guarantor may be the indirect recipient of funds advanced by Lenders to
Borrower under the Credit Agreement or the account party of LCs issued by Agent
pursuant to the Credit Agreement, and as such the value of the consideration
received and to be received by it under the Loan Documents is reasonably worth
at least as much as its liability and obligation under this Guaranty.
D. It is expressly understood among Borrower, Guarantor, Agent and
Lenders that the execution and delivery of this Guaranty is a condition
precedent to Lenders' obligations to extend credit under the Credit Agreement
and Agent's obligation to issue LCs under the Credit Agreement.
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which are hereby acknowledged, Guarantor guarantees to Lenders the prompt
payment at maturity (by acceleration or otherwise), and at all times thereafter,
of the Guaranteed Debt, as follows:
1. Definitions. UNLESS OTHERWISE DEFINED IN THIS GUARANTY, ANY
CAPITALIZED TERM USED IN THIS GUARANTY SHALL HAVE THE MEANING GIVEN THAT TERM IN
THE CREDIT AGREEMENT. The following terms shall have the following meanings as
used in this Guaranty:
1.1 "BORROWER" includes, without limitation, Borrower as a
debtor-in-possession, and any receiver, trustee, liquidator,
conservator, custodian, or similar party hereafter appointed for
Borrower or all or substantially all of Borrower's assets pursuant to
any liquidation, conservatorship, bankruptcy, moratorium,
rearrangement, receivership, insolvency, reorganization, or similar
Debtor Relief Law from time to time in effect affecting the Rights of
creditors generally.
1.2 "GUARANTEED DEBT" means the Obligation as defined in the
Credit Agreement (including, without limitation, amounts that would
become due but for operation of any applicable provision of Title 11 of
the U.S. Code (including, without limitation, 11 U.S.C. Sections 502
and 506)), together with all pre- and post-maturity interest thereon
(including, without limitation, all post-
<PAGE> 2
petition interest if Borrower or any Subsidiary voluntarily or
involuntarily files for bankruptcy protection) and any and all costs,
attorneys' fees and expenses reasonably incurred by Agent or any Lender
to enforce Borrower's, Guarantor's, or any other obligor's, payment of
any of the foregoing indebtedness.
1.3 "SUBORDINATED DEBT" means all obligations of Borrower to
Guarantor, whether direct, indirect, fixed, contingent, liquidated,
unliquidated, joint, several, or joint and several, now or hereafter
existing, due or to become due to Guarantor, or held or to be held by
Guarantor, whether created directly or acquired by assignment or
otherwise, and whether or not evidenced by written instrument.
2. Guaranty. This is an absolute, irrevocable and continuing guaranty
of payment of the Guaranteed Debt which will remain in effect until the
Guaranteed Debt is completely paid and all commitments to lend under the Credit
Agreement have terminated. The circumstance that at any time or from time to
time all or any portion of the Guaranteed Debt may be paid in full shall not
affect the Guarantor's obligation with respect to the Guaranteed Debt of
Borrower to Agent and Lenders thereafter incurred. The Guarantor may not rescind
or revoke its obligations to Agent and Lenders with respect to the Guaranteed
Debt.
3. Amount of Guaranty. In consummating the transactions contemplated by
the Credit Agreement, Guarantor does not intend to disturb, delay, hinder, or
defraud either its present or future creditors. Guarantor is familiar with, and
has independently reviewed books and records regarding, the financial condition
of Borrower and is familiar with the value of the security and support for the
payment and performance of the Guaranteed Debt. Based upon such examination, and
taking into account the fairly discounted value of Guarantor's contingent
obligations under this Guaranty and the limitation of liability set forth in
Section 4 hereof and the value of the subrogation and contribution claims
Guarantor could make in connection with this Guaranty, and assuming each of the
transaction contemplated by the Credit Agreement is consummated and Borrower
makes full use of the credit facilities thereunder, the present realizable fair
market value of the assets of Guarantor exceeds the total obligations of
Guarantor, and Guarantor is able to realize upon its assets and pay its
obligations as such obligations mature in the normal course of business.
4. Limit of Liability. The obligations of Guarantor hereunder shall be
limited to an aggregate amount equal to the largest amount that would not render
its obligations hereunder subject to avoidance under Section 548 of the U.S.
Bankruptcy Code or any comparable provisions of any applicable state Law.
5. Liability for Other Indebtedness of Borrower. If Guarantor becomes
liable for any indebtedness owing by Borrower to Agent or any Lender, by
endorsement or otherwise, other than under this Guaranty, such liability shall
not be, in any manner, impaired or affected hereby, and the Rights of Agent or
Lenders under this Guaranty shall be cumulative of any and all other Rights that
Agent or Lenders may ever have against Guarantor. The exercise by Agent or
Lenders of any Right or remedy under this Guaranty under the Loan Documents, or
other instrument, or at Law or in equity, shall not preclude the concurrent or
subsequent exercise of any other Right or remedy.
6. Default by Borrower. If a Default exists, Guarantor shall pay the
amount of the Guaranteed Debt then due and payable to Agent and Lenders on
demand and without (a) further notice of dishonor, to Guarantor, (b) any prior
notice to Guarantor of the acceptance by Agent or Lenders of this Guaranty, (c)
any notice having been given to Guarantor prior to such demand of the creating
or incurring of such indebtedness,
2
<PAGE> 3
or (d) notice of intent to accelerate or notice of acceleration to Guarantor or
Borrower. To enforce such payment by Guarantor it shall not be necessary for
Agent or Lenders to first or contemporaneously institute suit or exhaust
remedies against Borrower or others liable on such indebtedness, or to enforce
Rights against any security or collateral ever given to secure such
indebtedness.
7. Subordination. All Subordinated Debt shall be expressly subordinated
to the final payment in full of the Guaranteed Debt. Guarantor agrees not to
receive or accept any payment from Borrower with respect to the Subordinated
Debt at any time a Default exists; and, in the event Guarantor receives any
payment on the Subordinated Debt in violation of the foregoing, Guarantor shall
hold any such payment in trust for Agent and Lenders and promptly turn it over
to Agent, in the form received (with any necessary endorsements), to be applied
to the Guaranteed Debt.
8. Subrogation. Guarantor agrees that it will not assert, enforce, or
otherwise exercise (a) any right of subrogation to any of the rights or liens of
Agent or any Lender or any other beneficiary against Borrower or any other
obligor on the Guaranteed Debt or any Collateral or other security, or (b) any
right of recourse, reimbursement, subrogation, contribution, indemnification, or
similar right against Borrower or any other obligor or other guarantor on all or
any part of the Guaranteed Debt or any guarantor thereof (whether such rights in
clause (a) or clause (b) arise in equity, under contract, by statute, under
common law, or otherwise).
9. No Release. Guarantor hereby agrees that its obligations under the
terms of this Guaranty shall not be released, diminished, impaired, reduced or
affected by the occurrence of any one or more of the following events:
(a) Agent's or Lenders' taking or accepting of any other
security or guaranty for any or all of the Guaranteed Debt;
(b) any release, surrender, exchange, subordination or loss of
any security at any time existing in connection with any or all of the
Guaranteed Debt;
(c) any full or partial release of the liability of any other
obligor on the Obligation;
(d) the insolvency, becoming subject to any Debtor Relief Law,
or lack of corporate power of Borrower, any of the undersigned, or any
party at any time liable for the payment of any or all of the
Guaranteed Debt, whether now existing or hereafter occurring;
(e) any renewal, extension or rearrangement of the payment of
any or all of the Guaranteed Debt, either with or without notice to or
consent of Guarantor, or any adjustment, indulgence, forbearance, or
compromise that may be granted or given by Agent or any Lender to
Borrower, Guarantor, or any other obligor on the Obligation;
(f) any neglect, delay, omission, failure or refusal of Agent
or any Lender to take or prosecute any action for the collection of all
or any part of the Guaranteed Debt or to foreclose or take or prosecute
any action in connection with any instrument or agreement evidencing or
securing any or all of the Guaranteed Debt;
3
<PAGE> 4
(g) any failure of Agent or any Lender to notify Guarantor of
any renewal, extension, or assignment of any or all of the Guaranteed
Debt, or the release of any security or of any other action taken or
refrained from being taken by Agent or any Lender against Borrower or
any new agreement between Agent, any Lender, and Borrower, it being
understood that neither Agent nor any Lender shall be required to give
Guarantor any notice of any kind under any circumstances whatsoever
with respect to or in connection with the Guaranteed Debt, other than
any notice required to be given to Guarantor elsewhere herein;
(h) the unenforceability of all or any part of the Guaranteed
Debt against Borrower by reason of the fact that the Guaranteed Debt
exceeds the amount permitted by Law, the act of creating the Guaranteed
Debt, or any part thereof, is ultra vires, or the officers creating
same exceeded their authority or violated their fiduciary duties in
connection therewith;
(i) any payment of the Obligation to Agent or Lenders is held
to constitute a preference under any Debtor Relief Law or if for any
other reason Agent or any Lender is required to refund such payment or
make payment to someone else (and in each such instance this Guaranty
shall be reinstated in an amount equal to such payment), or if there is
more than one person or entity signing this Guaranty or otherwise
guaranteeing payment of the Guaranteed Debt, the release of any one or
more of them hereunder; or
(j) any discharge, release, or other forgiveness of Borrower's
personal liability for the payment of the Guaranteed Debt.
10. Waiver. Guarantor hereby waives all rights by which it might be
entitled to require suit on an accrued right of action in respect of any of the
Guaranteed Debt or require suit against Borrower or others, whether arising
pursuant to Section 34.02 of the Texas Business and Commerce Code, as amended
(regarding Guarantor's right to require Agent or Lenders to sue Borrower on
accrued right of action following Guarantor's written notice to Agent or
Lenders), Section 17.001 of the Texas Civil Practice and Remedies Code, as
amended (allowing suit against Guarantor without suit against Borrower, but
precluding entry of judgment against Guarantor prior to entry of judgment
against Borrower), Rule 31 of the Texas Rules of Civil Procedure, as amended
(requiring Agent or Lenders to join Borrower in any suit against Guarantor
unless judgment has been previously entered against Borrower), or otherwise.
Guarantor waives notice of acceptance of this Guaranty, notice of any loan to
which it may apply, and waives presentment, demand for payment, protest, notice
of dishonor or nonpayment of any loan, notice of intent to accelerate, notice of
acceleration, and notice of any suit or notice of the taking of other action by
Lender against Borrower, Guarantor or any other person and any notice to any
party liable thereon (including Guarantor).
11. Reliance and Duty to Remain Informed. Guarantor confirms that it
has executed and delivered this Guaranty after reviewing the terms and
conditions of the Loan Documents and such other information as it has deemed
appropriate in order to make its own credit analysis and decision to execute and
deliver this Guaranty. Guarantor confirms that it has made its own independent
investigation with respect to Borrower's creditworthiness and is not executing
and delivering this Guaranty in reliance on any representation or warranty by
Agent or Lender as to such creditworthiness. Guarantor expressly assumes all
responsibilities to remain informed of the financial condition of Borrower and
any circumstances affecting (a) Borrower's ability to perform under the Loan
Documents to which Borrower is a party or (b) any collateral securing all or any
part of the Guaranteed Debt.
4
<PAGE> 5
12. Representations and Warranties. Guarantor acknowledges that certain
representations and warranties set forth in the Credit Agreement are in respect
of it, and Guarantor reaffirms that each such representation and warranty is
true and correct in all material respects. Furthermore, Guarantor represents and
warrants to Agent and Lenders that Guarantor's board of directors has determined
that its liability and obligation hereunder may reasonably be expected to
benefit it directly or indirectly.
13. Change in Guarantor's Status. Should Guarantor become insolvent, or
fail to pay its debts generally as they become due, or voluntarily seek, consent
to, or acquiesce in the benefit or benefits of any Debtor Relief Law or become a
party to (or be made the subject of) any proceeding provided for by any Debtor
Relief Law (other than as a creditor or claimant) that could suspend or
otherwise adversely affect the Rights of Agent or Lenders granted hereunder,
then, in any such event, the Guaranteed Debt shall be, as between Guarantor,
Agent and Lender, a fully matured, due, and payable obligation of Guarantor to
Agent or Lender (without regard to whether Borrower is then in Default or
whether the Guaranteed Debt, or any part thereof is then due and owing by
Borrower to Lender), payable in full by Guarantor to Agent or Lender upon
demand, which shall be the estimated amount owing in respect of the contingent
claim created hereunder.
14. Covenants. Guarantor acknowledges that certain covenants set forth
in the Credit Agreement are in respect of it or shall be imposed upon it, and
Guarantor covenants and agrees to promptly and properly perform, observe, and
comply with each such covenant. Furthermore, Guarantor shall, jointly and
severally, indemnify, protect, and hold Agent and Lenders and their respective
parents, subsidiaries, directors, officers, employees, representatives, agents,
successors, permitted assigns, and attorneys (collectively, the "INDEMNIFIED
PARTIES") harmless from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims, and proceedings
and all costs, expenses (including, without limitation, all reasonable
attorneys' fees and legal expenses whether or not suit is brought), and
reasonable disbursements of any kind or nature (the "INDEMNIFIED LIABILITIES")
that may at any time be imposed on, incurred by, or asserted against the
indemnified parties, in any way relating to or arising out of (a) the direct or
indirect result of the violation by any Company of any Environmental Law, (b)
any Company's generation, manufacture, production, storage, release, threatened
release, discharge, disposal, or presence in connection with its properties of a
Hazardous Substance (including, without limitation, (I) all damages from any
use, generation, manufacture, production, storage, release, threatened release,
discharge, disposal, or presence, or (ii) the costs of any environmental
investigation, monitoring, repair, cleanup, or detoxification and the
preparation and implementation of any closure, remedial, or other plans), or (c)
the Loan Documents or any of the transactions contemplated therein. However,
although each indemnified party has the Right to be indemnified under the Loan
Documents for its own ordinary negligence, no indemnified party has the Right to
be indemnified under the Loan Documents for its own fraud, gross negligence, or
willful misconduct. The provisions of and undertakings and indemnification set
forth in this paragraph shall survive the satisfaction and payment of the
Obligation and termination of this Guaranty.
15. Offset Claims. The Guaranteed Debt shall not be reduced, discharged
or released because or by reason of any existing or future offset, claim or
defense (except for the defense of complete and final payment of the Guaranteed
Debt) of Borrower or any other party against Agent or Lenders or against payment
of the Guaranteed Debt, whether such offset, claim, or defense arises in
connection with the Guaranteed Debt or otherwise. Such claims and defenses
include, without limitation, failure of consideration, breach of warranty,
fraud, statute of frauds, bankruptcy, infancy, statute of limitations, lender
liability, accord and satisfaction, and usury.
5
<PAGE> 6
16. Binding Agreement. This Guaranty is for the benefit of Agent and
Lenders and their respective successors and assigns. Guarantor acknowledges that
in the event of an assignment of the Guaranteed Debt or any part thereof in
accordance with the Credit Agreement, the rights and benefits under this
Guaranty, to the extent applicable to the indebtedness so assigned, may be
transferred with such indebtedness. This Guaranty is binding on Guarantor and
its successors and permitted assigns.
17. Loan Document. This Guaranty is a Loan Document and, therefore,
this Guaranty is subject to the applicable provisions of SECTION 14 of the
Credit Agreement, all of which applicable provisions are incorporated into this
Guaranty by reference as if set forth verbatim.
18. Notices. All notices required or permitted to be given under this
Guaranty, if any, must be in writing and shall or may, as the case may be, be
given in the same manner as notice is given under the Credit Agreement as
follows:
If to Agent:
NationsBank of Texas, N.A.
Corporate Finance Group
700 Louisiana Street, 8th Floor
P.O. Box 2518
Houston, Texas 77252-2518
Telephone No.: (713) 247-6258
Facsimile No.: (713) 247-6360
Attention: Richard L. Nichols, Jr.
Vice President
with a copy to:
Porter & Hedges, L.L.P.
700 Louisiana, 35th Floor
Houston, Texas 77002
Telephone No.: (713) 226-0681
Facsimile No.: (713) 226-0281
Attention: F. Walter Bistline, Jr.
If to Borrower:
NCI Building Systems, Inc.
7301 Fairview
Houston, Texas 77041
Telephone No.: (713) 466-7758
Facsimile No.: (713) 466-3368
Attention: Robert J. Medlock
Chief Financial Officer
6
<PAGE> 7
with a copy to:
Gardere & Wynne, L.L.P.
Thanksgiving Tower
1301 Elm Street, Suite 3000
Dallas, Texas 75201
Telephone No.: (214) 999-3000
Facsimile No.: (214) 999-4667
Attention: John K. Sterling
If to Guarantor:
NCI Operating Corp.
7301 Fairview
Houston, Texas 77041
Telephone No.: (713) 466-7758
Facsimile No.: (713) 466-3368
Attention: Robert J. Medlock
Chief Financial Officer
with a copy to:
Gardere & Wynne, L.L.P.
Thanksgiving Tower
1301 Elm Street, Suite 3000
Dallas, Texas 75201
Telephone No.: (214) 999-3000
Facsimile No.: (214) 999-4667
Attention: John K. Sterling
Subject to the terms of the Credit Agreement, by giving at least 30 days written
notice, any party to this Guaranty shall have the right from time to time and at
any time while this Guaranty is in effect to change their respective addresses
or fax numbers and each shall have the right to specify a different address or
fax number within the United States of America. Nothing in this SECTION 18 shall
be construed to require any notice to Guarantor not otherwise expressly required
in this Guaranty.
19. GOVERNING LAW. THIS GUARANTY IS EXECUTED AND DELIVERED AS AN
INCIDENT TO A LENDING TRANSACTION NEGOTIATED, CONSUMMATED, AND PERFORMABLE IN
HARRIS COUNTY, TEXAS, AND SHALL BE CONSTRUED ACCORDING TO THE LAWS OF THE STATE
OF TEXAS AND, AS APPLICABLE, THE LAWS OF THE
UNITED STATES.
20. NO ORAL AGREEMENTS. THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HERETO SHALL BE DETERMINED SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND
INSTRUMENTS, AND ANY PRIOR ORAL AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY
AND MERGED INTO SUCH WRITINGS. THIS GUARANTY (AS AMENDED
7
<PAGE> 8
IN WRITING FROM TIME TO TIME) AND THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY
BORROWER, AGENT, LENDERS OR GUARANTOR (OR BY BORROWER OR GUARANTOR FOR THE
BENEFIT OF AGENT AND LENDERS) REPRESENT THE FINAL AGREEMENT BETWEEN BORROWER,
GUARANTOR, AND LENDER AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. THIS SECTION IS INCLUDED HEREIN
PURSUANT TO SECTION 26.02 OF THE TEXAS BUSINESS AND COMMERCE CODE, AS AMENDED
FROM TIME TO TIME.
This Guaranty is executed as of the date set forth above.
NCI OPERATING CORP.,
a Nevada corporation
By: /s/ Robert J. Medlock
-----------------------------------------------
Name: Robert J. Medlock
---------------------------------------------
Title: Vice President and Chief Financial Officer
--------------------------------------------
8
<PAGE> 1
EXHIBIT 4.14
GUARANTY
THIS GUARANTY (as amended, this "GUARANTY") is executed as of May 1,
1998, by the undersigned ("GUARANTOR") in favor of NationsBank of Texas, N.A.
("AGENT"), as Agent for the benefit of the Lenders ("LENDERS") now or hereafter
party to the Credit Agreement (as defined below).
RECITALS
A. NCI Building Systems, Inc., a Delaware corporation ("BORROWER"),
Agent and Lenders have executed a Credit Agreement dated March 25, 1998 (as
amended, supplemented or restated, the "CREDIT AGREEMENT"), together with
certain other Loan Documents.
B. Guarantor is a Subsidiary of Borrower and, because of its ownership
by Borrower, expects to continue to receive business opportunities, financial
support and management support from Borrower. Guarantor has agreed to enter into
this Guaranty so that Borrower can receive the benefits of the Guaranteed Debt
(as defined below) and continue to provide these services to Guarantor.
C. Guarantor's board of directors has determined that Guarantor may
benefit directly or indirectly from Borrower's execution of the Credit Agreement
as Guarantor may be the indirect recipient of funds advanced by Lenders to
Borrower under the Credit Agreement or the account party of LCs issued by Agent
pursuant to the Credit Agreement, and as such the value of the consideration
received and to be received by it under the Loan Documents is reasonably worth
at least as much as its liability and obligation under this Guaranty.
D. It is expressly understood among Borrower, Guarantor, Agent and
Lenders that the execution and delivery of this Guaranty is a condition
precedent to Lenders' obligations to extend credit under the Credit Agreement
and Agent's obligation to issue LCs under the Credit Agreement.
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which are hereby acknowledged, Guarantor guarantees to Lenders the prompt
payment at maturity (by acceleration or otherwise), and at all times thereafter,
of the Guaranteed Debt, as follows:
1. Definitions. UNLESS OTHERWISE DEFINED IN THIS GUARANTY, ANY
CAPITALIZED TERM USED IN THIS GUARANTY SHALL HAVE THE MEANING GIVEN THAT TERM IN
THE CREDIT AGREEMENT. The following terms shall have the following meanings as
used in this Guaranty:
1.1 "BORROWER" includes, without limitation, Borrower as a
debtor-in-possession, and any receiver, trustee, liquidator,
conservator, custodian, or similar party hereafter appointed for
Borrower or all or substantially all of Borrower's assets pursuant to
any liquidation, conservatorship, bankruptcy, moratorium,
rearrangement, receivership, insolvency, reorganization, or similar
Debtor Relief Law from time to time in effect affecting the Rights of
creditors generally.
1.2 "GUARANTEED DEBT" means the Obligation as defined in the
Credit Agreement (including, without limitation, amounts that would
become due but for operation of any applicable provision of Title 11 of
the U.S. Code (including, without limitation, 11 U.S.C. Sections 502
and 506)), together with all pre- and post-maturity interest thereon
(including, without limitation, all post-petition
<PAGE> 2
interest if Borrower or any Subsidiary voluntarily or involuntarily
files for bankruptcy protection) and any and all costs, attorneys' fees
and expenses reasonably incurred by Agent or any Lender to enforce
Borrower's, Guarantor's, or any other obligor's, payment of any of the
foregoing indebtedness.
1.3 "SUBORDINATED DEBT" means all obligations of Borrower to
Guarantor, whether direct, indirect, fixed, contingent, liquidated,
unliquidated, joint, several, or joint and several, now or hereafter
existing, due or to become due to Guarantor, or held or to be held by
Guarantor, whether created directly or acquired by assignment or
otherwise, and whether or not evidenced by written instrument.
2. Guaranty. This is an absolute, irrevocable and continuing
guaranty of payment of the Guaranteed Debt which will remain in effect until the
Guaranteed Debt is completely paid and all commitments to lend under the Credit
Agreement have terminated. The circumstance that at any time or from time to
time all or any portion of the Guaranteed Debt may be paid in full shall not
affect the Guarantor's obligation with respect to the Guaranteed Debt of
Borrower to Agent and Lenders thereafter incurred. The Guarantor may not rescind
or revoke its obligations to Agent and Lenders with respect to the Guaranteed
Debt.
3. Amount of Guaranty. In consummating the transactions contemplated
by the Credit Agreement, Guarantor does not intend to disturb, delay, hinder, or
defraud either its present or future creditors. Guarantor is familiar with, and
has independently reviewed books and records regarding, the financial condition
of Borrower and is familiar with the value of the security and support for the
payment and performance of the Guaranteed Debt. Based upon such examination, and
taking into account the fairly discounted value of Guarantor's contingent
obligations under this Guaranty and the limitation of liability set forth in
Section 4 hereof and the value of the subrogation and contribution claims
Guarantor could make in connection with this Guaranty, and assuming each of the
transaction contemplated by the Credit Agreement is consummated and Borrower
makes full use of the credit facilities thereunder, the present realizable fair
market value of the assets of Guarantor exceeds the total obligations of
Guarantor, and Guarantor is able to realize upon its assets and pay its
obligations as such obligations mature in the normal course of business.
4. Limit of Liability. The obligations of Guarantor hereunder shall
be limited to an aggregate amount equal to the largest amount that would not
render its obligations hereunder subject to avoidance under Section 548 of the
U.S. Bankruptcy Code or any comparable provisions of any applicable state Law.
5. Liability for Other Indebtedness of Borrower. If Guarantor
becomes liable for any indebtedness owing by Borrower to Agent or any Lender, by
endorsement or otherwise, other than under this Guaranty, such liability shall
not be, in any manner, impaired or affected hereby, and the Rights of Agent or
Lenders under this Guaranty shall be cumulative of any and all other Rights that
Agent or Lenders may ever have against Guarantor. The exercise by Agent or
Lenders of any Right or remedy under this Guaranty under the Loan Documents, or
other instrument, or at Law or in equity, shall not preclude the concurrent or
subsequent exercise of any other Right or remedy.
6. Default by Borrower. If a Default exists, Guarantor shall pay the
amount of the Guaranteed Debt then due and payable to Agent and Lenders on
demand and without (a) further notice of dishonor, to Guarantor, (b) any prior
notice to Guarantor of the acceptance by Agent or Lenders of this Guaranty, (c)
any notice having been given to Guarantor prior to such demand of the creating
or incurring of such indebtedness,
2
<PAGE> 3
or (d) notice of intent to accelerate or notice of acceleration to Guarantor or
Borrower. To enforce such payment by Guarantor it shall not be necessary for
Agent or Lenders to first or contemporaneously institute suit or exhaust
remedies against Borrower or others liable on such indebtedness, or to enforce
Rights against any security or collateral ever given to secure such
indebtedness.
7. Subordination. All Subordinated Debt shall be expressly
subordinated to the final payment in full of the Guaranteed Debt. Guarantor
agrees not to receive or accept any payment from Borrower with respect to the
Subordinated Debt at any time a Default exists; and, in the event Guarantor
receives any payment on the Subordinated Debt in violation of the foregoing,
Guarantor shall hold any such payment in trust for Agent and Lenders and
promptly turn it over to Agent, in the form received (with any necessary
endorsements), to be applied to the Guaranteed Debt.
8. Subrogation. Guarantor agrees that it will not assert, enforce,
or otherwise exercise (a) any right of subrogation to any of the rights or liens
of Agent or any Lender or any other beneficiary against Borrower or any other
obligor on the Guaranteed Debt or any Collateral or other security, or (b) any
right of recourse, reimbursement, subrogation, contribution, indemnification, or
similar right against Borrower or any other obligor or other guarantor on all or
any part of the Guaranteed Debt or any guarantor thereof (whether such rights in
clause (a) or clause (b) arise in equity, under contract, by statute, under
common law, or otherwise).
9. No Release. Guarantor hereby agrees that its obligations under
the terms of this Guaranty shall not be released, diminished, impaired, reduced
or affected by the occurrence of any one or more of the following events:
(a) Agent's or Lenders' taking or accepting of any other security
or guaranty for any or all of the Guaranteed Debt;
(b) any release, surrender, exchange, subordination or loss of
any security at any time existing in connection with any or all of the
Guaranteed Debt;
(c) any full or partial release of the liability of any other
obligor on the Obligation;
(d) the insolvency, becoming subject to any Debtor Relief Law, or
lack of corporate power of Borrower, any of the undersigned, or any
party at any time liable for the payment of any or all of the
Guaranteed Debt, whether now existing or hereafter occurring;
(e) any renewal, extension or rearrangement of the payment of any
or all of the Guaranteed Debt, either with or without notice to or
consent of Guarantor, or any adjustment, indulgence, forbearance, or
compromise that may be granted or given by Agent or any Lender to
Borrower, Guarantor, or any other obligor on the Obligation;
(f) any neglect, delay, omission, failure or refusal of Agent or
any Lender to take or prosecute any action for the collection of all or
any part of the Guaranteed Debt or to foreclose or take or prosecute
any action in connection with any instrument or agreement evidencing or
securing any or all of the Guaranteed Debt;
3
<PAGE> 4
(g) any failure of Agent or any Lender to notify Guarantor of any
renewal, extension, or assignment of any or all of the Guaranteed Debt,
or the release of any security or of any other action taken or
refrained from being taken by Agent or any Lender against Borrower or
any new agreement between Agent, any Lender, and Borrower, it being
understood that neither Agent nor any Lender shall be required to give
Guarantor any notice of any kind under any circumstances whatsoever
with respect to or in connection with the Guaranteed Debt, other than
any notice required to be given to Guarantor elsewhere herein;
(h) the unenforceability of all or any part of the Guaranteed
Debt against Borrower by reason of the fact that the Guaranteed Debt
exceeds the amount permitted by Law, the act of creating the Guaranteed
Debt, or any part thereof, is ultra vires, or the officers creating
same exceeded their authority or violated their fiduciary duties in
connection therewith;
(i) any payment of the Obligation to Agent or Lenders is held to
constitute a preference under any Debtor Relief Law or if for any other
reason Agent or any Lender is required to refund such payment or make
payment to someone else (and in each such instance this Guaranty shall
be reinstated in an amount equal to such payment), or if there is more
than one person or entity signing this Guaranty or otherwise
guaranteeing payment of the Guaranteed Debt, the release of any one or
more of them hereunder; or
(j) any discharge, release, or other forgiveness of Borrower's
personal liability for the payment of the Guaranteed Debt.
10. Waiver. Guarantor hereby waives all rights by which it might be
entitled to require suit on an accrued right of action in respect of any of the
Guaranteed Debt or require suit against Borrower or others, whether arising
pursuant to Section 34.02 of the Texas Business and Commerce Code, as amended
(regarding Guarantor's right to require Agent or Lenders to sue Borrower on
accrued right of action following Guarantor's written notice to Agent or
Lenders), Section 17.001 of the Texas Civil Practice and Remedies Code, as
amended (allowing suit against Guarantor without suit against Borrower, but
precluding entry of judgment against Guarantor prior to entry of judgment
against Borrower), Rule 31 of the Texas Rules of Civil Procedure, as amended
(requiring Agent or Lenders to join Borrower in any suit against Guarantor
unless judgment has been previously entered against Borrower), or otherwise.
Guarantor waives notice of acceptance of this Guaranty, notice of any loan to
which it may apply, and waives presentment, demand for payment, protest, notice
of dishonor or nonpayment of any loan, notice of intent to accelerate, notice of
acceleration, and notice of any suit or notice of the taking of other action by
Lender against Borrower, Guarantor or any other person and any notice to any
party liable thereon (including Guarantor).
11. Reliance and Duty to Remain Informed. Guarantor confirms that it
has executed and delivered this Guaranty after reviewing the terms and
conditions of the Loan Documents and such other information as it has deemed
appropriate in order to make its own credit analysis and decision to execute and
deliver this Guaranty. Guarantor confirms that it has made its own independent
investigation with respect to Borrower's creditworthiness and is not executing
and delivering this Guaranty in reliance on any representation or warranty by
Agent or Lender as to such creditworthiness. Guarantor expressly assumes all
responsibilities to remain informed of the financial condition of Borrower and
any circumstances affecting (a) Borrower's ability to perform under the Loan
Documents to which Borrower is a party or (b) any collateral securing all or any
part of the Guaranteed Debt.
4
<PAGE> 5
12. Representations and Warranties. Guarantor acknowledges that
certain representations and warranties set forth in the Credit Agreement are in
respect of it, and Guarantor reaffirms that each such representation and
warranty is true and correct in all material respects. Furthermore, Guarantor
represents and warrants to Agent and Lenders that Guarantor's board of directors
has determined that its liability and obligation hereunder may reasonably be
expected to benefit it directly or indirectly.
13. Change in Guarantor's Status. Should Guarantor become insolvent,
or fail to pay its debts generally as they become due, or voluntarily seek,
consent to, or acquiesce in the benefit or benefits of any Debtor Relief Law or
become a party to (or be made the subject of) any proceeding provided for by any
Debtor Relief Law (other than as a creditor or claimant) that could suspend or
otherwise adversely affect the Rights of Agent or Lenders granted hereunder,
then, in any such event, the Guaranteed Debt shall be, as between Guarantor,
Agent and Lender, a fully matured, due, and payable obligation of Guarantor to
Agent or Lender (without regard to whether Borrower is then in Default or
whether the Guaranteed Debt, or any part thereof is then due and owing by
Borrower to Lender), payable in full by Guarantor to Agent or Lender upon
demand, which shall be the estimated amount owing in respect of the contingent
claim created hereunder.
14. Covenants. Guarantor acknowledges that certain covenants set
forth in the Credit Agreement are in respect of it or shall be imposed upon it,
and Guarantor covenants and agrees to promptly and properly perform, observe,
and comply with each such covenant. Furthermore, Guarantor shall, jointly and
severally, indemnify, protect, and hold Agent and Lenders and their respective
parents, subsidiaries, directors, officers, employees, representatives, agents,
successors, permitted assigns, and attorneys (collectively, the "INDEMNIFIED
PARTIES") harmless from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims, and proceedings
and all costs, expenses (including, without limitation, all reasonable
attorneys' fees and legal expenses whether or not suit is brought), and
reasonable disbursements of any kind or nature (the "INDEMNIFIED LIABILITIES")
that may at any time be imposed on, incurred by, or asserted against the
indemnified parties, in any way relating to or arising out of (a) the direct or
indirect result of the violation by any Company of any Environmental Law, (b)
any Company's generation, manufacture, production, storage, release, threatened
release, discharge, disposal, or presence in connection with its properties of a
Hazardous Substance (including, without limitation, (I) all damages from any
use, generation, manufacture, production, storage, release, threatened release,
discharge, disposal, or presence, or (ii) the costs of any environmental
investigation, monitoring, repair, cleanup, or detoxification and the
preparation and implementation of any closure, remedial, or other plans), or (c)
the Loan Documents or any of the transactions contemplated therein. However,
although each indemnified party has the Right to be indemnified under the Loan
Documents for its own ordinary negligence, no indemnified party has the Right to
be indemnified under the Loan Documents for its own fraud, gross negligence, or
willful misconduct. The provisions of and undertakings and indemnification set
forth in this paragraph shall survive the satisfaction and payment of the
Obligation and termination of this Guaranty.
15. Offset Claims. The Guaranteed Debt shall not be reduced,
discharged or released because or by reason of any existing or future offset,
claim or defense (except for the defense of complete and final payment of the
Guaranteed Debt) of Borrower or any other party against Agent or Lenders or
against payment of the Guaranteed Debt, whether such offset, claim, or defense
arises in connection with the Guaranteed Debt or otherwise. Such claims and
defenses include, without limitation, failure of consideration, breach of
warranty, fraud, statute of frauds, bankruptcy, infancy, statute of limitations,
lender liability, accord and satisfaction, and usury.
5
<PAGE> 6
16. Binding Agreement. This Guaranty is for the benefit of Agent and
Lenders and their respective successors and assigns. Guarantor acknowledges that
in the event of an assignment of the Guaranteed Debt or any part thereof in
accordance with the Credit Agreement, the rights and benefits under this
Guaranty, to the extent applicable to the indebtedness so assigned, may be
transferred with such indebtedness. This Guaranty is binding on Guarantor and
its successors and permitted assigns.
17. Loan Document. This Guaranty is a Loan Document and, therefore,
this Guaranty is subject to the applicable provisions of SECTION 14 of the
Credit Agreement, all of which applicable provisions are incorporated into this
Guaranty by reference as if set forth verbatim.
18. Notices. All notices required or permitted to be given under this
Guaranty, if any, must be in writing and shall or may, as the case may be, be
given in the same manner as notice is given under the Credit Agreement as
follows:
If to Agent:
NationsBank of Texas, N.A.
Corporate Finance Group
700 Louisiana Street, 8th Floor
P.O. Box 2518
Houston, Texas 77252-2518
Telephone No.: (713) 247-6258
Facsimile No.: (713) 247-6360
Attention: Richard L. Nichols, Jr.
Vice President
with a copy to:
Porter & Hedges, L.L.P.
700 Louisiana, 35th Floor
Houston, Texas 77002
Telephone No.: (713) 226-0681
Facsimile No.: (713) 226-0281
Attention: F. Walter Bistline, Jr.
If to Borrower:
NCI Building Systems, Inc.
7301 Fairview
Houston, Texas 77041
Telephone No.: (713) 466-7758
Facsimile No.: (713) 466-3368
Attention: Robert J. Medlock
Chief Financial Officer
6
<PAGE> 7
with a copy to:
Gardere & Wynne, L.L.P.
Thanksgiving Tower
1301 Elm Street, Suite 3000
Dallas, Texas 75201
Telephone No.: (214) 999-3000
Facsimile No.: (214) 999-4667
Attention: John K. Sterling
If to Guarantor:
Metal Building Components Holding, Inc.
c/o Delaware Corporate Management, Inc.
1105 North Market Street, Suite 1300
P.O. Box 8985
Wilmington, Delaware 19899
Telephone No.: (302) 427-0803
Attention: David P. Fontello
with a copy to:
Gardere & Wynne, L.L.P.
Thanksgiving Tower
1301 Elm Street, Suite 3000
Dallas, Texas 75201
Telephone No.: (214) 999-3000
Facsimile No.: (214) 999-4667
Attention: John K. Sterling
Subject to the terms of the Credit Agreement, by giving at least 30 days written
notice, any party to this Guaranty shall have the right from time to time and at
any time while this Guaranty is in effect to change their respective addresses
or fax numbers and each shall have the right to specify a different address or
fax number within the United States of America. Nothing in this SECTION 18 shall
be construed to require any notice to Guarantor not otherwise expressly required
in this Guaranty.
19. GOVERNING LAW. THIS GUARANTY IS EXECUTED AND DELIVERED AS AN
INCIDENT TO A LENDING TRANSACTION NEGOTIATED, CONSUMMATED, AND PERFORMABLE IN
HARRIS COUNTY, TEXAS, AND SHALL BE CONSTRUED ACCORDING TO THE LAWS OF THE STATE
OF TEXAS AND, AS APPLICABLE, THE LAWS OF THE UNITED
STATES.
20. NO ORAL AGREEMENTS. THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HERETO SHALL BE DETERMINED SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND
INSTRUMENTS, AND ANY PRIOR ORAL AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY
AND MERGED INTO SUCH WRITINGS. THIS GUARANTY (AS AMENDED
7
<PAGE> 8
IN WRITING FROM TIME TO TIME) AND THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY
BORROWER, AGENT, LENDERS OR GUARANTOR (OR BY BORROWER OR GUARANTOR FOR THE
BENEFIT OF AGENT AND LENDERS) REPRESENT THE FINAL AGREEMENT BETWEEN BORROWER,
GUARANTOR, AND LENDER AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. THIS SECTION IS INCLUDED HEREIN
PURSUANT TO SECTION 26.02 OF THE TEXAS BUSINESS AND COMMERCE CODE, AS AMENDED
FROM TIME TO TIME.
This Guaranty is executed as of the date set forth above.
METAL BUILDING COMPONENTS HOLDING,
INC., a Delaware corporation
By: /s/ Robert J. Medlock
--------------------------------------
Name: Robert J. Medlock
------------------------------------
Title: Vice President and Treasurer
-----------------------------------
8
<PAGE> 1
EXHIBIT 4.15
GUARANTY
THIS GUARANTY (as amended, this "GUARANTY") is executed as of May 1,
1998, by the undersigned ("GUARANTOR") in favor of NationsBank of Texas, N.A.
("AGENT"), as Agent for the benefit of the Lenders ("LENDERS") now or hereafter
party to the Credit Agreement (as defined below).
RECITALS
A. NCI Building Systems, Inc., a Delaware corporation ("BORROWER"),
Agent and Lenders have executed a Credit Agreement dated March 25, 1998 (as
amended, supplemented or restated, the "CREDIT AGREEMENT"), together with
certain other Loan Documents.
B. Guarantor is a Subsidiary of Borrower and, because of its ownership
by Borrower, expects to continue to receive business opportunities, financial
support and management support from Borrower. Guarantor has agreed to enter into
this Guaranty so that Borrower can receive the benefits of the Guaranteed Debt
(as defined below) and continue to provide these services to Guarantor.
C. Guarantor's board of directors has determined that Guarantor may
benefit directly or indirectly from Borrower's execution of the Credit Agreement
as Guarantor may be the indirect recipient of funds advanced by Lenders to
Borrower under the Credit Agreement or the account party of LCs issued by Agent
pursuant to the Credit Agreement, and as such the value of the consideration
received and to be received by it under the Loan Documents is reasonably worth
at least as much as its liability and obligation under this Guaranty.
D. It is expressly understood among Borrower, Guarantor, Agent and
Lenders that the execution and delivery of this Guaranty is a condition
precedent to Lenders' obligations to extend credit under the Credit Agreement
and Agent's obligation to issue LCs under the Credit Agreement.
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which are hereby acknowledged, Guarantor guarantees to Lenders the prompt
payment at maturity (by acceleration or otherwise), and at all times thereafter,
of the Guaranteed Debt, as follows:
1. Definitions. UNLESS OTHERWISE DEFINED IN THIS GUARANTY, ANY
CAPITALIZED TERM USED IN THIS GUARANTY SHALL HAVE THE MEANING GIVEN THAT TERM IN
THE CREDIT AGREEMENT. The following terms shall have the following meanings as
used in this Guaranty:
1.1 "BORROWER" includes, without limitation, Borrower as a
debtor-in-possession, and any receiver, trustee, liquidator,
conservator, custodian, or similar party hereafter appointed for
Borrower or all or substantially all of Borrower's assets pursuant to
any liquidation, conservatorship, bankruptcy, moratorium,
rearrangement, receivership, insolvency, reorganization, or similar
Debtor Relief Law from time to time in effect affecting the Rights of
creditors generally.
1.2 "GUARANTEED DEBT" means the Obligation as defined in the
Credit Agreement (including, without limitation, amounts that would
become due but for operation of any applicable provision of Title 11 of
the U.S. Code (including, without limitation, 11 U.S.C. Sections 502
and 506)), together with all pre- and post-maturity interest thereon
(including, without limitation, all post-petition
<PAGE> 2
interest if Borrower or any Subsidiary voluntarily or involuntarily
files for bankruptcy protection) and any and all costs, attorneys' fees
and expenses reasonably incurred by Agent or any Lender to enforce
Borrower's, Guarantor's, or any other obligor's, payment of any of the
foregoing indebtedness.
1.3 "SUBORDINATED DEBT" means all obligations of Borrower to
Guarantor, whether direct, indirect, fixed, contingent, liquidated,
unliquidated, joint, several, or joint and several, now or hereafter
existing, due or to become due to Guarantor, or held or to be held by
Guarantor, whether created directly or acquired by assignment or
otherwise, and whether or not evidenced by written instrument.
2. Guaranty. This is an absolute, irrevocable and continuing guaranty
of payment of the Guaranteed Debt which will remain in effect until the
Guaranteed Debt is completely paid and all commitments to lend under the Credit
Agreement have terminated. The circumstance that at any time or from time to
time all or any portion of the Guaranteed Debt may be paid in full shall not
affect the Guarantor's obligation with respect to the Guaranteed Debt of
Borrower to Agent and Lenders thereafter incurred. The Guarantor may not rescind
or revoke its obligations to Agent and Lenders with respect to the Guaranteed
Debt.
3. Amount of Guaranty. In consummating the transactions contemplated by
the Credit Agreement, Guarantor does not intend to disturb, delay, hinder, or
defraud either its present or future creditors. Guarantor is familiar with, and
has independently reviewed books and records regarding, the financial condition
of Borrower and is familiar with the value of the security and support for the
payment and performance of the Guaranteed Debt. Based upon such examination, and
taking into account the fairly discounted value of Guarantor's contingent
obligations under this Guaranty and the limitation of liability set forth in
Section 4 hereof and the value of the subrogation and contribution claims
Guarantor could make in connection with this Guaranty, and assuming each of the
transaction contemplated by the Credit Agreement is consummated and Borrower
makes full use of the credit facilities thereunder, the present realizable fair
market value of the assets of Guarantor exceeds the total obligations of
Guarantor, and Guarantor is able to realize upon its assets and pay its
obligations as such obligations mature in the normal course of business.
4. Limit of Liability. The obligations of Guarantor hereunder shall be
limited to an aggregate amount equal to the largest amount that would not render
its obligations hereunder subject to avoidance under Section 548 of the U.S.
Bankruptcy Code or any comparable provisions of any applicable state Law.
5. Liability for Other Indebtedness of Borrower. If Guarantor becomes
liable for any indebtedness owing by Borrower to Agent or any Lender, by
endorsement or otherwise, other than under this Guaranty, such liability shall
not be, in any manner, impaired or affected hereby, and the Rights of Agent or
Lenders under this Guaranty shall be cumulative of any and all other Rights that
Agent or Lenders may ever have against Guarantor. The exercise by Agent or
Lenders of any Right or remedy under this Guaranty under the Loan Documents, or
other instrument, or at Law or in equity, shall not preclude the concurrent or
subsequent exercise of any other Right or remedy.
6. Default by Borrower. If a Default exists, Guarantor shall pay the
amount of the Guaranteed Debt then due and payable to Agent and Lenders on
demand and without (a) further notice of dishonor, to Guarantor, (b) any prior
notice to Guarantor of the acceptance by Agent or Lenders of this Guaranty, (c)
any notice having been given to Guarantor prior to such demand of the creating
or incurring of such indebtedness,
2
<PAGE> 3
or (d) notice of intent to accelerate or notice of acceleration to Guarantor or
Borrower. To enforce such payment by Guarantor it shall not be necessary for
Agent or Lenders to first or contemporaneously institute suit or exhaust
remedies against Borrower or others liable on such indebtedness, or to enforce
Rights against any security or collateral ever given to secure such
indebtedness.
7. Subordination. All Subordinated Debt shall be expressly subordinated
to the final payment in full of the Guaranteed Debt. Guarantor agrees not to
receive or accept any payment from Borrower with respect to the Subordinated
Debt at any time a Default exists; and, in the event Guarantor receives any
payment on the Subordinated Debt in violation of the foregoing, Guarantor shall
hold any such payment in trust for Agent and Lenders and promptly turn it over
to Agent, in the form received (with any necessary endorsements), to be applied
to the Guaranteed Debt.
8. Subrogation. Guarantor agrees that it will not assert, enforce, or
otherwise exercise (a) any right of subrogation to any of the rights or liens of
Agent or any Lender or any other beneficiary against Borrower or any other
obligor on the Guaranteed Debt or any Collateral or other security, or (b) any
right of recourse, reimbursement, subrogation, contribution, indemnification, or
similar right against Borrower or any other obligor or other guarantor on all or
any part of the Guaranteed Debt or any guarantor thereof (whether such rights in
clause (a) or clause (b) arise in equity, under contract, by statute, under
common law, or otherwise).
9. No Release. Guarantor hereby agrees that its obligations under the
terms of this Guaranty shall not be released, diminished, impaired, reduced or
affected by the occurrence of any one or more of the following events:
(a) Agent's or Lenders' taking or accepting of any other
security or guaranty for any or all of the Guaranteed Debt;
(b) any release, surrender, exchange, subordination or loss of
any security at any time existing in connection with any or all of the
Guaranteed Debt;
(c) any full or partial release of the liability of any other
obligor on the Obligation;
(d) the insolvency, becoming subject to any Debtor Relief Law,
or lack of corporate power of Borrower, any of the undersigned, or any
party at any time liable for the payment of any or all of the
Guaranteed Debt, whether now existing or hereafter occurring;
(e) any renewal, extension or rearrangement of the payment of
any or all of the Guaranteed Debt, either with or without notice to or
consent of Guarantor, or any adjustment, indulgence, forbearance, or
compromise that may be granted or given by Agent or any Lender to
Borrower, Guarantor, or any other obligor on the Obligation;
(f) any neglect, delay, omission, failure or refusal of Agent
or any Lender to take or prosecute any action for the collection of all
or any part of the Guaranteed Debt or to foreclose or take or prosecute
any action in connection with any instrument or agreement evidencing or
securing any or all of the Guaranteed Debt;
3
<PAGE> 4
(g) any failure of Agent or any Lender to notify Guarantor of
any renewal, extension, or assignment of any or all of the Guaranteed
Debt, or the release of any security or of any other action taken or
refrained from being taken by Agent or any Lender against Borrower or
any new agreement between Agent, any Lender, and Borrower, it being
understood that neither Agent nor any Lender shall be required to give
Guarantor any notice of any kind under any circumstances whatsoever
with respect to or in connection with the Guaranteed Debt, other than
any notice required to be given to Guarantor elsewhere herein;
(h) the unenforceability of all or any part of the Guaranteed
Debt against Borrower by reason of the fact that the Guaranteed Debt
exceeds the amount permitted by Law, the act of creating the Guaranteed
Debt, or any part thereof, is ultra vires, or the officers creating
same exceeded their authority or violated their fiduciary duties in
connection therewith;
(i) any payment of the Obligation to Agent or Lenders is held
to constitute a preference under any Debtor Relief Law or if for any
other reason Agent or any Lender is required to refund such payment or
make payment to someone else (and in each such instance this Guaranty
shall be reinstated in an amount equal to such payment), or if there is
more than one person or entity signing this Guaranty or otherwise
guaranteeing payment of the Guaranteed Debt, the release of any one or
more of them hereunder; or
(j) any discharge, release, or other forgiveness of Borrower's
personal liability for the payment of the Guaranteed Debt.
10. Waiver. Guarantor hereby waives all rights by which it might be
entitled to require suit on an accrued right of action in respect of any of the
Guaranteed Debt or require suit against Borrower or others, whether arising
pursuant to Section 34.02 of the Texas Business and Commerce Code, as amended
(regarding Guarantor's right to require Agent or Lenders to sue Borrower on
accrued right of action following Guarantor's written notice to Agent or
Lenders), Section 17.001 of the Texas Civil Practice and Remedies Code, as
amended (allowing suit against Guarantor without suit against Borrower, but
precluding entry of judgment against Guarantor prior to entry of judgment
against Borrower), Rule 31 of the Texas Rules of Civil Procedure, as amended
(requiring Agent or Lenders to join Borrower in any suit against Guarantor
unless judgment has been previously entered against Borrower), or otherwise.
Guarantor waives notice of acceptance of this Guaranty, notice of any loan to
which it may apply, and waives presentment, demand for payment, protest, notice
of dishonor or nonpayment of any loan, notice of intent to accelerate, notice of
acceleration, and notice of any suit or notice of the taking of other action by
Lender against Borrower, Guarantor or any other person and any notice to any
party liable thereon (including Guarantor).
11. Reliance and Duty to Remain Informed. Guarantor confirms that it
has executed and delivered this Guaranty after reviewing the terms and
conditions of the Loan Documents and such other information as it has deemed
appropriate in order to make its own credit analysis and decision to execute and
deliver this Guaranty. Guarantor confirms that it has made its own independent
investigation with respect to Borrower's creditworthiness and is not executing
and delivering this Guaranty in reliance on any representation or warranty by
Agent or Lender as to such creditworthiness. Guarantor expressly assumes all
responsibilities to remain informed of the financial condition of Borrower and
any circumstances affecting (a) Borrower's ability to perform under the Loan
Documents to which Borrower is a party or (b) any collateral securing all or any
part of the Guaranteed Debt.
4
<PAGE> 5
12. Representations and Warranties. Guarantor acknowledges that certain
representations and warranties set forth in the Credit Agreement are in respect
of it, and Guarantor reaffirms that each such representation and warranty is
true and correct in all material respects. Furthermore, Guarantor represents and
warrants to Agent and Lenders that Guarantor's board of directors has determined
that its liability and obligation hereunder may reasonably be expected to
benefit it directly or indirectly.
13. Change in Guarantor's Status. Should Guarantor become insolvent, or
fail to pay its debts generally as they become due, or voluntarily seek, consent
to, or acquiesce in the benefit or benefits of any Debtor Relief Law or become a
party to (or be made the subject of) any proceeding provided for by any Debtor
Relief Law (other than as a creditor or claimant) that could suspend or
otherwise adversely affect the Rights of Agent or Lenders granted hereunder,
then, in any such event, the Guaranteed Debt shall be, as between Guarantor,
Agent and Lender, a fully matured, due, and payable obligation of Guarantor to
Agent or Lender (without regard to whether Borrower is then in Default or
whether the Guaranteed Debt, or any part thereof is then due and owing by
Borrower to Lender), payable in full by Guarantor to Agent or Lender upon
demand, which shall be the estimated amount owing in respect of the contingent
claim created hereunder.
14. Covenants. Guarantor acknowledges that certain covenants set forth
in the Credit Agreement are in respect of it or shall be imposed upon it, and
Guarantor covenants and agrees to promptly and properly perform, observe, and
comply with each such covenant. Furthermore, Guarantor shall, jointly and
severally, indemnify, protect, and hold Agent and Lenders and their respective
parents, subsidiaries, directors, officers, employees, representatives, agents,
successors, permitted assigns, and attorneys (collectively, the "INDEMNIFIED
PARTIES") harmless from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims, and proceedings
and all costs, expenses (including, without limitation, all reasonable
attorneys' fees and legal expenses whether or not suit is brought), and
reasonable disbursements of any kind or nature (the "INDEMNIFIED LIABILITIES")
that may at any time be imposed on, incurred by, or asserted against the
indemnified parties, in any way relating to or arising out of (a) the direct or
indirect result of the violation by any Company of any Environmental Law, (b)
any Company's generation, manufacture, production, storage, release, threatened
release, discharge, disposal, or presence in connection with its properties of a
Hazardous Substance (including, without limitation, (I) all damages from any
use, generation, manufacture, production, storage, release, threatened release,
discharge, disposal, or presence, or (ii) the costs of any environmental
investigation, monitoring, repair, cleanup, or detoxification and the
preparation and implementation of any closure, remedial, or other plans), or (c)
the Loan Documents or any of the transactions contemplated therein. However,
although each indemnified party has the Right to be indemnified under the Loan
Documents for its own ordinary negligence, no indemnified party has the Right to
be indemnified under the Loan Documents for its own fraud, gross negligence, or
willful misconduct. The provisions of and undertakings and indemnification set
forth in this paragraph shall survive the satisfaction and payment of the
Obligation and termination of this Guaranty.
15. Offset Claims. The Guaranteed Debt shall not be reduced, discharged
or released because or by reason of any existing or future offset, claim or
defense (except for the defense of complete and final payment of the Guaranteed
Debt) of Borrower or any other party against Agent or Lenders or against payment
of the Guaranteed Debt, whether such offset, claim, or defense arises in
connection with the Guaranteed Debt or otherwise. Such claims and defenses
include, without limitation, failure of consideration, breach of warranty,
fraud, statute of frauds, bankruptcy, infancy, statute of limitations, lender
liability, accord and satisfaction, and usury.
5
<PAGE> 6
16. Binding Agreement. This Guaranty is for the benefit of Agent and
Lenders and their respective successors and assigns. Guarantor acknowledges that
in the event of an assignment of the Guaranteed Debt or any part thereof in
accordance with the Credit Agreement, the rights and benefits under this
Guaranty, to the extent applicable to the indebtedness so assigned, may be
transferred with such indebtedness. This Guaranty is binding on Guarantor and
its successors and permitted assigns.
17. Loan Document. This Guaranty is a Loan Document and, therefore,
this Guaranty is subject to the applicable provisions of SECTION 14 of the
Credit Agreement, all of which applicable provisions are incorporated into this
Guaranty by reference as if set forth verbatim.
18. Notices. All notices required or permitted to be given under this
Guaranty, if any, must be in writing and shall or may, as the case may be, be
given in the same manner as notice is given under the Credit Agreement as
follows:
If to Agent:
NationsBank of Texas, N.A.
Corporate Finance Group
700 Louisiana Street, 8th Floor
P.O. Box 2518
Houston, Texas 77252-2518
Telephone No.: (713) 247-6258
Facsimile No.: (713) 247-6360
Attention: Richard L. Nichols, Jr.
Vice President
with a copy to:
Porter & Hedges, L.L.P.
700 Louisiana, 35th Floor
Houston, Texas 77002
Telephone No.: (713) 226-0681
Facsimile No.: (713) 226-0281
Attention: F. Walter Bistline, Jr.
If to Borrower:
NCI Building Systems, Inc.
7301 Fairview
Houston, Texas 77041
Telephone No.: (713) 466-7758
Facsimile No.: (713) 466-3368
Attention: Robert J. Medlock
Chief Financial Officer
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<PAGE> 7
with a copy to:
Gardere & Wynne, L.L.P.
Thanksgiving Tower
1301 Elm Street, Suite 3000
Dallas, Texas 75201
Telephone No.: (214) 999-3000
Facsimile No.: (214) 999-4667
Attention: John K. Sterling
If to Guarantor:
Metal Coaters Holding, Inc.
c/o Delaware Corporate Management, Inc.
1105 North Market Street, Suite 1300
P.O. Box 8985
Wilmington, Delaware 19899
Telephone No.: (302) 427-0803
Attention: David P. Fontello
with a copy to:
Gardere & Wynne, L.L.P.
Thanksgiving Tower
1301 Elm Street, Suite 3000
Dallas, Texas 75201
Telephone No.: (214) 999-3000
Facsimile No.: (214) 999-4667
Attention: John K. Sterling
Subject to the terms of the Credit Agreement, by giving at least 30 days written
notice, any party to this Guaranty shall have the right from time to time and at
any time while this Guaranty is in effect to change their respective addresses
or fax numbers and each shall have the right to specify a different address or
fax number within the United States of America. Nothing in this SECTION 18 shall
be construed to require any notice to Guarantor not otherwise expressly required
in this Guaranty.
19. GOVERNING LAW. THIS GUARANTY IS EXECUTED AND DELIVERED AS AN
INCIDENT TO A LENDING TRANSACTION NEGOTIATED, CONSUMMATED, AND PERFORMABLE IN
HARRIS COUNTY, TEXAS, AND SHALL BE CONSTRUED ACCORDING TO THE LAWS OF THE STATE
OF TEXAS AND, AS APPLICABLE, THE LAWS OF THE
UNITED STATES.
20. NO ORAL AGREEMENTS. THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HERETO SHALL BE DETERMINED SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND
INSTRUMENTS, AND ANY PRIOR ORAL AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY
AND MERGED INTO SUCH WRITINGS. THIS GUARANTY (AS AMENDED
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<PAGE> 8
IN WRITING FROM TIME TO TIME) AND THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY
BORROWER, AGENT, LENDERS OR GUARANTOR (OR BY BORROWER OR GUARANTOR FOR THE
BENEFIT OF AGENT AND LENDERS) REPRESENT THE FINAL AGREEMENT BETWEEN BORROWER,
GUARANTOR, AND LENDER AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. THIS SECTION IS INCLUDED HEREIN
PURSUANT TO SECTION 26.02 OF THE TEXAS BUSINESS AND COMMERCE CODE, AS AMENDED
FROM TIME TO TIME.
This Guaranty is executed as of the date set forth above.
METAL COATERS HOLDING, INC.,
a Delaware corporation
By: /s/ Robert J. Medlock
---------------------------
Name: Robert J. Medlock
--------------------------
Title: Vice President and
Treasurer
-------------------------
8
<PAGE> 1
EXHIBIT 4.16
GUARANTY
THIS GUARANTY (as amended, this "GUARANTY") is executed as of May 1,
1998, by the undersigned ("GUARANTOR") in favor of NationsBank of Texas, N.A.
("AGENT"), as Agent for the benefit of the Lenders ("LENDERS") now or hereafter
party to the Credit Agreement (as defined below).
RECITALS
A. NCI Building Systems, Inc., a Delaware corporation ("BORROWER"),
Agent and Lenders have executed a Credit Agreement dated March 25, 1998 (as
amended, supplemented or restated, the "CREDIT AGREEMENT"), together with
certain other Loan Documents.
B. Guarantor is a Subsidiary of Borrower and, because of its ownership
by Borrower, expects to continue to receive business opportunities, financial
support and management support from Borrower. Guarantor has agreed to enter into
this Guaranty so that Borrower can receive the benefits of the Guaranteed Debt
(as defined below) and continue to provide these services to Guarantor.
C. Guarantor's board of directors has determined that Guarantor may
benefit directly or indirectly from Borrower's execution of the Credit Agreement
as Guarantor may be the indirect recipient of funds advanced by Lenders to
Borrower under the Credit Agreement or the account party of LCs issued by Agent
pursuant to the Credit Agreement, and as such the value of the consideration
received and to be received by it under the Loan Documents is reasonably worth
at least as much as its liability and obligation under this Guaranty.
D. It is expressly understood among Borrower, Guarantor, Agent and
Lenders that the execution and delivery of this Guaranty is a condition
precedent to Lenders' obligations to extend credit under the Credit Agreement
and Agent's obligation to issue LCs under the Credit Agreement.
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which are hereby acknowledged, Guarantor guarantees to Lenders the prompt
payment at maturity (by acceleration or otherwise), and at all times thereafter,
of the Guaranteed Debt, as follows:
1. Definitions. UNLESS OTHERWISE DEFINED IN THIS GUARANTY, ANY
CAPITALIZED TERM USED IN THIS GUARANTY SHALL HAVE THE MEANING GIVEN THAT TERM IN
THE CREDIT AGREEMENT. The following terms shall have the following meanings as
used in this Guaranty:
1.1 "BORROWER" includes, without limitation, Borrower as a
debtor-in-possession, and any receiver, trustee, liquidator,
conservator, custodian, or similar party hereafter appointed for
Borrower or all or substantially all of Borrower's assets pursuant to
any liquidation, conservatorship, bankruptcy, moratorium,
rearrangement, receivership, insolvency, reorganization, or similar
Debtor Relief Law from time to time in effect affecting the Rights of
creditors generally.
1.2 "GUARANTEED DEBT" means the Obligation as defined in the
Credit Agreement (including, without limitation, amounts that would
become due but for operation of any applicable provision of Title 11 of
the U.S. Code (including, without limitation, 11 U.S.C. Sections 502
and 506)), together with all pre- and post-maturity interest thereon
(including, without limitation, all post-petition
<PAGE> 2
interest if Borrower or any Subsidiary voluntarily or involuntarily
files for bankruptcy protection) and any and all costs, attorneys' fees
and expenses reasonably incurred by Agent or any Lender to enforce
Borrower's, Guarantor's, or any other obligor's, payment of any of the
foregoing indebtedness.
1.3 "SUBORDINATED DEBT" means all obligations of Borrower to
Guarantor, whether direct, indirect, fixed, contingent, liquidated,
unliquidated, joint, several, or joint and several, now or hereafter
existing, due or to become due to Guarantor, or held or to be held by
Guarantor, whether created directly or acquired by assignment or
otherwise, and whether or not evidenced by written instrument.
2. Guaranty. This is an absolute, irrevocable and continuing guaranty
of payment of the Guaranteed Debt which will remain in effect until the
Guaranteed Debt is completely paid and all commitments to lend under the Credit
Agreement have terminated. The circumstance that at any time or from time to
time all or any portion of the Guaranteed Debt may be paid in full shall not
affect the Guarantor's obligation with respect to the Guaranteed Debt of
Borrower to Agent and Lenders thereafter incurred. The Guarantor may not rescind
or revoke its obligations to Agent and Lenders with respect to the Guaranteed
Debt.
3. Amount of Guaranty. In consummating the transactions contemplated by
the Credit Agreement, Guarantor does not intend to disturb, delay, hinder, or
defraud either its present or future creditors. Guarantor is familiar with, and
has independently reviewed books and records regarding, the financial condition
of Borrower and is familiar with the value of the security and support for the
payment and performance of the Guaranteed Debt. Based upon such examination, and
taking into account the fairly discounted value of Guarantor's contingent
obligations under this Guaranty and the limitation of liability set forth in
Section 4 hereof and the value of the subrogation and contribution claims
Guarantor could make in connection with this Guaranty, and assuming each of the
transaction contemplated by the Credit Agreement is consummated and Borrower
makes full use of the credit facilities thereunder, the present realizable fair
market value of the assets of Guarantor exceeds the total obligations of
Guarantor, and Guarantor is able to realize upon its assets and pay its
obligations as such obligations mature in the normal course of business.
4. Limit of Liability. The obligations of Guarantor hereunder shall be
limited to an aggregate amount equal to the largest amount that would not render
its obligations hereunder subject to avoidance under Section 548 of the U.S.
Bankruptcy Code or any comparable provisions of any applicable state Law.
5. Liability for Other Indebtedness of Borrower. If Guarantor becomes
liable for any indebtedness owing by Borrower to Agent or any Lender, by
endorsement or otherwise, other than under this Guaranty, such liability shall
not be, in any manner, impaired or affected hereby, and the Rights of Agent or
Lenders under this Guaranty shall be cumulative of any and all other Rights that
Agent or Lenders may ever have against Guarantor. The exercise by Agent or
Lenders of any Right or remedy under this Guaranty under the Loan Documents, or
other instrument, or at Law or in equity, shall not preclude the concurrent or
subsequent exercise of any other Right or remedy.
6. Default by Borrower. If a Default exists, Guarantor shall pay the
amount of the Guaranteed Debt then due and payable to Agent and Lenders on
demand and without (a) further notice of dishonor, to Guarantor, (b) any prior
notice to Guarantor of the acceptance by Agent or Lenders of this Guaranty, (c)
any notice having been given to Guarantor prior to such demand of the creating
or incurring of such indebtedness,
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<PAGE> 3
or (d) notice of intent to accelerate or notice of acceleration to Guarantor or
Borrower. To enforce such payment by Guarantor it shall not be necessary for
Agent or Lenders to first or contemporaneously institute suit or exhaust
remedies against Borrower or others liable on such indebtedness, or to enforce
Rights against any security or collateral ever given to secure such
indebtedness.
7. Subordination. All Subordinated Debt shall be expressly subordinated
to the final payment in full of the Guaranteed Debt. Guarantor agrees not to
receive or accept any payment from Borrower with respect to the Subordinated
Debt at any time a Default exists; and, in the event Guarantor receives any
payment on the Subordinated Debt in violation of the foregoing, Guarantor shall
hold any such payment in trust for Agent and Lenders and promptly turn it over
to Agent, in the form received (with any necessary endorsements), to be applied
to the Guaranteed Debt.
8. Subrogation. Guarantor agrees that it will not assert, enforce, or
otherwise exercise (a) any right of subrogation to any of the rights or liens of
Agent or any Lender or any other beneficiary against Borrower or any other
obligor on the Guaranteed Debt or any Collateral or other security, or (b) any
right of recourse, reimbursement, subrogation, contribution, indemnification, or
similar right against Borrower or any other obligor or other guarantor on all or
any part of the Guaranteed Debt or any guarantor thereof (whether such rights in
clause (a) or clause (b) arise in equity, under contract, by statute, under
common law, or otherwise).
9. No Release. Guarantor hereby agrees that its obligations under the
terms of this Guaranty shall not be released, diminished, impaired, reduced or
affected by the occurrence of any one or more of the following events:
(a) Agent's or Lenders' taking or accepting of any other
security or guaranty for any or all of the Guaranteed Debt;
(b) any release, surrender, exchange, subordination or loss of
any security at any time existing in connection with any or all of the
Guaranteed Debt;
(c) any full or partial release of the liability of any other
obligor on the Obligation;
(d) the insolvency, becoming subject to any Debtor Relief Law,
or lack of corporate power of Borrower, any of the undersigned, or any
party at any time liable for the payment of any or all of the
Guaranteed Debt, whether now existing or hereafter occurring;
(e) any renewal, extension or rearrangement of the payment of
any or all of the Guaranteed Debt, either with or without notice to or
consent of Guarantor, or any adjustment, indulgence, forbearance, or
compromise that may be granted or given by Agent or any Lender to
Borrower, Guarantor, or any other obligor on the Obligation;
(f) any neglect, delay, omission, failure or refusal of Agent
or any Lender to take or prosecute any action for the collection of all
or any part of the Guaranteed Debt or to foreclose or take or prosecute
any action in connection with any instrument or agreement evidencing or
securing any or all of the Guaranteed Debt;
3
<PAGE> 4
(g) any failure of Agent or any Lender to notify Guarantor of
any renewal, extension, or assignment of any or all of the Guaranteed
Debt, or the release of any security or of any other action taken or
refrained from being taken by Agent or any Lender against Borrower or
any new agreement between Agent, any Lender, and Borrower, it being
understood that neither Agent nor any Lender shall be required to give
Guarantor any notice of any kind under any circumstances whatsoever
with respect to or in connection with the Guaranteed Debt, other than
any notice required to be given to Guarantor elsewhere herein;
(h) the unenforceability of all or any part of the Guaranteed
Debt against Borrower by reason of the fact that the Guaranteed Debt
exceeds the amount permitted by Law, the act of creating the Guaranteed
Debt, or any part thereof, is ultra vires, or the officers creating
same exceeded their authority or violated their fiduciary duties in
connection therewith;
(i) any payment of the Obligation to Agent or Lenders is held
to constitute a preference under any Debtor Relief Law or if for any
other reason Agent or any Lender is required to refund such payment or
make payment to someone else (and in each such instance this Guaranty
shall be reinstated in an amount equal to such payment), or if there is
more than one person or entity signing this Guaranty or otherwise
guaranteeing payment of the Guaranteed Debt, the release of any one or
more of them hereunder; or
(j) any discharge, release, or other forgiveness of Borrower's
personal liability for the payment of the Guaranteed Debt.
10. Waiver. Guarantor hereby waives all rights by which it might be
entitled to require suit on an accrued right of action in respect of any of the
Guaranteed Debt or require suit against Borrower or others, whether arising
pursuant to Section 34.02 of the Texas Business and Commerce Code, as amended
(regarding Guarantor's right to require Agent or Lenders to sue Borrower on
accrued right of action following Guarantor's written notice to Agent or
Lenders), Section 17.001 of the Texas Civil Practice and Remedies Code, as
amended (allowing suit against Guarantor without suit against Borrower, but
precluding entry of judgment against Guarantor prior to entry of judgment
against Borrower), Rule 31 of the Texas Rules of Civil Procedure, as amended
(requiring Agent or Lenders to join Borrower in any suit against Guarantor
unless judgment has been previously entered against Borrower), or otherwise.
Guarantor waives notice of acceptance of this Guaranty, notice of any loan to
which it may apply, and waives presentment, demand for payment, protest, notice
of dishonor or nonpayment of any loan, notice of intent to accelerate, notice of
acceleration, and notice of any suit or notice of the taking of other action by
Lender against Borrower, Guarantor or any other person and any notice to any
party liable thereon (including Guarantor).
11. Reliance and Duty to Remain Informed. Guarantor confirms that it
has executed and delivered this Guaranty after reviewing the terms and
conditions of the Loan Documents and such other information as it has deemed
appropriate in order to make its own credit analysis and decision to execute and
deliver this Guaranty. Guarantor confirms that it has made its own independent
investigation with respect to Borrower's creditworthiness and is not executing
and delivering this Guaranty in reliance on any representation or warranty by
Agent or Lender as to such creditworthiness. Guarantor expressly assumes all
responsibilities to remain informed of the financial condition of Borrower and
any circumstances affecting (a) Borrower's ability to perform under the Loan
Documents to which Borrower is a party or (b) any collateral securing all or any
part of the Guaranteed Debt.
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<PAGE> 5
12. Representations and Warranties. Guarantor acknowledges that certain
representations and warranties set forth in the Credit Agreement are in respect
of it, and Guarantor reaffirms that each such representation and warranty is
true and correct in all material respects. Furthermore, Guarantor represents and
warrants to Agent and Lenders that Guarantor's board of directors has determined
that its liability and obligation hereunder may reasonably be expected to
benefit it directly or indirectly.
13. Change in Guarantor's Status. Should Guarantor become insolvent, or
fail to pay its debts generally as they become due, or voluntarily seek, consent
to, or acquiesce in the benefit or benefits of any Debtor Relief Law or become a
party to (or be made the subject of) any proceeding provided for by any Debtor
Relief Law (other than as a creditor or claimant) that could suspend or
otherwise adversely affect the Rights of Agent or Lenders granted hereunder,
then, in any such event, the Guaranteed Debt shall be, as between Guarantor,
Agent and Lender, a fully matured, due, and payable obligation of Guarantor to
Agent or Lender (without regard to whether Borrower is then in Default or
whether the Guaranteed Debt, or any part thereof is then due and owing by
Borrower to Lender), payable in full by Guarantor to Agent or Lender upon
demand, which shall be the estimated amount owing in respect of the contingent
claim created hereunder.
14. Covenants. Guarantor acknowledges that certain covenants set forth
in the Credit Agreement are in respect of it or shall be imposed upon it, and
Guarantor covenants and agrees to promptly and properly perform, observe, and
comply with each such covenant. Furthermore, Guarantor shall, jointly and
severally, indemnify, protect, and hold Agent and Lenders and their respective
parents, subsidiaries, directors, officers, employees, representatives, agents,
successors, permitted assigns, and attorneys (collectively, the "INDEMNIFIED
PARTIES") harmless from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims, and proceedings
and all costs, expenses (including, without limitation, all reasonable
attorneys' fees and legal expenses whether or not suit is brought), and
reasonable disbursements of any kind or nature (the "INDEMNIFIED LIABILITIES")
that may at any time be imposed on, incurred by, or asserted against the
indemnified parties, in any way relating to or arising out of (a) the direct or
indirect result of the violation by any Company of any Environmental Law, (b)
any Company's generation, manufacture, production, storage, release, threatened
release, discharge, disposal, or presence in connection with its properties of a
Hazardous Substance (including, without limitation, (I) all damages from any
use, generation, manufacture, production, storage, release, threatened release,
discharge, disposal, or presence, or (ii) the costs of any environmental
investigation, monitoring, repair, cleanup, or detoxification and the
preparation and implementation of any closure, remedial, or other plans), or (c)
the Loan Documents or any of the transactions contemplated therein. However,
although each indemnified party has the Right to be indemnified under the Loan
Documents for its own ordinary negligence, no indemnified party has the Right to
be indemnified under the Loan Documents for its own fraud, gross negligence, or
willful misconduct. The provisions of and undertakings and indemnification set
forth in this paragraph shall survive the satisfaction and payment of the
Obligation and termination of this Guaranty.
15. Offset Claims. The Guaranteed Debt shall not be reduced, discharged
or released because or by reason of any existing or future offset, claim or
defense (except for the defense of complete and final payment of the Guaranteed
Debt) of Borrower or any other party against Agent or Lenders or against payment
of the Guaranteed Debt, whether such offset, claim, or defense arises in
connection with the Guaranteed Debt or otherwise. Such claims and defenses
include, without limitation, failure of consideration, breach of warranty,
fraud, statute of frauds, bankruptcy, infancy, statute of limitations, lender
liability, accord and satisfaction, and usury.
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<PAGE> 6
16. Binding Agreement. This Guaranty is for the benefit of Agent and
Lenders and their respective successors and assigns. Guarantor acknowledges that
in the event of an assignment of the Guaranteed Debt or any part thereof in
accordance with the Credit Agreement, the rights and benefits under this
Guaranty, to the extent applicable to the indebtedness so assigned, may be
transferred with such indebtedness. This Guaranty is binding on Guarantor and
its successors and permitted assigns.
17. Loan Document. This Guaranty is a Loan Document and, therefore,
this Guaranty is subject to the applicable provisions of SECTION 14 of the
Credit Agreement, all of which applicable provisions are incorporated into this
Guaranty by reference as if set forth verbatim.
18. Notices. All notices required or permitted to be given under this
Guaranty, if any, must be in writing and shall or may, as the case may be, be
given in the same manner as notice is given under the Credit Agreement as
follows:
If to Agent:
NationsBank of Texas, N.A.
Corporate Finance Group
700 Louisiana Street, 8th Floor
P.O. Box 2518
Houston, Texas 77252-2518
Telephone No.: (713) 247-6258
Facsimile No.: (713) 247-6360
Attention: Richard L. Nichols, Jr.
Vice President
with a copy to:
Porter & Hedges, L.L.P.
700 Louisiana, 35th Floor
Houston, Texas 77002
Telephone No.: (713) 226-0681
Facsimile No.: (713) 226-0281
Attention: F. Walter Bistline, Jr.
If to Borrower:
NCI Building Systems, Inc.
7301 Fairview
Houston, Texas 77041
Telephone No.: (713) 466-7758
Facsimile No.: (713) 466-3368
Attention: Robert J. Medlock
Chief Financial Officer
6
<PAGE> 7
with a copy to:
Gardere & Wynne, L.L.P.
Thanksgiving Tower
1301 Elm Street, Suite 3000
Dallas, Texas 75201
Telephone No.: (214) 999-3000
Facsimile No.: (214) 999-4667
Attention: John K. Sterling
If to Guarantor:
MBCI Operating, L.P.
7301 Fairview
Houston, Texas 77041
Telephone No.: (713) 466-7758
Facsimile No.: (713) 466-3368
Attention: Robert J. Medlock
with a copy to:
Gardere & Wynne, L.L.P.
Thanksgiving Tower
1301 Elm Street, Suite 3000
Dallas, Texas 75201
Telephone No.: (214) 999-3000
Facsimile No.: (214) 999-4667
Attention: John K. Sterling
Subject to the terms of the Credit Agreement, by giving at least 30 days written
notice, any party to this Guaranty shall have the right from time to time and at
any time while this Guaranty is in effect to change their respective addresses
or fax numbers and each shall have the right to specify a different address or
fax number within the United States of America. Nothing in this SECTION 18 shall
be construed to require any notice to Guarantor not otherwise expressly required
in this Guaranty.
19. GOVERNING LAW. THIS GUARANTY IS EXECUTED AND DELIVERED AS AN
INCIDENT TO A LENDING TRANSACTION NEGOTIATED, CONSUMMATED, AND PERFORMABLE IN
HARRIS COUNTY, TEXAS, AND SHALL BE CONSTRUED ACCORDING TO THE LAWS OF THE STATE
OF TEXAS AND, AS APPLICABLE, THE LAWS OF THE
UNITED STATES.
20. NO ORAL AGREEMENTS. THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HERETO SHALL BE DETERMINED SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND
INSTRUMENTS, AND ANY PRIOR ORAL AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY
AND MERGED INTO SUCH WRITINGS. THIS GUARANTY (AS AMENDED
7
<PAGE> 8
IN WRITING FROM TIME TO TIME) AND THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY
BORROWER, AGENT, LENDERS OR GUARANTOR (OR BY BORROWER OR GUARANTOR FOR THE
BENEFIT OF AGENT AND LENDERS) REPRESENT THE FINAL AGREEMENT BETWEEN BORROWER,
GUARANTOR, AND LENDER AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. THIS SECTION IS INCLUDED HEREIN
PURSUANT TO SECTION 26.02 OF THE TEXAS BUSINESS AND COMMERCE CODE, AS AMENDED
FROM TIME TO TIME.
This Guaranty is executed as of the date set forth above.
MBCI OPERATING, L.P.,
a Texas limited partnership
By: NCI Operating Corp.,
a Nevada corporation and its
general partner
By: /s/ Robert J. Medlock
---------------------------
Name: Robert J. Medlock
--------------------------
Title: Vice President and
Chief Financial Officer
-------------------------
8
<PAGE> 1
EXHIBIT 4.17
GUARANTY
THIS GUARANTY (as amended, this "GUARANTY") is executed as of May 1,
1998, by the undersigned ("GUARANTOR") in favor of NationsBank of Texas, N.A.
("AGENT"), as Agent for the benefit of the Lenders ("LENDERS") now or hereafter
party to the Credit Agreement (as defined below).
RECITALS
A. NCI Building Systems, Inc., a Delaware corporation ("BORROWER"),
Agent and Lenders have executed a Credit Agreement dated March 25, 1998 (as
amended, supplemented or restated, the "CREDIT AGREEMENT"), together with
certain other Loan Documents.
B. Guarantor is a Subsidiary of Borrower and, because of its ownership
by Borrower, expects to continue to receive business opportunities, financial
support and management support from Borrower. Guarantor has agreed to enter into
this Guaranty so that Borrower can receive the benefits of the Guaranteed Debt
(as defined below) and continue to provide these services to Guarantor.
C. Guarantor's board of directors has determined that Guarantor may
benefit directly or indirectly from Borrower's execution of the Credit Agreement
as Guarantor may be the indirect recipient of funds advanced by Lenders to
Borrower under the Credit Agreement or the account party of LCs issued by Agent
pursuant to the Credit Agreement, and as such the value of the consideration
received and to be received by it under the Loan Documents is reasonably worth
at least as much as its liability and obligation under this Guaranty.
D. It is expressly understood among Borrower, Guarantor, Agent and
Lenders that the execution and delivery of this Guaranty is a condition
precedent to Lenders' obligations to extend credit under the Credit Agreement
and Agent's obligation to issue LCs under the Credit Agreement.
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which are hereby acknowledged, Guarantor guarantees to Lenders the prompt
payment at maturity (by acceleration or otherwise), and at all times thereafter,
of the Guaranteed Debt, as follows:
1. Definitions. UNLESS OTHERWISE DEFINED IN THIS GUARANTY, ANY
CAPITALIZED TERM USED IN THIS GUARANTY SHALL HAVE THE MEANING GIVEN THAT TERM IN
THE CREDIT AGREEMENT. The following terms shall have the following meanings as
used in this Guaranty:
1.1 "BORROWER" includes, without limitation, Borrower as a
debtor-in-possession, and any receiver, trustee, liquidator,
conservator, custodian, or similar party hereafter appointed for
Borrower or all or substantially all of Borrower's assets pursuant to
any liquidation, conservatorship, bankruptcy, moratorium,
rearrangement, receivership, insolvency, reorganization, or similar
Debtor Relief Law from time to time in effect affecting the Rights of
creditors generally.
1.2 "GUARANTEED DEBT" means the Obligation as defined in the
Credit Agreement (including, without limitation, amounts that would
become due but for operation of any applicable provision of Title 11 of
the U.S. Code (including, without limitation, 11 U.S.C. Sections 502
and 506)), together with all pre- and post-maturity interest thereon
(including, without limitation, all post-petition
<PAGE> 2
interest if Borrower or any Subsidiary voluntarily or involuntarily
files for bankruptcy protection) and any and all costs, attorneys' fees
and expenses reasonably incurred by Agent or any Lender to enforce
Borrower's, Guarantor's, or any other obligor's, payment of any of the
foregoing indebtedness.
1.3 "SUBORDINATED DEBT" means all obligations of Borrower to
Guarantor, whether direct, indirect, fixed, contingent, liquidated,
unliquidated, joint, several, or joint and several, now or hereafter
existing, due or to become due to Guarantor, or held or to be held by
Guarantor, whether created directly or acquired by assignment or
otherwise, and whether or not evidenced by written instrument.
2. Guaranty. This is an absolute, irrevocable and continuing guaranty
of payment of the Guaranteed Debt which will remain in effect until the
Guaranteed Debt is completely paid and all commitments to lend under the Credit
Agreement have terminated. The circumstance that at any time or from time to
time all or any portion of the Guaranteed Debt may be paid in full shall not
affect the Guarantor's obligation with respect to the Guaranteed Debt of
Borrower to Agent and Lenders thereafter incurred. The Guarantor may not rescind
or revoke its obligations to Agent and Lenders with respect to the Guaranteed
Debt.
3. Amount of Guaranty. In consummating the transactions contemplated by
the Credit Agreement, Guarantor does not intend to disturb, delay, hinder, or
defraud either its present or future creditors. Guarantor is familiar with, and
has independently reviewed books and records regarding, the financial condition
of Borrower and is familiar with the value of the security and support for the
payment and performance of the Guaranteed Debt. Based upon such examination, and
taking into account the fairly discounted value of Guarantor's contingent
obligations under this Guaranty and the limitation of liability set forth in
Section 4 hereof and the value of the subrogation and contribution claims
Guarantor could make in connection with this Guaranty, and assuming each of the
transaction contemplated by the Credit Agreement is consummated and Borrower
makes full use of the credit facilities thereunder, the present realizable fair
market value of the assets of Guarantor exceeds the total obligations of
Guarantor, and Guarantor is able to realize upon its assets and pay its
obligations as such obligations mature in the normal course of business.
4. Limit of Liability. The obligations of Guarantor hereunder shall be
limited to an aggregate amount equal to the largest amount that would not render
its obligations hereunder subject to avoidance under Section 548 of the U.S.
Bankruptcy Code or any comparable provisions of any applicable state Law.
5. Liability for Other Indebtedness of Borrower. If Guarantor becomes
liable for any indebtedness owing by Borrower to Agent or any Lender, by
endorsement or otherwise, other than under this Guaranty, such liability shall
not be, in any manner, impaired or affected hereby, and the Rights of Agent or
Lenders under this Guaranty shall be cumulative of any and all other Rights that
Agent or Lenders may ever have against Guarantor. The exercise by Agent or
Lenders of any Right or remedy under this Guaranty under the Loan Documents, or
other instrument, or at Law or in equity, shall not preclude the concurrent or
subsequent exercise of any other Right or remedy.
6. Default by Borrower. If a Default exists, Guarantor shall pay the
amount of the Guaranteed Debt then due and payable to Agent and Lenders on
demand and without (a) further notice of dishonor, to Guarantor, (b) any prior
notice to Guarantor of the acceptance by Agent or Lenders of this Guaranty, (c)
any notice having been given to Guarantor prior to such demand of the creating
or incurring of such indebtedness,
2
<PAGE> 3
or (d) notice of intent to accelerate or notice of acceleration to Guarantor or
Borrower. To enforce such payment by Guarantor it shall not be necessary for
Agent or Lenders to first or contemporaneously institute suit or exhaust
remedies against Borrower or others liable on such indebtedness, or to enforce
Rights against any security or collateral ever given to secure such
indebtedness.
7. Subordination. All Subordinated Debt shall be expressly subordinated
to the final payment in full of the Guaranteed Debt. Guarantor agrees not to
receive or accept any payment from Borrower with respect to the Subordinated
Debt at any time a Default exists; and, in the event Guarantor receives any
payment on the Subordinated Debt in violation of the foregoing, Guarantor shall
hold any such payment in trust for Agent and Lenders and promptly turn it over
to Agent, in the form received (with any necessary endorsements), to be applied
to the Guaranteed Debt.
8. Subrogation. Guarantor agrees that it will not assert, enforce, or
otherwise exercise (a) any right of subrogation to any of the rights or liens of
Agent or any Lender or any other beneficiary against Borrower or any other
obligor on the Guaranteed Debt or any Collateral or other security, or (b) any
right of recourse, reimbursement, subrogation, contribution, indemnification, or
similar right against Borrower or any other obligor or other guarantor on all or
any part of the Guaranteed Debt or any guarantor thereof (whether such rights in
clause (a) or clause (b) arise in equity, under contract, by statute, under
common law, or otherwise).
9. No Release. Guarantor hereby agrees that its obligations under the
terms of this Guaranty shall not be released, diminished, impaired, reduced or
affected by the occurrence of any one or more of the following events:
(a) Agent's or Lenders' taking or accepting of any other
security or guaranty for any or all of the Guaranteed Debt;
(b) any release, surrender, exchange, subordination or loss of
any security at any time existing in connection with any or all of the
Guaranteed Debt;
(c) any full or partial release of the liability of any other
obligor on the Obligation;
(d) the insolvency, becoming subject to any Debtor Relief Law,
or lack of corporate power of Borrower, any of the undersigned, or any
party at any time liable for the payment of any or all of the
Guaranteed Debt, whether now existing or hereafter occurring;
(e) any renewal, extension or rearrangement of the payment of
any or all of the Guaranteed Debt, either with or without notice to or
consent of Guarantor, or any adjustment, indulgence, forbearance, or
compromise that may be granted or given by Agent or any Lender to
Borrower, Guarantor, or any other obligor on the Obligation;
(f) any neglect, delay, omission, failure or refusal of Agent
or any Lender to take or prosecute any action for the collection of all
or any part of the Guaranteed Debt or to foreclose or take or prosecute
any action in connection with any instrument or agreement evidencing or
securing any or all of the Guaranteed Debt;
3
<PAGE> 4
(g) any failure of Agent or any Lender to notify Guarantor of
any renewal, extension, or assignment of any or all of the Guaranteed
Debt, or the release of any security or of any other action taken or
refrained from being taken by Agent or any Lender against Borrower or
any new agreement between Agent, any Lender, and Borrower, it being
understood that neither Agent nor any Lender shall be required to give
Guarantor any notice of any kind under any circumstances whatsoever
with respect to or in connection with the Guaranteed Debt, other than
any notice required to be given to Guarantor elsewhere herein;
(h) the unenforceability of all or any part of the Guaranteed
Debt against Borrower by reason of the fact that the Guaranteed Debt
exceeds the amount permitted by Law, the act of creating the Guaranteed
Debt, or any part thereof, is ultra vires, or the officers creating
same exceeded their authority or violated their fiduciary duties in
connection therewith;
(i) any payment of the Obligation to Agent or Lenders is held
to constitute a preference under any Debtor Relief Law or if for any
other reason Agent or any Lender is required to refund such payment or
make payment to someone else (and in each such instance this Guaranty
shall be reinstated in an amount equal to such payment), or if there is
more than one person or entity signing this Guaranty or otherwise
guaranteeing payment of the Guaranteed Debt, the release of any one or
more of them hereunder; or
(j) any discharge, release, or other forgiveness of Borrower's
personal liability for the payment of the Guaranteed Debt.
10. Waiver. Guarantor hereby waives all rights by which it might be
entitled to require suit on an accrued right of action in respect of any of the
Guaranteed Debt or require suit against Borrower or others, whether arising
pursuant to Section 34.02 of the Texas Business and Commerce Code, as amended
(regarding Guarantor's right to require Agent or Lenders to sue Borrower on
accrued right of action following Guarantor's written notice to Agent or
Lenders), Section 17.001 of the Texas Civil Practice and Remedies Code, as
amended (allowing suit against Guarantor without suit against Borrower, but
precluding entry of judgment against Guarantor prior to entry of judgment
against Borrower), Rule 31 of the Texas Rules of Civil Procedure, as amended
(requiring Agent or Lenders to join Borrower in any suit against Guarantor
unless judgment has been previously entered against Borrower), or otherwise.
Guarantor waives notice of acceptance of this Guaranty, notice of any loan to
which it may apply, and waives presentment, demand for payment, protest, notice
of dishonor or nonpayment of any loan, notice of intent to accelerate, notice of
acceleration, and notice of any suit or notice of the taking of other action by
Lender against Borrower, Guarantor or any other person and any notice to any
party liable thereon (including Guarantor).
11. Reliance and Duty to Remain Informed. Guarantor confirms that it
has executed and delivered this Guaranty after reviewing the terms and
conditions of the Loan Documents and such other information as it has deemed
appropriate in order to make its own credit analysis and decision to execute and
deliver this Guaranty. Guarantor confirms that it has made its own independent
investigation with respect to Borrower's creditworthiness and is not executing
and delivering this Guaranty in reliance on any representation or warranty by
Agent or Lender as to such creditworthiness. Guarantor expressly assumes all
responsibilities to remain informed of the financial condition of Borrower and
any circumstances affecting (a) Borrower's ability to perform under the Loan
Documents to which Borrower is a party or (b) any collateral securing all or any
part of the Guaranteed Debt.
4
<PAGE> 5
12. Representations and Warranties. Guarantor acknowledges that certain
representations and warranties set forth in the Credit Agreement are in respect
of it, and Guarantor reaffirms that each such representation and warranty is
true and correct in all material respects. Furthermore, Guarantor represents and
warrants to Agent and Lenders that Guarantor's board of directors has determined
that its liability and obligation hereunder may reasonably be expected to
benefit it directly or indirectly.
13. Change in Guarantor's Status. Should Guarantor become insolvent, or
fail to pay its debts generally as they become due, or voluntarily seek, consent
to, or acquiesce in the benefit or benefits of any Debtor Relief Law or become a
party to (or be made the subject of) any proceeding provided for by any Debtor
Relief Law (other than as a creditor or claimant) that could suspend or
otherwise adversely affect the Rights of Agent or Lenders granted hereunder,
then, in any such event, the Guaranteed Debt shall be, as between Guarantor,
Agent and Lender, a fully matured, due, and payable obligation of Guarantor to
Agent or Lender (without regard to whether Borrower is then in Default or
whether the Guaranteed Debt, or any part thereof is then due and owing by
Borrower to Lender), payable in full by Guarantor to Agent or Lender upon
demand, which shall be the estimated amount owing in respect of the contingent
claim created hereunder.
14. Covenants. Guarantor acknowledges that certain covenants set forth
in the Credit Agreement are in respect of it or shall be imposed upon it, and
Guarantor covenants and agrees to promptly and properly perform, observe, and
comply with each such covenant. Furthermore, Guarantor shall, jointly and
severally, indemnify, protect, and hold Agent and Lenders and their respective
parents, subsidiaries, directors, officers, employees, representatives, agents,
successors, permitted assigns, and attorneys (collectively, the "INDEMNIFIED
PARTIES") harmless from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims, and proceedings
and all costs, expenses (including, without limitation, all reasonable
attorneys' fees and legal expenses whether or not suit is brought), and
reasonable disbursements of any kind or nature (the "INDEMNIFIED LIABILITIES")
that may at any time be imposed on, incurred by, or asserted against the
indemnified parties, in any way relating to or arising out of (a) the direct or
indirect result of the violation by any Company of any Environmental Law, (b)
any Company's generation, manufacture, production, storage, release, threatened
release, discharge, disposal, or presence in connection with its properties of a
Hazardous Substance (including, without limitation, (I) all damages from any
use, generation, manufacture, production, storage, release, threatened release,
discharge, disposal, or presence, or (ii) the costs of any environmental
investigation, monitoring, repair, cleanup, or detoxification and the
preparation and implementation of any closure, remedial, or other plans), or (c)
the Loan Documents or any of the transactions contemplated therein. However,
although each indemnified party has the Right to be indemnified under the Loan
Documents for its own ordinary negligence, no indemnified party has the Right to
be indemnified under the Loan Documents for its own fraud, gross negligence, or
willful misconduct. The provisions of and undertakings and indemnification set
forth in this paragraph shall survive the satisfaction and payment of the
Obligation and termination of this Guaranty.
15. Offset Claims. The Guaranteed Debt shall not be reduced, discharged
or released because or by reason of any existing or future offset, claim or
defense (except for the defense of complete and final payment of the Guaranteed
Debt) of Borrower or any other party against Agent or Lenders or against payment
of the Guaranteed Debt, whether such offset, claim, or defense arises in
connection with the Guaranteed Debt or otherwise. Such claims and defenses
include, without limitation, failure of consideration, breach of warranty,
fraud, statute of frauds, bankruptcy, infancy, statute of limitations, lender
liability, accord and satisfaction, and usury.
5
<PAGE> 6
16. Binding Agreement. This Guaranty is for the benefit of Agent and
Lenders and their respective successors and assigns. Guarantor acknowledges that
in the event of an assignment of the Guaranteed Debt or any part thereof in
accordance with the Credit Agreement, the rights and benefits under this
Guaranty, to the extent applicable to the indebtedness so assigned, may be
transferred with such indebtedness. This Guaranty is binding on Guarantor and
its successors and permitted assigns.
17. Loan Document. This Guaranty is a Loan Document and, therefore,
this Guaranty is subject to the applicable provisions of SECTION 14 of the
Credit Agreement, all of which applicable provisions are incorporated into this
Guaranty by reference as if set forth verbatim.
18. Notices. All notices required or permitted to be given under this
Guaranty, if any, must be in writing and shall or may, as the case may be, be
given in the same manner as notice is given under the Credit Agreement as
follows:
If to Agent:
NationsBank of Texas, N.A.
Corporate Finance Group
700 Louisiana Street, 8th Floor
P.O. Box 2518
Houston, Texas 77252-2518
Telephone No.: (713) 247-6258
Facsimile No.: (713) 247-6360
Attention: Richard L. Nichols, Jr.
Vice President
with a copy to:
Porter & Hedges, L.L.P.
700 Louisiana, 35th Floor
Houston, Texas 77002
Telephone No.: (713) 226-0681
Facsimile No.: (713) 226-0281
Attention: F. Walter Bistline, Jr.
If to Borrower:
NCI Building Systems, Inc.
7301 Fairview
Houston, Texas 77041
Telephone No.: (713) 466-7758
Facsimile No.: (713) 466-3368
Attention: Robert J. Medlock
Chief Financial Officer
6
<PAGE> 7
with a copy to:
Gardere & Wynne, L.L.P.
Thanksgiving Tower
1301 Elm Street, Suite 3000
Dallas, Texas 75201
Telephone No.: (214) 999-3000
Facsimile No.: (214) 999-4667
Attention: John K. Sterling
If to Guarantor:
Metal Coaters Operating, L.P.
7301 Fairview
Houston, Texas 77041
Telephone No.: (713) 466-7788
Facsimile No.: (713) 466-3368
Attention: Robert J. Medlock
with a copy to:
Gardere & Wynne, L.L.P.
Thanksgiving Tower
1301 Elm Street, Suite 3000
Dallas, Texas 75201
Telephone No.: (214) 999-3000
Facsimile No.: (214) 999-4667
Attention: John K. Sterling
Subject to the terms of the Credit Agreement, by giving at least 30 days written
notice, any party to this Guaranty shall have the right from time to time and at
any time while this Guaranty is in effect to change their respective addresses
or fax numbers and each shall have the right to specify a different address or
fax number within the United States of America. Nothing in this SECTION 18 shall
be construed to require any notice to Guarantor not otherwise expressly required
in this Guaranty.
19. GOVERNING LAW. THIS GUARANTY IS EXECUTED AND DELIVERED AS AN
INCIDENT TO A LENDING TRANSACTION NEGOTIATED, CONSUMMATED, AND PERFORMABLE IN
HARRIS COUNTY, TEXAS, AND SHALL BE CONSTRUED ACCORDING TO THE LAWS OF THE STATE
OF TEXAS AND, AS APPLICABLE, THE LAWS OF THE
UNITED STATES.
20. NO ORAL AGREEMENTS. THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HERETO SHALL BE DETERMINED SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND
INSTRUMENTS, AND ANY PRIOR ORAL AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY
AND MERGED INTO SUCH WRITINGS. THIS GUARANTY (AS AMENDED
7
<PAGE> 8
IN WRITING FROM TIME TO TIME) AND THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY
BORROWER, AGENT, LENDERS OR GUARANTOR (OR BY BORROWER OR GUARANTOR FOR THE
BENEFIT OF AGENT AND LENDERS) REPRESENT THE FINAL AGREEMENT BETWEEN BORROWER,
GUARANTOR, AND LENDER AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. THIS SECTION IS INCLUDED HEREIN
PURSUANT TO SECTION 26.02 OF THE TEXAS BUSINESS AND COMMERCE CODE, AS AMENDED
FROM TIME TO TIME.
This Guaranty is executed as of the date set forth above.
METAL COATERS OPERATING, L.P.,
a Texas limited partnership
By: NCI Operating Corp.,
a Nevada corporation and its
general partner
By: /s/ Robert J. Medlock
---------------------------
Name: Robert J. Medlock
--------------------------
Title: Vice President and
Chief Financial Officer
-------------------------
8
<PAGE> 1
EXHIBIT 4.18
GUARANTY
THIS GUARANTY (as amended, this "GUARANTY") is executed as of May 13,
1998, by the undersigned ("GUARANTOR") in favor of NationsBank of Texas, N.A.
("AGENT"), as Agent for the benefit of the Lenders ("LENDERS") now or hereafter
party to the Credit Agreement (as defined below).
RECITALS
A. NCI Building Systems, Inc., a Delaware corporation ("BORROWER"),
Agent and Lenders have executed a Credit Agreement dated March 25, 1998 (as
amended, supplemented or restated, the "CREDIT AGREEMENT"), together with
certain other Loan Documents.
B. Guarantor is a Subsidiary of Borrower and, because of its
ownership by Borrower, expects to continue to receive business opportunities,
financial support and management support from Borrower. Guarantor has agreed to
enter into this Guaranty so that Borrower can receive the benefits of the
Guaranteed Debt (as defined below) and continue to provide these services to
Guarantor.
C. Guarantor's board of directors has determined that Guarantor may
benefit directly or indirectly from Borrower's execution of the Credit Agreement
as Guarantor may be the indirect recipient of funds advanced by Lenders to
Borrower under the Credit Agreement or the account party of LCs issued by Agent
pursuant to the Credit Agreement, and as such the value of the consideration
received and to be received by it under the Loan Documents is reasonably worth
at least as much as its liability and obligation under this Guaranty.
D. It is expressly understood among Borrower, Guarantor, Agent and
Lenders that the execution and delivery of this Guaranty is a condition
precedent to Lenders' obligations to extend credit under the Credit Agreement
and Agent's obligation to issue LCs under the Credit Agreement.
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which are hereby acknowledged, Guarantor guarantees to Lenders the prompt
payment at maturity (by acceleration or otherwise), and at all times thereafter,
of the Guaranteed Debt, as follows:
1. Definitions. UNLESS OTHERWISE DEFINED IN THIS GUARANTY, ANY
CAPITALIZED TERM USED IN THIS GUARANTY SHALL HAVE THE MEANING GIVEN THAT TERM IN
THE CREDIT AGREEMENT. The following terms shall have the following meanings as
used in this Guaranty:
1.1 "BORROWER" includes, without limitation, Borrower as a
debtor-in-possession, and any receiver, trustee, liquidator,
conservator, custodian, or similar party hereafter appointed for
Borrower or all or substantially all of Borrower's assets pursuant to
any liquidation, conservatorship, bankruptcy, moratorium,
rearrangement, receivership, insolvency, reorganization, or similar
Debtor Relief Law from time to time in effect affecting the Rights of
creditors generally.
1.2 "GUARANTEED DEBT" means the Obligation as defined in the
Credit Agreement (including, without limitation, amounts that would
become due but for operation of any applicable provision of Title 11 of
the U.S. Code (including, without limitation, 11 U.S.C. Sections 502
and 506)), together with all pre- and post- maturity interest thereon
(including, without limitation, all post-
<PAGE> 2
petition interest if Borrower or any Subsidiary voluntarily or
involuntarily files for bankruptcy protection) and any and all costs,
attorneys' fees and expenses reasonably incurred by Agent or any Lender
to enforce Borrower's, Guarantor's, or any other obligor's, payment of
any of the foregoing indebtedness.
1.3 "SUBORDINATED DEBT" means all obligations of Borrower to
Guarantor, whether direct, indirect, fixed, contingent, liquidated,
unliquidated, joint, several, or joint and several, now or hereafter
existing, due or to become due to Guarantor, or held or to be held by
Guarantor, whether created directly or acquired by assignment or
otherwise, and whether or not evidenced by written instrument.
2. Guaranty. This is an absolute, irrevocable and continuing
guaranty of payment of the Guaranteed Debt which will remain in effect until the
Guaranteed Debt is completely paid and all commitments to lend under the Credit
Agreement have terminated. The circumstance that at any time or from time to
time all or any portion of the Guaranteed Debt may be paid in full shall not
affect the Guarantor's obligation with respect to the Guaranteed Debt of
Borrower to Agent and Lenders thereafter incurred. The Guarantor may not rescind
or revoke its obligations to Agent and Lenders with respect to the Guaranteed
Debt.
3. Amount of Guaranty. In consummating the transactions contemplated
by the Credit Agreement, Guarantor does not intend to disturb, delay, hinder, or
defraud either its present or future creditors. Guarantor is familiar with, and
has independently reviewed books and records regarding, the financial condition
of Borrower and is familiar with the value of the security and support for the
payment and performance of the Guaranteed Debt. Based upon such examination, and
taking into account the fairly discounted value of Guarantor's contingent
obligations under this Guaranty and the limitation of liability set forth in
Section 4 hereof and the value of the subrogation and contribution claims
Guarantor could make in connection with this Guaranty, and assuming each of the
transaction contemplated by the Credit Agreement is consummated and Borrower
makes full use of the credit facilities thereunder, the present realizable fair
market value of the assets of Guarantor exceeds the total obligations of
Guarantor, and Guarantor is able to realize upon its assets and pay its
obligations as such obligations mature in the normal course of business.
4. Limit of Liability. The obligations of Guarantor hereunder shall
be limited to an aggregate amount equal to the largest amount that would not
render its obligations hereunder subject to avoidance under Section 548 of the
U.S. Bankruptcy Code or any comparable provisions of any applicable state Law.
5. Liability for Other Indebtedness of Borrower. If Guarantor
becomes liable for any indebtedness owing by Borrower to Agent or any Lender, by
endorsement or otherwise, other than under this Guaranty, such liability shall
not be, in any manner, impaired or affected hereby, and the Rights of Agent or
Lenders under this Guaranty shall be cumulative of any and all other Rights that
Agent or Lenders may ever have against Guarantor. The exercise by Agent or
Lenders of any Right or remedy under this Guaranty under the Loan Documents, or
other instrument, or at Law or in equity, shall not preclude the concurrent or
subsequent exercise of any other Right or remedy.
6. Default by Borrower. If a Default exists, Guarantor shall pay the
amount of the Guaranteed Debt then due and payable to Agent and Lenders on
demand and without (a) further notice of dishonor, to Guarantor, (b) any prior
notice to Guarantor of the acceptance by Agent or Lenders of this Guaranty, (c)
any notice having been given to Guarantor prior to such demand of the creating
or incurring of such indebtedness,
2
<PAGE> 3
or (d) notice of intent to accelerate or notice of acceleration to Guarantor or
Borrower. To enforce such payment by Guarantor it shall not be necessary for
Agent or Lenders to first or contemporaneously institute suit or exhaust
remedies against Borrower or others liable on such indebtedness, or to enforce
Rights against any security or collateral ever given to secure such
indebtedness.
7. Subordination. All Subordinated Debt shall be expressly
subordinated to the final payment in full of the Guaranteed Debt. Guarantor
agrees not to receive or accept any payment from Borrower with respect to the
Subordinated Debt at any time a Default exists; and, in the event Guarantor
receives any payment on the Subordinated Debt in violation of the foregoing,
Guarantor shall hold any such payment in trust for Agent and Lenders and
promptly turn it over to Agent, in the form received (with any necessary
endorsements), to be applied to the Guaranteed Debt.
8. Subrogation. Guarantor agrees that it will not assert, enforce,
or otherwise exercise (a) any right of subrogation to any of the rights or liens
of Agent or any Lender or any other beneficiary against Borrower or any other
obligor on the Guaranteed Debt or any Collateral or other security, or (b) any
right of recourse, reimbursement, subrogation, contribution, indemnification, or
similar right against Borrower or any other obligor or other guarantor on all or
any part of the Guaranteed Debt or any guarantor thereof (whether such rights in
clause (a) or clause (b) arise in equity, under contract, by statute, under
common law, or otherwise).
9. No Release. Guarantor hereby agrees that its obligations under
the terms of this Guaranty shall not be released, diminished, impaired, reduced
or affected by the occurrence of any one or more of the following events:
(a) Agent's or Lenders' taking or accepting of any other security
or guaranty for any or all of the Guaranteed Debt;
(b) any release, surrender, exchange, subordination or loss of
any security at any time existing in connection with any or all of the
Guaranteed Debt;
(c) any full or partial release of the liability of any other
obligor on the Obligation;
(d) the insolvency, becoming subject to any Debtor Relief Law, or
lack of corporate power of Borrower, any of the undersigned, or any
party at any time liable for the payment of any or all of the
Guaranteed Debt, whether now existing or hereafter occurring;
(e) any renewal, extension or rearrangement of the payment of any
or all of the Guaranteed Debt, either with or without notice to or
consent of Guarantor, or any adjustment, indulgence, forbearance, or
compromise that may be granted or given by Agent or any Lender to
Borrower, Guarantor, or any other obligor on the Obligation;
(f) any neglect, delay, omission, failure or refusal of Agent or
any Lender to take or prosecute any action for the collection of all or
any part of the Guaranteed Debt or to foreclose or take or prosecute
any action in connection with any instrument or agreement evidencing or
securing any or all of the Guaranteed Debt;
3
<PAGE> 4
(g) any failure of Agent or any Lender to notify Guarantor of any
renewal, extension, or assignment of any or all of the Guaranteed Debt,
or the release of any security or of any other action taken or
refrained from being taken by Agent or any Lender against Borrower or
any new agreement between Agent, any Lender, and Borrower, it being
understood that neither Agent nor any Lender shall be required to give
Guarantor any notice of any kind under any circumstances whatsoever
with respect to or in connection with the Guaranteed Debt, other than
any notice required to be given to Guarantor elsewhere herein;
(h) the unenforceability of all or any part of the Guaranteed
Debt against Borrower by reason of the fact that the Guaranteed Debt
exceeds the amount permitted by Law, the act of creating the Guaranteed
Debt, or any part thereof, is ultra vires, or the officers creating
same exceeded their authority or violated their fiduciary duties in
connection therewith;
(i) any payment of the Obligation to Agent or Lenders is held to
constitute a preference under any Debtor Relief Law or if for any other
reason Agent or any Lender is required to refund such payment or make
payment to someone else (and in each such instance this Guaranty shall
be reinstated in an amount equal to such payment), or if there is more
than one person or entity signing this Guaranty or otherwise
guaranteeing payment of the Guaranteed Debt, the release of any one or
more of them hereunder; or
(j) any discharge, release, or other forgiveness of Borrower's
personal liability for the payment of the Guaranteed Debt.
10. Waiver. Guarantor hereby waives all rights by which it might be
entitled to require suit on an accrued right of action in respect of any of the
Guaranteed Debt or require suit against Borrower or others, whether arising
pursuant to Section 34.02 of the Texas Business and Commerce Code, as amended
(regarding Guarantor's right to require Agent or Lenders to sue Borrower on
accrued right of action following Guarantor's written notice to Agent or
Lenders), Section 17.001 of the Texas Civil Practice and Remedies Code, as
amended (allowing suit against Guarantor without suit against Borrower, but
precluding entry of judgment against Guarantor prior to entry of judgment
against Borrower), Rule 31 of the Texas Rules of Civil Procedure, as amended
(requiring Agent or Lenders to join Borrower in any suit against Guarantor
unless judgment has been previously entered against Borrower), or otherwise.
Guarantor waives notice of acceptance of this Guaranty, notice of any loan to
which it may apply, and waives presentment, demand for payment, protest, notice
of dishonor or nonpayment of any loan, notice of intent to accelerate, notice of
acceleration, and notice of any suit or notice of the taking of other action by
Lender against Borrower, Guarantor or any other person and any notice to any
party liable thereon (including Guarantor).
11. Reliance and Duty to Remain Informed. Guarantor confirms that it
has executed and delivered this Guaranty after reviewing the terms and
conditions of the Loan Documents and such other information as it has deemed
appropriate in order to make its own credit analysis and decision to execute and
deliver this Guaranty. Guarantor confirms that it has made its own independent
investigation with respect to Borrower's creditworthiness and is not executing
and delivering this Guaranty in reliance on any representation or warranty by
Agent or Lender as to such creditworthiness. Guarantor expressly assumes all
responsibilities to remain informed of the financial condition of Borrower and
any circumstances affecting (a) Borrower's ability to perform under the Loan
Documents to which Borrower is a party or (b) any collateral securing all or any
part of the Guaranteed Debt.
4
<PAGE> 5
12. Representations and Warranties. Guarantor acknowledges that
certain representations and warranties set forth in the Credit Agreement are in
respect of it, and Guarantor reaffirms that each such representation and
warranty is true and correct in all material respects. Furthermore, Guarantor
represents and warrants to Agent and Lenders that Guarantor's board of directors
has determined that its liability and obligation hereunder may reasonably be
expected to benefit it directly or indirectly.
13. Change in Guarantor's Status. Should Guarantor become insolvent,
or fail to pay its debts generally as they become due, or voluntarily seek,
consent to, or acquiesce in the benefit or benefits of any Debtor Relief Law or
become a party to (or be made the subject of) any proceeding provided for by any
Debtor Relief Law (other than as a creditor or claimant) that could suspend or
otherwise adversely affect the Rights of Agent or Lenders granted hereunder,
then, in any such event, the Guaranteed Debt shall be, as between Guarantor,
Agent and Lender, a fully matured, due, and payable obligation of Guarantor to
Agent or Lender (without regard to whether Borrower is then in Default or
whether the Guaranteed Debt, or any part thereof is then due and owing by
Borrower to Lender), payable in full by Guarantor to Agent or Lender upon
demand, which shall be the estimated amount owing in respect of the contingent
claim created hereunder.
14. Covenants. Guarantor acknowledges that certain covenants set
forth in the Credit Agreement are in respect of it or shall be imposed upon it,
and Guarantor covenants and agrees to promptly and properly perform, observe,
and comply with each such covenant. Furthermore, Guarantor shall, jointly and
severally, indemnify, protect, and hold Agent and Lenders and their respective
parents, subsidiaries, directors, officers, employees, representatives, agents,
successors, permitted assigns, and attorneys (collectively, the "INDEMNIFIED
PARTIES") harmless from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims, and proceedings
and all costs, expenses (including, without limitation, all reasonable
attorneys' fees and legal expenses whether or not suit is brought), and
reasonable disbursements of any kind or nature (the "INDEMNIFIED LIABILITIES")
that may at any time be imposed on, incurred by, or asserted against the
indemnified parties, in any way relating to or arising out of (a) the direct or
indirect result of the violation by any Company of any Environmental Law, (b)
any Company's generation, manufacture, production, storage, release, threatened
release, discharge, disposal, or presence in connection with its properties of a
Hazardous Substance (including, without limitation, (I) all damages from any
use, generation, manufacture, production, storage, release, threatened release,
discharge, disposal, or presence, or (ii) the costs of any environmental
investigation, monitoring, repair, cleanup, or detoxification and the
preparation and implementation of any closure, remedial, or other plans), or (c)
the Loan Documents or any of the transactions contemplated therein. However,
although each indemnified party has the Right to be indemnified under the Loan
Documents for its own ordinary negligence, no indemnified party has the Right to
be indemnified under the Loan Documents for its own fraud, gross negligence, or
willful misconduct. The provisions of and undertakings and indemnification set
forth in this paragraph shall survive the satisfaction and payment of the
Obligation and termination of this Guaranty.
15. Offset Claims. The Guaranteed Debt shall not be reduced,
discharged or released because or by reason of any existing or future offset,
claim or defense (except for the defense of complete and final payment of the
Guaranteed Debt) of Borrower or any other party against Agent or Lenders or
against payment of the Guaranteed Debt, whether such offset, claim, or defense
arises in connection with the Guaranteed Debt or otherwise. Such claims and
defenses include, without limitation, failure of consideration, breach of
warranty, fraud, statute of frauds, bankruptcy, infancy, statute of limitations,
lender liability, accord and satisfaction, and usury.
5
<PAGE> 6
16. Binding Agreement. This Guaranty is for the benefit of Agent and
Lenders and their respective successors and assigns. Guarantor acknowledges that
in the event of an assignment of the Guaranteed Debt or any part thereof in
accordance with the Credit Agreement, the rights and benefits under this
Guaranty, to the extent applicable to the indebtedness so assigned, may be
transferred with such indebtedness. This Guaranty is binding on Guarantor and
its successors and permitted assigns.
17. Loan Document. This Guaranty is a Loan Document and, therefore,
this Guaranty is subject to the applicable provisions of SECTION 14 of the
Credit Agreement, all of which applicable provisions are incorporated into this
Guaranty by reference as if set forth verbatim.
18. Notices. All notices required or permitted to be given under this
Guaranty, if any, must be in writing and shall or may, as the case may be, be
given in the same manner as notice is given under the Credit Agreement as
follows:
If to Agent:
NationsBank of Texas, N.A.
Corporate Finance Group
700 Louisiana Street, 8th Floor
P.O. Box 2518
Houston, Texas 77252-2518
Telephone No.: (713) 247-6258
Facsimile No.: (713) 247-6360
Attention: Richard L. Nichols, Jr.
Vice President
with a copy to:
Porter & Hedges, L.L.P.
700 Louisiana, 35th Floor
Houston, Texas 77002
Telephone No.: (713) 226-0681
Facsimile No.: (713) 226-0281
Attention: F. Walter Bistline, Jr.
If to Borrower:
NCI Building Systems, Inc.
7301 Fairview
Houston, Texas 77041
Telephone No.: (713) 466-7758
Facsimile No.: (713) 466-3368
Attention: Robert J. Medlock
Chief Financial Officer
6
<PAGE> 7
with a copy to:
Gardere & Wynne, L.L.P.
Thanksgiving Tower
1301 Elm Street, Suite 3000
Dallas, Texas 75201
Telephone No.: (214) 999-3000
Facsimile No.: (214) 999-4667
Attention: John K. Sterling
If to Guarantor:
Metal Coaters of California, Inc.
7301 Fairview
Houston, Texas 77041
Telephone No.: (713) 466-7758
Facsimile No.: (713) 466-3368
Attention: Robert J. Medlock
Chief Financial Officer
with a copy to:
Gardere & Wynne, L.L.P.
Thanksgiving Tower
1301 Elm Street, Suite 3000
Dallas, Texas 75201
Telephone No.: (214) 999-3000
Facsimile No.: (214) 999-4667
Attention: John K. Sterling
Subject to the terms of the Credit Agreement, by giving at least 30 days written
notice, any party to this Guaranty shall have the right from time to time and at
any time while this Guaranty is in effect to change their respective addresses
or fax numbers and each shall have the right to specify a different address or
fax number within the United States of America. Nothing in this SECTION 18 shall
be construed to require any notice to Guarantor not otherwise expressly required
in this Guaranty.
19. GOVERNING LAW. THIS GUARANTY IS EXECUTED AND DELIVERED AS AN
INCIDENT TO A LENDING TRANSACTION NEGOTIATED, CONSUMMATED, AND PERFORMABLE IN
HARRIS COUNTY, TEXAS, AND SHALL BE CONSTRUED ACCORDING TO THE LAWS OF THE STATE
OF TEXAS AND, AS APPLICABLE, THE LAWS OF THE
UNITED STATES.
20. NO ORAL AGREEMENTS. THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HERETO SHALL BE DETERMINED SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND
INSTRUMENTS, AND ANY PRIOR ORAL AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY
AND MERGED INTO SUCH WRITINGS. THIS GUARANTY (AS AMENDED
7
<PAGE> 8
IN WRITING FROM TIME TO TIME) AND THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY
BORROWER, AGENT, LENDERS OR GUARANTOR (OR BY BORROWER OR GUARANTOR FOR THE
BENEFIT OF AGENT AND LENDERS) REPRESENT THE FINAL AGREEMENT BETWEEN BORROWER,
GUARANTOR, AND LENDER AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. THIS SECTION IS INCLUDED HEREIN
PURSUANT TO SECTION 26.02 OF THE TEXAS BUSINESS AND COMMERCE CODE, AS AMENDED
FROM TIME TO TIME.
This Guaranty is executed as of the date set forth above.
METAL COATERS OF CALIFORNIA, INC.,
a Texas corporation
By: /s/ Robert J. Medlock
--------------------------------------
Name: Robert J. Medlock
------------------------------------
Title: Vice President
-----------------------------------
8
<PAGE> 1
EXHIBIT 4.19
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (as amended, this "PLEDGE AGREEMENT") is
executed as of May 1, 1998, by the undersigned ("PLEDGOR") for the benefit of
NationsBank of Texas, N.A.("AGENT"), as Administrative Agent for itself and for
the Lenders (collectively, "LENDERS") now or hereafter party to the Credit
Agreement (as defined below).
RECITALS
A. NCI Building Systems, Inc., a Delaware corporation ("BORROWER"),
Agent and Lenders and other parties named therein have executed a Credit
Agreement dated March 25, 1998 (as amended, supplemented or restated, the
"CREDIT AGREEMENT"), together with certain other Loan Documents.
B. Pledgor is the sole owner of all of the capital stock of NCI
Operating Corp., a Nevada corporation and NCI Holding Corp., a Delaware
corporation.
C. It is expressly understood among Pledgor, Borrower, Agent and
Lenders that the execution and delivery of this Pledge Agreement is a condition
precedent to Lenders' obligations to extend credit under the Credit Agreement
and Agent's obligation to issue LCs under the Credit Agreement.
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties agree as follows:
1. Certain Definitions. UNLESS OTHERWISE DEFINED IN THIS PLEDGE
AGREEMENT, ANY CAPITALIZED TERM USED IN THIS PLEDGE AGREEMENT HAS THE MEANING
GIVEN THAT TERM IN THE CREDIT AGREEMENT OR IN THE UCC. If the definition given a
term in the Credit Agreement conflicts with the definition given that term in
the UCC, the Credit Agreement definition shall control to the extent allowed by
Law. If the definition given a term in Chapter 9 of the UCC conflicts with the
definition given that term in any other chapter of the UCC, the Chapter 9
definition shall control. As used in this Pledge Agreement:
"COLLATERAL" means Borrower's right, title and interest in and to
the Pledged Shares, including after acquired Collateral and proceeds of the
Collateral.
"CREDIT AGREEMENT" is defined in the Recitals.
"DEFAULT" means a "Default" under and as defined in the Credit
Agreement.
"OBLIGATION" means the "Obligation"under and as defined in the
Credit Agreement.
"PLEDGE AGREEMENT" means this Pledge Agreement together with all
schedules and annexes attached to this Pledge Agreement, and all amendments and
modifications to this Agreement, the schedules and exhibits.
<PAGE> 2
"PLEDGED SHARES" means all shares of capital stock now or
hereafter issued to Borrower by any Subsidiary and the certificate(s)
representing the Pledged Shares (including the shares listed on SCHEDULE I) and
all dividends, cash, instruments and other property from time-to-time received,
receivable or otherwise distributed in respect of or in exchange of any Pledged
Shares.
"PLEDGOR" includes, without limitation, Pledgor as a
debtor-in-possession, and any receiver, trustee, liquidator, conservator,
custodian, or similar party hereafter appointed for Pledgor or all or
substantially all of Pledgor's assets pursuant to any liquidation,
conservatorship, bankruptcy, moratorium, rearrangement, receivership,
insolvency, reorganization, or similar Law from time to time in effect affecting
the rights of creditors generally.
"SECURITY INTEREST" means the security interests granted and the
transfers, pledges and collateral assignments made under SECTION 3 of this
Pledge Agreement.
"UCC" means (a) generally, and with respect to the definitions
above, the Uniform Commercial Code, as adopted in Texas, as amended from time to
time, and (b) with respect to rights in states other than Texas, the Uniform
Commercial Code as enacted in the applicable state, as amended from time to
time.
2. Credit Agreement. This Pledge Agreement is being executed and
delivered pursuant to the terms and conditions of the Credit Agreement. Each
Security Interest is a "Lien" referred to in the Credit Agreement.
3. Security Interest. In order to secure the full and complete
payment and performance of the Obligation when due, Borrower hereby grants to
Agent a security interest in, and pledges and assigns to Agent: (a) the
Collateral, and (b) all present and future accounts, contract rights, general
intangibles, chattel paper, documents, instruments, cash and noncash proceeds
and other rights arising from or by virtue of, or from the voluntary or
involuntary sale or other disposition of, or collections with respect to, or
claims against any other person with respect to, the Collateral. Such security
interest is granted, and such pledge and assignment are made, as security only
and shall not subject Lenders to, or transfer or in any way affect or modify,
any obligation of Borrower with respect to any of the Collateral or any
transaction involving or giving rise thereto.
4. No Assumption or Modification. The Security Interest is given to
secure the prompt, unconditional and complete payment and performance of the
Obligation when due, and is given as security only. Agent does not assume and
shall not be liable for any of Borrower's liabilities, duties, or obligations
under or in connection with the Collateral. Agent's acceptance of this Pledge
Agreement, or its taking any action in carrying out this Pledge Agreement, does
not constitute Agent's approval of the Collateral or Agent's assumption of any
obligation under or in connection with the Collateral. This Pledge Agreement
does not affect or modify Borrower's obligations with respect to the Collateral.
5. Fraudulent Conveyance. Notwithstanding anything contained in this
Pledge Agreement to the contrary, Borrower agrees that if, but for the
application of this SECTION 5 the Obligation or any Security Interest would
constitute a preferential transfer under 11 U.S.C. Section 547, a fraudulent
conveyance under 11 U.S.C. Section 548 (or any successor section) or a
fraudulent conveyance or transfer under any state fraudulent
2
<PAGE> 3
conveyance or fraudulent transfer Law or similar Law in effect from time to time
(each a "FRAUDULENT CONVEYANCE"), then the Obligation and each affected Security
Interest will be enforceable against Borrower to the maximum extent possible
without causing the Obligation or any Security Interest to be a Fraudulent
Conveyance, and shall be deemed to have been automatically amended to carry out
the intent of this SECTION 5.
6. Representations and Warranties. Borrower hereby confirms and
restates each of the representations and warranties in the Credit Agreement and
further represents and warrants to Agent and Lenders as follows:
(a) The Pledged Shares are duly authorized, validly issued, fully
paid and non-assessable, and their transfer thereof is not subject to any
restrictions other than restrictions imposed by applicable securities and
corporate laws.
(b) Borrower owns the Collateral free and clear of all liens.
(c) The information contained in SCHEDULE 1 which attached to
this Pledge Agreement is true and accurate and sufficiently describes all of the
Collateral.
7. Covenants. Borrower shall:
(a) Promptly notify Agent of any change in any fact or
circumstances represented or warranted by Borrower with respect to any of the
Collateral.
(b) Promptly notify Agent of any additional shares in any
domestic corporation that becomes a Subsidiary of Borrower subsequent to the
execution of this Pledge Agreement.
(c) Promptly notify Agent of any claim, action or proceeding
affecting the security interest granted and the pledge and assignment made under
PARAGRAPH 3 or title to all or any of the Collateral and, at the request of
Lender, appear in and defend, at Borrower's expense, any such action or
proceeding.
(d) Except as permitted under the Credit Agreement, not sell,
assign or otherwise dispose of any Collateral.
(e) Not create, incur or suffer to exist any other lien upon any
of the Collateral.
(f) At Borrower's expense and Agent's request, file or cause to
be filed such applications and take such other actions as Agent may request to
obtain the consent or approval of any tribunal to Agent's rights hereunder,
including, without limitation, the right to sell all the Collateral upon a
Default (as defined in the Credit Agreement) without additional consent or
approval from such tribunal (and, because Borrower agrees that Agent's remedies
at law for failure of Borrower to comply with this provision would be inadequate
and that such failure would not be adequately compensable in damages, Borrower
agrees that its covenants in this provision may be specifically enforced).
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<PAGE> 4
(g) From time to time promptly execute and deliver to Agent all
such other stock powers, assignments, certificates, supplemental documents, and
financing statements (if appropriate), and do all other acts or things as Agent
may reasonably request in order to more fully create, evidence, perfect,
continue and preserve the priority of the Security Interest.
8. Default; Remedies. Should a Default occur and be continuing,
Agent may, at its election, exercise any and all rights available to a secured
party under the UCC, in addition to any and all other rights afforded by the
Loan Documents, at law, in equity, or otherwise, including, without limitation,
exercising the Stock Power, a form of which is attached as ANNEX "A" to this
Pledge Agreement, or applying by appropriate judicial proceedings for
appointment of a receiver for all or part of the Collateral (and Borrower hereby
consents to any such appointment).
(a) Notice. Reasonable notification of the time and place of any
public sale of the Collateral, or reasonable notification of the time after
which any private sale or other intended disposition of the Collateral is to be
made, shall be sent to Borrower and to any other person entitled to notice under
the UCC; provided that if any of the Collateral threatens to decline speedily in
value or is of the type customarily sold on a recognized market, Agent may sell
or otherwise dispose of the Collateral without notification, advertisement, or
other notice of any kind. It is agreed that notice sent or given not less than
five Business Days prior to the taking of the action to which the notice relates
is reasonable for the purposes of this subparagraph.
(b) Sales of Securities. In connection with the sale of the
Collateral, Agent is authorized, but not obligated, to limit prospective
purchasers to the extent deemed necessary or desirable by Agent to render such
sale exempt from the registration requirements of the Securities Act of 1933, as
amended, and any applicable state securities laws, and no sale so made in good
faith by Lender shall be deemed not to be "commercially reasonable" because so
made.
(c) Application of Proceeds. Agent shall apply the proceeds of
any sale or other disposition of the Collateral under this PARAGRAPH 8 in the
following order: First, to the payment of all its expenses incurred in retaking,
holding and preparing any of the Collateral for sale(s) or other disposition, in
arranging for such sale(s) or other disposition, and in actually selling or
disposing of the same (all of which are part of the Obligation); second, toward
repayment of amounts expended by Agent under Paragraph 8; third, toward payment
of the balance of the Obligation in accordance with the Credit Agreement. Any
surplus remaining shall be delivered to Borrower or as a court of competent
jurisdiction may direct. If the proceeds are insufficient to pay the Obligation
in full, Borrower shall remain liable for any deficiency.
9. Other Rights of Agent and Lenders.
(a) Performance. In the event Borrower shall fail to perform any
of its obligations hereunder with respect to the Collateral, then Agent may, at
its option, but without being required to do so, take such action which Borrower
is required, but has failed or refused, to take. Any sum which may be expended
or paid by Agent under this subparagraph (including, without limitation, court
costs and attorneys' fees) shall bear interest from the dates of expenditure or
payment at the Maximum Rate (as defined in the Credit Agreement) until paid and,
together with such interest, shall be payable by Borrower upon demand and shall
be part of the Obligation.
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(b) Collection. Upon notice from Agent, each person or entity
obligated with respect to any of the Collateral, whether as an issuer, account
debtor or otherwise (an "OBLIGOR") is hereby authorized and directed by Borrower
to make payments on any of the Collateral (including, without limitation,
dividends and other distributions) directly to Agent, regardless of whether
Borrower was previously making collections thereon. Subject to Subparagraph (e)
hereof, until such notice is given, Borrower is authorized to retain and expend
all payments made on Collateral. Agent shall have the right in its own name or
in the name of Borrower to compromise or extend time of payment with respect to
all or any portion of the Collateral for such amounts and upon such terms as
Agent may determine; to demand, collect, receive, receipt for, sue for, compound
and give acquittances for any and all amounts due or to become due with respect
to Collateral; to take control of cash and other proceeds of any Collateral; to
endorse the name of Borrower on any notes, acceptances, checks, drafts, money
orders or other evidences of payment on Collateral that may come into the
possession of Agent; to send requests for verification of obligations to any
Obligor; and to do all other acts and things necessary to carry out the intent
of this agreement. If any Obligor fails or refuses to make payment on any
Collateral when due, Agent is authorized, in its sole discretion, either in its
own name or in the name of Borrower, to take such action as Agent shall deem
appropriate for the collection of any such amounts. Regardless of any other
provision hereof, however, Agent shall never be liable for its failure to
collect, or for its failure to exercise diligence in the collection of, any
amounts owed with respect to Collateral, nor shall it be under any duty whatever
to anyone except Borrower to account for funds that it shall actually receive
hereunder. Without limiting the generality of the foregoing, Agent shall have no
responsibility for ascertaining any maturities, calls, conversions, exchanges,
offers, tenders or similar matters relating to any Collateral, or for informing
Borrower with respect to any of such matters (irrespective of whether Agent
actually has, or may be deemed to have, knowledge thereof). The receipt of Agent
to any Obligor shall be a full and complete release, discharge and acquittance
to such Obligor, to the extent of any amount so paid to Lender. The rights
granted Agent under this subparagraph may be exercised at any time, whether or
not a Default has occurred and is continuing.
(c) Record Ownership of Securities. Whether or not a Default has
occurred and is continuing, Agent at any time may have the Collateral registered
in its name, or in the name of its nominee or nominees, as pledgee; and Agent
shall execute and deliver to Borrower all such proxies, powers of attorney,
dividend coupons or orders and other documents as Borrower may reasonably
request for the purpose of enabling Borrower to exercise the voting rights and
powers which it is entitled to exercise hereunder and to receive the dividends
and other payments which it is authorized to receive and retain hereunder.
Nothing in this Pledge Agreement shall prohibit the issuance of cash dividends
by Pledgor if such distribution is permitted under the Credit Agreement.
A. Voting of Securities. So long as no Default has occurred,
Borrower shall be entitled to exercise all voting rights pertaining to the
Collateral. After the occurrence and during the continuance of a Default, the
right to vote the Collateral shall be vested exclusively in Agent. To this end,
Borrower irrevocably appoints Agent the proxy and attorney-in-fact of Borrower,
with full power of substitution, to vote and to act with respect to the
Collateral, subject to the understanding that such proxy may not be exercised
unless a Default has occurred and is continuing. The proxy herein granted is
coupled with an interest, is irrevocable, and shall continue until the
Obligation has been paid and performed in full.
B. Certain Proceeds. Any and all stock dividends or distributions
in property made on or in respect of the Collateral, and any proceeds of the
Collateral, whether such dividends, distributions, or
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<PAGE> 6
proceeds result from a subdivision, combination or reclassification of the
outstanding capital stock of Borrower or as a result of any merger,
consolidation, acquisition or other exchange of assets to which Borrower may be
a party, or otherwise, shall be part of the Collateral hereunder, shall, if
received by Borrower, be held in trust for the benefit of Agent, and shall
forthwith be delivered to Agent (accompanied by proper instruments of assignment
and/or stock and/or bond powers executed by Borrower in accordance with Agent's
instructions) to be held subject to the terms hereof. Any cash proceeds of
Collateral which come into the possession of Agent may, at Agent's option, be
applied in whole or in part to the Obligation (to the extent then due), be
released in whole or in part to or on the written instructions of Borrower for
any general or specific purpose, or be retained in whole or in part by Lender as
additional Collateral.
10. Miscellaneous.
(a) Reference to Miscellaneous Provisions. This Pledge Agreement
is one of the "Loan Documents" referred to in the Credit Agreement,
and, therefore, this Pledge Agreement is subject to the applicable
provisions of SECTION 14 of the Credit Agreement, all of which are
incorporated in this Pledge Agreement by reference the same as if set
forth in this Pledge Agreement verbatim.
(b) Term. Upon full and final payment of the Obligation and final
termination of the Secured Party's and the Lenders' commitment to lend
under the Credit Agreement without Secured Party having exercised its
rights under this Pledge Agreement, this Pledge Agreement shall
terminate; provided that no Obligor on any of the Collateral shall be
obligated to inquire as to the termination of this Pledge Agreement,
but shall be fully protected in making payment directly to Secured
Party, which payment shall be promptly paid over to Borrower after
termination of this Pledge Agreement.
(c) Notice. Any notice or communication required or permitted
under this Pledge Agreement must be given as prescribed in the Credit
Agreement.
(d) Governing Law. THIS PLEDGE AGREEMENT SHALL BE CONSTRUED--AND
ITS PERFORMANCE ENFORCED--UNDER TEXAS LAW.
(e) Credit Agreement. In the event of any conflict or
inconsistency between the terms hereof and the Credit Agreement, the
terms of the Credit Agreement shall be controlling.
EXECUTED as of the date set forth in the preamble.
NCI BUILDING SYSTEMS, INC.
as Borrower and Pledgor
By: /s/ Robert J. Medlock
----------------------------------------------
Name: Robert J. Medlock
--------------------------------------------
Title: Vice President and Chief Financial Officer
-------------------------------------------
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NATIONSBANK OF TEXAS, N.A.
as Administrative Agent and a Lender
By: /s/ Richard L. Nichols, Jr.
--------------------------------------
Name: Richard L. Nichols, Jr.
------------------------------------
Title: Vice President
-----------------------------------
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<PAGE> 1
EXHIBIT 4.20
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (as amended, this "PLEDGE AGREEMENT") is
executed as of May 1, 1998, by the undersigned ("PLEDGOR") for the benefit of
NationsBank of Texas, N.A.("AGENT"), as Administrative Agent for itself and for
the Lenders (collectively, "LENDERS") now or hereafter party to the Credit
Agreement (as defined below).
RECITALS
A. NCI Building Systems, Inc., a Delaware corporation ("BORROWER"),
Agent and Lenders and other parties named therein have executed a Credit
Agreement dated March 25, 1998 (as amended, supplemented or restated, the
"CREDIT AGREEMENT"), together with certain other Loan Documents.
B. Pledgor is the sole owner of all of the capital stock of (i) A&S
Business Interests, Inc. (f/k/a A&S Building Systems, Inc.), a Texas
corporation, (ii) Metal Building Components Holding, Inc., a Delaware
corporation and (iii) Metal Coaters Holding, Inc., a Delaware corporation.
C. It is expressly understood among Pledgor, Borrower, Agent and
Lenders that the execution and delivery of this Pledge Agreement is a condition
precedent to Lenders' obligations to extend credit under the Credit Agreement
and Agent's obligation to issue LCs under the Credit Agreement.
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties agree as follows:
1. Certain Definitions. UNLESS OTHERWISE DEFINED IN THIS PLEDGE
AGREEMENT, ANY CAPITALIZED TERM USED IN THIS PLEDGE AGREEMENT HAS THE MEANING
GIVEN THAT TERM IN THE CREDIT AGREEMENT OR IN THE UCC. If the definition given a
term in the Credit Agreement conflicts with the definition given that term in
the UCC, the Credit Agreement definition shall control to the extent allowed by
Law. If the definition given a term in Chapter 9 of the UCC conflicts with the
definition given that term in any other chapter of the UCC, the Chapter 9
definition shall control.
As used in this Pledge Agreement:
"COLLATERAL" means Borrower's right, title and interest in and
to the Pledged Shares, including after acquired Collateral and proceeds of the
Collateral.
"CREDIT AGREEMENT" is defined in the Recitals.
"DEFAULT" means a "Default" under and as defined in the Credit
Agreement.
"OBLIGATION" means the "Obligation"under and as defined in the
Credit Agreement.
"PLEDGE AGREEMENT" means this Pledge Agreement together with
all schedules and annexes attached to this Pledge Agreement, and all amendments
and modifications to this Agreement, the schedules and exhibits.
<PAGE> 2
"PLEDGED SHARES" means all shares of capital stock now or
hereafter issued to Borrower by any Subsidiary and the certificate(s)
representing the Pledged Shares (including the shares listed on SCHEDULE I) and
all dividends, cash, instruments and other property from time-to-time received,
receivable or otherwise distributed in respect of or in exchange of any Pledged
Shares.
"PLEDGOR" includes, without limitation, Pledgor as a
debtor-in-possession, and any receiver, trustee, liquidator, conservator,
custodian, or similar party hereafter appointed for Pledgor or all or
substantially all of Pledgor's assets pursuant to any liquidation,
conservatorship, bankruptcy, moratorium, rearrangement, receivership,
insolvency, reorganization, or similar Law from time to time in effect affecting
the rights of creditors generally.
"SECURITY INTEREST" means the security interests granted and
the transfers, pledges and collateral assignments made under SECTION 3 of this
Pledge Agreement.
"UCC" means (a) generally, and with respect to the definitions
above, the Uniform Commercial Code, as adopted in Texas, as amended from time to
time, and (b) with respect to rights in states other than Texas, the Uniform
Commercial Code as enacted in the applicable state, as amended from time to
time.
2. Credit Agreement. This Pledge Agreement is being executed and
delivered pursuant to the terms and conditions of the Credit Agreement. Each
Security Interest is a "Lien" referred to in the Credit Agreement.
3. Security Interest. In order to secure the full and complete payment
and performance of the Obligation when due, Borrower hereby grants to Agent a
security interest in, and pledges and assigns to Agent: (a) the Collateral, and
(b) all present and future accounts, contract rights, general intangibles,
chattel paper, documents, instruments, cash and noncash proceeds and other
rights arising from or by virtue of, or from the voluntary or involuntary sale
or other disposition of, or collections with respect to, or claims against any
other person with respect to, the Collateral. Such security interest is granted,
and such pledge and assignment are made, as security only and shall not subject
Lenders to, or transfer or in any way affect or modify, any obligation of
Borrower with respect to any of the Collateral or any transaction involving or
giving rise thereto.
4. No Assumption or Modification. The Security Interest is given to
secure the prompt, unconditional and complete payment and performance of the
Obligation when due, and is given as security only. Agent does not assume and
shall not be liable for any of Borrower's liabilities, duties, or obligations
under or in connection with the Collateral. Agent's acceptance of this Pledge
Agreement, or its taking any action in carrying out this Pledge Agreement, does
not constitute Agent's approval of the Collateral or Agent's assumption of any
obligation under or in connection with the Collateral. This Pledge Agreement
does not affect or modify Borrower's obligations with respect to the Collateral.
5. Fraudulent Conveyance. Notwithstanding anything contained in this
Pledge Agreement to the contrary, Borrower agrees that if, but for the
application of this SECTION 5 the Obligation or any Security Interest would
constitute a preferential transfer under 11 U.S.C. Section 547, a fraudulent
conveyance under 11 U.S.C. Section 548 (or any successor section) or a
fraudulent conveyance or transfer under any state fraudulent
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<PAGE> 3
conveyance or fraudulent transfer Law or similar Law in effect from time to time
(each a "FRAUDULENT CONVEYANCE"), then the Obligation and each affected Security
Interest will be enforceable against Borrower to the maximum extent possible
without causing the Obligation or any Security Interest to be a Fraudulent
Conveyance, and shall be deemed to have been automatically amended to carry out
the intent of this SECTION 5.
6. Representations and Warranties. Borrower hereby confirms and
restates each of the representations and warranties in the Credit Agreement and
further represents and warrants to Agent and Lenders as follows:
(a) The Pledged Shares are duly authorized, validly issued,
fully paid and non-assessable, and their transfer thereof is not subject to any
restrictions other than restrictions imposed by applicable securities and
corporate laws.
(b) Borrower owns the Collateral free and clear of all liens.
(c) The information contained in SCHEDULE 1 which attached to
this Pledge Agreement is true and accurate and sufficiently describes all of the
Collateral.
7. Covenants. Borrower shall:
(a) Promptly notify Agent of any change in any fact or
circumstances represented or warranted by Borrower with respect to any of the
Collateral.
(b) Promptly notify Agent of any additional shares in any
domestic corporation that becomes a Subsidiary of Borrower subsequent to the
execution of this Pledge Agreement.
(c) Promptly notify Agent of any claim, action or proceeding
affecting the security interest granted and the pledge and assignment made under
PARAGRAPH 3 or title to all or any of the Collateral and, at the request of
Lender, appear in and defend, at Borrower's expense, any such action or
proceeding.
(d) Except as permitted under the Credit Agreement, not sell,
assign or otherwise dispose of any Collateral.
(e) Not create, incur or suffer to exist any other lien upon
any of the Collateral.
(f) At Borrower's expense and Agent's request, file or cause
to be filed such applications and take such other actions as Agent may request
to obtain the consent or approval of any tribunal to Agent's rights hereunder,
including, without limitation, the right to sell all the Collateral upon a
Default (as defined in the Credit Agreement) without additional consent or
approval from such tribunal (and, because Borrower agrees that Agent's remedies
at law for failure of Borrower to comply with this provision would be inadequate
and that such failure would not be adequately compensable in damages, Borrower
agrees that its covenants in this provision may be specifically enforced).
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(g) From time to time promptly execute and deliver to Agent
all such other stock powers, assignments, certificates, supplemental documents,
and financing statements (if appropriate), and do all other acts or things as
Agent may reasonably request in order to more fully create, evidence, perfect,
continue and preserve the priority of the Security Interest.
8. Default; Remedies. Should a Default occur and be continuing, Agent
may, at its election, exercise any and all rights available to a secured party
under the UCC, in addition to any and all other rights afforded by the Loan
Documents, at law, in equity, or otherwise, including, without limitation,
exercising the Stock Power, a form of which is attached as ANNEX "A" to this
Pledge Agreement, or applying by appropriate judicial proceedings for
appointment of a receiver for all or part of the Collateral (and Borrower hereby
consents to any such appointment).
(a) Notice. Reasonable notification of the time and place of
any public sale of the Collateral, or reasonable notification of the time after
which any private sale or other intended disposition of the Collateral is to be
made, shall be sent to Borrower and to any other person entitled to notice under
the UCC; provided that if any of the Collateral threatens to decline speedily in
value or is of the type customarily sold on a recognized market, Agent may sell
or otherwise dispose of the Collateral without notification, advertisement, or
other notice of any kind. It is agreed that notice sent or given not less than
five Business Days prior to the taking of the action to which the notice relates
is reasonable for the purposes of this subparagraph.
(b) Sales of Securities. In connection with the sale of the
Collateral, Agent is authorized, but not obligated, to limit prospective
purchasers to the extent deemed necessary or desirable by Agent to render such
sale exempt from the registration requirements of the Securities Act of 1933, as
amended, and any applicable state securities laws, and no sale so made in good
faith by Lender shall be deemed not to be "commercially reasonable" because so
made.
(c) Application of Proceeds. Agent shall apply the proceeds of
any sale or other disposition of the Collateral under this PARAGRAPH 8 in the
following order: First, to the payment of all its expenses incurred in retaking,
holding and preparing any of the Collateral for sale(s) or other disposition, in
arranging for such sale(s) or other disposition, and in actually selling or
disposing of the same (all of which are part of the Obligation); second, toward
repayment of amounts expended by Agent under Paragraph 8; third, toward payment
of the balance of the Obligation in accordance with the Credit Agreement. Any
surplus remaining shall be delivered to Borrower or as a court of competent
jurisdiction may direct. If the proceeds are insufficient to pay the Obligation
in full, Borrower shall remain liable for any deficiency.
9. Other Rights of Agent and Lenders.
(a) Performance. In the event Borrower shall fail to perform
any of its obligations hereunder with respect to the Collateral, then Agent may,
at its option, but without being required to do so, take such action which
Borrower is required, but has failed or refused, to take. Any sum which may be
expended or paid by Agent under this subparagraph (including, without
limitation, court costs and attorneys' fees) shall bear interest from the dates
of expenditure or payment at the Maximum Rate (as defined in the Credit
Agreement) until paid and, together with such interest, shall be payable by
Borrower upon demand and shall be part of the Obligation.
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(b) Collection. Upon notice from Agent, each person or entity
obligated with respect to any of the Collateral, whether as an issuer, account
debtor or otherwise (an "OBLIGOR") is hereby authorized and directed by Borrower
to make payments on any of the Collateral (including, without limitation,
dividends and other distributions) directly to Agent, regardless of whether
Borrower was previously making collections thereon. Subject to Subparagraph (e)
hereof, until such notice is given, Borrower is authorized to retain and expend
all payments made on Collateral. Agent shall have the right in its own name or
in the name of Borrower to compromise or extend time of payment with respect to
all or any portion of the Collateral for such amounts and upon such terms as
Agent may determine; to demand, collect, receive, receipt for, sue for, compound
and give acquittances for any and all amounts due or to become due with respect
to Collateral; to take control of cash and other proceeds of any Collateral; to
endorse the name of Borrower on any notes, acceptances, checks, drafts, money
orders or other evidences of payment on Collateral that may come into the
possession of Agent; to send requests for verification of obligations to any
Obligor; and to do all other acts and things necessary to carry out the intent
of this agreement. If any Obligor fails or refuses to make payment on any
Collateral when due, Agent is authorized, in its sole discretion, either in its
own name or in the name of Borrower, to take such action as Agent shall deem
appropriate for the collection of any such amounts. Regardless of any other
provision hereof, however, Agent shall never be liable for its failure to
collect, or for its failure to exercise diligence in the collection of, any
amounts owed with respect to Collateral, nor shall it be under any duty whatever
to anyone except Borrower to account for funds that it shall actually receive
hereunder. Without limiting the generality of the foregoing, Agent shall have no
responsibility for ascertaining any maturities, calls, conversions, exchanges,
offers, tenders or similar matters relating to any Collateral, or for informing
Borrower with respect to any of such matters (irrespective of whether Agent
actually has, or may be deemed to have, knowledge thereof). The receipt of Agent
to any Obligor shall be a full and complete release, discharge and acquittance
to such Obligor, to the extent of any amount so paid to Lender. The rights
granted Agent under this subparagraph may be exercised at any time, whether or
not a Default has occurred and is continuing.
(c) Record Ownership of Securities. Whether or not a Default
has occurred and is continuing, Agent at any time may have the Collateral
registered in its name, or in the name of its nominee or nominees, as pledgee;
and Agent shall execute and deliver to Borrower all such proxies, powers of
attorney, dividend coupons or orders and other documents as Borrower may
reasonably request for the purpose of enabling Borrower to exercise the voting
rights and powers which it is entitled to exercise hereunder and to receive the
dividends and other payments which it is authorized to receive and retain
hereunder. Nothing in this Pledge Agreement shall prohibit the issuance of cash
dividends by Pledgor if such distribution is permitted under the Credit
Agreement.
A. Voting of Securities. So long as no Default has occurred,
Borrower shall be entitled to exercise all voting rights pertaining to the
Collateral. After the occurrence and during the continuance of a Default, the
right to vote the Collateral shall be vested exclusively in Agent. To this end,
Borrower irrevocably appoints Agent the proxy and attorney-in-fact of Borrower,
with full power of substitution, to vote and to act with respect to the
Collateral, subject to the understanding that such proxy may not be exercised
unless a Default has occurred and is continuing. The proxy herein granted is
coupled with an interest, is irrevocable, and shall continue until the
Obligation has been paid and performed in full.
B. Certain Proceeds. Any and all stock dividends or
distributions in property made on or in respect of the Collateral, and any
proceeds of the Collateral, whether such dividends, distributions, or
5
<PAGE> 6
proceeds result from a subdivision, combination or reclassification of the
outstanding capital stock of Borrower or as a result of any merger,
consolidation, acquisition or other exchange of assets to which Borrower may be
a party, or otherwise, shall be part of the Collateral hereunder, shall, if
received by Borrower, be held in trust for the benefit of Agent, and shall
forthwith be delivered to Agent (accompanied by proper instruments of assignment
and/or stock and/or bond powers executed by Borrower in accordance with Agent's
instructions) to be held subject to the terms hereof. Any cash proceeds of
Collateral which come into the possession of Agent may, at Agent's option, be
applied in whole or in part to the Obligation (to the extent then due), be
released in whole or in part to or on the written instructions of Borrower for
any general or specific purpose, or be retained in whole or in part by Lender as
additional Collateral.
10. Miscellaneous.
(a) Reference to Miscellaneous Provisions. This Pledge
Agreement is one of the "Loan Documents" referred to in the Credit
Agreement, and, therefore, this Pledge Agreement is subject to the
applicable provisions of SECTION 14 of the Credit Agreement, all of
which are incorporated in this Pledge Agreement by reference the same
as if set forth in this Pledge Agreement verbatim.
(b) Term. Upon full and final payment of the Obligation and
final termination of the Secured Party's and the Lenders' commitment to
lend under the Credit Agreement without Secured Party having exercised
its rights under this Pledge Agreement, this Pledge Agreement shall
terminate; provided that no Obligor on any of the Collateral shall be
obligated to inquire as to the termination of this Pledge Agreement,
but shall be fully protected in making payment directly to Secured
Party, which payment shall be promptly paid over to Borrower after
termination of this Pledge Agreement.
(c) Notice. Any notice or communication required or permitted
under this Pledge Agreement must be given as prescribed in the Credit
Agreement.
(d) Governing Law. THIS PLEDGE AGREEMENT SHALL BE CONSTRUED--
AND ITS PERFORMANCE ENFORCED--UNDER TEXAS LAW.
(e) Credit Agreement. In the event of any conflict or
inconsistency between the terms hereof and the Credit Agreement, the
terms of the Credit Agreement shall be controlling.
EXECUTED as of the date set forth in the preamble.
NCI HOLDING CORP.
as Pledgor
By: /s/ Robert J. Medlock
----------------------------------------------
Name: Robert J. Medlock
--------------------------------------------
Title: Vice President and Chief Financial Officer
-------------------------------------------
6
<PAGE> 7
NATIONSBANK OF TEXAS, N.A.
as Administrative Agent and a Lender
By: /s/ Richard L. Nichols, Jr.
----------------------------------------------
Name: Richard L. Nichols, Jr.
--------------------------------------------
Title: Vice President
-------------------------------------------
7
<PAGE> 1
EXHIBIT 4.21
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (as amended, this "PLEDGE AGREEMENT") is
executed as of May 13, 1998, by the undersigned ("PLEDGOR") for the benefit of
NationsBank, N.A., successor by merger with NationsBank of Texas, N.A.
("AGENT"), as Administrative Agent for itself and for the Lenders (collectively,
"LENDERS") now or hereafter party to the Credit Agreement (as defined below).
RECITALS
A. NCI Building Systems, Inc., a Delaware corporation ("BORROWER"),
Agent and Lenders and other parties named therein have executed a Credit
Agreement dated March 25, 1998 (as amended, supplemented or restated, the
"CREDIT AGREEMENT"), together with certain other Loan Documents.
B. Pledgor is the sole owner of all of the capital stock of Metal
Coaters of California, Inc., a Texas corporation.
C. It is expressly understood among Pledgor, Borrower, Agent and
Lenders that the execution and delivery of this Pledge Agreement is a condition
precedent to Lenders' obligations to extend credit under the Credit Agreement
and Agent's obligation to issue LCs under the Credit Agreement.
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties agree as follows:
1. Certain Definitions. UNLESS OTHERWISE DEFINED IN THIS PLEDGE
AGREEMENT, ANY CAPITALIZED TERM USED IN THIS PLEDGE AGREEMENT HAS THE MEANING
GIVEN THAT TERM IN THE CREDIT AGREEMENT OR IN THE UCC. If the definition given a
term in the Credit Agreement conflicts with the definition given that term in
the UCC, the Credit Agreement definition shall control to the extent allowed by
Law. If the definition given a term in Chapter 9 of the UCC conflicts with the
definition given that term in any other chapter of the UCC, the Chapter 9
definition shall control.
As used in this Pledge Agreement:
"COLLATERAL" means Borrower's right, title and interest in and
to the Pledged Shares, including after acquired Collateral and proceeds of the
Collateral.
"CREDIT AGREEMENT" is defined in the Recitals.
"DEFAULT" means a "Default" under and as defined in the Credit
Agreement.
"OBLIGATION" means the "Obligation"under and as defined in the
Credit Agreement.
"PLEDGE AGREEMENT" means this Pledge Agreement together with
all schedules and annexes attached to this Pledge Agreement, and all amendments
and modifications to this Agreement, the schedules and exhibits.
<PAGE> 2
"PLEDGED SHARES" means all shares of capital stock now or
hereafter issued to Borrower by any Subsidiary and the certificate(s)
representing the Pledged Shares (including the shares listed on SCHEDULE I) and
all dividends, cash, instruments and other property from time-to-time received,
receivable or otherwise distributed in respect of or in exchange of any Pledged
Shares.
"PLEDGOR" includes, without limitation, Pledgor as a
debtor-in-possession, and any receiver, trustee, liquidator, conservator,
custodian, or similar party hereafter appointed for Pledgor or all or
substantially all of Pledgor's assets pursuant to any liquidation,
conservatorship, bankruptcy, moratorium, rearrangement, receivership,
insolvency, reorganization, or similar Law from time to time in effect affecting
the rights of creditors generally.
"SECURITY INTEREST" means the security interests granted and
the transfers, pledges and collateral assignments made under SECTION 3 of this
Pledge Agreement.
"UCC" means (a) generally, and with respect to the definitions
above, the Uniform Commercial Code, as adopted in Texas, as amended from time to
time, and (b) with respect to rights in states other than Texas, the Uniform
Commercial Code as enacted in the applicable state, as amended from time to
time.
2. Credit Agreement. This Pledge Agreement is being executed and
delivered pursuant to the terms and conditions of the Credit Agreement. Each
Security Interest is a "Lien" referred to in the Credit Agreement.
3. Security Interest. In order to secure the full and complete payment
and performance of the Obligation when due, Borrower hereby grants to Agent a
security interest in, and pledges and assigns to Agent: (a) the Collateral, and
(b) all present and future accounts, contract rights, general intangibles,
chattel paper, documents, instruments, cash and noncash proceeds and other
rights arising from or by virtue of, or from the voluntary or involuntary sale
or other disposition of, or collections with respect to, or claims against any
other person with respect to, the Collateral. Such security interest is granted,
and such pledge and assignment are made, as security only and shall not subject
Lenders to, or transfer or in any way affect or modify, any obligation of
Borrower with respect to any of the Collateral or any transaction involving or
giving rise thereto.
4. No Assumption or Modification. The Security Interest is given to
secure the prompt, unconditional and complete payment and performance of the
Obligation when due, and is given as security only. Agent does not assume and
shall not be liable for any of Borrower's liabilities, duties, or obligations
under or in connection with the Collateral. Agent's acceptance of this Pledge
Agreement, or its taking any action in carrying out this Pledge Agreement, does
not constitute Agent's approval of the Collateral or Agent's assumption of any
obligation under or in connection with the Collateral. This Pledge Agreement
does not affect or modify Borrower's obligations with respect to the Collateral.
5. Fraudulent Conveyance. Notwithstanding anything contained in this
Pledge Agreement to the contrary, Borrower agrees that if, but for the
application of this SECTION 5 the Obligation or any Security Interest would
constitute a preferential transfer under 11 U.S.C. Section 547, a fraudulent
conveyance under 11 U.S.C. Section 548 (or any successor section) or a
fraudulent conveyance or transfer under any state fraudulent
2
<PAGE> 3
conveyance or fraudulent transfer Law or similar Law in effect from time to time
(each a "FRAUDULENT CONVEYANCE"), then the Obligation and each affected Security
Interest will be enforceable against Borrower to the maximum extent possible
without causing the Obligation or any Security Interest to be a Fraudulent
Conveyance, and shall be deemed to have been automatically amended to carry out
the intent of this SECTION 5.
6. Representations and Warranties. Borrower hereby confirms and
restates each of the representations and warranties in the Credit Agreement and
further represents and warrants to Agent and Lenders as follows:
(a) The Pledged Shares are duly authorized, validly issued,
fully paid and non-assessable, and their transfer thereof is not subject to any
restrictions other than restrictions imposed by applicable securities and
corporate laws.
(b) Borrower owns the Collateral free and clear of all liens.
(c) The information contained in SCHEDULE 1 which attached to
this Pledge Agreement is true and accurate and sufficiently describes all of the
Collateral.
7. Covenants. Borrower shall:
(a) Promptly notify Agent of any change in any fact or
circumstances represented or warranted by Borrower with respect to any of the
Collateral.
(b) Promptly notify Agent of any additional shares in any
domestic corporation that becomes a Subsidiary of Borrower subsequent to the
execution of this Pledge Agreement.
(c) Promptly notify Agent of any claim, action or proceeding
affecting the security interest granted and the pledge and assignment made under
PARAGRAPH 3 or title to all or any of the Collateral and, at the request of
Lender, appear in and defend, at Borrower's expense, any such action or
proceeding.
(d) Except as permitted under the Credit Agreement, not sell,
assign or otherwise dispose of any Collateral.
(e) Not create, incur or suffer to exist any other lien upon
any of the Collateral.
(f) At Borrower's expense and Agent's request, file or cause
to be filed such applications and take such other actions as Agent may request
to obtain the consent or approval of any tribunal to Agent's rights hereunder,
including, without limitation, the right to sell all the Collateral upon a
Default (as defined in the Credit Agreement) without additional consent or
approval from such tribunal (and, because Borrower agrees that Agent's remedies
at law for failure of Borrower to comply with this provision would be inadequate
and that such failure would not be adequately compensable in damages, Borrower
agrees that its covenants in this provision may be specifically enforced).
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<PAGE> 4
(g) From time to time promptly execute and deliver to Agent
all such other stock powers, assignments, certificates, supplemental documents,
and financing statements (if appropriate), and do all other acts or things as
Agent may reasonably request in order to more fully create, evidence, perfect,
continue and preserve the priority of the Security Interest.
8. Default; Remedies. Should a Default occur and be continuing, Agent
may, at its election, exercise any and all rights available to a secured party
under the UCC, in addition to any and all other rights afforded by the Loan
Documents, at law, in equity, or otherwise, including, without limitation,
exercising the Stock Power, a form of which is attached as ANNEX "A" to this
Pledge Agreement, or applying by appropriate judicial proceedings for
appointment of a receiver for all or part of the Collateral (and Borrower hereby
consents to any such appointment).
(a) Notice. Reasonable notification of the time and place of
any public sale of the Collateral, or reasonable notification of the time after
which any private sale or other intended disposition of the Collateral is to be
made, shall be sent to Borrower and to any other person entitled to notice under
the UCC; provided that if any of the Collateral threatens to decline speedily in
value or is of the type customarily sold on a recognized market, Agent may sell
or otherwise dispose of the Collateral without notification, advertisement, or
other notice of any kind. It is agreed that notice sent or given not less than
five Business Days prior to the taking of the action to which the notice relates
is reasonable for the purposes of this subparagraph.
(b) Sales of Securities. In connection with the sale of the
Collateral, Agent is authorized, but not obligated, to limit prospective
purchasers to the extent deemed necessary or desirable by Agent to render such
sale exempt from the registration requirements of the Securities Act of 1933, as
amended, and any applicable state securities laws, and no sale so made in good
faith by Lender shall be deemed not to be "commercially reasonable" because so
made.
(c) Application of Proceeds. Agent shall apply the proceeds of
any sale or other disposition of the Collateral under this PARAGRAPH 8 in the
following order: First, to the payment of all its expenses incurred in retaking,
holding and preparing any of the Collateral for sale(s) or other disposition, in
arranging for such sale(s) or other disposition, and in actually selling or
disposing of the same (all of which are part of the Obligation); second, toward
repayment of amounts expended by Agent under Paragraph 8; third, toward payment
of the balance of the Obligation in accordance with the Credit Agreement. Any
surplus remaining shall be delivered to Borrower or as a court of competent
jurisdiction may direct. If the proceeds are insufficient to pay the Obligation
in full, Borrower shall remain liable for any deficiency.
9. Other Rights of Agent and Lenders.
(a) Performance. In the event Borrower shall fail to perform
any of its obligations hereunder with respect to the Collateral, then Agent may,
at its option, but without being required to do so, take such action which
Borrower is required, but has failed or refused, to take. Any sum which may be
expended or paid by Agent under this subparagraph (including, without
limitation, court costs and attorneys' fees) shall bear interest from the dates
of expenditure or payment at the Maximum Rate (as defined in the Credit
Agreement) until paid and, together with such interest, shall be payable by
Borrower upon demand and shall be part of the Obligation.
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<PAGE> 5
(b) Collection. Upon notice from Agent, each person or entity
obligated with respect to any of the Collateral, whether as an issuer, account
debtor or otherwise (an "OBLIGOR") is hereby authorized and directed by Borrower
to make payments on any of the Collateral (including, without limitation,
dividends and other distributions) directly to Agent, regardless of whether
Borrower was previously making collections thereon. Subject to Subparagraph (e)
hereof, until such notice is given, Borrower is authorized to retain and expend
all payments made on Collateral. Agent shall have the right in its own name or
in the name of Borrower to compromise or extend time of payment with respect to
all or any portion of the Collateral for such amounts and upon such terms as
Agent may determine; to demand, collect, receive, receipt for, sue for, compound
and give acquittances for any and all amounts due or to become due with respect
to Collateral; to take control of cash and other proceeds of any Collateral; to
endorse the name of Borrower on any notes, acceptances, checks, drafts, money
orders or other evidences of payment on Collateral that may come into the
possession of Agent; to send requests for verification of obligations to any
Obligor; and to do all other acts and things necessary to carry out the intent
of this agreement. If any Obligor fails or refuses to make payment on any
Collateral when due, Agent is authorized, in its sole discretion, either in its
own name or in the name of Borrower, to take such action as Agent shall deem
appropriate for the collection of any such amounts. Regardless of any other
provision hereof, however, Agent shall never be liable for its failure to
collect, or for its failure to exercise diligence in the collection of, any
amounts owed with respect to Collateral, nor shall it be under any duty whatever
to anyone except Borrower to account for funds that it shall actually receive
hereunder. Without limiting the generality of the foregoing, Agent shall have no
responsibility for ascertaining any maturities, calls, conversions, exchanges,
offers, tenders or similar matters relating to any Collateral, or for informing
Borrower with respect to any of such matters (irrespective of whether Agent
actually has, or may be deemed to have, knowledge thereof). The receipt of Agent
to any Obligor shall be a full and complete release, discharge and acquittance
to such Obligor, to the extent of any amount so paid to Lender. The rights
granted Agent under this subparagraph may be exercised at any time, whether or
not a Default has occurred and is continuing.
(c) Record Ownership of Securities. Whether or not a Default
has occurred and is continuing, Agent at any time may have the Collateral
registered in its name, or in the name of its nominee or nominees, as pledgee;
and Agent shall execute and deliver to Borrower all such proxies, powers of
attorney, dividend coupons or orders and other documents as Borrower may
reasonably request for the purpose of enabling Borrower to exercise the voting
rights and powers which it is entitled to exercise hereunder and to receive the
dividends and other payments which it is authorized to receive and retain
hereunder. Nothing in this Pledge Agreement shall prohibit the issuance of cash
dividends by Pledgor if such distribution is permitted under the Credit
Agreement.
A. Voting of Securities. So long as no Default has occurred,
Borrower shall be entitled to exercise all voting rights pertaining to the
Collateral. After the occurrence and during the continuance of a Default, the
right to vote the Collateral shall be vested exclusively in Agent. To this end,
Borrower irrevocably appoints Agent the proxy and attorney-in-fact of Borrower,
with full power of substitution, to vote and to act with respect to the
Collateral, subject to the understanding that such proxy may not be exercised
unless a Default has occurred and is continuing. The proxy herein granted is
coupled with an interest, is irrevocable, and shall continue until the
Obligation has been paid and performed in full.
B. Certain Proceeds. Any and all stock dividends or
distributions in property made on or in respect of the Collateral, and any
proceeds of the Collateral, whether such dividends, distributions, or
5
<PAGE> 6
proceeds result from a subdivision, combination or reclassification of the
outstanding capital stock of Borrower or as a result of any merger,
consolidation, acquisition or other exchange of assets to which Borrower may be
a party, or otherwise, shall be part of the Collateral hereunder, shall, if
received by Borrower, be held in trust for the benefit of Agent, and shall
forthwith be delivered to Agent (accompanied by proper instruments of assignment
and/or stock and/or bond powers executed by Borrower in accordance with Agent's
instructions) to be held subject to the terms hereof. Any cash proceeds of
Collateral which come into the possession of Agent may, at Agent's option, be
applied in whole or in part to the Obligation (to the extent then due), be
released in whole or in part to or on the written instructions of Borrower for
any general or specific purpose, or be retained in whole or in part by Lender as
additional Collateral.
10. Miscellaneous.
(a) Reference to Miscellaneous Provisions. This Pledge
Agreement is one of the "Loan Documents" referred to in the Credit
Agreement, and, therefore, this Pledge Agreement is subject to the
applicable provisions of SECTION 14 of the Credit Agreement, all of
which are incorporated in this Pledge Agreement by reference the same
as if set forth in this Pledge Agreement verbatim.
(b) Term. Upon full and final payment of the Obligation and
final termination of the Secured Party's and the Lenders' commitment to
lend under the Credit Agreement without Secured Party having exercised
its rights under this Pledge Agreement, this Pledge Agreement shall
terminate; provided that no Obligor on any of the Collateral shall be
obligated to inquire as to the termination of this Pledge Agreement,
but shall be fully protected in making payment directly to Secured
Party, which payment shall be promptly paid over to Borrower after
termination of this Pledge Agreement.
(c) Notice. Any notice or communication required or permitted
under this Pledge Agreement must be given as prescribed in the Credit
Agreement.
(d) Governing Law. THIS PLEDGE AGREEMENT SHALL BE CONSTRUED--
AND ITS PERFORMANCE ENFORCED--UNDER TEXAS LAW.
(e) Credit Agreement. In the event of any conflict or
inconsistency between the terms hereof and the Credit Agreement, the
terms of the Credit Agreement shall be controlling.
EXECUTED as of the date set forth in the preamble.
METAL COATERS HOLDING, INC.,
a Delaware corporation, as Pledgor
By: /s/ Robert J. Medlock
-----------------------------------------------
Name: Robert J. Medlock
---------------------------------------------
Title: Vice President and Chief Financial Officer
--------------------------------------------
6
<PAGE> 7
NATIONSBANK, N.A., SUCCESSOR BY
MERGER WITH NATIONSBANK OF TEXAS,
N. A., as Administrative Agent and a Lender
By: /s/ Richard L. Nichols, Jr.
-----------------------------------------------
Name: Richard L. Nichols, Jr.
---------------------------------------------
Title: Vice President
--------------------------------------------
7
<PAGE> 1
EXHIBIT 4.22
ASSIGNMENT OF PARTNERSHIP INTERESTS
THIS ASSIGNMENT OF PARTNERSHIP INTERESTS (as amended, this
"ASSIGNMENT") is executed as of May 1, 1998, by the undersigned ("ASSIGNOR") for
the benefit of NationsBank of Texas, N.A.("AGENT"), as Administrative Agent for
itself and for the Lenders (collectively, "LENDERS") now or hereafter party to
the Credit Agreement (as defined below).
RECITALS
A. NCI Building Systems, Inc., a Delaware corporation ("BORROWER"),
Agent and Lenders and other parties named therein have executed a Credit
Agreement dated March 25, 1998 (as amended, supplemented or restated, the
"CREDIT AGREEMENT"), together with certain other Loan Documents.
B. NCI Operating Corp., a Delaware corporation and a wholly-owned
subsidiary of Borrower is the general partner of (i) NCI Building Systems, L.P.,
a Texas limited partnership, (ii) A&S Building Systems, L.P., a Texas limited
partnership, (iii) MBCI Operating, L.P., a Texas limited partnership and (iv)
Metal Coaters Operating, L.P., a Texas limited partnership.
C. It is expressly understood among Assignor, Borrower and Lenders that
the execution and delivery of this Assignment is a condition precedent to
Lenders' obligations to extend credit under the Credit Agreement and Agent's
obligation to issue LCs under the Credit Agreement.
D. Assignor's board of directors has determined that the Assignor may
benefit directly or indirectly from Borrower's execution of the Credit Agreement
as the Assignor may be the indirect recipient of funds advanced by Lenders to
Borrower under the Credit Agreement or the account party of LCs issued by Agent
pursuant to the Credit Agreement, and as such the value of the consideration
received and to be received by it under the Loan Documents is reasonably worth
at least as much as its liability and obligation under this Agreement.
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties agree as follows:
1. Certain Definitions. UNLESS OTHERWISE DEFINED IN THIS ASSIGNMENT,
ANY CAPITALIZED TERM USED IN THIS ASSIGNMENT HAS THE MEANING GIVEN THAT TERM IN
THE CREDIT AGREEMENT OR IN THE UCC. If the definition given a term in the Credit
Agreement conflicts with the definition given that term in the UCC, the Credit
Agreement definition shall control to the extent allowed by Law. If the
definition given a term in Chapter 9 of the UCC conflicts with the definition
given that term in any other chapter of the UCC, the Chapter 9 definition shall
control. As used in this Assignment:
"ASSIGNMENT" means this Assignment together with all schedules
and annexes attached to this Assignment, and all amendments and modifications to
this Assignment, the schedules and exhibits.
"ASSIGNOR" includes, without limitation, Assignor as a
debtor-in-possession, and any receiver, trustee, liquidator, conservator,
custodian, or similar party hereafter appointed for Assignor or all
<PAGE> 2
or substantially all of Assignor's assets pursuant to any liquidation,
conservatorship, bankruptcy, moratorium, rearrangement, receivership,
insolvency, reorganization, or similar Law from time to time in effect affecting
the rights of creditors generally.
"COLLATERAL" means Assignors's right, title and interest in
and to the Partnership Interests, including after acquired Collateral and
proceeds of the Collateral.
"CREDIT AGREEMENT" is defined in the Recitals.
"DEFAULT" means a "Default" under and as defined in the Credit
Agreement.
"OBLIGATION" means the "Obligation"under and as defined in the
Credit Agreement.
"PARTNERSHIP INTERESTS" means all partnership interests, now
or hereafter owned by Assignor in any Subsidiary and all distributions, cash,
instruments and other property from time-to-time received, receivable or
otherwise distributed in respect of or in exchange of any Partnership Interest.
"SECURITY INTEREST" means the security interests granted and
the transfers, pledges and collateral assignments made under SECTION 3 of this
Assignment.
"UCC" means (a) generally, and with respect to the definitions
above, the Uniform Commercial Code, as adopted in Texas, as amended from time to
time, and (b) with respect to rights in states other than Texas, the Uniform
Commercial Code as enacted in the applicable state, as amended from time to
time.
2. Credit Agreement. This Assignment is being executed and delivered
pursuant to the terms and conditions of the Credit Agreement. Each Security
Interest is a "Lien" referred to in the Credit Agreement.
3. Security Interest. In order to secure the full and complete payment
and performance of the Obligation when due, Assignor hereby grants to Agent a
security interest in, and pledges and assigns to Agent: (a) the Collateral, and
(b) all present and future accounts, contract rights, general intangibles,
chattel paper, documents, instruments, cash and noncash proceeds and other
rights arising from or by virtue of, or from the voluntary or involuntary sale
or other disposition of, or collections with respect to, or claims against any
other person with respect to, the Collateral. Such security interest is granted,
and such pledge and assignment is made, as security only and shall not subject
Lenders to, or transfer or in any way affect or modify, any obligation of
Assignor with respect to any of the Collateral or any transaction involving or
giving rise thereto.
4. No Assumption or Modification. The Security Interest is given to
secure the prompt, unconditional and complete payment and performance of the
Obligation when due, and is given as security only. Agent does not assume and
shall not be liable for any of Assignor's liabilities, duties, or obligations
under or in connection with the Collateral. Agent's acceptance of this
Assignment, or its taking any action in carrying out this Assignment, does not
constitute Agent's approval of the Collateral or Agent's assumption
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<PAGE> 3
of any obligation under or in connection with the Collateral. This Assignment
does not affect or modify Assignor's obligations with respect to the Collateral.
5. Fraudulent Conveyance. Notwithstanding anything contained in this
Assignment to the contrary, Assignor agrees that if, but for the application of
this SECTION 5 the Obligation or any Security Interest would constitute a
preferential transfer under 11 U.S.C. Section 547, a fraudulent conveyance under
11 U.S.C. Section 548 (or any successor section) or a fraudulent conveyance or
transfer under any state fraudulent conveyance or fraudulent transfer Law or
similar Law in effect from time to time (each a "FRAUDULENT CONVEYANCE"), then
the Obligation and each affected Security Interest will be enforceable against
Assignor to the maximum extent possible without causing the Obligation or any
Security Interest to be a Fraudulent Conveyance, and shall be deemed to have
been automatically amended to carry out the intent of this SECTION 5.
6. Representations and Warranties. To the extent applicable, Assignor
hereby adopts and restates each of the representations and warranties in the
Credit Agreement and further represents and warrants to Lenders as follows:
(a) Except as provided in the relevant partnership agreement,
the assignment, pledge, or transfer of the Partnership Interests is not subject
to any restrictions other than restrictions imposed by applicable securities and
partnership laws.
(b) Except as provided in the relevant partnership agreement,
Assignor owns the Collateral free and clear of all liens.
(c) The information contained in item B in the recitals above
is true and accurate and the Collateral is accurately described in this
Assignment.
7. Covenants. Assignor shall:
(a) Promptly notify Agent of any change in any fact or
circumstances represented or warranted by Assignor with respect to any of the
Collateral.
(b) Promptly notify Agent of any additional partnership
interest that it acquires or owns in any domestic partnership that becomes a
Subsidiary subsequent to the execution of this Assignment.
(c) Promptly notify Agent of any claim, action or proceeding
affecting the security interest granted and the pledge and assignment made under
PARAGRAPH 3 or title to all or any of the Collateral and, at the request of
Lenders, appear in and defend, at Assignor's expense, any such action or
proceeding.
(d) Except as permitted under the Credit Agreement, not sell,
assign or otherwise dispose of any Collateral.
(e) Not create, incur or suffer to exist any other lien upon
any of the Collateral.
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(f) At Assignor's expense and Agent's request, file or cause
to be filed such applications and take such other actions as Agent may request
to obtain the consent or approval of any tribunal to Agent's rights hereunder,
including, without limitation, the right to sell all the Collateral upon a
Default (as defined in the Credit Agreement) without additional consent or
approval from such tribunal (and, because Assignor agrees that Agent's remedies
at law for failure of Assignor to comply with this provision would be inadequate
and that such failure would not be adequately compensable in damages, Assignor
agrees that its covenants in this provision may be specifically enforced).
(g) From time to time promptly execute and deliver to Agent
all such other assignments, certificates, supplemental documents, and financing
statements (if appropriate), and do all other acts or things as Agent may
reasonably request in order to more fully create, evidence, perfect, continue
and preserve the priority of the Security Interest.
8. Default; Remedies. Should a Default occur and be continuing, Agent
may, at its election, exercise any and all rights available to a secured party
under the UCC, in addition to any and all other rights afforded by the Loan
Documents, at law, in equity, or otherwise, or applying by appropriate judicial
proceedings for appointment of a receiver for all or part of the Collateral (and
Assignor hereby consents to any such appointment).
(a) Notice. Reasonable notification of the time and place of
any public sale of the Collateral, or reasonable notification of the time after
which any private sale or other intended disposition of the Collateral is to be
made, shall be sent to Assignor and to any other person entitled to notice under
the UCC; provided that if any of the Collateral threatens to decline speedily in
value or is of the type customarily sold on a recognized market, Agent may sell
or otherwise dispose of the Collateral without notification, advertisement, or
other notice of any kind. It is agreed that notice sent or given not less than
five Business Days prior to the taking of the action to which the notice relates
is reasonable for the purposes of this subparagraph.
(b) Sales of Partnership Interests. In connection with the
sale of the Collateral, Agent is authorized, but not obligated, to limit
prospective purchasers to the extent deemed necessary or desirable by Agent to
render such sale exempt from the registration requirements of the Securities Act
of 1933, as amended, and any applicable state securities laws, and no sale so
made in good faith by Lenders shall be deemed not to be "commercially
reasonable" because so made.
(c) Application of Proceeds. Agent shall apply the proceeds of
any sale or other disposition of the Collateral under this PARAGRAPH 8 in the
following order: First, to the payment of all its expenses incurred in preparing
any of the Collateral for sale(s) or other disposition(s), in arranging for such
sale(s) or other disposition(s), and in actually selling or disposing of the
same (all of which are part of the Obligation); second, toward repayment of
amounts expended by Agent under Paragraph 8; third, toward payment of the
balance of the Obligation in accordance with the Credit Agreement. Any surplus
remaining shall be delivered to Assignor or as a court of competent jurisdiction
may direct. If the proceeds are insufficient to pay the Obligation in full,
Borrower, Assignor and other Guarantors shall remain jointly and severally
liable for any deficiency.
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9. Other Rights of Agent and Lenders.
(a) Performance. In the event Assignor shall fail to perform
any of its obligations hereunder with respect to the Collateral, then Agent may,
at its option, but without being required to do so, take such action which
Assignor is required, but has failed or refused, to take. Any sum which may be
expended or paid by Agent under this subparagraph (including, without
limitation, court costs and attorneys' fees) shall bear interest from the dates
of expenditure or payment at the Maximum Rate (as defined in the Credit
Agreement) until paid and, together with such interest, shall be payable by
Assignor upon demand and shall be part of the Obligation.
(b) Collection. Upon notice from Agent, each person or entity
obligated with respect to any of the Collateral, whether as an issuer, account
debtor or otherwise (an "OBLIGOR") is hereby authorized and directed by Assignor
to make payments on any of the Collateral (including, without limitation,
dividends and other distributions) directly to Agent, regardless of whether
Assignor was previously making collections thereon. Subject to Subparagraph (e)
hereof, until such notice is given, Assignor is authorized to retain and expend
all payments made on Collateral. Agent shall have the right in its own name or
in the name of Assignor to compromise or extend time of payment with respect to
all or any portion of the Collateral for such amounts and upon such terms as
Agent may determine; to demand, collect, receive, receipt for, sue for, compound
and give acquittances for any and all amounts due or to become due with respect
to Collateral; to take control of cash and other proceeds of any Collateral; to
endorse the name of Assignor on any notes, acceptances, checks, drafts, money
orders or other evidences of payment on Collateral that may come into the
possession of Agent; to send requests for verification of obligations to any
Obligor; and to do all other acts and things necessary to carry out the intent
of this agreement. If any Obligor fails or refuses to make payment on any
Collateral when due, Agent is authorized, in its sole discretion, either in its
own name or in the name of Assignor, to take such action as Agent shall deem
appropriate for the collection of any such amounts. Regardless of any other
provision hereof, however, Agent shall never be liable for its failure to
collect, or for its failure to exercise diligence in the collection of, any
amounts owed with respect to Collateral, nor shall it be under any duty whatever
to anyone except Assignor to account for funds that it shall actually receive
hereunder. Without limiting the generality of the foregoing, Agent shall have no
responsibility for ascertaining any maturities, calls, conversions, exchanges,
offers, tenders or similar matters relating to any Collateral, or for informing
Assignor with respect to any of such matters (irrespective of whether Agent
actually has, or may be deemed to have, knowledge thereof). The receipt of Agent
to any Obligor shall be a full and complete release, discharge and acquittance
to such Obligor, to the extent of any amount so paid to Lenders. The rights
granted Agent under this subparagraph may be exercised at any time, whether or
not a Default has occurred and is continuing.
(c) Record Ownership of Partnership Interests. Whether or not
a Default has occurred and is continuing and to the extent applicable, Agent at
any time may have the Collateral registered in its name, or in the name of its
nominee or nominees, as assignee; and Agent shall execute and deliver to
Assignor all such proxies, powers of attorney, dividend coupons or orders and
other documents as Assignor may reasonably request for the purpose of enabling
Assignor to exercise the voting rights and powers which it is entitled to
exercise hereunder and to receive the distributions and other payments which it
is authorized to receive and retain hereunder. Nothing in this Assignment shall
prohibit the payment of cash distributions by the Partnership if such
distribution is permitted under the Credit Agreement.
(d) Partnership Action. So long as no Default has occurred,
Assignor shall be entitled to exercise all rights pertaining to the Collateral.
After the occurrence and during the continuance of a
5
<PAGE> 6
Default, the right to vote or take action as a result of owning the Collateral
shall be vested exclusively in Agent. To this end, Assignor irrevocably appoints
Agent the proxy and attorney-in-fact of Assignor, with full power of
substitution, to vote and to act with respect to the Collateral, subject to the
understanding that such proxy may not be exercised unless a Default has occurred
and is continuing. The proxy herein granted is coupled with an interest, is
irrevocable, and shall continue until the Obligation has been paid and performed
in full.
(e) Certain Proceeds. Any and all distributions in property
made on or in respect of the Collateral, and any proceeds of the Collateral,
whether such distributions, or proceeds result from a subdivision, combination
or reclassification of the partnership interests of Assignor or as a result of
any merger, consolidation, acquisition or other exchange of assets to which
Assignor may be a party, or otherwise, shall be part of the Collateral
hereunder, shall, if received by Assignor, be held in trust for the benefit of
Agent, and shall forthwith be delivered to Agent (accompanied by proper
instruments of assignment and/or stock and/or bond powers executed by Assignor
in accordance with Agent's instructions) to be held subject to the terms hereof.
Any cash proceeds of Collateral which come into the possession of Agent may, at
Agent's option, be applied in whole or in part to the Obligation (to the extent
then due), be released in whole or in part to or on the written instructions of
Assignor for any general or specific purpose, or be retained in whole or in part
by Lenders as additional Collateral.
10. Miscellaneous.
(a) Reference to Miscellaneous Provisions. This Assignment is
one of the "Loan Documents" referred to in the Credit Agreement, and,
therefore, this Assignment is subject to the applicable provisions of
SECTION 14 of the Credit Agreement, all of which are incorporated in
this Assignment by reference the same as if set forth in this
Assignment verbatim.
(b) Term. Upon full and final payment of the Obligation and
final termination of the Lenders' commitment to lend under the Credit
Agreement without Lenders' having exercised their rights under this
Assignment, this Assignment shall terminate; provided that no Obligor
on any of the Collateral shall be obligated to inquire as to the
termination of this Assignment, but shall be fully protected in making
payment directly to Lenders, which payment shall be promptly paid over
to Assignor after termination of this Assignment.
(c) Notice. Any notice or communication required or permitted
under this Assignment must be given as prescribed in the Credit
Agreement.
(d) Governing Law. THIS ASSIGNMENT SHALL BE CONSTRUED--AND ITS
PERFORMANCE ENFORCED--UNDER TEXAS LAW.
(e) Credit Agreement. In the event of any conflict or
inconsistency between the terms hereof and the Credit Agreement, the
terms of the Credit Agreement shall be controlling.
6
<PAGE> 7
EXECUTED as of the date set forth in the preamble.
NCI OPERATING CORP.,
as Assignor
By: /s/ Robert J. Medlock
-----------------------------------------------
Name: Robert J. Medlock
---------------------------------------------
Title: Vice President and Chief Financial Officer
--------------------------------------------
NATIONSBANK OF TEXAS, N.A.,
as Administrative Agent and a Lender
By: /s/ Richard L. Nichols, Jr.
-----------------------------------------------
Name: Richard L. Nichols, Jr.
---------------------------------------------
Title: Vice President
--------------------------------------------
7
<PAGE> 1
EXHIBIT 4.23
ASSIGNMENT OF PARTNERSHIP INTERESTS
THIS ASSIGNMENT OF PARTNERSHIP INTERESTS (as amended, this
"ASSIGNMENT") is executed as of May 1, 1998, by the undersigned ("ASSIGNOR") for
the benefit of NationsBank of Texas, N.A.("AGENT"), as Administrative Agent for
itself and for the Lenders (collectively, "LENDERS") now or hereafter party to
the Credit Agreement (as defined below).
RECITALS
A. NCI Building Systems, Inc., a Delaware corporation ("BORROWER"),
Agent and Lenders and other parties named therein have executed a Credit
Agreement dated March 25, 1998 (as amended, supplemented or restated, the
"CREDIT AGREEMENT"), together with certain other Loan Documents.
B. NCI Holding Corp., a Delaware corporation and a wholly-owned
subsidiary of Borrower is a limited general partner of (i) NCI Building Systems,
L.P., a Texas limited partnership, (ii) A&S Building Systems, L.P., a Texas
limited partnership, (iii) MBCI Operating, L.P., a Texas limited partnership and
(iv) Metal Coaters Operating, L.P., a Texas limited partnership.
C. It is expressly understood among Assignor, Borrower and Lenders that
the execution and delivery of this Assignment is a condition precedent to
Lenders' obligations to extend credit under the Credit Agreement and Agent's
obligation to issue LCs under the Credit Agreement.
D. Assignor's board of directors has determined that the Assignor may
benefit directly or indirectly from Borrower's execution of the Credit Agreement
as the Assignor may be the indirect recipient of funds advanced by Lenders to
Borrower under the Credit Agreement or the account party of LCs issued by Agent
pursuant to the Credit Agreement, and as such the value of the consideration
received and to be received by it under the Loan Documents is reasonably worth
at least as much as its liability and obligation under this Agreement.
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties agree as follows:
1. Certain Definitions. UNLESS OTHERWISE DEFINED IN THIS ASSIGNMENT,
ANY CAPITALIZED TERM USED IN THIS ASSIGNMENT HAS THE MEANING GIVEN THAT TERM IN
THE CREDIT AGREEMENT OR IN THE UCC. If the definition given a term in the Credit
Agreement conflicts with the definition given that term in the UCC, the Credit
Agreement definition shall control to the extent allowed by Law. If the
definition given a term in Chapter 9 of the UCC conflicts with the definition
given that term in any other chapter of the UCC, the Chapter 9 definition shall
control. As used in this Assignment:
"ASSIGNMENT" means this Assignment together with all schedules
and annexes attached to this Assignment, and all amendments and modifications to
this Assignment, the schedules and exhibits.
"ASSIGNOR" includes, without limitation, Assignor as a
debtor-in-possession, and any receiver, trustee, liquidator, conservator,
custodian, or similar party hereafter appointed for Assignor or all
<PAGE> 2
or substantially all of Assignor's assets pursuant to any liquidation,
conservatorship, bankruptcy, moratorium, rearrangement, receivership,
insolvency, reorganization, or similar Law from time to time in effect affecting
the rights of creditors generally.
"COLLATERAL" means Assignors's right, title and interest in
and to the Partnership Interests, including after acquired Collateral and
proceeds of the Collateral.
"CREDIT AGREEMENT" is defined in the Recitals.
"DEFAULT" means a "Default" under and as defined in the Credit
Agreement.
"OBLIGATION" means the "Obligation"under and as defined in the
Credit Agreement.
"PARTNERSHIP INTERESTS" means all partnership interests, now
or hereafter owned by Assignor in any Subsidiary and all distributions, cash,
instruments and other property from time-to-time received, receivable or
otherwise distributed in respect of or in exchange of any Partnership Interest.
"SECURITY INTEREST" means the security interests granted and
the transfers, pledges and collateral assignments made under SECTION 3 of this
Assignment.
"UCC" means (a) generally, and with respect to the definitions
above, the Uniform Commercial Code, as adopted in Texas, as amended from time to
time, and (b) with respect to rights in states other than Texas, the Uniform
Commercial Code as enacted in the applicable state, as amended from time to
time.
2. Credit Agreement. This Assignment is being executed and delivered
pursuant to the terms and conditions of the Credit Agreement. Each Security
Interest is a "Lien" referred to in the Credit Agreement.
3. Security Interest. In order to secure the full and complete payment
and performance of the Obligation when due, Assignor hereby grants to Agent a
security interest in, and pledges and assigns to Agent: (a) the Collateral, and
(b) all present and future accounts, contract rights, general intangibles,
chattel paper, documents, instruments, cash and noncash proceeds and other
rights arising from or by virtue of, or from the voluntary or involuntary sale
or other disposition of, or collections with respect to, or claims against any
other person with respect to, the Collateral. Such security interest is granted,
and such pledge and assignment is made, as security only and shall not subject
Lenders to, or transfer or in any way affect or modify, any obligation of
Assignor with respect to any of the Collateral or any transaction involving or
giving rise thereto.
4. No Assumption or Modification. The Security Interest is given to
secure the prompt, unconditional and complete payment and performance of the
Obligation when due, and is given as security only. Agent does not assume and
shall not be liable for any of Assignor's liabilities, duties, or obligations
under or in connection with the Collateral. Agent's acceptance of this
Assignment, or its taking any action in carrying out this Assignment, does not
constitute Agent's approval of the Collateral or Agent's assumption
2
<PAGE> 3
of any obligation under or in connection with the Collateral. This Assignment
does not affect or modify Assignor's obligations with respect to the Collateral.
5. Fraudulent Conveyance. Notwithstanding anything contained in this
Assignment to the contrary, Assignor agrees that if, but for the application of
this SECTION 5 the Obligation or any Security Interest would constitute a
preferential transfer under 11 U.S.C. Section 547, a fraudulent conveyance under
11 U.S.C. Section 548 (or any successor section) or a fraudulent conveyance or
transfer under any state fraudulent conveyance or fraudulent transfer Law or
similar Law in effect from time to time (each a "FRAUDULENT CONVEYANCE"), then
the Obligation and each affected Security Interest will be enforceable against
Assignor to the maximum extent possible without causing the Obligation or any
Security Interest to be a Fraudulent Conveyance, and shall be deemed to have
been automatically amended to carry out the intent of this SECTION 5.
6. Representations and Warranties. To the extent applicable, Assignor
hereby adopts and restates each of the representations and warranties in the
Credit Agreement and further represents and warrants to Lenders as follows:
(a) Except as provided in the relevant partnership agreement,
the assignment, pledge, or transfer of the Partnership Interests is not subject
to any restrictions other than restrictions imposed by applicable securities and
partnership laws.
(b) Except as provided in the relevant partnership agreement,
Assignor owns the Collateral free and clear of all liens.
(c) The information contained in item B in the recitals above
is true and accurate and the Collateral is accurately described in this
Assignment.
7. Covenants. Assignor shall:
(a) Promptly notify Agent of any change in any fact or
circumstances represented or warranted by Assignor with respect to any of the
Collateral.
(b) Promptly notify Agent of any additional partnership
interest that it acquires or owns in any domestic partnership that becomes a
Subsidiary subsequent to the execution of this Assignment.
(c) Promptly notify Agent of any claim, action or proceeding
affecting the security interest granted and the pledge and assignment made under
PARAGRAPH 3 or title to all or any of the Collateral and, at the request of
Lenders, appear in and defend, at Assignor's expense, any such action or
proceeding.
(d) Except as permitted under the Credit Agreement, not sell,
assign or otherwise dispose of any Collateral.
(e) Not create, incur or suffer to exist any other lien upon
any of the Collateral.
3
<PAGE> 4
(f) At Assignor's expense and Agent's request, file or cause
to be filed such applications and take such other actions as Agent may request
to obtain the consent or approval of any tribunal to Agent's rights hereunder,
including, without limitation, the right to sell all the Collateral upon a
Default (as defined in the Credit Agreement) without additional consent or
approval from such tribunal (and, because Assignor agrees that Agent's remedies
at law for failure of Assignor to comply with this provision would be inadequate
and that such failure would not be adequately compensable in damages, Assignor
agrees that its covenants in this provision may be specifically enforced).
(g) From time to time promptly execute and deliver to Agent
all such other assignments, certificates, supplemental documents, and financing
statements (if appropriate), and do all other acts or things as Agent may
reasonably request in order to more fully create, evidence, perfect, continue
and preserve the priority of the Security Interest.
8. Default; Remedies. Should a Default occur and be continuing, Agent
may, at its election, exercise any and all rights available to a secured party
under the UCC, in addition to any and all other rights afforded by the Loan
Documents, at law, in equity, or otherwise, or applying by appropriate judicial
proceedings for appointment of a receiver for all or part of the Collateral (and
Assignor hereby consents to any such appointment).
(a) Notice. Reasonable notification of the time and place of
any public sale of the Collateral, or reasonable notification of the time after
which any private sale or other intended disposition of the Collateral is to be
made, shall be sent to Assignor and to any other person entitled to notice under
the UCC; provided that if any of the Collateral threatens to decline speedily in
value or is of the type customarily sold on a recognized market, Agent may sell
or otherwise dispose of the Collateral without notification, advertisement, or
other notice of any kind. It is agreed that notice sent or given not less than
five Business Days prior to the taking of the action to which the notice relates
is reasonable for the purposes of this subparagraph.
(b) Sales of Partnership Interests. In connection with the
sale of the Collateral, Agent is authorized, but not obligated, to limit
prospective purchasers to the extent deemed necessary or desirable by Agent to
render such sale exempt from the registration requirements of the Securities Act
of 1933, as amended, and any applicable state securities laws, and no sale so
made in good faith by Lenders shall be deemed not to be "commercially
reasonable" because so made.
(c) Application of Proceeds. Agent shall apply the proceeds of
any sale or other disposition of the Collateral under this PARAGRAPH 8 in the
following order: First, to the payment of all its expenses incurred in preparing
any of the Collateral for sale(s) or other disposition(s), in arranging for such
sale(s) or other disposition(s), and in actually selling or disposing of the
same (all of which are part of the Obligation); second, toward repayment of
amounts expended by Agent under Paragraph 8; third, toward payment of the
balance of the Obligation in accordance with the Credit Agreement. Any surplus
remaining shall be delivered to Assignor or as a court of competent jurisdiction
may direct. If the proceeds are insufficient to pay the Obligation in full,
Borrower, Assignor and other Guarantors shall remain jointly and severally
liable for any deficiency.
4
<PAGE> 5
9. Other Rights of Agent and Lenders.
(a) Performance. In the event Assignor shall fail to perform
any of its obligations hereunder with respect to the Collateral, then Agent may,
at its option, but without being required to do so, take such action which
Assignor is required, but has failed or refused, to take. Any sum which may be
expended or paid by Agent under this subparagraph (including, without
limitation, court costs and attorneys' fees) shall bear interest from the dates
of expenditure or payment at the Maximum Rate (as defined in the Credit
Agreement) until paid and, together with such interest, shall be payable by
Assignor upon demand and shall be part of the Obligation.
(b) Collection. Upon notice from Agent, each person or entity
obligated with respect to any of the Collateral, whether as an issuer, account
debtor or otherwise (an "OBLIGOR") is hereby authorized and directed by Assignor
to make payments on any of the Collateral (including, without limitation,
dividends and other distributions) directly to Agent, regardless of whether
Assignor was previously making collections thereon. Subject to Subparagraph (e)
hereof, until such notice is given, Assignor is authorized to retain and expend
all payments made on Collateral. Agent shall have the right in its own name or
in the name of Assignor to compromise or extend time of payment with respect to
all or any portion of the Collateral for such amounts and upon such terms as
Agent may determine; to demand, collect, receive, receipt for, sue for, compound
and give acquittances for any and all amounts due or to become due with respect
to Collateral; to take control of cash and other proceeds of any Collateral; to
endorse the name of Assignor on any notes, acceptances, checks, drafts, money
orders or other evidences of payment on Collateral that may come into the
possession of Agent; to send requests for verification of obligations to any
Obligor; and to do all other acts and things necessary to carry out the intent
of this agreement. If any Obligor fails or refuses to make payment on any
Collateral when due, Agent is authorized, in its sole discretion, either in its
own name or in the name of Assignor, to take such action as Agent shall deem
appropriate for the collection of any such amounts. Regardless of any other
provision hereof, however, Agent shall never be liable for its failure to
collect, or for its failure to exercise diligence in the collection of, any
amounts owed with respect to Collateral, nor shall it be under any duty whatever
to anyone except Assignor to account for funds that it shall actually receive
hereunder. Without limiting the generality of the foregoing, Agent shall have no
responsibility for ascertaining any maturities, calls, conversions, exchanges,
offers, tenders or similar matters relating to any Collateral, or for informing
Assignor with respect to any of such matters (irrespective of whether Agent
actually has, or may be deemed to have, knowledge thereof). The receipt of Agent
to any Obligor shall be a full and complete release, discharge and acquittance
to such Obligor, to the extent of any amount so paid to Lenders. The rights
granted Agent under this subparagraph may be exercised at any time, whether or
not a Default has occurred and is continuing.
(c) Record Ownership of Partnership Interests. Whether or not
a Default has occurred and is continuing and to the extent applicable, Agent at
any time may have the Collateral registered in its name, or in the name of its
nominee or nominees, as assignee; and Agent shall execute and deliver to
Assignor all such proxies, powers of attorney, dividend coupons or orders and
other documents as Assignor may reasonably request for the purpose of enabling
Assignor to exercise the voting rights and powers which it is entitled to
exercise hereunder and to receive the distributions and other payments which it
is authorized to receive and retain hereunder. Nothing in this Assignment shall
prohibit the payment of cash distributions by the Partnership if such
distribution is permitted under the Credit Agreement.
(d) Partnership Action. So long as no Default has occurred,
Assignor shall be entitled to exercise all rights pertaining to the Collateral.
After the occurrence and during the continuance of a
5
<PAGE> 6
Default, the right to vote or take action as a result of owning the Collateral
shall be vested exclusively in Agent. To this end, Assignor irrevocably appoints
Agent the proxy and attorney-in-fact of Assignor, with full power of
substitution, to vote and to act with respect to the Collateral, subject to the
understanding that such proxy may not be exercised unless a Default has occurred
and is continuing. The proxy herein granted is coupled with an interest, is
irrevocable, and shall continue until the Obligation has been paid and performed
in full.
(e) Certain Proceeds. Any and all distributions in property
made on or in respect of the Collateral, and any proceeds of the Collateral,
whether such distributions, or proceeds result from a subdivision, combination
or reclassification of the partnership interests of Assignor or as a result of
any merger, consolidation, acquisition or other exchange of assets to which
Assignor may be a party, or otherwise, shall be part of the Collateral
hereunder, shall, if received by Assignor, be held in trust for the benefit of
Agent, and shall forthwith be delivered to Agent (accompanied by proper
instruments of assignment and/or stock and/or bond powers executed by Assignor
in accordance with Agent's instructions) to be held subject to the terms hereof.
Any cash proceeds of Collateral which come into the possession of Agent may, at
Agent's option, be applied in whole or in part to the Obligation (to the extent
then due), be released in whole or in part to or on the written instructions of
Assignor for any general or specific purpose, or be retained in whole or in part
by Lenders as additional Collateral.
10. Miscellaneous.
(a) Reference to Miscellaneous Provisions. This Assignment is
one of the "Loan Documents" referred to in the Credit Agreement, and,
therefore, this Assignment is subject to the applicable provisions of
SECTION 14 of the Credit Agreement, all of which are incorporated in
this Assignment by reference the same as if set forth in this
Assignment verbatim.
(b) Term. Upon full and final payment of the Obligation and
final termination of the Lenders' commitment to lend under the Credit
Agreement without Lenders' having exercised their rights under this
Assignment, this Assignment shall terminate; provided that no Obligor
on any of the Collateral shall be obligated to inquire as to the
termination of this Assignment, but shall be fully protected in making
payment directly to Lenders, which payment shall be promptly paid over
to Assignor after termination of this Assignment.
(c) Notice. Any notice or communication required or permitted
under this Assignment must be given as prescribed in the Credit
Agreement.
(d) Governing Law. THIS ASSIGNMENT SHALL BE CONSTRUED--AND ITS
PERFORMANCE ENFORCED--UNDER TEXAS LAW.
(e) Credit Agreement. In the event of any conflict or
inconsistency between the terms hereof and the Credit Agreement, the
terms of the Credit Agreement shall be controlling.
6
<PAGE> 7
EXECUTED as of the date set forth in the preamble.
NCI HOLDING CORP.,
as Assignor
By: /s/ Robert J. Medlock
-----------------------------------------------
Name: Robert J. Medlock
---------------------------------------------
Title: Vice President and Chief Financial Officer
--------------------------------------------
NATIONSBANK OF TEXAS, N.A.,
as Administrative Agent and a Lender
By: /s/ Richard L. Nichols, Jr.
-----------------------------------------------
Name: Richard L. Nichols, Jr.
---------------------------------------------
Title: Vice President
--------------------------------------------
7
<PAGE> 1
EXHIBIT 4.24
ASSIGNMENT OF PARTNERSHIP INTERESTS
THIS ASSIGNMENT OF PARTNERSHIP INTERESTS (as amended, this
"ASSIGNMENT") is executed as of May 1, 1998, by the undersigned ("ASSIGNOR") for
the benefit of NationsBank of Texas, N.A.("AGENT"), as Administrative Agent for
itself and for the Lenders (collectively, "LENDERS") now or hereafter party to
the Credit Agreement (as defined below).
RECITALS
A. NCI Building Systems, Inc., a Delaware corporation ("BORROWER"),
Agent and Lenders and other parties named therein have executed a Credit
Agreement dated March 25, 1998 (as amended, supplemented or restated, the
"CREDIT AGREEMENT"), together with certain other Loan Documents.
B. Metal Building Components Holding, Inc., a Delaware corporation and
a wholly-owned subsidiary of Borrower is a limited general partner of MBCI
Operating, L.P., a Texas limited partnership.
C. It is expressly understood among Assignor, Borrower and Lenders that
the execution and delivery of this Assignment is a condition precedent to
Lenders' obligations to extend credit under the Credit Agreement and Agent's
obligation to issue LCs under the Credit Agreement.
D. Assignor's board of directors has determined that the Assignor may
benefit directly or indirectly from Borrower's execution of the Credit Agreement
as the Assignor may be the indirect recipient of funds advanced by Lenders to
Borrower under the Credit Agreement or the account party of LCs issued by Agent
pursuant to the Credit Agreement, and as such the value of the consideration
received and to be received by it under the Loan Documents is reasonably worth
at least as much as its liability and obligation under this Agreement.
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties agree as follows:
1. Certain Definitions. UNLESS OTHERWISE DEFINED IN THIS ASSIGNMENT,
ANY CAPITALIZED TERM USED IN THIS ASSIGNMENT HAS THE MEANING GIVEN THAT TERM IN
THE CREDIT AGREEMENT OR IN THE UCC. If the definition given a term in the Credit
Agreement conflicts with the definition given that term in the UCC, the Credit
Agreement definition shall control to the extent allowed by Law. If the
definition given a term in Chapter 9 of the UCC conflicts with the definition
given that term in any other chapter of the UCC, the Chapter 9 definition shall
control. As used in this Assignment:
"ASSIGNMENT" means this Assignment together with all schedules
and annexes attached to this Assignment, and all amendments and modifications to
this Assignment, the schedules and exhibits.
"ASSIGNOR" includes, without limitation, Assignor as a
debtor-in-possession, and any receiver, trustee, liquidator, conservator,
custodian, or similar party hereafter appointed for Assignor or all or
substantially all of Assignor's assets pursuant to any liquidation,
conservatorship, bankruptcy, moratorium,
<PAGE> 2
rearrangement, receivership, insolvency, reorganization, or similar Law from
time to time in effect affecting the rights of creditors generally.
"COLLATERAL" means Assignors's right, title and interest in
and to the Partnership Interests, including after acquired Collateral and
proceeds of the Collateral.
"CREDIT AGREEMENT" is defined in the Recitals.
"DEFAULT" means a "Default" under and as defined in the Credit
Agreement.
"OBLIGATION" means the "Obligation"under and as defined in the
Credit Agreement.
"PARTNERSHIP INTERESTS" means all partnership interests, now
or hereafter owned by Assignor in any Subsidiary and all distributions, cash,
instruments and other property from time-to-time received, receivable or
otherwise distributed in respect of or in exchange of any Partnership Interest.
"SECURITY INTEREST" means the security interests granted and
the transfers, pledges and collateral assignments made under SECTION 3 of this
Assignment.
"UCC" means (a) generally, and with respect to the definitions
above, the Uniform Commercial Code, as adopted in Texas, as amended from time to
time, and (b) with respect to rights in states other than Texas, the Uniform
Commercial Code as enacted in the applicable state, as amended from time to
time.
2. Credit Agreement. This Assignment is being executed and delivered
pursuant to the terms and conditions of the Credit Agreement. Each Security
Interest is a "Lien" referred to in the Credit Agreement.
3. Security Interest. In order to secure the full and complete payment
and performance of the Obligation when due, Assignor hereby grants to Agent a
security interest in, and pledges and assigns to Agent: (a) the Collateral, and
(b) all present and future accounts, contract rights, general intangibles,
chattel paper, documents, instruments, cash and noncash proceeds and other
rights arising from or by virtue of, or from the voluntary or involuntary sale
or other disposition of, or collections with respect to, or claims against any
other person with respect to, the Collateral. Such security interest is granted,
and such pledge and assignment is made, as security only and shall not subject
Lenders to, or transfer or in any way affect or modify, any obligation of
Assignor with respect to any of the Collateral or any transaction involving or
giving rise thereto.
4. No Assumption or Modification. The Security Interest is given to
secure the prompt, unconditional and complete payment and performance of the
Obligation when due, and is given as security only. Agent does not assume and
shall not be liable for any of Assignor's liabilities, duties, or obligations
under or in connection with the Collateral. Agent's acceptance of this
Assignment, or its taking any action in carrying out this Assignment, does not
constitute Agent's approval of the Collateral or Agent's assumption of any
obligation under or in connection with the Collateral. This Assignment does not
affect or modify Assignor's obligations with respect to the Collateral.
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5. Fraudulent Conveyance. Notwithstanding anything contained in this
Assignment to the contrary, Assignor agrees that if, but for the application of
this SECTION 5 the Obligation or any Security Interest would constitute a
preferential transfer under 11 U.S.C. Section 547, a fraudulent conveyance under
11 U.S.C. Section 548 (or any successor section) or a fraudulent conveyance or
transfer under any state fraudulent conveyance or fraudulent transfer Law or
similar Law in effect from time to time (each a "FRAUDULENT CONVEYANCE"), then
the Obligation and each affected Security Interest will be enforceable against
Assignor to the maximum extent possible without causing the Obligation or any
Security Interest to be a Fraudulent Conveyance, and shall be deemed to have
been automatically amended to carry out the intent of this SECTION 5.
6. Representations and Warranties. To the extent applicable, Assignor
hereby adopts and restates each of the representations and warranties in the
Credit Agreement and further represents and warrants to Lenders as follows:
(a) Except as provided in the relevant partnership agreement,
the assignment, pledge, or transfer of the Partnership Interests is not subject
to any restrictions other than restrictions imposed by applicable securities and
partnership laws.
(b) Except as provided in the relevant partnership agreement,
Assignor owns the Collateral free and clear of all liens.
(c) The information contained in item B in the recitals above
is true and accurate and the Collateral is accurately described in this
Assignment.
7. Covenants. Assignor shall:
(a) Promptly notify Agent of any change in any fact or
circumstances represented or warranted by Assignor with respect to any of the
Collateral.
(b) Promptly notify Agent of any additional partnership
interest that it acquires or owns in any domestic partnership that becomes a
Subsidiary subsequent to the execution of this Assignment.
(c) Promptly notify Agent of any claim, action or proceeding
affecting the security interest granted and the pledge and assignment made under
PARAGRAPH 3 or title to all or any of the Collateral and, at the request of
Lenders, appear in and defend, at Assignor's expense, any such action or
proceeding.
(d) Except as permitted under the Credit Agreement, not sell,
assign or otherwise dispose of any Collateral.
(e) Not create, incur or suffer to exist any other lien upon
any of the Collateral.
(f) At Assignor's expense and Agent's request, file or cause
to be filed such applications and take such other actions as Agent may request
to obtain the consent or approval of any tribunal to Agent's rights hereunder,
including, without limitation, the right to sell all the Collateral upon a
Default (as defined in the Credit Agreement) without additional consent or
approval from such tribunal (and, because Assignor
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agrees that Agent's remedies at law for failure of Assignor to comply with this
provision would be inadequate and that such failure would not be adequately
compensable in damages, Assignor agrees that its covenants in this provision may
be specifically enforced).
(g) From time to time promptly execute and deliver to Agent
all such other assignments, certificates, supplemental documents, and financing
statements (if appropriate), and do all other acts or things as Agent may
reasonably request in order to more fully create, evidence, perfect, continue
and preserve the priority of the Security Interest.
8. Default; Remedies. Should a Default occur and be continuing, Agent
may, at its election, exercise any and all rights available to a secured party
under the UCC, in addition to any and all other rights afforded by the Loan
Documents, at law, in equity, or otherwise, or applying by appropriate judicial
proceedings for appointment of a receiver for all or part of the Collateral (and
Assignor hereby consents to any such appointment).
(a) Notice. Reasonable notification of the time and place of
any public sale of the Collateral, or reasonable notification of the time after
which any private sale or other intended disposition of the Collateral is to be
made, shall be sent to Assignor and to any other person entitled to notice under
the UCC; provided that if any of the Collateral threatens to decline speedily in
value or is of the type customarily sold on a recognized market, Agent may sell
or otherwise dispose of the Collateral without notification, advertisement, or
other notice of any kind. It is agreed that notice sent or given not less than
five Business Days prior to the taking of the action to which the notice relates
is reasonable for the purposes of this subparagraph.
(b) Sales of Partnership Interests. In connection with the
sale of the Collateral, Agent is authorized, but not obligated, to limit
prospective purchasers to the extent deemed necessary or desirable by Agent to
render such sale exempt from the registration requirements of the Securities Act
of 1933, as amended, and any applicable state securities laws, and no sale so
made in good faith by Lenders shall be deemed not to be "commercially
reasonable" because so made.
(c) Application of Proceeds. Agent shall apply the proceeds of
any sale or other disposition of the Collateral under this PARAGRAPH 8 in the
following order: First, to the payment of all its expenses incurred in preparing
any of the Collateral for sale(s) or other disposition(s), in arranging for such
sale(s) or other disposition(s), and in actually selling or disposing of the
same (all of which are part of the Obligation); second, toward repayment of
amounts expended by Agent under Paragraph 8; third, toward payment of the
balance of the Obligation in accordance with the Credit Agreement. Any surplus
remaining shall be delivered to Assignor or as a court of competent jurisdiction
may direct. If the proceeds are insufficient to pay the Obligation in full,
Borrower, Assignor and other Guarantors shall remain jointly and severally
liable for any deficiency.
9. Other Rights of Agent and Lenders.
(a) Performance. In the event Assignor shall fail to perform
any of its obligations hereunder with respect to the Collateral, then Agent may,
at its option, but without being required to do so, take such action which
Assignor is required, but has failed or refused, to take. Any sum which may be
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expended or paid by Agent under this subparagraph (including, without
limitation, court costs and attorneys' fees) shall bear interest from the dates
of expenditure or payment at the Maximum Rate (as defined in the Credit
Agreement) until paid and, together with such interest, shall be payable by
Assignor upon demand and shall be part of the Obligation.
(b) Collection. Upon notice from Agent, each person or entity
obligated with respect to any of the Collateral, whether as an issuer, account
debtor or otherwise (an "OBLIGOR") is hereby authorized and directed by Assignor
to make payments on any of the Collateral (including, without limitation,
dividends and other distributions) directly to Agent, regardless of whether
Assignor was previously making collections thereon. Subject to Subparagraph (e)
hereof, until such notice is given, Assignor is authorized to retain and expend
all payments made on Collateral. Agent shall have the right in its own name or
in the name of Assignor to compromise or extend time of payment with respect to
all or any portion of the Collateral for such amounts and upon such terms as
Agent may determine; to demand, collect, receive, receipt for, sue for, compound
and give acquittances for any and all amounts due or to become due with respect
to Collateral; to take control of cash and other proceeds of any Collateral; to
endorse the name of Assignor on any notes, acceptances, checks, drafts, money
orders or other evidences of payment on Collateral that may come into the
possession of Agent; to send requests for verification of obligations to any
Obligor; and to do all other acts and things necessary to carry out the intent
of this agreement. If any Obligor fails or refuses to make payment on any
Collateral when due, Agent is authorized, in its sole discretion, either in its
own name or in the name of Assignor, to take such action as Agent shall deem
appropriate for the collection of any such amounts. Regardless of any other
provision hereof, however, Agent shall never be liable for its failure to
collect, or for its failure to exercise diligence in the collection of, any
amounts owed with respect to Collateral, nor shall it be under any duty whatever
to anyone except Assignor to account for funds that it shall actually receive
hereunder. Without limiting the generality of the foregoing, Agent shall have no
responsibility for ascertaining any maturities, calls, conversions, exchanges,
offers, tenders or similar matters relating to any Collateral, or for informing
Assignor with respect to any of such matters (irrespective of whether Agent
actually has, or may be deemed to have, knowledge thereof). The receipt of Agent
to any Obligor shall be a full and complete release, discharge and acquittance
to such Obligor, to the extent of any amount so paid to Lenders. The rights
granted Agent under this subparagraph may be exercised at any time, whether or
not a Default has occurred and is continuing.
(c) Record Ownership of Partnership Interests. Whether or not
a Default has occurred and is continuing and to the extent applicable, Agent at
any time may have the Collateral registered in its name, or in the name of its
nominee or nominees, as assignee; and Agent shall execute and deliver to
Assignor all such proxies, powers of attorney, dividend coupons or orders and
other documents as Assignor may reasonably request for the purpose of enabling
Assignor to exercise the voting rights and powers which it is entitled to
exercise hereunder and to receive the distributions and other payments which it
is authorized to receive and retain hereunder. Nothing in this Assignment shall
prohibit the payment of cash distributions by the Partnership if such
distribution is permitted under the Credit Agreement.
(d) Partnership Action. So long as no Default has occurred,
Assignor shall be entitled to exercise all rights pertaining to the Collateral.
After the occurrence and during the continuance of a Default, the right to vote
or take action as a result of owning the Collateral shall be vested exclusively
in Agent. To this end, Assignor irrevocably appoints Agent the proxy and
attorney-in-fact of Assignor, with full power of substitution, to vote and to
act with respect to the Collateral, subject to the understanding that
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such proxy may not be exercised unless a Default has occurred and is continuing.
The proxy herein granted is coupled with an interest, is irrevocable, and shall
continue until the Obligation has been paid and performed in full.
(e) Certain Proceeds. Any and all distributions in property
made on or in respect of the Collateral, and any proceeds of the Collateral,
whether such distributions, or proceeds result from a subdivision, combination
or reclassification of the partnership interests of Assignor or as a result of
any merger, consolidation, acquisition or other exchange of assets to which
Assignor may be a party, or otherwise, shall be part of the Collateral
hereunder, shall, if received by Assignor, be held in trust for the benefit of
Agent, and shall forthwith be delivered to Agent (accompanied by proper
instruments of assignment and/or stock and/or bond powers executed by Assignor
in accordance with Agent's instructions) to be held subject to the terms hereof.
Any cash proceeds of Collateral which come into the possession of Agent may, at
Agent's option, be applied in whole or in part to the Obligation (to the extent
then due), be released in whole or in part to or on the written instructions of
Assignor for any general or specific purpose, or be retained in whole or in part
by Lenders as additional Collateral.
10. Miscellaneous.
(a) Reference to Miscellaneous Provisions. This Assignment is
one of the "Loan Documents" referred to in the Credit Agreement, and,
therefore, this Assignment is subject to the applicable provisions of
SECTION 14 of the Credit Agreement, all of which are incorporated in
this Assignment by reference the same as if set forth in this
Assignment verbatim.
(b) Term. Upon full and final payment of the Obligation and
final termination of the Lenders' commitment to lend under the Credit
Agreement without Lenders' having exercised their rights under this
Assignment, this Assignment shall terminate; provided that no Obligor
on any of the Collateral shall be obligated to inquire as to the
termination of this Assignment, but shall be fully protected in making
payment directly to Lenders, which payment shall be promptly paid over
to Assignor after termination of this Assignment.
(c) Notice. Any notice or communication required or permitted
under this Assignment must be given as prescribed in the Credit
Agreement.
(d) Governing Law. THIS ASSIGNMENT SHALL BE CONSTRUED--AND ITS
PERFORMANCE ENFORCED--UNDER TEXAS LAW.
(e) Credit Agreement. In the event of any conflict or
inconsistency between the terms hereof and the Credit Agreement, the
terms of the Credit Agreement shall be controlling.
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EXECUTED as of the date set forth in the preamble.
METAL BUILDING COMPONENTS HOLDING,
INC., as Assignor
By: /s/ Robert J. Medlock
-----------------------------------------------
Name: Robert J. Medlock
---------------------------------------------
Title: Vice President and Chief Financial Officer
--------------------------------------------
NATIONSBANK OF TEXAS, N.A.,
as Administrative Agent and a Lender
By: /s/ Richard L. Nichols, Jr.
-----------------------------------------------
Name: Richard L. Nichols, Jr.
---------------------------------------------
Title: Vice President
--------------------------------------------
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EXHIBIT 4.25
ASSIGNMENT OF PARTNERSHIP INTERESTS
THIS ASSIGNMENT OF PARTNERSHIP INTERESTS (as amended, this
"ASSIGNMENT") is executed as of May 1, 1998, by the undersigned ("ASSIGNOR") for
the benefit of NationsBank of Texas, N.A.("AGENT"), as Administrative Agent for
itself and for the Lenders (collectively, "LENDERS") now or hereafter party to
the Credit Agreement (as defined below).
RECITALS
A. NCI Building Systems, Inc., a Delaware corporation ("BORROWER"),
Agent and Lenders and other parties named therein have executed a Credit
Agreement dated March 25, 1998 (as amended, supplemented or restated, the
"CREDIT AGREEMENT"), together with certain other Loan Documents.
B. Metal Coaters Holding, Inc., a Delaware corporation and a
wholly-owned subsidiary of Borrower is a limited general partner of Metal
Coaters Operating, L.P., a Texas limited partnership.
C. It is expressly understood among Assignor, Borrower and Lenders that
the execution and delivery of this Assignment is a condition precedent to
Lenders' obligations to extend credit under the Credit Agreement and Agent's
obligation to issue LCs under the Credit Agreement.
D. Assignor's board of directors has determined that the Assignor may
benefit directly or indirectly from Borrower's execution of the Credit Agreement
as the Assignor may be the indirect recipient of funds advanced by Lenders to
Borrower under the Credit Agreement or the account party of LCs issued by Agent
pursuant to the Credit Agreement, and as such the value of the consideration
received and to be received by it under the Loan Documents is reasonably worth
at least as much as its liability and obligation under this Agreement.
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties agree as follows:
1. Certain Definitions. UNLESS OTHERWISE DEFINED IN THIS ASSIGNMENT,
ANY CAPITALIZED TERM USED IN THIS ASSIGNMENT HAS THE MEANING GIVEN THAT TERM IN
THE CREDIT AGREEMENT OR IN THE UCC. If the definition given a term in the Credit
Agreement conflicts with the definition given that term in the UCC, the Credit
Agreement definition shall control to the extent allowed by Law. If the
definition given a term in Chapter 9 of the UCC conflicts with the definition
given that term in any other chapter of the UCC, the Chapter 9 definition shall
control. As used in this Assignment:
"ASSIGNMENT" means this Assignment together with all schedules
and annexes attached to this Assignment, and all amendments and modifications to
this Assignment, the schedules and exhibits.
"ASSIGNOR" includes, without limitation, Assignor as a
debtor-in-possession, and any receiver, trustee, liquidator, conservator,
custodian, or similar party hereafter appointed for Assignor or all or
substantially all of Assignor's assets pursuant to any liquidation,
conservatorship, bankruptcy, moratorium,
<PAGE> 2
rearrangement, receivership, insolvency, reorganization, or similar Law from
time to time in effect affecting the rights of creditors generally.
"COLLATERAL" means Assignors's right, title and interest in
and to the Partnership Interests, including after acquired Collateral and
proceeds of the Collateral.
"CREDIT AGREEMENT" is defined in the Recitals.
"DEFAULT" means a "Default" under and as defined in the Credit
Agreement.
"OBLIGATION" means the "Obligation"under and as defined in the
Credit Agreement.
"PARTNERSHIP INTERESTS" means all partnership interests, now
or hereafter owned by Assignor in any Subsidiary and all distributions, cash,
instruments and other property from time-to-time received, receivable or
otherwise distributed in respect of or in exchange of any Partnership Interest.
"SECURITY INTEREST" means the security interests granted and
the transfers, pledges and collateral assignments made under SECTION 3 of this
Assignment.
"UCC" means (a) generally, and with respect to the definitions
above, the Uniform Commercial Code, as adopted in Texas, as amended from time to
time, and (b) with respect to rights in states other than Texas, the Uniform
Commercial Code as enacted in the applicable state, as amended from time to
time.
2. Credit Agreement. This Assignment is being executed and delivered
pursuant to the terms and conditions of the Credit Agreement. Each Security
Interest is a "Lien" referred to in the Credit Agreement.
3. Security Interest. In order to secure the full and complete payment
and performance of the Obligation when due, Assignor hereby grants to Agent a
security interest in, and pledges and assigns to Agent: (a) the Collateral, and
(b) all present and future accounts, contract rights, general intangibles,
chattel paper, documents, instruments, cash and noncash proceeds and other
rights arising from or by virtue of, or from the voluntary or involuntary sale
or other disposition of, or collections with respect to, or claims against any
other person with respect to, the Collateral. Such security interest is granted,
and such pledge and assignment is made, as security only and shall not subject
Lenders to, or transfer or in any way affect or modify, any obligation of
Assignor with respect to any of the Collateral or any transaction involving or
giving rise thereto.
4. No Assumption or Modification. The Security Interest is given to
secure the prompt, unconditional and complete payment and performance of the
Obligation when due, and is given as security only. Agent does not assume and
shall not be liable for any of Assignor's liabilities, duties, or obligations
under or in connection with the Collateral. Agent's acceptance of this
Assignment, or its taking any action in carrying out this Assignment, does not
constitute Agent's approval of the Collateral or Agent's assumption of any
obligation under or in connection with the Collateral. This Assignment does not
affect or modify Assignor's obligations with respect to the Collateral.
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<PAGE> 3
5. Fraudulent Conveyance. Notwithstanding anything contained in this
Assignment to the contrary, Assignor agrees that if, but for the application of
this SECTION 5 the Obligation or any Security Interest would constitute a
preferential transfer under 11 U.S.C. Section 547, a fraudulent conveyance under
11 U.S.C. Section 548 (or any successor section) or a fraudulent conveyance or
transfer under any state fraudulent conveyance or fraudulent transfer Law or
similar Law in effect from time to time (each a "FRAUDULENT CONVEYANCE"), then
the Obligation and each affected Security Interest will be enforceable against
Assignor to the maximum extent possible without causing the Obligation or any
Security Interest to be a Fraudulent Conveyance, and shall be deemed to have
been automatically amended to carry out the intent of this SECTION 5.
6. Representations and Warranties. To the extent applicable, Assignor
hereby adopts and restates each of the representations and warranties in the
Credit Agreement and further represents and warrants to Lenders as follows:
(a) Except as provided in the relevant partnership agreement,
the assignment, pledge, or transfer of the Partnership Interests is not subject
to any restrictions other than restrictions imposed by applicable securities and
partnership laws.
(b) Except as provided in the relevant partnership agreement,
Assignor owns the Collateral free and clear of all liens.
(c) The information contained in item B in the recitals above
is true and accurate and the Collateral is accurately described in this
Assignment.
7. Covenants. Assignor shall:
(a) Promptly notify Agent of any change in any fact or
circumstances represented or warranted by Assignor with respect to any of the
Collateral.
(b) Promptly notify Agent of any additional partnership
interest that it acquires or owns in any domestic partnership that becomes a
Subsidiary subsequent to the execution of this Assignment.
(c) Promptly notify Agent of any claim, action or proceeding
affecting the security interest granted and the pledge and assignment made under
PARAGRAPH 3 or title to all or any of the Collateral and, at the request of
Lenders, appear in and defend, at Assignor's expense, any such action or
proceeding.
(d) Except as permitted under the Credit Agreement, not sell,
assign or otherwise dispose of any Collateral.
(e) Not create, incur or suffer to exist any other lien upon
any of the Collateral.
(f) At Assignor's expense and Agent's request, file or cause
to be filed such applications and take such other actions as Agent may request
to obtain the consent or approval of any tribunal to Agent's rights hereunder,
including, without limitation, the right to sell all the Collateral upon a
Default (as defined in the Credit Agreement) without additional consent or
approval from such tribunal (and, because Assignor
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agrees that Agent's remedies at law for failure of Assignor to comply with this
provision would be inadequate and that such failure would not be adequately
compensable in damages, Assignor agrees that its covenants in this provision may
be specifically enforced).
(g) From time to time promptly execute and deliver to Agent
all such other assignments, certificates, supplemental documents, and financing
statements (if appropriate), and do all other acts or things as Agent may
reasonably request in order to more fully create, evidence, perfect, continue
and preserve the priority of the Security Interest.
8. Default; Remedies. Should a Default occur and be continuing, Agent
may, at its election, exercise any and all rights available to a secured party
under the UCC, in addition to any and all other rights afforded by the Loan
Documents, at law, in equity, or otherwise, or applying by appropriate judicial
proceedings for appointment of a receiver for all or part of the Collateral (and
Assignor hereby consents to any such appointment).
(a) Notice. Reasonable notification of the time and place of
any public sale of the Collateral, or reasonable notification of the time after
which any private sale or other intended disposition of the Collateral is to be
made, shall be sent to Assignor and to any other person entitled to notice under
the UCC; provided that if any of the Collateral threatens to decline speedily in
value or is of the type customarily sold on a recognized market, Agent may sell
or otherwise dispose of the Collateral without notification, advertisement, or
other notice of any kind. It is agreed that notice sent or given not less than
five Business Days prior to the taking of the action to which the notice relates
is reasonable for the purposes of this subparagraph.
(b) Sales of Partnership Interests. In connection with the
sale of the Collateral, Agent is authorized, but not obligated, to limit
prospective purchasers to the extent deemed necessary or desirable by Agent to
render such sale exempt from the registration requirements of the Securities Act
of 1933, as amended, and any applicable state securities laws, and no sale so
made in good faith by Lenders shall be deemed not to be "commercially
reasonable" because so made.
(c) Application of Proceeds. Agent shall apply the proceeds of
any sale or other disposition of the Collateral under this PARAGRAPH 8 in the
following order: First, to the payment of all its expenses incurred in preparing
any of the Collateral for sale(s) or other disposition(s), in arranging for such
sale(s) or other disposition(s), and in actually selling or disposing of the
same (all of which are part of the Obligation); second, toward repayment of
amounts expended by Agent under Paragraph 8; third, toward payment of the
balance of the Obligation in accordance with the Credit Agreement. Any surplus
remaining shall be delivered to Assignor or as a court of competent jurisdiction
may direct. If the proceeds are insufficient to pay the Obligation in full,
Borrower, Assignor and other Guarantors shall remain jointly and severally
liable for any deficiency.
9. Other Rights of Agent and Lenders.
(a) Performance. In the event Assignor shall fail to perform
any of its obligations hereunder with respect to the Collateral, then Agent may,
at its option, but without being required to do so, take such action which
Assignor is required, but has failed or refused, to take. Any sum which may be
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expended or paid by Agent under this subparagraph (including, without
limitation, court costs and attorneys' fees) shall bear interest from the dates
of expenditure or payment at the Maximum Rate (as defined in the Credit
Agreement) until paid and, together with such interest, shall be payable by
Assignor upon demand and shall be part of the Obligation.
(b) Collection. Upon notice from Agent, each person or entity
obligated with respect to any of the Collateral, whether as an issuer, account
debtor or otherwise (an "OBLIGOR") is hereby authorized and directed by Assignor
to make payments on any of the Collateral (including, without limitation,
dividends and other distributions) directly to Agent, regardless of whether
Assignor was previously making collections thereon. Subject to Subparagraph (e)
hereof, until such notice is given, Assignor is authorized to retain and expend
all payments made on Collateral. Agent shall have the right in its own name or
in the name of Assignor to compromise or extend time of payment with respect to
all or any portion of the Collateral for such amounts and upon such terms as
Agent may determine; to demand, collect, receive, receipt for, sue for, compound
and give acquittances for any and all amounts due or to become due with respect
to Collateral; to take control of cash and other proceeds of any Collateral; to
endorse the name of Assignor on any notes, acceptances, checks, drafts, money
orders or other evidences of payment on Collateral that may come into the
possession of Agent; to send requests for verification of obligations to any
Obligor; and to do all other acts and things necessary to carry out the intent
of this agreement. If any Obligor fails or refuses to make payment on any
Collateral when due, Agent is authorized, in its sole discretion, either in its
own name or in the name of Assignor, to take such action as Agent shall deem
appropriate for the collection of any such amounts. Regardless of any other
provision hereof, however, Agent shall never be liable for its failure to
collect, or for its failure to exercise diligence in the collection of, any
amounts owed with respect to Collateral, nor shall it be under any duty whatever
to anyone except Assignor to account for funds that it shall actually receive
hereunder. Without limiting the generality of the foregoing, Agent shall have no
responsibility for ascertaining any maturities, calls, conversions, exchanges,
offers, tenders or similar matters relating to any Collateral, or for informing
Assignor with respect to any of such matters (irrespective of whether Agent
actually has, or may be deemed to have, knowledge thereof). The receipt of Agent
to any Obligor shall be a full and complete release, discharge and acquittance
to such Obligor, to the extent of any amount so paid to Lenders. The rights
granted Agent under this subparagraph may be exercised at any time, whether or
not a Default has occurred and is continuing.
(c) Record Ownership of Partnership Interests. Whether or not
a Default has occurred and is continuing and to the extent applicable, Agent at
any time may have the Collateral registered in its name, or in the name of its
nominee or nominees, as assignee; and Agent shall execute and deliver to
Assignor all such proxies, powers of attorney, dividend coupons or orders and
other documents as Assignor may reasonably request for the purpose of enabling
Assignor to exercise the voting rights and powers which it is entitled to
exercise hereunder and to receive the distributions and other payments which it
is authorized to receive and retain hereunder. Nothing in this Assignment shall
prohibit the payment of cash distributions by the Partnership if such
distribution is permitted under the Credit Agreement.
(d) Partnership Action. So long as no Default has occurred,
Assignor shall be entitled to exercise all rights pertaining to the Collateral.
After the occurrence and during the continuance of a Default, the right to vote
or take action as a result of owning the Collateral shall be vested exclusively
in Agent. To this end, Assignor irrevocably appoints Agent the proxy and
attorney-in-fact of Assignor, with full power of substitution, to vote and to
act with respect to the Collateral, subject to the understanding that
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such proxy may not be exercised unless a Default has occurred and is continuing.
The proxy herein granted is coupled with an interest, is irrevocable, and shall
continue until the Obligation has been paid and performed in full.
(e) Certain Proceeds. Any and all distributions in property
made on or in respect of the Collateral, and any proceeds of the Collateral,
whether such distributions, or proceeds result from a subdivision, combination
or reclassification of the partnership interests of Assignor or as a result of
any merger, consolidation, acquisition or other exchange of assets to which
Assignor may be a party, or otherwise, shall be part of the Collateral
hereunder, shall, if received by Assignor, be held in trust for the benefit of
Agent, and shall forthwith be delivered to Agent (accompanied by proper
instruments of assignment and/or stock and/or bond powers executed by Assignor
in accordance with Agent's instructions) to be held subject to the terms hereof.
Any cash proceeds of Collateral which come into the possession of Agent may, at
Agent's option, be applied in whole or in part to the Obligation (to the extent
then due), be released in whole or in part to or on the written instructions of
Assignor for any general or specific purpose, or be retained in whole or in part
by Lenders as additional Collateral.
10. Miscellaneous.
(a) Reference to Miscellaneous Provisions. This Assignment is
one of the "Loan Documents" referred to in the Credit Agreement, and,
therefore, this Assignment is subject to the applicable provisions of
SECTION 14 of the Credit Agreement, all of which are incorporated in
this Assignment by reference the same as if set forth in this
Assignment verbatim.
(b) Term. Upon full and final payment of the Obligation and
final termination of the Lenders' commitment to lend under the Credit
Agreement without Lenders' having exercised their rights under this
Assignment, this Assignment shall terminate; provided that no Obligor
on any of the Collateral shall be obligated to inquire as to the
termination of this Assignment, but shall be fully protected in making
payment directly to Lenders, which payment shall be promptly paid over
to Assignor after termination of this Assignment.
(c) Notice. Any notice or communication required or permitted
under this Assignment must be given as prescribed in the Credit
Agreement.
(d) Governing Law. THIS ASSIGNMENT SHALL BE CONSTRUED--AND ITS
PERFORMANCE ENFORCED--UNDER TEXAS LAW.
(e) Credit Agreement. In the event of any conflict or
inconsistency between the terms hereof and the Credit Agreement, the
terms of the Credit Agreement shall be controlling.
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<PAGE> 7
EXECUTED as of the date set forth in the preamble.
METAL COATERS HOLDING,
INC., as Assignor
By: /s/ Robert J. Medlock
-----------------------------------------------
Name: Robert J. Medlock
---------------------------------------------
Title: Vice President and Chief Financial Officer
--------------------------------------------
NATIONSBANK OF TEXAS, N.A.,
as Administrative Agent and a Lender
By: /s/ Richard L. Nichols, Jr.
-----------------------------------------------
Name: Richard L. Nichols, Jr.
---------------------------------------------
Title: Vice President
--------------------------------------------
7
<PAGE> 1
EXHIBIT 4.26
NCI HOLDING CORP.
PROMISSORY NOTE
Wilmington, Delaware May 5, 1998
NCI Holding Corp., a Delaware corporation (the "Company"), for value
received, hereby promises to pay to the order of NCI Building Systems, Inc., a
Delaware corporation and the sole owner of all of the issued and outstanding
capital stock of the Company ("Payee"), the principal sum of FIVE HUNDRED FIFTY
MILLION AND NO/100 DOLLARS ($550,000,000) subject to adjustment as herein
provided (the "Principal Amount"), and to pay interest on the unpaid balance of
the Principal Amount at the rate herein provided.
1. Adjustment to Principal Amount. The Company and Payee
agree that (i) this Note is being given by the Company to Payee in consideration
of the transfer by Payee to the Company of all of the issued and outstanding
capital stock of Amatek Holdings, Inc., a Texas corporation ("Amatek"), acquired
by Payee pursuant to that certain Stock Purchase Agreement, dated March 25,
1998, as amended by letter agreement dated May 4, 1998 (the "Purchase
Agreement"), by and between Payee and BTR Australia Limited, a corporation
organized under the laws of Australia ("BTR"), and joined therein for certain
limited purposes by BTR plc and (ii) the Principal Amount of this Note is based
on the Purchase Price (as defined in the Purchase Agreement) paid by Payee for
the capital stock of Amatek. The Company and Payee acknowledge and agree that if
the Purchase Price is adjusted in accordance with the terms and provisions of
the Purchase Agreement that the Principal Amount of this Note shall be adjusted
ab initio to reflect such adjusted Purchase Price for the capital stock of
Amatek as if such adjusted Purchase Price had constituted the Principal Amount
on the date of this Note. The Principal Amount shall also be increased for any
acquisition costs paid to parties other than BTR that are capitalized by Payee
for federal income tax purposes into the purchase price of the capital stock of
Amatek.
2. Payment.
(a) Interest shall accrue on the Principal Amount
from the date hereof. For each Interest Period (as defined in that certain
Credit Agreement, dated March 25, 1998, by and among Payee, NationsBank of
Texas, N.A., NationsBanc Montgomery Securities LLC, Swiss Bank Corporation and
the several Lenders named therein, or any commercial credit agreement entered
into by Payee in replacement, refinancing or substitution thereof (as amended,
supplemented, restated, replaced or substituted, the "Credit Agreement"), or as
its equivalent period is defined in any amended, supplemented, restated,
replaced or substituted Credit Agreement), interest shall accrue at a per annum
rate of two percent over the highest applicable interest rate being paid at any
time during the Interest Period by Payee to (i) its principal commercial lenders
pursuant to the Credit Agreement or (ii) the holders of any senior or
subordinated notes of the Payee, if any, issued by Payee from time to time for
money borrowed. Accrued interest shall be due and payable by the
<PAGE> 2
Company to Payee on the last day of each Interest Period until the outstanding
principal sum of this Note is paid in full. If no commercial credit facility or
indebtedness for money borrowed is outstanding, interest shall accrue at a rate
of ten percent (10%) per annum.
(b) The Principal Amount is due and payable, in
one or more installments, on demand on such dates and in such amounts as
specified by Payee, together with the accrued interest, if any, specified in
such demand; provided, however, that in no event shall the date on which a
payment is due be earlier than ten (10) days from the date a demand is made;
provided further that if Payee is not the holder of this Note (after the
negotiation of this Note to a holder in due course) the Principal Amount is
payable on demand. If no demand is earlier made, the entire outstanding
Principal Amount, plus any accrued but unpaid interest thereon, shall be due and
payable in full on May 5, 2018.
(c) Payments pursuant to the terms of this Note
shall be credited first to the payment of all costs and expenses of collection
of this Note incurred by the holder of this Note, second to accrued but unpaid
interest to the extent thereof, and thereafter to unpaid principal.
(d) Any payments made by any of the Guarantors
(as defined therein) of the Credit Agreement to discharge obligations of Payee
thereunder shall also be deemed to discharge the obligations of the Company
under this Note in an amount not to exceed the Company's right to such funds
(via distributions of partnership earnings or corporate dividend contributions)
due to its direct or indirect ownership percentage in the relevant Guarantor
entity. Any such deemed payments made by the Guarantors shall be applied first
to the payment of all costs and expenses of collection of this Note incurred by
the holder of this Note, second as a credit to accrued but unpaid interest
hereunder, and thereafter to unpaid principal.
3. Prepayment. This Note may be prepaid in whole or in
part at any time or from time to time at the option of the Company, without
premium or penalty.
4. Default. A default shall occur hereunder if any
payment under this Note is not made when due. In the event of a default, the
entire principal balance and accrued but unpaid interest thereon shall, at the
option of the holder of this Note, at once become due and payable without
further notice.
5. Attorneys' Fees. If this Note is placed in the hands
of an attorney for collection pursuant to a suit or legal proceedings or through
bankruptcy proceedings, the Company agrees to pay in addition to all sums then
due hereunder, including principal and interest, and all expenses of collection,
including reasonable attorneys' fees.
6. Waiver. To the extent permitted by applicable law, the
Company hereby waives presentment and demand for payment, protest, and notice of
protest, notice of intention to accelerate, notice of acceleration, dishonor and
nonpayment.
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<PAGE> 3
7. Interest on Past Due Amounts. All past due principal
and interest shall bear interest at the highest rate permitted by applicable
law.
8. Usury Savings Clause. Notwithstanding any provisions
to the contrary in this Note, or in any other documents securing payment hereof
or otherwise relating hereto, in no event shall this Note require the payment or
permit the collection of interest, as defined under the applicable usury laws,
in excess of the maximum amount permitted by such laws. If any such excess
interest is contracted for, charged, taken, reserved or received under this Note
or under the terms of any other documents securing payment hereof or otherwise
relating hereto, or in the event applicable law shall be judicially interpreted
so as to render usurious any amount called for under this Note or under the
terms of any other documents relating hereto, or in the event the maturity of
the indebtedness evidenced by the Note is accelerated in whole or in part, or in
the event that all or part of the principal or interest of the Note shall be
prepaid, so that under any such circumstances the amount of interest contracted
for, charged, taken, reserved or received under this Note or any other documents
securing payment hereof or otherwise relating hereto, on the amount of principal
actually outstanding from time to time under the Note shall exceed the maximum
amount of interest permitted by applicable usury laws, then in any such event:
(a) the provisions of this paragraph shall govern and control, (b) to the extent
permissible under applicable laws, the excess amount of interest which may have
been charged, taken, reserved, received or collected shall be applied (i) as a
credit against the then unpaid principal amount on the Note or (ii) refunded to
the person paying the same, at the holder's option, (c) the effective rate of
interest shall be automatically reduced to the maximum lawful rate reserved or
received from the party obligated thereon under applicable laws as now or
hereafter construed by the courts having jurisdiction thereof, and (d) the
provisions of this Note shall be deemed reformed and the amounts thereafter
collectible hereunder reduced, without the necessity of executing any new
document, so as to comply with the applicable law, but also so as to permit the
recovery of the fullest amount otherwise called for hereunder. It is further
agreed that without limitation of the foregoing, all calculations of the rate of
interest contracted for, charged, taken, reserved or received under this Note
which are made for the purpose of determining whether such rate exceeds the
maximum lawful rate of interest, shall be made, to the extent permitted by
applicable usury laws, by amortizing, prorating, allocating and spreading during
the period of the full term of the Note, all interest at any time contracted
for, charged, taken, reserved or received from the party obligated thereon or
otherwise by the holder or holders thereof in connection with the Note so that
the rate or amount of interest on account of such indebtedness does not exceed
the usury ceiling from time to time in effect and applicable to such debt.
9. Governing Law. This Note shall be governed by,
construed and enforced in accordance with, the laws of the State of Texas and
applicable laws of the United States of America.
10. Miscellaneous. All references to the Company herein
shall include its successors and assigns, and all covenants, stipulations,
promises and agreements contained herein by or on behalf of the Company shall be
binding upon its successors and assigns, whether so
3
<PAGE> 4
expressed or not and shall inure to the benefit of and be enforceable by the
successors and assigns of any other holder hereof.
11. Security. This Note is an unsecured obligation of the
Company.
12. Invalid Provisions. Any provision in this Note held to
be illegal, invalid or unenforceable is fully severable; this Note shall be
construed and enforced as if that provision had never been included; and the
remaining provisions shall remain in full force and effect and shall not be
affected by the severed provision. The Company agrees to negotiate with the
holder hereof, in good faith, the terms of a replacement provision as similar to
the severed provision as may be possible and be legal, valid and enforceable.
However, if the provision held to be illegal, invalid or unenforceable is a
material part of this Note, such invalid, illegal or unenforceable provision
shall be, to the extent permitted by applicable law, replaced by a clause or
provision judicially construed and interpreted to be as similar in substance and
content to the original terms of such illegal, invalid or unenforceable clause
or provision as the context thereof would reasonably allow, so that such clause
or provision would thereafter be legal, valid and enforceable.
13. Course of Dealing. The acceptance by Payee or any
subsequent holder of this Note of any partial payment on the Note shall not be
deemed to be a waiver of any default then existing. No waiver by Payee or any
subsequent holder of this Note of any default shall be deemed to be a waiver of
any other then-existing or subsequent default. No delay or omission by Payee or
any subsequent holder of this Note in exercising any right, remedy, power,
privilege or benefit hereunder will impair that right, remedy, power, privilege
or benefit or be construed as a waiver thereof or any acquiescence therein, nor
will any single or partial exercise of any right, remedy, power, privilege or
benefit preclude other or further exercise thereof or the exercise of any other
right, remedy, power, privilege or benefit under this Note or otherwise.
14. Venue; Service of Process; Jury Trial. THE COMPANY,
ITS SUCCESSORS AND ASSIGNS (a) IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE
JURISDICTION OF THE STATE AND FEDERAL COURTS OF THE STATE OF TEXAS, (b)
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION THAT
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY LITIGATION ARISING
OUT OF OR IN CONNECTION WITH THIS NOTE BROUGHT IN DISTRICT COURTS OF DALLAS OR
HARRIS COUNTY, TEXAS, OR IN THE U.S. DISTRICT COURT FOR THE NORTHERN OR SOUTHERN
DISTRICT OF TEXAS, DALLAS OR HOUSTON DIVISION, (c) IRREVOCABLY WAIVES ANY CLAIMS
THAT ANY LITIGATION BROUGHT IN ANY OF THE AFOREMENTIONED COURTS HAS BEEN BROUGHT
IN AN INCONVENIENT FORUM, (d) IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT
OF ANY OF THOSE COURTS IN ANY LITIGATION BY THE MAILING OF COPIES THEREOF BY
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, POSTAGE PREPAID, BY HAND-DELIVERY, OR
BY DELIVERY BY A NATIONALLY RECOGNIZED COURIER SERVICE, AND SERVICE SHALL BE
DEEMED COMPLETE UPON DELIVERY OF THE
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<PAGE> 5
LEGAL PROCESS AT ITS PRINCIPAL EXECUTIVE OFFICE, (e) IRREVOCABLY AGREES THAT ANY
LEGAL PROCEEDING AGAINST ANY PARTY TO ANY LOAN DOCUMENT ARISING OUT OF OR IN
CONNECTION WITH THIS NOTE MAY BE BROUGHT IN ONE OF THE AFOREMENTIONED COURTS,
AND (f) IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW, ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS NOTE. The scope of each of the foregoing waivers is intended
to be all-encompassing of any and all disputes that may be filed in any court
and that relate to the subject matter of this transaction, including, without
limitation, contract claims, tort claims, breach of duty claims, and all other
common law and statutory claims. The Company acknowledges that these waivers are
a material inducement to Payee's agreement to engage in the transaction
contemplated hereby, and that Payee and each subsequent holder of this Note will
continue to rely on each of these waivers. The Company further warrants and
represents that it has reviewed these waivers with its legal counsel, and that
it knowingly and voluntarily agrees to each waiver following consultation with
legal counsel. THE WAIVERS IN THIS SECTION 14 ARE IRREVOCABLE, MEANING THAT THEY
MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THESE WAIVERS SHALL APPLY
TO ANY SUBSEQUENT AMENDMENTS, SUPPLEMENTS, OR REPLACEMENTS TO THIS NOTE. In the
event of Litigation, this Note may be filed as a written consent to a trial by
the court.
15. FINAL AGREEMENT. THIS NOTE (AS MODIFIED IN WRITING
FROM TIME TO TIME) REPRESENTS THE FINAL AGREEMENT AMONG THE COMPANY AND PAYEE
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE
PARTIES.
IN WITNESS WHEREOF, the Company has caused this Note to be executed in
its corporate name and in its behalf.
NCI HOLDING CORP.
By: /s/ Robert J. Medlock
-------------------------------------
Robert J. Medlock, Vice President
5
<PAGE> 1
EXHIBIT 4.27
NOTE PLEDGE AGREEMENT
THIS NOTE PLEDGE AGREEMENT (as hereinafter amended from time to time,
this "PLEDGE AGREEMENT") is executed as of May 5, 1998, by NCI Building Systems,
Inc., a Delaware corporation ("PLEDGOR") for the benefit of NationsBank, N.A.
(successor by merger with NationsBank of Texas, N.A., "AGENT"), as
Administrative Agent for itself and for the Lenders (collectively, "LENDERS")
now or hereafter party to the Credit Agreement (as defined below).
RECITALS
A. Pledgor (as Borrower therein), Agent and Lenders and other parties
named therein have executed a Credit Agreement dated March 25, 1998 (as amended
by that certain First Amendment dated as of May 1, 1998 and by that certain
Second Amendment of even date herewith, and as hereinafter amended, supplemented
or restated, the "CREDIT AGREEMENT"), together with certain other Loan
Documents.
B. Pledgor is the sole owner and holder of that certain Pledged Note
(as hereinafter defined).
C. It is expressly understood among Pledgor, Agent and Lenders that the
execution and delivery of this Pledge Agreement is a condition precedent to
Lenders' obligations to extend Loans under the Credit Agreement and Agent's
obligation to issue LCs under the Credit Agreement.
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties agree as follows:
1. Certain Definitions. UNLESS OTHERWISE DEFINED IN THIS PLEDGE
AGREEMENT, ANY CAPITALIZED TERM USED IN THIS PLEDGE AGREEMENT HAS THE MEANING
GIVEN THAT TERM IN THE CREDIT AGREEMENT OR IN THE UCC. If the definition given a
term in the Credit Agreement conflicts with the definition given that term in
the UCC, the Credit Agreement definition shall control to the extent allowed by
Law. If the definition given a term in Chapter 9 of the UCC conflicts with the
definition given that term in any other chapter of the UCC, the Chapter 9
definition shall control.
As used in this Pledge Agreement:
"COLLATERAL" means Pledgor's right, title and interest in and
to the Pledged Note, including all present and future contract rights, chattel
paper, documents, instruments, cash and noncash proceeds, substitutes and
replacements for, and other rights arising from or by virtue of, or collections
with respect to, or claims against any other Person with respect to the Pledged
Note.
"CREDIT AGREEMENT" is defined in the Recitals.
"DEFAULT" means a "Default" under and as defined in the Credit
Agreement.
"OBLIGATION" means the "Obligation" under and as defined in
the Credit Agreement.
"PLEDGE AGREEMENT" means this Pledge Agreement together with
all exhibits attached to this Pledge Agreement, and all amendments and
modifications to this Agreement and the exhibits.
<PAGE> 2
"PLEDGED NOTE" means that certain promissory note of even date
herewith in the principal amount of US$550,000,000, a copy of which is attached
as EXHIBIT "A", made by NCI Holding Corp., a Delaware corporation and a wholly
owned subsidiary of Pledgor, in favor of Pledgor.
"PLEDGOR" includes, without limitation, Pledgor as a
debtor-in-possession, and any receiver, trustee, liquidator, conservator,
custodian, or similar party hereafter appointed for Pledgor or all or
substantially all of Pledgor's assets pursuant to any liquidation,
conservatorship, bankruptcy, moratorium, rearrangement, receivership,
insolvency, reorganization, or similar Law from time to time in effect affecting
the rights of creditors generally.
"SECURITY INTEREST" means the security interests granted and
the transfers, pledges and collateral assignments made under SECTION 3 of this
Pledge Agreement.
"UCC" means (a) generally, and with respect to the definitions
above, the Uniform Commercial Code, as adopted in Texas, as amended from time to
time, and (b) with respect to rights in states other than Texas, the Uniform
Commercial Code as enacted in the applicable state, as amended from time to
time.
2. Credit Agreement. This Pledge Agreement is being executed and
delivered pursuant to the terms and conditions of the Credit Agreement. Each
Security Interest is a "Lien" referred to in the Credit Agreement.
3. Security Interest. In order to secure the full and complete payment
and performance of the Obligation when due, Pledgor hereby grants to Agent a
security interest in, and pledges and assigns the Collateral to Agent for the
ratable benefit of the Lenders. Such security interest is granted, and such
pledge and assignment are made, as security only and shall not subject Lenders
to, or transfer or in any way affect or modify, any obligation of Pledgor with
respect to any of the Collateral or any transaction involving or giving rise
thereto.
4. No Assumption or Modification. The Security Interest is given to
secure the prompt, unconditional and complete payment and performance of the
Obligation when due, and is given as security only. Agent does not assume and
shall not be liable for any of Pledgor's liabilities, duties, or obligations
under or in connection with the Collateral. Agent's acceptance of this Pledge
Agreement, or its taking any action in carrying out this Pledge Agreement, does
not constitute Agent's approval of the Collateral or Agent's assumption of any
obligation under or in connection with the Collateral. This Pledge Agreement
does not affect or modify Pledgor's obligations with respect to the Collateral.
5. Fraudulent Conveyance. Notwithstanding anything contained in this
Pledge Agreement to the contrary, Pledgor agrees that if, but for the
application of this SECTION 5, the Obligation or any Security Interest would
constitute a preferential transfer under 11 U.S.C. Section 547, a fraudulent
conveyance under 11 U.S.C. Section 548 (or any successor section) or a
fraudulent conveyance or transfer under any state fraudulent conveyance or
fraudulent transfer Law or similar Law in effect from time to time (each a
"FRAUDULENT CONVEYANCE"), then the Obligation and each affected Security
Interest will be enforceable against Pledgor to the maximum extent possible
without causing the Obligation or any Security Interest to be a Fraudulent
Conveyance, and shall be deemed to have been automatically amended to carry out
the intent of this SECTION 5.
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<PAGE> 3
6. Representations and Warranties. Pledgor hereby confirms and restates
each of the representations and warranties in the Credit Agreement and further
represents and warrants to Agent and Lenders as follows:
(a) Pledgor is the legal owner and holder of the Collateral
with full right, power and authority to assign the Collateral to Agent;
(b) the unpaid principal balance of the Pledged Note is
US$550,000,000;
(c) no default exists under the Pledged Note;
(d) Pledgor has not previously assigned the Pledged Note and
the Collateral is free and clear of all Liens:
(e) there are no modifications or amendments to the Pledged
Note;
(f) the maker of the Pledged Note does not have any defenses,
offsets or counterclaims in respect of the Collateral; and
(g) the pledge of the Collateral to Agent will not constitute
a default under the Pledged Note.
7. Covenants. Pledgor shall:
(a) Promptly notify Agent of any change in any fact or
circumstances represented or warranted by Pledgor with respect to any of the
Collateral.
(b) Promptly notify Agent of any default under the Pledged
Note.
(c) Promptly notify Agent of any claim, action or proceeding
affecting the security interest granted and the pledge and assignment made under
SECTION 3 hereof or title to all or any of the Collateral and, at the request of
Lender, appear in and defend, at Pledgor's expense, any such action or
proceeding.
(d) Except as permitted under the Credit Agreement, not sell,
assign or otherwise dispose of any Collateral.
(e) Not create, incur or suffer to exist any other Lien upon
any of the Collateral.
(f) At Pledgor's expense and Agent's request, file or cause to
be filed such applications and take such other actions as Agent may request to
obtain the consent or approval of any Tribunal to Agent's rights hereunder,
including, without limitation, the right to sell all the Collateral upon a
Default without additional consent or approval from such Tribunal (and, because
Pledgor agrees that Agent's remedies at law for failure of Pledgor to comply
with this provision would be inadequate and that such failure would not be
adequately compensable in damages, Pledgor agrees that its covenants in this
provision may be specifically enforced).
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(g) From time to time promptly execute and deliver to Agent
all such other pledges, assignments, certificates, supplemental documents, and
financing statements (if appropriate), and do all other acts or things as Agent
may reasonably request in order to more fully create, evidence, perfect,
continue and preserve the priority of the Security Interest.
8. Default; Remedies. Should a Default occur and be continuing, Agent
may, at its election, exercise any and all rights available to a secured party
under the UCC, in addition to any and all other rights afforded by the Loan
Documents, at law, in equity, or otherwise, including, without limitation (i)
collecting amounts due under the Collateral from the maker until the Obligation
is paid in full; and (ii) applying by appropriate judicial proceedings for
appointment of a receiver for all or part of the Collateral (and Pledgor hereby
consents to any such appointment).
(a) Notice. Reasonable notification of the time and place of
any public sale of the Collateral, or reasonable notification of the time after
which any private sale or other intended disposition of the Collateral is to be
made, shall be sent to Pledgor and to any other person entitled to notice under
the UCC; provided that if any of the Collateral threatens to decline speedily in
value or is of the type customarily sold on a recognized market, Agent may sell
or otherwise dispose of the Collateral without notification, advertisement, or
other notice of any kind, and no sale so made in good faith by Lender shall be
deemed not to be "commercially reasonable" because so made. It is agreed that
notice sent or given not less than five Business Days prior to the taking of the
action to which the notice relates is reasonable for the purposes of this
subparagraph.
(b) Application of Proceeds. Agent shall apply the proceeds of
any sale or other disposition of the Collateral under this SECTION 8 in the
following order: First, to the payment of all its expenses incurred in retaking,
holding and preparing any of the Collateral for sale(s) or other disposition, in
arranging for such sale(s) or other disposition, and in actually selling or
disposing of the same (all of which are part of the Obligation); second, toward
repayment of amounts expended by Agent under this SECTION 8; third, toward
payment of the balance of the Obligation in accordance with the Credit
Agreement. Any surplus remaining shall be delivered to Pledgor or as a court of
competent jurisdiction may direct. If the proceeds are insufficient to pay the
Obligation in full, Pledgor shall remain liable for any deficiency.
9. Other Rights of Agent and Lenders.
(a) Performance. In the event Pledgor shall fail to perform
any of its obligations hereunder with respect to the Collateral, then Agent may,
at its option, but without being required to do so, take such action which
Pledgor is required, but has failed or refused, to take. Any sum which may be
expended or paid by Agent under this subparagraph (including, without
limitation, court costs and attorneys' fees) shall bear interest from the dates
of expenditure or payment at the Maximum Rate (as defined in the Credit
Agreement) until paid and, together with such interest, shall be payable by
Pledgor upon demand and shall be part of the Obligation.
(b) Collection. Upon notice from Agent, the maker or each
person or entity obligated with respect to any of the Collateral, whether as a
maker, co-maker, endorser, accommodation party or otherwise (an "OBLIGOR") is
hereby authorized and directed by Pledgor to make payments on any of the
Collateral (including, without limitation, principal and interest payments(
directly to Agent, regardless of whether Pledgor was previously making
collections thereon. Subject to SECTION 9 (C) hereof, until such notice is
given, Pledgor is authorized to retain and expend all payments made on
Collateral. Agent shall have
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the right in its own name or in the name of Pledgor to compromise or extend time
of payment with respect to all or any portion of the Collateral for such amounts
and upon such terms as Agent may determine; to demand, collect, receive, receipt
for, sue for, compound and give acquittances for any and all amounts due or to
become due with respect to Collateral; to take control of cash and other
proceeds of any Collateral; to endorse the name of Pledgor substantially in the
form of EXHIBIT "B" hereto on the Pledged Note, on any other notes, acceptances,
checks, drafts, money orders or other evidences of payment on Collateral that
may come into the possession of Agent; to send requests for verification of
obligations to any Obligor; and to do all other acts and things necessary to
carry out the intent of this agreement. If any Obligor fails or refuses to make
payment on any Collateral when due, Agent is authorized, in its sole discretion,
either in its own name or in the name of Pledgor, to take such action as Agent
shall deem appropriate for the collection of any such amounts. Regardless of any
other provision hereof, however, Agent shall never be liable for its failure to
collect, or for its failure to exercise diligence in the collection of, any
amounts owed with respect to Collateral, nor shall it be under any duty whatever
to anyone except Pledgor to account for funds that it shall actually receive
hereunder. Without limiting the generality of the foregoing, Agent shall have no
responsibility for ascertaining any maturities, calls, conversions, exchanges,
offers, tenders or similar matters relating to any Collateral, or for informing
Pledgor with respect to any of such matters (irrespective of whether Agent
actually has, or may be deemed to have, knowledge thereof). The receipt of Agent
to any Obligor shall be a release, discharge and acquittance to such Obligor, to
the extent of any amount so paid to Lender. The rights granted Agent under this
subparagraph may be exercised at any time, whether or not a Default has occurred
and is continuing.
(c) Certain Proceeds. Any cash proceeds of Collateral which
come into the possession of Agent may, at Agent's option, be applied in whole or
in part to the Obligation (to the extent then due), be released in whole or in
part to or on the written instructions of Pledgor for any general or specific
purpose, or be retained in whole or in part by Lender as additional Collateral.
10. Miscellaneous.
(a) Reference to Miscellaneous Provisions. This Pledge
Agreement is one of the "Loan Documents" referred to in the Credit Agreement,
and therefore, this Pledge Agreement is subject to the applicable provisions of
SECTION 14 of the Credit Agreement, all of which are incorporated in this Pledge
Agreement by reference the same as if set forth in this Pledge Agreement
verbatim.
(b) Term. Upon full and final payment of the Obligation and
final termination of the Lenders' commitment to lend under the Credit Agreement
without Agent having exercised its rights under this Pledge Agreement, this
Pledge Agreement shall terminate, provided that no Obligor on any of the
Collateral shall be obligated to inquire as to the termination of this Pledge
Agreement, but shall be fully protected in making payment directly to Agent,
which payment shall be promptly paid over to Pledgor after termination of this
Pledge Agreement.
(c) Notice. Any notice or communication required or permitted
under this Pledge Agreement must be given as prescribed in the Credit Agreement.
(d) Governing Law. THIS PLEDGE AGREEMENT SHALL BE CONSTRUED- -
AND ITS PERFORMANCE ENFORCED--UNDER TEXAS LAW.
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(e) Credit Agreement. In the event of any conflict or
inconsistency between the terms hereof and the Credit Agreement, the terms of
the Credit Agreement shall be controlling.
EXECUTED as of the date set forth in the preamble.
NCI BUILDING SYSTEMS, INC.,
as Pledgor
By: /s/ Robert J. Medlock
-----------------------------------------
Robert J. Medlock
Vice President and Chief Financial
Officer
NATIONSBANK, N.A. (SUCCESSOR BY
MERGER WITH NATIONSBANK OF TEXAS,
N.A), as Administrative Agent and a Lender
By: /s/ Richard L. Nichols, Jr.
-----------------------------------------
Richard L. Nichols, Jr.
Vice President
6
<PAGE> 1
EXHIBIT 10.3
NCI BUILDING SYSTEMS, INC.
BONUS PROGRAM
[AMENDED AND RESTATED AS OF DECEMBER 11, 1998]
In 1989, the Board of Directors of NCI Building Systems, Inc. (then
named National Components Incorporated), a Delaware corporation (the "Company"),
adopted the Bonus Program (the "Program"). The Company subsequently amended the
Program from time to time.
On December 11, 1998, the Board of Directors of the Company amended and
restated the Program in its entirety to, among other things, provide for a new
bonus performance standard for persons eligible to participate in the Program
and set forth certain adjustments to return on assets and earnings per share
growth figures in calculating bonus levels under the Program.
The Program, as so amended and restated on December 11, 1998, is as
follows:
1. Purpose. The purpose of the Bonus Program (the "Program") is:
(A) To provide exceptional cash rewards earned by exceptional
performance such that the aggregate bonuses paid to all of the Company's
employees in a fiscal year, including those awarded under the Program,
approximate 10% of the pre-tax, pre-bonus profits of the Company for that fiscal
year; and
(B) To focus management attention on key objectives of the
Company by basing their bonus on return on assets and growth in earnings per
share.
2. Administration. The Program will be administered and interpreted by
the Compensation Committee of the Board of Directors of the Company (the
"Committee").
3. Bonus Performance Standards.
(A) Combination of ROA and EPS. Level 1 and Level 2
participants will be eligible for the award of an annual cash bonus equal to a
percentage of their respective base salaries, based upon the Company's
achievement of both a specified return on assets ("ROA") and a specified
increase in earnings per share ("EPS Growth") for the fiscal year.
No cash bonuses will be awarded to these participants
if (1) both ROA and EPS Growth are less than 20%, or (2) ROA is less than 10%.
Subject to the minimum requirements for ROA and EPS
Growth, Level 2 participants will be eligible for a cash bonus award based upon
the attached grid of ROA and EPS Growth achievement, in which the bonus eligible
for award is the percentage of base salary indicated
<PAGE> 2
at each intersecting grid mark for ROA and EPS Growth (e.g., ROA of 30% and EPS
Growth of 20% results in a 50% cash bonus). The maximum bonus for Level 2
participants will be 85% of base salary.
Cash bonus awards for which Level 1 participants are
eligible also will be based on the attached grid of ROA and EPS Growth
achievement, but will be 1.5 times the percentage of base salary indicated for
the Level 2 participants. The maximum bonus for Level 1 participants will be
127.5% of base salary.
(B) ROA Only. Level 3 and Level 4 participants will be
eligible for the award of a cash bonus equal to a percentage of their respective
base salaries, based upon the Company's achievement of a specified ROA for the
fiscal year.
No cash bonuses will be awarded to these participants
if ROA is less than 20%.
If ROA is 20% or more, Level 3 participants will be
eligible for the award of a cash bonus equal to 25% of base salary and an
additional 1.25% of base salary for each 1% increment in ROA over 20%. The
maximum bonus for Level 3 participants will be 50% of base salary.
If ROA is 20% or more, Level 4 participants will be
eligible for the award of a cash bonus equal to 12.5% of base salary and an
additional 0.625% of base salary for each 1% increment in ROA over 20%. The
maximum bonus for Level 4 participants will be 25% of base salary.
4. Participants and Eligibility.
(A) Whether or not to award a cash bonus to any particular
participant is within the absolute discretion of the Company and the Committee.
No bonus award to a Level 1, 2 or 3 participant may be paid unless and until and
approved by the Committee, and no bonus award may be paid to a Level 4
participant unless and until the Committee has approved the aggregate employee
bonus pool for that fiscal year.
(B) A participant shall not be eligible for and shall not be
entitled to receive a bonus for any fiscal year's performance unless the
participant is employed by the Company or one of its subsidiaries both on the
last day of the fiscal year and on the date of approval by the Committee of the
bonus (if a Level 1, 2 or 3 participant) or the aggregate employee bonus pool
for that year (if a Level 4 participant).
(C) The Committee, in its sole discretion, shall determine the
Level 1, Level 2 and Level 3 participants for any given fiscal year. Designation
of a manager as a participant for any
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<PAGE> 3
fiscal year is in the absolute discretion of the Company and the Committee and
does not entitle that participant to remain as a participant in any subsequent
year.
(D) Addition, removal or movement of participants into, from
or between any of Levels 1, 2 or 3 must be submitted to and approved by the
Committee. The Level 1 managers, with the approval of the Chairman of the Board
and President, shall have discretion to add or remove participants at Level 4
without further action of the Committee, provided the aggregate bonuses paid to
all employees do not exceed the amount of the employee bonus pool for that year
approved by the Committee.
5. ROA and EPS Calculation. The ROA and EPS for each fiscal year
(including 1998) shall be calculated using the asset and pre-tax income amounts
set forth on the audited annual financial statements of the Company for that
fiscal year and, when appropriate to the calculations, the internally generated
financial statements for each month and quarter of the fiscal year, prepared in
accordance with generally accepted accounting principles, with the following
adjustments:
(A) For all fiscal years, the following shall be excluded from
the calculation of assets: (i) cash; (ii) credit balances on accounts
receivable; (iii) deferred income taxes; (iv) deferred financing costs; and (v)
goodwill resulting from the acquisition of Amatek Holdings, Inc. and its
subsidiaries, including Metal Building Components, Inc. ("MBCI Goodwill").
(B) For fiscal years 1998 and 1999 only, the unamortized
investment in Midwest Metal Coatings, LLC shall be excluded from the calculation
of assets.
(C) For all fiscal years, interest expense shall be added back
to pre-tax income and income from investment of cash, if any, shall be deducted.
(D) For fiscal years 1998 and 1999 only, amortization and
depreciation of the MBCI Goodwill and of the investment in Midwest Metal
Coatings, LLC shall be added back to pre-tax income and the income or loss of
Midwest Metal Coatings, LLC shall be excluded.
If the Company conducts a public offering of equity securities, the Committee
will evaluate and determine at that time whether any adjustments should be made
to the calculation of EPS Growth.
6. Interpretation. The Committee shall interpret the Program and shall
prescribe such rules and regulations in connection with the operation of the
Program as it determines to be advisable. The Committee may rescind and amend
its rules, regulations and interpretations.
7. Amendment or Termination. The Program may be terminated at any time
or amended from time to time by the Committee without the consent or approval of
the participants in the Program.
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<PAGE> 4
8. Effect of Program. Neither the adoption of the Program nor any
action of the Committee, including action taken at any time to terminate or
amend the Program, shall be deemed to give any officer, manager, employee,
participant or other person any right to receive a bonus or any other rights,
whether as a third party beneficiary or otherwise.
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<PAGE> 1
EXHIBIT 10.4
NCI BUILDING SYSTEMS, INC.
NONQUALIFIED STOCK OPTION PLAN
[AMENDED AND RESTATED AS OF DECEMBER 12, 1996]
On April 11, 1989, the Board of Directors of NCI Building Systems, Inc.
(then named National Components Incorporated), a Delaware corporation (the
"Company"). adopted the Nonqualified Stock Option Plan (the "Plan"). The Company
subsequently has amended the Plan from time to time.
On December 12, 1996, the Board of Directors of the Company amended and
restated the Plan in its entirety to, among other things, increase the number of
shares of Common Stock that may be made the subject of options under the Plan,
set forth the terms for the automatic grant of options to Non- Employee
Directors, extend the term of the Plan and provide that stockholder approval of
any amendments to the Plan shall not be required except for an amendment that
would increase the number of securities that may be issued under the Plan.
The Plan, as so amended and restated on December 12, 1996, is as
follows:
1. PURPOSE. The purpose of the Plan is to provide certain key employees
and consultants (i.e., persons who provide management or consulting services) of
the Company and the Non-Employee Directors with a proprietary interest in the
Company through the granting of options which will
(a) increase the interest of the key employees, consultants,
and Non-Employee Directors in the Company's welfare;
(b) furnish an incentive to the key employees, consultants,
and Non-Employee Directors to continue their services for the Company; and
(c) provide a means through which the Company may attract able
persons to enter its employ or to provide management and consulting services to
the Company or to serve as Non- Employee Directors.
2. ADMINISTRATION. The Plan will be administered and interpreted by the
Board. The Board may delegate to any Committee or Committees of the Board the
power and authority to grant options to any or all classes of key employees of
the Company and to administer and interpret the Plan as its relates to such
employees and any options granted to them.
3. PARTICIPANTS. The Board may from time to time select the particular
employees of and consultants to the Company and its Subsidiaries to whom options
are to be granted. Upon each such grant, the selected employee or consultant
will become a participant in the Plan. Each Non-Employee Director of the Company
shall be granted an option under the Plan from time to time as provided herein
and, upon the initial grant of an option, will become a participant in the Plan.
4. SHARES SUBJECT TO PLAN. The Board may not grant options under the
Plan for more than 2,050,000 shares of Common Stock of the Company, but this
number may be adjusted to
<PAGE> 2
reflect, if deemed appropriate by the Board, any stock dividend, stock split,
share combination, recapitalization or the like, of or by the Company. Shares to
be optioned and sold may be made available from either authorized but unissued
Common Stock or Common Stock held by the Company in its treasury. Shares that by
reason of the expiration of an option or otherwise are no longer subject to
purchase pursuant to an option granted under the Plan may be reoffered under the
Plan.
5. GRANT OF OPTIONS; ALLOTMENT OF SHARES.
(a) The Board shall determine the number of shares of Common
Stock to be offered from time to time by grant of options to key employees of or
consultants to the Company or its Subsidiaries. The grant of an option to a key
employee or consultant shall not be deemed either to entitle the employee or
consultant to, or to disqualify the employee or consultant from, participation
in any other grant of options under the Plan. The Board may grant options to key
employees or consultants after its amendment and restatement on December 12,
1996 and prior to stockholder approval of the Plan. If for any reason the
stockholders of the Company do not approve the restated Plan at their 1997
annual meeting (or any adjournment thereof), all options granted to consultants,
and all options granted to employees under the restated Plan at a time when the
aggregate number of shares subject to then outstanding options exceeded the
aggregate number of shares then available for issuance pursuant to the Plan,
will be terminated and of no effect and all other options granted to employees
during such period shall remain outstanding and shall be governed by the Plan as
it existed prior to its amendment and restatement on December 12, 1996. No
option that is so subject to termination may be exercised in whole or in part
prior to such stockholder approval.
(b) On the date of his or her initial election or appointment
to the Board, a Non- Employee Director of the Company shall be granted an option
to purchase 5,000 shares of Common Stock of the Company. On the date of each
annual stockholders meeting of the Company, each Non- Employee Director of the
Company shall be granted an option to purchase 1,000 shares of Common Stock of
the Company unless (i) the initial election of such Non-Employee Director is at
such annual stockholders meeting or (ii) the term of such Non-Employee Director
ends on such date and he or she is not elected to an additional term at such
annual stockholders meeting. No option may be granted under this subsection
prior to the date of the 1997 annual meeting of stockholders of the Company (or
any adjournment thereof).
6. OPTION AGREEMENTS. Options granted pursuant to the Plan shall be
evidenced by stock option agreements containing such terms and provisions as are
approved by the Board but not inconsistent with the Plan. The Company shall
execute stock option agreements upon instructions from the Board. Options
granted under the Plan prior to its amendment and restatement on December 12,
1996 shall continue in effect in accordance with the terms of their original
grant and the option agreements executed in connection therewith and, if the
restated Plan is approved by stockholders of the Company at their 1997 annual
meeting, shall be entitled to the benefit of any amendments to the Plan so
approved that favorably modify the rights of the participants.
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<PAGE> 3
7. OPTION PRICE.
(a) With respect to options granted to key employees or
consultants, the option price shall be not less than 100% of the fair market
value per share of the Common Stock on the date of grant. The Board shall
determine the fair market value of the Common Stock, and shall set forth the
determination in its minutes, using any reasonable valuation method. Unless the
Board determines that another valuation method should be used for a particular
grant, the fair market value of the Common Stock shall be deemed to be the last
sale price of the Common Stock of the Company on the major securities exchange
or market on which it is traded on the last trading day immediately preceding
the date of grant.
(b) With respect to options granted to Non-Employee Directors,
the option price shall be equal to 100% of the fair market value per share of
the Common Stock on the date of grant, which for these purposes shall be deemed
to be the last sale price of the Common Stock of the Company on the major
securities exchange or market on which it is traded on the last trading day
immediately preceding the date of grant.
8. OPTION PERIOD; VESTING.
(a) The Option Period for options granted to key employees and
consultants will begin on the date the option is granted, which will be the date
the Board authorizes the option unless the Board specifies a later date. No
option may terminate later than ten years from the date the option is granted.
The Board or the Committee may provide for the options to vest and become
exercisable in installments and upon such other terms, conditions and
restrictions as it may determine. The Board may provide for earlier termination
of the option and the Option Period in the case of termination of the employment
or consulting relationship, or for any other reason. If the employee or
consultant dies or becomes permanently disabled (as determined in the sole
discretion of the Board or Committee) while serving in the employment of or as a
consultant to the Company or retires from such employment or consulting
relationship at or after Normal Retirement Age, or if there occurs a Change in
Control, then 100% of the shares subject to his or her options will become
vested and will be available thereafter for purchase during the Option Period.
(b) The Option Period for options granted to a Non-Employee
Director will begin on the date the option is granted and will terminate on the
earlier of (i) the tenth anniversary of the date of grant; (ii) the 30th day
after the Non-Employee Director is no longer a director of the Company for a
reason other than death, permanent disability (as determined in the sole
discretion of the Board or Committee) or retirement at or after the Normal
Retirement Age; or (iii) one year after death or permanent disability (as
determined in the sole discretion of the Board or Committee) of the Non-
Employee Director or after his or her retirement as a director of the Company at
or after the Normal Retirement Age. On the anniversary of the date of grant of
each such option, 25% of the shares subject to the option will become vested and
will be available thereafter for purchase during the Option Period, provided
that from the date of grant through such vesting date the Non-Employee Director
had served continuously as a director of the Company. If the Non-Employee
Director dies or becomes permanently disabled (as determined in the sole
discretion of the Board or Committee) while serving as a director of the Company
or retires as a director of the Company at or after Normal Retirement Age, or if
there
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<PAGE> 4
occurs a Change in Control, then 100% of the shares subject to the option will
become vested and will be available thereafter for purchase during the Option
Period.
9. RIGHTS OF ESTATE OR BENEFICIARIES IN EVENT OF DEATH. If a
participant dies prior to termination of his or her right to exercise an option
in accordance with the provisions of the Plan or his or her stock option
agreement without having totally exercised the option, the option may be
exercised during the remainder of the Option Period by the participant's estate
or by the person who acquired the right to exercise the option by bequest or
inheritance or by reason of the death of the participant, provided the option is
exercised prior to the date of expiration of the Option Period or one year from
the date of the participant's death, whichever first occurs.
10. PAYMENT. Full payment for shares of Common Stock purchased upon
exercising an option shall be made in cash or by check at the time of exercise,
or on such other terms as are set forth in the applicable option agreement. No
shares of Common Stock may be issued until full payment of the purchase price
therefor has been made, and a participant will have none of the rights of a
stockholder until shares are issued to him.
11. EXERCISE OF OPTION. Unless otherwise provided in this Plan, all
options granted under the Plan may be exercised during the Option Period at such
times, in such amounts, in accordance with such terms and subject to such
restrictions as are set forth in the applicable stock option agreements. In no
event may an option be exercised or shares be issued pursuant to an option if
any requisite action, approval or consent of any governmental authority of any
kind having jurisdiction over the exercise of options shall not have been taken
or secured.
12. CAPITAL ADJUSTMENTS AND REORGANIZATIONS. The number of shares of
Common Stock covered by each outstanding option granted under the Plan
(including those held by Non-Employee Directors) and the option price may be
adjusted to reflect, as deemed appropriate by the Board, any stock dividend,
stock split, share combination, exchange of shares, recapitalization, merger,
consolidation, separation, reorganization, liquidation or the like, of or by the
Company. The number of shares to be made the subject of an initial grant and
annual grants to Non-Employee Directors, as set forth in Section 5 hereof, shall
not be adjusted for any stock dividend or stock split that may occur prior to
the grant, but shall be adjusted to reflect any share combination, exchange of
shares, recapitalization, merger, consolidation, separation, reorganization,
liquidation or the like of or by the Company that occurs prior to the grant, in
the same manner as outstanding options held by all participants are adjusted by
the Board. If a Change of Control shall occur, the holder of an option will be
entitled to receive, for the aggregate exercise price payable upon exercise of
his or her option and in lieu of the Common Stock or other consideration
otherwise issuable to him or her upon exercise of the option, the same kind and
amount of securities or assets as may be distributable, in or pursuant to the
transaction or transactions resulting in the Change of Control, to a holder of
the same number of outstanding shares of Common Stock of the Company as the
number of shares of Common Stock of the Company that are subject to the option
immediately prior to such transaction or transactions.
13. NON-ASSIGNABILITY. Options may not be transferred other than by
will or by the laws of descent and distribution. During a participant's
lifetime, options granted to a participant may be exercised only by the
participant.
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<PAGE> 5
14. INTERPRETATION. The Board shall interpret the Plan and shall
prescribe such rules and regulations in connection with the operation of the
Plan as it determines to be advisable for the administration of the Plan. The
Board may rescind and amend its rules and regulations.
15. AMENDMENT OR DISCONTINUANCE. The Plan may be amended or
discontinued by the Board without the approval of the stockholders of the
Company, except that any amendment that would materially increase the number of
securities that may be issued under the Plan must be approved by the
stockholders of the Company. The Plan may not be amended more than once in any
six-month period to modify any of the terms or provisions of the Plan relating
to options granted or that may be granted to Non-Employee Directors, unless the
amendment is required to comply with changes in tax laws and regulations or with
laws and regulations governing employee benefit plans and programs.
16. EFFECT OF PLAN. Neither the adoption of the Plan nor any action of
the Board shall be deemed to give any officer, employee, or consultant or
director any right to be granted an option to purchase Common Stock of the
Company or any other rights except as may be evidenced by the stock option
agreement, or any amendment thereto, duly authorized by the Board and executed
on behalf of the Company and then only to the extent and on the terms and
conditions expressly set forth therein and in the Plan.
17. TERM. Unless sooner terminated by action of the Board, this Plan
will terminate on April 10, 2009. The Board may not grant options under the Plan
after that date, but options granted before that date will continue to be
effective in accordance with their terms (subject to the condition of obtaining
stockholder approval with respect to certain options as set forth in Section
5(a)).
18. DEFINITIONS. For the purpose of this Plan, unless the context
requires otherwise, the following terms shall have the meanings indicated:
(a) "Board" means the Board of Directors of the Company.
(b) "Change of Control" means any sale of substantially all of
the assets of the Company, or any merger, consolidation or corporate
reorganization of the Company, or any tender offer or exchange offer for stock
of the Company, as a result of which the holders of Common Stock of the Company
immediately prior to the consummation of such transactions or series of
transactions own or could own capital stock representing less than 50.1% of the
equity or less than 50.1% of the voting power of all classes of stock of the
surviving, resulting or purchasing corporation that is outstanding immediately
following the consummation thereof.
(c) "Committee" means any committee of the Board to which it
has delegated the power and authority to grant options to any or all classes of
key employees of the Company and to administer and interpret the Plan as its
relates to such employees or consultants and any options granted to them.
(d) "Common Stock" means the Company's Common Stock, $.01 par
value, which the Company is currently authorized to issue or may in the future
be authorized to issue (as long as the common stock varies from that currently
authorized, if at all, only in amount of par value).
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<PAGE> 6
(e) "Non-Employee Director" means an independent director who:
(1) Is not currently an officer of the Company or a
Subsidiary, or otherwise currently employed by the Company or a
Subsidiary;
(2) Does not receive compensation, either directly or
indirectly, from the Company or a Subsidiary for services rendered as a
consultant or in any capacity other than as a director, except for an
amount that does not exceed the dollar amount for which the disclosure
would be required under the Securities Acts;
(3) Does not possess an interest in any other
transaction for which disclosure would be required under the Securities
Acts; and
(4) Is not engaged in a business relationship for
which disclosure would be required pursuant to the Securities Acts.
(f) "Nonqualified Option" means an option granted under the
Plan which is not intended to be an option that satisfies the requirements of
Section 422 of the Internal Revenue Code of 1986, as amended.
(g) "Normal Retirement Age" means the age established by the
Board from time to time as the normal age for retirement of a director or
employee, as applicable. In the absence of a determination by the Board, the
Normal Retirement Age of Non-Employee Directors shall be deemed to be 70 years
of age and, for all other participants, shall be deemed to be 65 years of age.
(h) "Option Period" means the period beginning on the date of
grant of an option and terminating on the last day an option may be exercised,
as provided in the Plan or, if applicable, the related stock option agreement.
(i) "Plan" means the NCI Building Systems, Inc. Nonqualified
Stock Option Plan, as amended and restated as of December 12, 1996, as hereafter
amended from time to time.
(j) "Securities Acts" means the Securities Act of 1933 and the
Securities Exchange Act of 1934, as amended, and the regulations issued
thereunder.
(k) "Subsidiary" means any corporation in an unbroken chain of
corporations beginning with the Company if, at the time of the granting of the
option, each of the corporations other than the last corporation in the unbroken
chain owns stock possessing 50% or more of the total combined voting power of
all classes of stock in one of the other corporations in the chain, and
"Subsidiaries" means more than one of any such corporations.
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<PAGE> 1
EXHIBIT 13
[NCI LOGO]
[PHOTO]
<PAGE> 2
[VARIOUS LOGOS]
BUSINESS DESCRIPTION
One of the largest integrated manufacturers and marketers of metal building
components and pre-engineered metal building systems in North America, NCI
Building Systems offers one of the most extensive metal product lines in the
building industry, under well-recognized brand names. Through internal growth,
accretive acquisitions and the astute management of assets, the company has
compiled a record of revenue and earnings growth well above the industry
average.
In 1998, NCI doubled its size by combining with Metal Building Components, Inc.,
establishing NCI as a leader in each of its key markets.
Today, NCI is:
o The largest producer and distributor of metal components for building
construction -- growing at an estimated 15% annual rate.
o The second largest producer of pre-engineered metal building systems.
o The largest supplier of metal roofs in an estimated $20 billion roofing
industry.
o A leading provider of metal coating and painting services.
o An industry leader in growth, profitability and innovation.
o A low-cost supplier.
The Company is prepared to benefit from a larger sales force and customer base,
broader product lines, expanded geographic distribution, and increased
manufacturing capacity. NCI's target is 15% annual revenue growth, 20% earnings
growth and 30% Return on Operating Assets based on it's sound growth strategy
and assuming a relatively stable industry economic outlook.
NCI continues to successfully assemble the "Components of Growth."
<PAGE> 3
[MAP]
*MAJOR BUILDING PLANT
+COMPONENT PLANT
oCOIL COATING PLANT
With the addition of 20 manufacturing facilities, NCI increased its operating
space by 130% to 3.5 million square feet, and now has 38 facilities in 18 states
and Mexico. Facility integration employs NCI's "hub and spoke" system of
satellite manufacturing. This concept places "spoke" locations for the
manufacture of secondary structural framing, covering systems, and final
distribution closer to the customer, reducing transportation costs and
delivery times and improving customer service.
Highlights of 1998
o Increased revenues by 65.6% and EPS to $2.05
o Successfully combined with MBCI doubling our revenue base
o Combined the industry's profit leaders
o NCI became the #1 domestic metal construction products manufacturer
o Generated ROE of 20%
o Listed common stock on the NYSE under the ticker symbol `NCS' and affected
a two-for-one stock split As our 1998 Annual Report theme indicates, NCI
continues to assemble new "Components of Growth" for 1999 and the new
century.
<PAGE> 4
SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
Year ended October 31, (1)
--------------------------------------------------------
1994 1995 1996 1997 1998
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Sales ............................................ $167,767 $234,215 $332,880 $407,751 $675,331
Net income ....................................... 10,256 17,032 24,814 27,887 37,318
Net income per share - diluted ................... .77 1.26 1.51 1.64 2.05
Working capital .................................. 16,885 31,687 51,958 76,746 58,393
Total assets ..................................... 63,373 83,082 158,326 196,332 823,537
Long-term debt, noncurrent portion ............... 326 278 1,730 1,679 444,477
Shareholders' equity ............................. $ 39,682 $ 57,682 $116,175 $147,815 $223,612
-------- -------- -------- -------- --------
Average common shares, assuming dilution ......... 13,390 13,530 16,455 17,085 18,192
-------- -------- -------- -------- --------
</TABLE>
(1) All numbers in thousands except net income per share.
OPERATING POLICIES
RETURN ON ASSETS
Return on assets (ROA) is defined as operating income divided by average
operating assets used in the business (eliminating primarily cash, goodwill, and
certain other non-operating assets). NCI's management and directors are
thoroughly convinced that this ratio is the best measure of operating
performance. Tight control over inventory, receivables, and fixed investment is
as important as, and interrelated to, control of the income statement. Return on
assets is a proxy for cash flow, which can reward shareholders with undiluted
growth. In fiscal year 1998, NCI earned a return on operating assets employed
in the business of 31%.
GROWTH
The company is dedicated to increasing its market share through strong
marketing and low cost, quality manufacturing. Special niches that provide
unusual profit and growth opportunities are sought. Overall profit growth of at
least 20% per year is an intermediate goal of the company with larger increments
possible in the short-term. This growth may be internally generated or it may
come from carefully selected acquisitions.
DIVIDENDS
The company's officers and directors are all large stock or option holders.
Thus, there is much sympathy for dividends. However, it is considered
appropriate, at this stage of the company's development and in view of the
available returns, to invest that money in the growth of the equity of the
Company and the repayment of debt as opposed to paying dividends.
COMPENSATION
The company believes in providing base salaries for its management on the low
side of industry norms with opportunities, based on performance, to obtain very
high bonuses. Specifically, return on assets is the criterion for performance
measurement. Bonuses begin when the ratio of operating income divided by assets
used in the business is equal to 20%. Maximum bonuses, at a very high level, can
be earned when 30% returns and 20% growth in earnings per share are achieved.
This measure is felt to be most important because management of both the
balance sheet and the income statement are critical to long-term success,
especially in a cyclical industry.
CORPORATE RESPONSIBILITY
The company is committed to the goal of being an exemplary corporate citizen.
Toward that end, we have an intense safety program ongoing in the workplace. We
also improved our broad coverage of health insurance to all employees this year.
There are not only employment, but, advancement opportunities through our
growth. We have proper awareness and concern for the overall environment.
Finally, we employ high quality engineering professionals to ensure that our
products are designed using sound engineering practices and principles.
1
<PAGE> 5
DEAR SHAREHOLDERS
Our company had an exciting and rewarding 1998, establishing new "Components of
Growth" that we believe will serve as springboards for NCI's performance in the
coming years. Sales and diluted earnings per share set new records at $675.3
million and $2.05, respectively. These numbers were up 66% and 25% compared to
1997. Internal sales growth was strong in our core businesses. Financial
performance also was substantially enhanced by sales and earnings contribution
during the last two quarters from Metal Building Components, Inc. (MBCI), which
was acquired in May of 1998. Strong cash flow and balance sheet management, a
trademark of the company, have enabled us to reduce acquisition debt
significantly.
As a result of the transaction, NCI's balance sheet became more highly leveraged
than in the past with $540 million in debt. However, strong cash flow was used
to reduce this amount to $474 million by October 31, 1998, net of $15 million
for an additional acquisition expense. Based on the company's outlook for
continued strong cash generation, we believe we can reduce debt an additional
$50 million in 1999.
[PHOTO]
THE TRANSACTION WITH MBCI COMBINED LEADERS IN
GROWTH AND PROFITABILITY.
The dominant event for fiscal 1998 was the mid-year transaction with MBCI for
approximately $590 million including 1.4 million shares of NCI common stock --
the company's largest transaction to date. This combination united two industry
leaders in sales growth and profitability, and effectively:
o DOUBLED SALES FROM $408 MILLION TO $816 MILLION IN 1997 PRO FORMA REVENUES.
NCI now dominates the building components and metal building systems
markets, and has leading positions in the metal coating and painting and
roll-up industrial door markets. The combined manufacturing capabilities
also provide a broad North American geographic presence.
o PROVIDED MAJOR FUTURE GROWTH OPPORTUNITIES. Once competitors, NCI and MBCI
now are able to leverage customer relationships and cross sell a
significantly larger product and service offering. Additionally, NCI now
has one of the largest metal coating businesses in the industry, a
vertical integration bringing metal coating and painting in house and a
growing capacity to service an external customer base.
o CREATED $15 MILLION IN ANNUAL COST REDUCTION OPPORTUNITIES. In 1998,
management identified $15 million in potential cost savings through
enhanced purchasing power plus operational consolidations. This is a
minimum amount of savings that we now expect. It improved NCI's
competitive position as a low-cost provider.
o ASSEMBLED A STRONGER AND DEEPER MANAGEMENT TEAM. MBCI brought with it some
of the top executives and managers in the metal building and components
industry, substantially broadening NCI's talent pool. A.R. Ginn, MBCI's
president, and Ken Maddox, MBCI's chief financial officer, were added to
NCI's board of directors and are key members of the Company's executive
management team.
In summary, the combination of these top-performing companies represents a
hallmark event to NCI and its shareholders.
2
<PAGE> 6
NCI SPLITS STOCK; LISTS ON THE NYSE UNDER THE NEW SYMBOL 'NCS.'
NCI listed on the New York Stock Exchange on August 13, 1998. As a company
approaching $1 billion in revenues, we see this listing as a natural evolution.
The "Big Board" provides NCI with increased global visibility, and may lead to
higher valuation as more investors learn of the Company's history of consistent
growth and opportunity ahead.
We also made the decision to split the stock two for one, effective in July, in
order to help improve liquidity and achieve a more popular price level. We are
pleased with increased national and regional coverage since our acquisition,
which gained us national media attention in such publications as the Wall
Street Journal and New York Times, and the addition of new analysts covering NCI
in 1998. Along with increased size and enhanced growth prospects, these factors
should attract a new profile of investors interested in the building materials
sector as well those seeking solid value.
NCI'S GROWTH STRATEGY AND BUSINESS OBJECTIVES
REMAIN UNCHANGED.
Growth strategies have remained unchanged since the company's founding in 1984.
Through internal growth and acquisitions, we will continue to expand marketing
opportunities with a broader product line and larger customer base. We will
vertically integrate where it makes sense in order to become the `one-stop
shopping' source for metal components, pre-engineered building systems, and
metal coating and painting. The MBCI acquisition is a catalyst for these
strategies, and adds to a number of other initiatives underway that we believe
will generate further new growth.
TWO TRANSACTIONS ADD METAL COATING AND PAINTING CAPACITY. Acquired in 1998 for
$15 million, Metal Coaters of California is our first West Coast metal coating
operation and will help deliver coated steel to our western states facilities
more quickly and at a lower cost. We are extremely proud that Metal Coaters of
California was profitable in its first full month as an NCI operation. This
facility should achieve our 30% ROA goal in 1999. Also last year, NCI invested
in a 50% joint venture with Precoat Metals, a division of Sequa Corporation.
This facility will start up in the first calendar quarter of 1999.
NEW LONG BAY SYSTEM ENABLES COMPETITIVE ENTRY INTO LARGE BUILDINGS MARKET. NCI
leads the market in the production of smaller metal buildings averaging in the
$30,000 price range. NCI's new long bay secondary system provides us with a
competitive entry into larger buildings with internal column spaces over 40
feet -- a large and profitable market.
GROWTH OF MEXICAN MANUFACTURING VENTURE EXPECTED IN 1999. A joint venture in
Monterrey, Mexico is providing highly needed mainframe manufacturing capacity to
service our numerous mini-plants across the U.S. The Monterrey plant has
abundant access to raw materials and available labor and is already proving to
be a cost effective endeavor. In addition, we believe this facility can leverage
NCI's entry into the Mexican market. Started in 1997, this facility should be a
big contributor in 1999.
3
<PAGE> 7
HUMAN RESOURCES COMPLETED A HUGE INTEGRATION IN RECORD TIME.
We are particularly pleased with the way NCI and MBCI have fit together. Our
Human Resources Department coordinated benefits, and added a new, modified bonus
program that rewards management based on a combination of both earnings per
share growth and return on assets employed (ROA). This revised bonus program
takes effect in fiscal 1999. Formerly, NCI rewarded just on ROA, however, we
believe our new growth opportunities call for incorporating this second
important performance characteristic as well.
THE OUTLOOK FOR NCI HAS NEVER BEEN BRIGHTER.
Each year, NCI states its operating policies in the annual report. These
policies have not changed over the years, nor have our objectives. We seek to
enhance shareholder value by averaging 15% annual revenue growth and 20% annual
growth in earnings, and providing 30% Return on Operating Assets, and to remain
alert for acquisition opportunities that will escalate shareholder value. We
exceed those objectives nearly every year. We firmly believe 1999 will be no
exception. The efforts in 1998 have set in place NCI's strong "Components of
Growth" for the new century.
<TABLE>
<S> <C> <C>
/s/ C.A. RUNDELL, JR. /s/ JOHNIE SCHULTE, JR. /s/ A.R. GINN
C.A. Rundell, Jr. Johnie Schulte, Jr. A.R. Ginn
Chairman of the Board Chief Executive Officer President & Chief Operating
Officer
</TABLE>
December 11, 1998
[PHOTO]
From left to right: Johnie Schulte, Jr., C.A. Rundell, Jr., and A.R. Ginn.
<PAGE> 8
1998 - A MILESTONE IN NCI HISTORY
Since being founded by Johnie Schulte in 1984, the Company has created higher
bench-marks for performance each year as NCI employees test marketing programs
unique to the industry, pursue new products and markets, develop innovative
manufacturing and distribution systems, and further leverage growth with a long
track record of successful acquisitions. Key periods in the company's evolution
are:
1984-1993: NCI's first acquisition, MID-WEST METALLIC division of American
Buildings Company, is completed in 1989. In 1992, NCI acquires A&S BUILDING
SYSTEMS. Other NCI product brands include ALL AMERICAN SYSTEMS AND STEEL
SYSTEMS. Also in 1992, the company goes public at $3.17 per share. The stock is
split 3-for-2 in 1993. NCI breaks the $100 million sales mark by a landslide
achieving $134.5 million in sales and $6.3 million in net income in its tenth
year in business.
1994-95: Forbes recognizes NCI each year as one of its top '200 Small Companies
in America.' The company acquires ROYAL METAL BUILDINGS, CARLISLE WESTERN
ALABAMA AND DOORS & BUILDING COMPONENTS, INC. In 1995, NCI completes a secondary
offering at $12 per share. Revenue surpasses the $200 million level in 1995
achieving sales of $234.2 million and net income of $17.0 million.
1996-1997: Recognized again by Forbes in 1996, NCI acquires MESCO, CARLISLE
HOUSTON AND INSULATED PANEL SYSTEMS. Four new plants open. Sales double again by
1997, reaching $407.8 million and generating $27.9 million in net income.
1998 -- Proforma sales double to $816 million with NCI's largest transaction to
date, METAL BUILDING COMPONENTS, INC. NCI bolsters its rapidly growing metal
painting business with the acquisition of CALIFORNIA COIL COATERS and a joint
venture with PRECOAT METALS. Additional mainframe capacity comes online with a
manufacturing joint venture in Monterrey, Mexico. The company again splits the
stock 2-for-1, and lists on the NYSE.
[PHOTO]
This year's listing on the New York Stock Exchange exemplifies a year of
memorable achievements that has launched NCI into a new phase of growth and
opportunity.
5
<PAGE> 9
[PHOTO]
ROBERT J. MEDLOCK
Executive Vice President, and Chief Financial Officer
"NCI is a leading non-residential supplier of metal building products and the
unquestioned leader in sales and net income growth with a 5-year CAGR of 37.9%
and 40.5%, respectively. This impacts our visibility in both our markets and on
Wall Street, and supports our ability to remain the most competitive and
aggressive player in our industry."
[GRAPH]
NCI CONTINUES TO TAKE ADVANTAGE
OF GROWTH OPPORTUNITIES
THROUGH ACQUISITION AND INTERNAL
BUSINESS DEVELOPMENT.
Performance in 1998 punctuates NCI's strategy and successful track record of
capitalizing on opportunities that add immediate and long-term growth potential.
This year's principal achievement was our largest acquisition to date -- Metal
Building Components, Inc. While this was not the only important initiative taken
during the year that will impact 1999 and beyond, the acquisition is
significantly affecting every facet of the business, from new sales
opportunities, to market expansion, to distribution, to cost reduction. It
combines two companies that have collaborated and competed for over a decade.
Both have been leaders in their respective markets, aggressively acquisitive,
and entrepreneurial in business approach. Both lead the industry in sales and
earnings growth and profitability by a wide margin.
THE BENEFITS OF THE MBCI
ACQUISITION TOUCH ALL ASPECTS
OF THE BUSINESS, INCLUDING:
o Realizing economies of scale, including purchasing efficiencies;
o Expanding internal metal coil coating and painting capacity and utilizing
internal capacity to produce many products that were previously purchased
from third parties;
o Cross selling broader product lines to a wider customer base;
o Expanding the geographic scope of operations throughout the United States;
o Rationalizing production capacity to maximize productivity and eliminate
redundant costs;
o Consolidating metal components management, sales and marketing; and
o Eliminating duplicative administrative costs.
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<PAGE> 10
[PHOTO]
ECONOMIES OF SCALE ENHANCE
LOW-COST PRODUCTION.
NCI has gained substantial cost savings from combining operations with MBCI. We
originally targeted $15 million in annual savings resulting from purchasing
power, production and distribution expansions and efficiencies, combining
painting and coating facilities, and eliminating redundancies. After the first
six months together, our cost reduction efforts are on track, and we now believe
that annual savings will exceed our original target.
Further cost improvements will be realized in 1999 by rationalizing and
combining component and building system operations and products. The company's
large-scale manufacturing capabilities provide additional purchasing
efficiencies and enhance productivity through the sharing of best practices
between metal components and building systems operations.
By the end of the year, we completed the consolidation of NCI and MBCI's
components operations. We accomplished that task well ahead of schedule. This
included the standardization of products, processes and manufacturing equipment,
paint and color consolidations, corporate-wide standardization of product
coding and labeling, and the closure of three redundant plants. The company
also installed the first phase of a new MIS system that, when completed in 1999,
will help manage order entry, inventory, manufacturing and financials throughout
the company.
[PHOTO]
KEN MADDOX
Executive Vice President, Administration
"NCI has become the largest user of coated steel in the U.S. construction
industry, sourcing from both domestic and international suppliers. Integration
into metal coating and painting places the company as the largest user of paint
in the industry. These factors when combined with other cost reduction efforts
has enabled the company to be the low cost supplier of metal building systems
and components."
[GRAPH]
7
<PAGE> 11
[PHOTO]
FRED KOETTING
Vice President, Operations of Metal Buildings Division
"NCI is well prepared to meet anticipated sales growth in the next few years.
The success of our frame production facility in Mexico and the expansion of
structural and building frame capacity in Houston, along with the addition of
the MBCI component product lines will give us ample ability to service our
customers."
[GRAPH]
[PHOTO]
ADDED MANUFACTURING CAPACITY
AND GEOGRAPHIC REACH SUPPORT
GROWTH PLANS.
With the addition of 20 manufacturing facilities, we have increased our total
operating space by 130% to 3.5 million square feet, and now have 38 facilities
in 18 states and Mexico. This increase came through the acquired MBCI plants,
two additional metal painting and coil coating facilities, and the new mainframe
plant in Mexico, which became fully operational in 1998. This has enabled
manufacturing to cost-effectively support the company's expansion efforts into
new geographic markets. NCI's metal building system plants, located primarily in
the South, Southwest and West, fortify the company's metal components expansion
nationwide. The addition of MBCI's metal components locations in the Northeast
and Northwest provide an attractive platform for the metal buildings group to
extend into new regional markets.
Facilities integration will continue to employ NCI's "hub and spoke" system of
satellite manufacturing. This concept places "spoke" locations for the
manufacture of secondary structural framing, covering systems and final
distribution closer to the customer, thereby reducing transportation costs and
delivery times, and improving customer service. These lower labor and
engineering intensive facilities are supported by "hub" plants, which handle
heavy manufacturing of components such as mainframes. Throughout the
integration, modest capital investments have been made to support higher
production levels where possible.
8
<PAGE> 12
In 1998, we also completed one of our highest priority objectives -- the
integration and internalization of the company's metal coating and painting
capability. During the year, we established the internal capacity to pre-treat,
coat and paint all of our products for all facilities nationwide. This is a
highly cost-effective vertical integration and has also created a new profit
center. Even with the additional capacity resulting from the MBCI acquisition,
however, painting and coating capacity was still strained. In May, Metal Coaters
of California was acquired for $15 million. Located on main railways in Southern
California, this plant is now effectively servicing NCI's manufacturing demand
in the West. We are in the process of adding a sixth painting operation with a
50% owned joint venture with Precoat Metals, a division of Sequa Corporation.
Located in Granite City, Illinois, this new facility will be fully operational
in the first calendar quarter of 1999. Together, these two facilities have added
18% additional painting and coating production capacity, sufficient to cover our
needs into the year 2000.
Another focus in 1998 was the joint venture manufacturing facility in
Monterrey, Mexico. NCI has had a growing need for additional heavy manufacturing
capacity, including primary structural mainframes. This issue has become even
more critical with the growth anticipated from the MBCI acquisition. Initiated
in 1997, the plant is now fully operational and able to support the company's
anticipated growth requirements. This facility is a joint venture with an
established Mexican steel service company. Benefits of the arrangement include
an abundant access to raw materials and qualified labor. This new plant has
added 17% more heavy steel manufacturing capacity and will provide secondary
framing to support NCI's expansion into the Mexican market.
[PHOTO]
LEN GEORGE
Executive Vice President of Metal Buildings Group
"We are extremely excited about the potential that our new long bay secondary
system offers. This new structural assembly will enable NCI to effectively
compete in the large building market, which is estimated at $1 billion. The
average large-bay building sale is approximately $500,000, compared to the
company's current average building sale of $35,000."
[PHOTO]
[GRAPH]
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<PAGE> 13
[PHOTO]
KELLY GINN
Vice President, Manufacturing of Metal Components Group
"In 1998, NCI essentially evolved from its leading position in metal building
systems to become the leading manufacturer of metal components, building
systems and metal coil coating and painting - all businesses that should
generate 15% or greater revenue growth through current aggressive strategies to
expand and penetrate our markets."
[GRAPH]
As a result of the company's expanded geographic scope, we are better able to
meet customer's product and delivery needs, realize production efficiencies and
improve our ability to attract builders and other customers. We believe these
facilities will be sufficient to support our production requirements for the
next few years and are not planning for any large capital expansion in 1999.
GROWTH OPPORTUNITIES
BIGGER MARKETS, BETTER DISTRIBUTION
AND MORE PRODUCTS.
Achievements in 1998 have made NCI a more vertically integrated and
geographically diverse provider of metal buildings, components and services.
Adding to the company's large business in metal buildings, NCI has market share
in metal components more than twice that of its nearest competitor, and leading
positions in metal coil coating and painting and commercial doors. As the
industry's largest one-stop source for metal buildings and components, the
company has large new sales growth opportunities based on expanded geographic
coverage, cross selling between NCI and MBCI distribution channels and product
lines, and new product introductions.
NCI'S LARGE EXPOSURE IN THE COMPONENTS
BUSINESS IS ANTICIPATED TO ADD
HIGHER-GROWTH POTENTIAL AND GREATER
RESILIENCE TO ECONOMIC CYCLES.
Comprising 59% of the company's 1998 revenues, metal components is a $3 billion
market growing at an estimated 15% per year. The largest percentage of our
component sales comes from metal roofs, which competes with non-metal roofing
systems in the estimated $20 billion roofing market.
10
<PAGE> 14
[PHOTO]
We believe strong growth will continue in our roofing business, as the company
offers a cost-effective, low-maintenance product with a life more than twice
that of conventional roofing materials. Other metal component products include
wall systems, overhead doors, fascia, mansard and various trim accessories for
commercial, industrial, architectural, agricultural and residential
construction and repair and retrofit uses. Components are being used to a
greater degree for building repair and retrofit which is generally unaffected
by new construction cycles, and can even be counter-cyclical.
Demand for metal buildings and components in major construction and
architectural communities continues to expand. Our products are finding
increasing use in such high-traffic, long-term applications as strip malls,
office buildings, community centers, schools, churches and residential
construction. Growing aesthetic appeal plays an important role in our increasing
popularity. Practical benefits favorably position metal building systems and
components as cost effective alternatives to conventional construction
materials. These include greater flexibility, lower life-cycle costs, faster
occupancy, trouble-free maintenance and long-term energy savings. In addition,
the builder's cost for constructing a metal building can be as much as 20% less
than that of a conventional building. Factors contributing to this price
advantage include better utilization of factory labor (versus field labor),
better materials utilization (less waste) and shorter construction time.
[PHOTO]
JERRY BOEN
Vice President, Marketing of Metal Components Division
"Metal components, such as
roof systems, are frequently used for repair and remodeling. Sales have not
historically been highly effected by new construction or economic cycles. With
59% of NCI's revenues generated from components sales, this shift in product
mix is expected to reduce NCI's overall exposure to new construction
cyclicality."
[PHOTO]
CHARLES W. DICKINSON
Vice President, Sales of Metal Components Division
11
<PAGE> 15
[PHOTO]
AL RICHEY
Vice President, Sales & Marketing of Metal Buildings Group
"NCI's unique marketing approach -multiple brands represented by regional sales
groups -- has been extremely effective in building our dealer network. A
priority in 1999 will be to leverage the distribution network acquired with
MBCI to extend cost-effectively our geographic reach and market penetration. In
addition, we have set aggressive goals to recruit 15% more authorized builders
and put them through training to increase their sales effectiveness and support
the achievement of our sales targets."
[PHOTO]
TOM BISHOP
President, American Building Components
"American Building Components is now able to offer their customers a much wider
product range at high revenue level. Rollformed, pre-packaged metal garage parts
and an increased presence in the Western United States are only part of the
benefits available from the combination of American Building Components and
NCI."
[PHOTO]
Construction and building material analysts are projecting low to flat industry
growth in 1999; however, NCI outperforms these indices nearly every year,
delivering an average of 38% annual revenue growth over the past five years,
and 45% over the last 10 years. We believe we will continue to meet our growth
goals in 1999 and outperform the industry through unique market niches,
diversified product lines, and aggressive sales and marketing programs, with
additional stimulation from component sales, careful asset management and
further pursuit of acquisition opportunities.
100% DISTRIBUTION EXPANSION
PROVIDES SUBSTANTIAL CROSS-SELLING
OPPORTUNITIES.
With a distribution network that nearly doubled in 1998 to nearly 1,200
authorized builders, a key growth strategy is to increase sales and net income
by cross selling the company's broadened line of name brand product lines
through a substantially larger network. Unlike competitors who generally market
under one national brand name, NCI operates under multiple regional, well-known
brands. This approach has helped the company grow its dealer network. Local and
regional reputation often play an important role in builders' selection, and
NCI's strategy of producing under recognized regional brand names is consistent
with the way dealers contract for product.
12
<PAGE> 16
NCI will continue to market its well-known brands, adding such component lines
to the product selection as Metal Building Components, Inc., American Building
Components, DBCI, Metal Coaters of Georgia, Metal-Prep, DOUBLECOTE, and Metal
Coaters of California. These products are sold through a variety of distribution
channels to a broad range of end users. These include 1) authorized builders, 2)
building materials manufacturers, distributors and retailers, 3) roofing system
installers, 4) contractors and end users, and 5) builders of self-storage
facilities. In addition to leveraging the current distribution channels, NCI
seeks to recruit new builders and has engaged in industry-wide training programs
to better acquaint builders with products, services, and pricing in order to
expand sales.
A key growth strategy is to leverage customer relationships in the component
group to increase building systems sales, and vice versa. For example, we
believe there is great potential to stimulate higher components growth,
primarily for metal roofing and wall systems segments, by marketing these
products through building systems channels. On the other hand, we intend to
generate higher building system sales by pursuing new and existing geographic
markets. The addition of metal components locations nationwide provides the
opportunity to expand building systems sales into components markets in the
Northeast and Northwest. By utilizing the nationwide manufacturing facilities
as platforms for expansion, both segments serve to benefit. We are well
positioned to increase sales of building systems in markets that previously
have been difficult for NCI to serve on a cost-effective basis, while the
components business can grow in new markets as a result of NCI's builder
relationships.
[PHOTO]
TOM WHEELER Executive Vice President, General Manager, A&S Building Systems
"Many of our builder relationships are based on just a few of our full range of
products and services. With our combined resources, we have an incredibly broad
product line to offer to a distribution system that has doubled to nearly 1,200
authorized dealers. This has opened whole new markets to pursue."
[PHOTO]
JOHN EUBANKS
President, Mesco Metal Buildings
"Acquired in 1996, Mesco's main market thrust is in the South Central and
Southeastern United States with manufacturing facilities in Texas and South
Carolina. Mesco has built its reputation and market acceptance through customer
dependability in its performance and integrity in its product and its people.
With strong fundamentals in place, the availability of a diversified product
line through NCI will significantly increase our business and growth
opportunities in the future."
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<PAGE> 17
[PHOTO]
RICHARD KLEIN
President and COO of Metal Coaters Group
"We are extremely pleased with the performance of our Metal Coaters of
California, Inc. operation. This 100,000 square foot facility was closed on May
11 for modifications. The plant was reopened on May 28 and became profitable
immediately. This facility is able to meet the high internal demand from our
Western States operations, and provide us with substantial room to service
existing outside customers and generate new business."
[PHOTO]
JOHN HOLMES
President of Metal Prep Division
"Metal Prep and the metal construction industry will benefit from the addition
of the new Midwest Coating joint venture. Metal Prep operated at full capacity
during 1998 and with the additional product capability, the superior
pre-painted hot roll product will now be available throughout the market."
NEW PRODUCTS AND MARKETS ADD NEW
GROWTH OPPORTUNITY.
Our large and profitable metal coating and painting business is not just another
step toward vertical integration; it offers a profitable new sales growth
opportunity. The company has already integrated the NCI and MBCI painting
operations and added two facilities to achieve significant cost savings,
increased geographical coverage, and relieve strained capacity. NCI targets
approximately 50% of these facilities' capacity from external customers, and
this business is on course to participate in achieving our corporate goal of 30%
return on operating assets in 1999.
Another new opportunity is NCI's entry into the large-bay building market as a
result of an internally designed long bay framing system. Traditionally focused
on the smaller buildings niche market, we have completed the design of an
extremely strong, light-weight long bay framing system that will span over 40
feet. In the past, NCI has purchased bar joists from outside suppliers
increasing project costs and lead times. This new system will be produced
internally, enabling our competitive entry into a big, profitable new market.
The MBCI acquisition has provided us with the opportunity to substantially
expand our selling and distribution presence into new geographic markets.
MBCI's metal components locations have provided us with a competitive entry into
regional markets in the Northeast and Northwest United States and Canada. We are
also expanding south of the border, largely through our Mexican manufacturing
joint venture. In 1999, Metallic de Mexico will launch NCI's foray into the
Mexican building market, estimated at $60 million per year. We believe that this
new market could generate $5 million in sales in 1999 and be profitable.
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<PAGE> 18
[PHOTO]
HUMAN RESOURCES
NCI'S MANAGEMENT DEPTH HAS
INCREASED SUBSTANTIALLY.
Averaging more than 20 years of industry experience, the combined management
teams of NCI and MBCI share similar business philosophies, and historically have
demonstrated an ability to grow sales and net income in times of adverse, as
well as strong, economic conditions. We attribute this ability to marketing our
products effectively, strategically locating new manufacturing facilities,
controlling expenses, maintaining flexibility in capital budgeting, and reducing
production and distribution costs. In addition, the two management teams have
successfully identified and completed nine acquisitions in the last five years.
NCI's board has been enhanced by the addition of A.R. Ginn and Ken Maddox, who
continue to serve as president and chief financial officer, respectively, of the
Metal Components Group and the Metal Coaters Group. In addition, A.R. Ginn
serves as the president and chief operating officer of NCI, and Ken Maddox
serves as executive vice president, administration.
We successfully completed the integration of NCI's and MBCI's nearly 4,000
employees, facilities, management and benefit programs in record time. NCI's
corporate culture nurtures each divisions' ability to operate independently,
and encourages independent thinking, competition and belief that capable people
will get the job done. Through all of the separate divisions, however, there
runs a strong employee feeling of being part of a large, successful team that
serves as a highly productive driver behind NCI's growth and profitability.
[PHOTO]
DONNIE HUMPHRIES
Vice President, Human Relations of Metal Buildings Group
"In the last six months of 1998, greater progress was made than we could have
hoped for in the integration of these two large companies. The complete overhaul
and standardization of employee benefits, incentive programs and human resource
policies was completed as a result of both company's high level of competency,
enthusiasm and mutual respect."
[PHOTO]
DAVID CURTIS
President, Doors & Building Components, Inc. (DBCI)
"The proliferation of self-storage facilities in the United States and Europe
has provided substantial new opportunities in the overhead door business. Our
business grew well ahead of projections in 1998 and is again estimating a
substantial sales increase in 1999."
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<PAGE> 19
NCI BOARD OF DIRECTORS
[PHOTO
From left to right: C.A. Rundell Jr., Johnie Schulte, Jr., William Breedlove,
and A.R. Ginn.
[PHOTO]
From left to right: Daniel Zabcik, Leonard George, Robert McDonald,
Kenneth Maddox, T.C. Arnett, and Gary Forbes.
PROFILE
NCI is a manufacturer and marketer of pre-engineered metal building systems and
components. The company contributes to the building process by designing
structures to user specifications, then manufacturing the appropriate parts for
its customers -- frequently authorized builders -- to erect and make ready for
occupancy. Components are sold to many of the same markets where engineering is
not required. NCI aggressively markets its products nationwide through several
channels under the following trade names: Metallic Building Company, Mid-West
Steel Building Company, Doors & Building Components, Steel Systems, A&S Building
Systems, Classic Steel Frame Homes, Mesco Metal Buildings, MBCI, ABC, IPS,
DOUBLECOTE, Metal Prep, Metal Coaters of Georgia, Metal Coaters of California
and Mid-West Metal Coatings. NCI's products are directed at the non-residential
market, primarily industrial and low-rise commercial applications.
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<PAGE> 20
CORPORATE DIRECTORY
BOARD OF DIRECTORS
<TABLE>
<CAPTION>
OFFICERS DIRECTORS
<S> <C> <C>
C.A. RUNDELL, JR. C.A. RUNDELL, JR. GARY L. FORBES**
Chairman of the Board Chairman of the Board Vice President
NCI Building Systems, Inc. Equus Incorporated
JOHNIE SCHULTE, JR.
CEO & Chairman of the Executive JOHNIE SCHULTE, JR. LEONARD F. GEORGE
Committee CEO & Chairman of the Executive Executive Vice President
Committee Metal Buildings Division
A.R. GINN NCI Building Systems, Inc.
President & Chief Operating Officer WILLIAM D. BREEDLOVE**
A.R. GINN Vice Chairman
KENNETH W. MADDOX President and Chief Operating Officer Hoak Breedlove Wesneski & Co.
Executive Vice President, NCI Building Systems, Inc.
Administration ROBERT N. MCDONALD*
KENNETH W. MADDOX Private Investor
ROBERT J. MEDLOCK Executive Vice President,
Executive Vice President & Chief Administration * Compensation Committee
Financial Officer ** Audit Committee
DANIEL D. ZABCIK
DONNIE R. HUMPHRIES Private Investor
Secretary
T.C. ARNETT*
Private Investor
</TABLE>
FORWARD - LOOKING STATEMENTS
"This Annual Report contains forward-looking statements concerning the business
and operations of the Company. Although the Company believes that the
expectations reflected in these forward-looking statements are reasonable, these
expectations and the related statements are subject to risks, uncertainties,
and other factors that could cause the actual results to differ materially from
those projected. These risks, uncertainties, and factors include, but are not
limited to, industry cyclicality and seasonality, adverse weather conditions,
fluctuations in customer demand and order patterns, raw material pricing,
competitive activity and pricing pressure, the ability to make strategic
activities accretive to earning, and general economic conditions affecting the
construction industry, as well as other risks detailed in the Company's filings
with the Securities and Exchange Commission, including its most recent annual
and quarterly reports on Forms 10(k) and 10(Q), the Company expressly disclaim
any obligation to release publicly any updates or revisions to these
forward-looking statements to reflect any changes in its expectations." Design:
Pegasus Design, Inc. Houston, Texas This annual report is printed on recycled
paper containing recovered, post-consumer waste paper.
16
<PAGE> 21
[GRAPHIC]
NCI BUILDING SYSTEMS, INC.
7301 FAIRVIEW
HOUSTON, TEXAS 77041
(713) 466-7788
<PAGE> 22
1998 FINANCIAL REVIEW
17
<PAGE> 23
CONSOLIDATED STATEMENTS OF INCOME
NCI BUILDING SYSTEMS, INC.
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
October 31,
-------------------------------------
1996 1997 1998
--------- --------- ---------
<S> <C> <C> <C>
Sales ............................................ $ 332,880 $ 407,751 $ 675,331
Cost of sales .................................... 241,374 299,407 497,862
Gross profit ................................ 91,506 108,344 177,469
--------- --------- ---------
Operating expenses ............................... 53,095 66,055 94,040
Nonrecurring acquisition expense ................. -- -- 2,060
--------- --------- ---------
Income from operations ...................... 38,411 42,289 81,369
Interest expense ................................. (108) (163) (20,756)
Other income ..................................... 1,586 1,999 499
Joint venture income ............................. -- -- 737
--------- --------- ---------
Income before income taxes .................. 39,889 44,125 61,849
--------- --------- ---------
Provision (benefit) for income taxes
Current ..................................... 15,898 15,920 16,573
Deferred .................................... (822) 318 7,958
--------- --------- ---------
Total income tax ................................. 15,076 16,238 24,531
--------- --------- ---------
Net income ....................................... $ 24,813 $ 27,887 37,318
========= ========= =========
Net income per common and
common equivalent share - Basic ............. $ 1.60 $ 1.73 $ 2.17
========= ========= =========
Net income per common and
common equivalent share - Diluted ........... $ 1.51 $ 1.64 $ 2.05
========= ========= =========
</TABLE>
See Independent Auditor's Report and Accompanying Notes to the Consolidated
Financial Statements.
18
<PAGE> 24
CONSOLIDATED BALANCE SHEETS
NCI BUILDING SYSTEMS, INC.
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
October 31,
--------------------
1997 1998
-------- --------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents ................................................. $ 32,166 $ 4,599
Accounts receivable, net .................................................. 47,006 99,261
Inventories ............................................................... 37,381 78,001
Deferred income taxes ..................................................... 3,463 6,495
Prepaid expenses .......................................................... 942 4,214
-------- --------
Total current assets ...................................................... 120,958 192,570
Property, plant and equipment, net ............................................. 51,223 179,500
Excess of cost over fair value of acquired net assets .......................... 21,072 413,288
Other assets, primarily investment in joint ventures ........................... 3,079 38,179
-------- --------
Total assets ................................................................... $196,332 $823,537
-------- --------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 47 $ 31,297
Accounts payable .......................................................... 23,921 62,694
Accrued compensation and benefits ......................................... 9,688 16,261
Other accrued expense ..................................................... 10,553 23,925
-------- --------
Total current liabilities ................................................. 44,212 134,177
Long-term debt, noncurrent portion ............................................. 1,679 444,477
Deferred income taxes .......................................................... 2,626 21,271
Contingencies
Shareholders' equity
Preferred stock, $1 par value, 1,000,000
shares authorized, none outstanding .................................. -- --
Common stock, $.01 par value, 50,000,000 shares authorized, 8,125,739
and 18,064,482 shares issued and outstanding, respectively ........... 82 181
Additional paid-in capital ................................................ 51,109 89,489
Retained earnings ......................................................... 96,624 133,942
-------- --------
Total shareholders' equity ................................................ 147,815 223,612
-------- --------
Total liabilities and shareholders' equity ..................................... $196,332 $823,537
======== ========
</TABLE>
See Independent Auditor's Report and Accompanying Notes to the Consolidated
Financial Statements.
19
<PAGE> 25
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
NCI BUILDING SYSTEMS, INC.
(IN THOUSANDS)
<TABLE>
<CAPTION>
Additional
Common Paid-In Retained Shareholders'
Stock Capital Earnings Equity
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Balance, October 31, 1995 ........................ $ 63 $ 13,696 $ 43,923 $ 57,682
Proceeds from stock offering ..................... 11 24,759 -- 24,770
Proceeds from exercise of stock options,
including tax benefit thereon ............... 2 2,723 -- 2,725
Shares issued for
contribution to 401(k) plan ................. 1 1,008 -- 1,009
Shares issued in connection with the ............. 3 5,172 -- 5,175
purchase of DBCI
Net income ....................................... -- -- 24,814 24,814
-------- -------- -------- --------
Balance, October 31, 1996 ........................ 80 47,358 68,737 116,175
Proceeds from exercise of stock options,
including tax benefit thereon ............... 1 2,234 -- 2,235
Shares issued for
contribution to 401(k) plan ................. 1 1,517 -- 1,518
Net income ....................................... -- -- 27,887 27,887
-------- -------- -------- --------
Balance, October 31, 1997 ........................ 82 51,109 96,624 147,815
Proceeds from exercise of stock options,
including tax benefit thereon ............... 2 4,317 -- 4,319
Two for one split of common stock ................ 82 (82) -- --
Shares issued in connection with the purchase
of Metal Building Components, Inc ........... 14 32,186 -- 32,200
Shares issued for
contribution to 401(k) plan ................. 1 1,959 -- 1,960
Net income ....................................... -- -- 37,318 37,318
-------- -------- -------- --------
Balance, October 31, 1998 ........................ $ 181 $ 89,489 $133,942 $223,612
======== ======== ======== ========
</TABLE>
See Independent Auditor's Report and Accompanying Notes to the Consolidated
Financial Statements.
20
<PAGE> 26
CONSOLIDATED STATEMENTS OF CASH FLOWS
NCI BUILDING SYSTEMS, INC.
(IN THOUSANDS)
<TABLE>
<CAPTION>
October 31,
------------------------------------------
1996 1997 1998
--------- --------- ---------
<S> <C> <C> <C>
Cash flows from operating activities
Net income ........................................................... $ 24,814 $ 27,887 $ 37,318
Adjustments to reconcile net income to
net cash provided by operating activities
Depreciation and amortization .............................. 5,791 7,876 17,818
(Gain) loss on sale of fixed assets ........................ 1 (3) (32)
Provision for doubtful accounts ............................ 681 1,223 2,625
Deferred income tax (benefit) provision .................... (822) 318 7,958
Changes in current assets and liability accounts,
net of effects of acquisitions:
(Increase) in accounts, notes and other receivables .................. (9,857) (10,481) (3,663)
(Increase) decrease in inventories ................................... (4,521) (5,552) 9,951
(Increase) decrease in prepaid expenses .............................. (35) (625) 109
Increase in accounts payable ......................................... 3,043 2,394 24,189
Increase in accrued expenses ......................................... 5,446 5,579 13,772
--------- --------- ---------
Net cash provided by operating activities ..................... 24,541 28,616 110,045
Cash flows from investing activities:
Proceeds from the sale of fixed assets .......................... 115 25 98
Acquisition of Mesco Metal Buildings ............................ (20,631) -- --
Acquisition of Doors & Building Components, Inc ................. (11,000) -- --
Acquisition of Carlisle Engineered Metals, Inc .................. (2,840) (6,230) --
Acquisition of Metal Building Components, Inc ................... -- -- (553,510)
Acquisition of California Finished Metals, Inc .................. -- -- (15,458)
(Increase) decrease in other noncurrent assets .................. (1,988) (1,147) (24,450)
Capital expenditures ............................................ (10,319) (11,332) (20,834)
--------- --------- ---------
Net cash provided by (used in) investing activities ...... (46,663) (18,684) (614,154)
Cash flows from financing activities:
Net proceeds from sale of stock ................................. 24,770 -- --
Exercise of stock options ....................................... 750 1,340 2,494
Borrowings on line of credit and notes .......................... -- -- 592,700
Principal payments on long-term debt, line of
credit and notes payable ................................... (85) (50) (118,652)
--------- --------- ---------
Net cash provided by (used in) financing activities ...... 25,435 1,290 476,542
--------- --------- ---------
Net increase (decrease) in cash ...................................... 3,313 11,222 (27,567)
Cash at beginning of period .......................................... 17,631 20,944 32,166
--------- --------- ---------
Cash at end of period ................................................ $ 20,944 $ 32,166 $ 4,599
========= ========= =========
</TABLE>
See Independent Auditor's Report and Accompanying Notes to the Consolidated
Financial Statements.
21
<PAGE> 27
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NCI BUILDING SYSTEMS, INC.
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Reporting Entity
These financial statements include the operations and activities of NCI Building
Systems, Inc. and its wholly-owned subsidiaries (Company) after the elimination
of all material intercompany accounts and balances. The Company designs,
manufactures and markets metal building systems and components for commercial,
industrial, agricultural and community service use. The Company recognizes
revenues as jobs are shipped or as services are performed.
Certain prior year amounts have been reclassified to conform with the
current year presentation.
(b) Accounts Receivable
The Company reports accounts receivable net of the allowance for doubtful
accounts of $1,498,000 and $2,321,000 at October 31, 1997 and 1998,
respectively. Trade accounts receivable are the result of sales of building
systems and components to customers throughout the United States and affiliated
territories including international builders who resell to end users. Although
the Company's sales historically have been concentrated in Texas and surrounding
states, in recent years it has been expanding its authorized builder
organization and customer base into the midwestern states and, to a lesser
extent, into south central, southeastern and coastal states. All sales are
denominated in United States dollars. Credit sales do not normally require a
pledge of collateral; however, various types of liens may be filed to enhance
the collection process.
(c) Inventories
Inventories are stated at the lower of cost or market value, using specific
identification or the weighted-average method for steel coils and other raw
materials. A summary of inventories follows:
<TABLE>
<CAPTION>
October 31,
------------------
1997 1998
------- -------
(in thousands)
<S> <C> <C>
Raw materials ........... $28,943 $55,190
Work-in-process and
finished goods ......... 8,438 22,811
------- -------
$37,381 $78,001
======= =======
</TABLE>
(d) Property, Plant and Equipment
Property, plant and equipment are stated at cost and depreciated over their
estimated useful lives. Depreciation is computed using the straight-line method
for financial reporting purposes and both straight-line and accelerated methods
for income tax purposes. Depreciation expense for the years ended October 31,
1996, 1997 and 1998 was $4,236,000, $5,893,000, and $9,970,000, respectively.
<TABLE>
<CAPTION>
October 31,
-------------------------
1997 1998
--------- ---------
(in thousands)
<S> <C> <C>
Land .......................... $ 3,969 $ 11,184
Buildings and improvements .... 23,600 74,510
Machinery, equipment
and furniture ............ 41,393 112,013
Transportation equipment ...... 1,089 4,711
Computer software ............. 481 5,753
--------- ---------
70,532 208,171
Less accumulated depreciation.. (19,309) (28,671)
--------- ---------
$ 51,223 $ 179,500
========= =========
</TABLE>
Estimated useful lives for depreciation are:
<TABLE>
<S> <C>
Buildings and improvements ............. 10 - 40 years
Machinery, equipment
and furniture...................... 5 - 13 years
Transportation equipment................ 3 - 10 years
Computer software ...................... 5 years
</TABLE>
(e) Statement of Cash Flows
For purposes of the cash flows statement, the Company considers all highly
liquid investments with an original maturity date of three months or less to be
cash equivalents. Total interest paid for the years ended October 31, 1996, 1997
and 1998 was $108,000, $163,000 and $16,733,000, respectively. Income taxes
paid, net of refunds received, for the years ended October 31, 1996, 1997 and
1998 was $12,638,000, $15,676,000 and $19,915,000 respectively. Non-cash
investing or financing activities included: $1,960,000 for the 1997 contribution
for the 401(k) plan which was paid in common stock in 1998, $1,518,000 for the
1996 contribution for the 401(k) plan which was paid in common stock in 1997,
and common stock valued at $32.2 million paid in connection with the acquisition
of MBCI, as discussed at Note 11.
(f) Excess of Cost Over Fair Value of Acquired Net Assets
Excess of cost over fair value of acquired net assets is amortized on a
straight-line basis over periods of fifteen to forty years. Accumulated
amortization as of October 31, 1998 was $9,788,000, and $3,042,000 as of October
31, 1997. The carrying value of goodwill is reviewed if the facts and
circumstances suggest that it may be impaired. If this review indicates that
goodwill will not be recoverable, as determined based on the undiscounted cash
flows of the entity acquired over the remaining amortization period, the
Company's carrying value of the goodwill would be reduced by the estimated
shortfall of cash flows.
22
<PAGE> 28
(g) Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
(h) Advertising Costs
Advertising costs are expensed as incurred. Advertising expense was $1,267,000,
$1,416,000 and $2,301,000 in 1996, 1997 and 1998, respectively.
(i) Long-Lived Assets
Impairment losses are recognized when indicators of impairment are present and
the estimated undiscounted cash flows are not sufficient to recover the assets
carrying amount. Assets held for disposal are measured at the lower of carrying
value or estimated fair value, less costs to sell.
(j) Stock-Based Compensation
The Company uses the intrinsic value method in accounting for its stock-based
employee compensation plans.
(k) Comprehensive Income
During the third quarter of fiscal 1998, the Company adopted Financial
Accounting Standards Board (FASB) Statement No. 130, Reporting Comprehensive
Income. Statement 130 establishes new rules for the reporting and display of
comprehensive income and its components. Certain items which were previously
required to be reported separately in shareholder's equity, such as unrealized
gains or loses on available-for-sale securities, minimum pension liability
adjustments and foreign currency translation adjustments, are now required to
be included in other comprehensive income. For fiscal 1996, 1997, and 1998 the
Company's comprehensive income was the same as net income, and the adoption of
this statement had no impact on the presentation of the financial statements.
(l) Pending Accounting Changes
In June 1997, the FASB issued Statement No. 131, Disclosures about Segments of
an Enterprise and Related Information, which establishes new standards for
reporting information about operating segments in both annual and interim
financial statements. It also establishes standards for related disclosures
about products and services, geographic areas, and major customers. The
Statement is effective for the Company's fiscal year ending October 31, 1999.
Management has not completed its review of Statement 131.
(2) LONG-TERM DEBT
<TABLE>
<CAPTION>
October 31,
-----------------------
1997 1998
--------- ---------
(in thousands)
<S> <C> <C>
Five-year revolving credit line with a bank
bearing interest at a rate of 30-day LIBOR
plus 1.75% (7.0% at October 31, 1998),
maturing on July 1, 2003 ......................... $ -- $ 141,600
Five-year term loan payable to a bank
bearing interest at a rate of 90-day LIBOR
plus 1.75% (7.0% at October 31, 1998)
repayable beginning on October 31, 1998,
in quarterly installments beginning with
$7.5 million and gradually increasing
to $12.5 million on the maturity date,
July 1, 2003 ..................................... -- 192,500
364-day revolving credit facility with a bank
bearing interest at a rate of 30-day LIBOR
plus 1.75% (7.0% at October 31, 1998)
maturing on April 30, 1999 ....................... -- 140,000
Note payable to employee bearing
interest at 7%, maturing April 1, 2001,
with an option to convert into common
stock at $14.96 per share ........................ 1,500 1,500
Other ............................................ 226 174
--------- ---------
1,726 475,774
Current portion of long-term debt ................ (47) (31,297)
--------- ---------
$ 1,679 $ 444,477
========= =========
</TABLE>
Aggregate required principal reductions are as follows:
<TABLE>
<CAPTION>
Year Ended October 31,
- ----------------------------------
(in thousands)
<C> <C>
1999 . . . . . . . . . . . . . . . . . $ 31,297
2000 . . . . . . . . . . . . . . . . . 36,305
2001 . . . . . . . . . . . . . . . . . 42,807
2002 . . . . . . . . . . . . . . . . . 46,260
2003 . . . . . . . . . . . . . . . . . 319,105
---------
$ 475,774
=========
</TABLE>
The Company has a $600 million senior credit facility from a bank, which
consists of (i) a five-year revolving credit facility of up to $200 million, of
which up to $20 million may be utilized in the form of commercial and standby
letters of credit, (ii) a five-year term loan facility in the principal amount
of $200 million, and (iii)
23
<PAGE> 29
a 364-day revolving credit facility of up to $200 million. On May 4, 1998, the
Company borrowed $140 million under the five-year revolver, $200 million under
the five-year term loan and $200 million under the 364-day revolver to fund the
MBCI acquisition. Loans and letters of credit under the five-year revolver will
be available, and amounts repaid may be reborrowed, at any time until July,
2003, subject to the fulfillment of certain conditions precedent, including the
absence of default under the senior credit facility. The term loan was fully
drawn down as of the acquisition date, and any amounts repaid may not be
reborrowed. The Company's obligations under the senior credit facility are
secured by the pledge of all capital stock, partnership interests and other
equity interests of the Company's subsidiaries. All obligations are also
guaranteed by each of the Company's corporate subsidiaries and operating
limited partnerships. The senior credit facility contains customary financial
and restrictive covenants with amounts and ratios negotiated between the Company
and the lender.
The Company has an interest rate swap agreement in place which caps
interest on LIBOR loans at 5.89% plus the applicable LIBOR margin for the
principal amount of the term loan. The estimated fair value of the swap
transactions as of October 31, 1998 was not significant. If the 364-day revolver
is not repaid by the Company or extended by the lenders, the Company has the
option to convert it to a three-year term note. The Company is required to make
mandatory prepayments on the senior credit facility upon the occurrence of
certain events, including the sale of assets and the issuance and sale of equity
securities, in each case subject to certain limitations.
The carrying amount of the Company's long-term debt approximates its fair
value.
(3) RELATED PARTY TRANSACTIONS
During 1996, 1997 and 1998, the Company purchased $1,417,000, $1,869,000 and
$1,862,000, respectively, of materials from a related party under arm's length
transactions.
(4) INCOME TAXES
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes.
Taxes on income from continuing operations consist of the following:
<TABLE>
<CAPTION>
Year Ended October 31,
---------------------------------
1996 1997 1998
-------- -------- --------
(in thousands)
<S> <C> <C> <C>
Current: Federal ....... $ 14,530 $ 15,478 $ 15,371
State ......... 1,368 442 1,202
-------- -------- --------
Total current ......... 15,898 15,920 16,573
Deferred: Federal ....... (745) 304 7,292
State ......... (77) 14 666
-------- -------- --------
Total deferred ........ (822) 318 7,958
-------- -------- --------
Total provision ......... $ 15,076 $ 16,238 $ 24,531
======== ======== ========
</TABLE>
The reconciliation of income tax computed at the United States federal statutory
tax rate to the effective income tax rate is as follows:
<TABLE>
<CAPTION>
Year Ended October 31,
----------------------------
1996 1997 1998
------ ------ ------
<S> <C> <C> <C>
Statutory federal income tax rate ...... 35.0% 35.0% 35.0%
Non-deductible goodwill
amortization ...................... -- -- 2.7%
State income taxes ..................... 2.4 1.2 2.1%
Other .................................. 0.4 0.6 (0.1%)
------ ------ ------
Effective tax rate ................ 37.8% 36.8% 39.7%
====== ====== ======
</TABLE>
Significant components of the Company's deferred tax liabilities
and assets are as follows:
<TABLE>
<CAPTION>
1997 1998
-------- --------
(in thousands)
<S> <C> <C>
Deferred tax assets
Inventory ......................... $ 1,632 $ 1,968
Bad debt reserve .................. 527 1,446
Accrued insurance reserves ........ 595 1,258
Deferred compensation ............. -- 711
Other reserves .................... 709 1,112
-------- --------
Total deferred tax assets .............. 3,463 6,495
-------- --------
Deferred tax liabilities
Depreciation and amortization ..... 1,675 18,327
Other ............................. 951 2,944
-------- --------
Total deferred tax liabilities ......... 2,626 21,271
-------- --------
Net deferred tax asset (liability) ..... $ 837 $(14,776)
-------- --------
</TABLE>
(5) OPERATING LEASE COMMITMENTS
Total rental expense incurred from operating non-cancelable leases for the years
ended October 31, 1996, 1997 and 1998 was $3,990,000, $4,644,000 and $5,527,000,
respectively.
Aggregate minimum required annual payments on long-term operating leases at
October 31, 1998 were as follows:
24
<PAGE> 30
<TABLE>
<CAPTION>
Year Ended October 31, (in thousands)
- ------------------------------------------------------
<C> <C>
1999 . . . . . . . . . . . . . . . . . . . . $ 2,319
2000 . . . . . . . . . . . . . . . . . . . . 1,184
2001 . . . . . . . . . . . . . . . . . . . . 634
2002 . . . . . . . . . . . . . . . . . . . . 314
2003 . . . . . . . . . . . . . . . . . . . . 58
-------
$ 4,509
=======
</TABLE>
(6) SHAREHOLDERS' RIGHTS PLAN
In June 1998 the Board of Directors adopted a Shareholders' Rights Plan in which
one preferred stock purchase right (Right) was declared as a dividend for each
common share outstanding. Each Right entitles shareholders to purchase, under
certain conditions, one-hundredth of a share of newly authorized Series A
Junior Participating Preferred Stock at an exercise price of $125. Rights will
be exercisable only if a person or group acquires beneficial ownership of 20
percent or more of the common shares or commences a tender or exchange offer,
upon consummation of which such person or group would beneficially own 20
percent or more of the common shares. In the event that a person or group
acquires 20 percent or more of the common shares, the Rights enable dilution of
the acquiring person's or group's interest by providing for a 50 percent
discount on the purchase of common shares by the non-controlling shareholders.
The company will generally be entitled to redeem the Rights at $0.01 per Right
at any time before a person or group acquires 20 percent or more of the common
shares. Rights will expire on June 24, 2008, unless earlier exercised, redeemed
or exchanged.
(7) COMMON STOCK
In June 1998, the Company's Board of Directors approved a two-for-one split of
the Common Stock effective for stockholders of record on July 8, 1998. Share and
per share amounts have been restated to reflect the stock split. The Board of
Directors has approved a non-statutory employee stock option plan. This plan
includes the future granting of stock options to purchase up to 4,100,000 shares
as an incentive and reward for key management personnel. Options expire ten
years from date of grant. The right to acquire the option shares is earned in
25% increments over the first four years of the option period. Stock option
transactions during 1996, 1997 and 1998 are as follows (in thousands, except per
share amounts):
<TABLE>
<CAPTION>
Weighted
Number Average
of Shares Exercise Price
--------- --------------
<S> <C> <C>
Balance, October 31, 1995 ......... 1,524 $ 3.36
Granted ...................... 630 12.75
Canceled ..................... (46) (9.83)
Exercised .................... (492) (1.52)
------- -------
Balance, October 31, 1996 ......... 1,616 7.39
Granted ...................... 314 15.23
Canceled ..................... (10) (12.09)
Exercised ......................... (211) (6.34)
------- -------
Balance, October 31, 1997 .... 1,709 8.94
Granted ...................... 517 23.65
Canceled ..................... (22) (14.56)
Exercised .................... (313) (7.98)
------- -------
Balance, October 31, 1998 ......... 1,891 $ 13.06
======= =======
</TABLE>
Options exerciseable at October 31, 1996, 1997, and 1998 were 783,000,
841,000 and 910,000, respectively. The weighted average exercise prices for
options exerciseable at October 31, 1996, 1997 and 1998 were $3.00, $4.60 and
$6.67. Exercise prices for options outstanding at October 31, 1998 range from
$.80 to $27.00. The weighted average remaining contractual life of options
outstanding at October 31, 1998 is 6.7 years.
In accordance with the terms of APB No. 25, because the exercise price of
the Company's employee stock options equals the market price of the underlying
stock on the date of the grant, the Company records no compensation expense for
its stock option awards. As required by SFAS No. 123, the Company provides the
following disclosure of hypothetical values for these awards. The weighted
average grant-date fair value of options granted during 1996, 1997 and 1998 was
$6.53, $7.89 and $12.07, respectively. These values were estimated using the
Black-Sholes option-pricing model with the following weighted average
assumptions: no expected dividend, expected volatility of 38.1%, risk free
interest rates ranging from 5.5% to 6.7% for 1996, 6.4% to 6.9% for 1997 and
4.6% to 5.9% for 1998, and expected lives of 7 years. Had compensation expense
been recorded based on these hypothetical values, the Company's net income and
earnings per share would have been as follows (in thousands, except per share
data):
<TABLE>
<CAPTION>
1996 1997 1998
---------- ---------- ----------
<S> <C> <C> <C>
Proforma net income .......... $ 24,379 $ 27,081 $ 35,887
Proforma net income
per share - Basic ....... $ 1.57 $ 1.68 $ 2.08
Proforma net income
per share - Diluted ..... $ 1.48 $ 1.59 $ 1.98
</TABLE>
Because options vest over several years and additional options grants are
expected, the effects of these hypothetical calculations are not likely to be
representative of similar future calculations.
(8) LITIGATION
The Company is involved in certain litigation that the Company considers to be
in the normal course of business. Management of the Company believes that such
litigation will not result in any material losses.
25
<PAGE> 31
(9) NET INCOME PER SHARE
During the first quarter of fiscal 1998, the Company adopted FASB Statement No.
128, Earnings Per Share, which requires the presentation of basic and diluted
earnings per share. Under this statement, the dilutive effect of stock options
is excluded from basic earnings per share, but included in the computation of
diluted earnings per share. Earnings per share amounts for all periods presented
have been restated. The computations are as follows:
<TABLE>
<CAPTION>
Year Ended October 31,
-----------------------------
1996 1997 1998
------- ------- -------
(in thousands, except per share data)
<S> <C> <C> <C>
Net income ............................. $24,814 $27,887 $37,318
Add: Interest, net of tax,
on convertible debenture
assumed converted ................. 38 66 66
------- ------- -------
Adjusted net income .................... $24,852 $27,953 $37,384
======= ======= =======
Weighted average common
shares outstanding ................ 15,499 16,127 17,212
======= ======= =======
Add: Common stock equivalents:
Stock options ..................... 898 858 880
Convertible debenture ............. 58 100 100
Weighted average common
shares outstanding,
assuming dilution ............... 16,455 17,085 18,192
Net income per share--basic ............ $ 1.60 $ 1.73 $ 2.17
======= ======= =======
Net income per share--diluted .......... $ 1.51 $ 1.64 $ 2.05
======= ======= =======
</TABLE>
(10) EMPLOYEE BENEFIT PLAN
The Company has a 401(k) profit sharing plan (the "Savings Plan") which covers
all eligible employees. The Savings Plan requires the Company to match employee
contributions up to a certain percentage of a participant's salary. No other
contributions may be made to the Savings Plan. Contributions accrued for the
Savings Plan for the year ended October 31, 1996, 1997 and 1998 were $1,155,000,
$1,604,000 and $2,219,000 respectively.
(11) ACQUISITIONS
In November 1995, the Company acquired substantially all of the assets and
assumed certain liabilities of Doors and Building Components, Inc. ("DBCI"), a
manufacturer of roll-up steel overhead doors used primarily in self-storage and
commercial/industrial applications, for approximately $12 million in cash and
600,000 shares of common stock of the Company, valued at $5.2 million. Based on
the final determination of book value of the purchased assets, the price was
reduced by approximately $2.5 million of which $1.5 million was due from the
seller and was recorded as a receivable in the October 31, 1996 balance sheet.
This amount was settled in cash in December, 1996. The acquisition was accounted
for using the purchase method of accounting. The excess of cost over fair value
of the acquired net assets was $11.4 million.
In April, 1996, the Company acquired substantially all of the assets and
assumed certain liabilities of Mesco Metal Buildings, a division of Anderson
Industries, Inc. ("Mesco"), a manufacturer of metal building systems and
components, for approximately $20.8 million in cash and a $1.5 million 7%
convertible subordinated debenture due April, 2001. The acquisition was
accounted for using the purchase method of accounting. The excess of cost over
fair value of the acquired net assets was $10.9 million.
On May 4, 1998, the Company acquired Metal Building Components, Inc.
("MBCI") through the purchase of all of the outstanding capital stock of Amatek
Holdings, Inc. from BTR Australia Limited, a wholly owned subsidiary of BTR plc,
for a purchase price of approximately $593 million, including cash of $550
million (plus transaction costs) and 1.4 million shares of the Company's common
stock valued at $32.2 million. MBCI designs, manufactures, sells and distributes
metal components for commercial, industrial, architectural, agricultural and
residential construction uses. MBCI also processes its own hot roll coil metal
for use in component manufacturing, as well as processing hot roll coil metal
and toll coating light gauge metal for use by other parties in the construction
of metal building components and numerous other products. The funds for this
acquisition were provided from the proceeds of a new $600 million credit
facility from a bank under which the Company initially borrowed $540 million.
The acquisition was accounted for using the purchase method of accounting. The
excess of cost over the fair value of the acquired assets was approximately
$395.1 million, based on the preliminary purchase price allocation, which may
be adjusted upon final valuation of certain assets and liabilities.
The consolidated results of operations for 1998 include MBCI since the date of
acquisition. Assuming the acquisition of MBCI had been consummated as at the
beginning of the respective periods presented, the proforma unaudited results of
operations are as follows (in thousands, except per share data):
<TABLE>
<CAPTION>
Year Ended October 31,
1997 1998
----------- -----------
<S> <C> <C>
Sales $ 815,718 $ 871,026
Net income $ 31,431 $ 36,408
Net income per share - basic $ 1.79 $ 2.03
Net income per share - diluted $ 1.70 $ 1.93
</TABLE>
26
<PAGE> 32
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Shareholders
NCI Building Systems, Inc.
We have audited the accompanying consolidated balance sheets of NCI Building
Systems, Inc. as of October 31, 1998 and 1997, and the related consolidated
statements of income, shareholders' equity and cash flows for each of the three
years in the period ended October 31, 1998. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of NCI Building
Systems, Inc. at October 31, 1998 and 1997 and the consolidated results of its
operations and its cash flows for each of the three years in the period ended
October 31, 1998, in conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Houston, Texas
December 8, 1998
27
<PAGE> 33
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The following table presents, as a percentage of sales, certain selected
consolidated financial data for the Company for the periods indicated:
<TABLE>
<CAPTION>
Year Ended October 31,
------------------------------
1996 1997 1998
------ ------ ------
<S> <C> <C> <C>
Sales .................................. 100.0% 100.0% 100.0%
Cost of sales .......................... 72.5 73.4 73.7
------ ------ ------
Gross profit ........................... 27.5 26.6 26.3
Operating expenses ..................... 16.0 16.3 14.2
Nonrecurring acquisition expense ....... -- -- 0.3
------ ------ ------
Income from operations ................. 11.5 10.3 11.8
Interest expense ....................... 0.0 0.0 3.1
Other income net ....................... (0.5) (0.5) (0.5)
------ ------ ------
Income before income taxes ............. 12.0 10.8 9.2
Provision for income taxes ............. 4.5 4.0 3.6
------ ------ ------
Net income ............................. 7.5% 6.8% 5.6%
====== ====== ======
</TABLE>
FISCAL 1998 COMPARED TO FISCAL 1997
Sales in fiscal 1998 increased by $267.8 million, or 66%, compared to fiscal
1997. The acquisition of Metal Building Components, Inc. ("MBCI") on May 4, 1998
accounted for a substantial portion of this increase. Because NCI combined its
component business with MBCI, consolidated its component sales and marketing
personnel and transferred the operations of three of its manufacturing
facilities to MBCI's manufacturing facilities shortly after the completion of
the transaction, it is difficult to determine the exact impact on sales of the
acquisition. The Company believes that its business grew approximately 9% in
fiscal 1998. This internal growth resulted from geographical expansion of sales
efforts and the Company's authorized builder organization.
Gross profit for fiscal 1998 increased by $69.1 million, or 64%, compared
to fiscal 1997. Gross profit dollars increased at a slightly slower rate than
sales since components typically have a lower gross profit percentage than
building systems. This accounted for the slight decline in gross profit percent
to 26.3% in fiscal 1998 from 26.6% in fiscal 1997. The Company believes that the
internal growth of gross profit would be similar to the sales increase mentioned
above.
Operating expenses include engineering, selling and general and
administrative costs. Engineering expense is associated only with the sale of
metal building systems. This expense increased by $1.2 million, or 9%, in fiscal
1998 compared to fiscal 1997. This increase is in line with the growth of metal
building systems sales. Selling, general and administrative expenses increased
$28.8 million, or 55%, in fiscal 1998 compared to fiscal 1997. These expenses
grew at a slower rate than sales because the component business has a lower
level of selling expense associated with it. As a result, the percentage of
selling, general and administrative expenses to sales declined to 12.1% in
fiscal 1998 from 13.0% in fiscal 1997.
The nonrecurring acquisition expense of $2.1 million represented the
one-time cost of severance and relocation expenses related to the consolidation
of component sales and marketing functions, estimated costs associated with
announced plant closures and consolidations and costs associated with the
integration of product lines.
Interest expense increased in fiscal 1998 to $20.8 million compared to $.2
million in fiscal 1997 reflecting the cost of borrowed funds to finance the
MBCI acquisition and the amortization of debt issuance costs related to such
borrowings. On May 4, 1998 the Company borrowed $540 million to finance the MBCI
acquisition and had outstanding total debt of $475.7 million at the end of
October 1998. The company entered into an interest rate swap agreement to fix
the interest on $200 million (currently $192.5 million is outstanding) of this
amount at 5.9% plus the applicable margin on borrowings which is currently
1.75%. The remainder of the debt bears interest at a floating rate.
Joint venture income of $737,000 in fiscal 1998 primarily represents the
50% ownership in a coil coating plant which was acquired as part of the MBCI
transaction.
Income before income taxes increased by $17.7 million, or 40%, in fiscal
1998. The increase was less than the sales increase as a result of the increase
in interest expense, amortization of goodwill expense and the nonrecurring
acquisition expenses.
Provision for income taxes increased by 51% in fiscal 1998, reflecting an
effective tax rate of 39.7% in fiscal 1998 compared to 36.8% in fiscal 1997. The
increase in effective tax rate resulted primarily from nondeductible
amortization of goodwill associated with the MBCI transaction.
FISCAL 1997 COMPARED TO FISCAL 1996
Sales in fiscal 1997 increased by $74.9 million, or 22%, compared to fiscal
1996. The acquisition of the operations of Carlisle Engineered Metals ("ECI") in
February 1997 and the inclusion of Mesco Metal Buildings ("Mesco") for the whole
fiscal year 1997 accounted for approximately $23 million of this increase. The
remaining increase of approximately $50 million, or 15%, resulted from growth
of the Doors and Building Components sales due to geographic expansion, building
systems sales growth due to increased builder recruitment and a full years'
operation of the Company's Atwater plant and growth in the component division of
the Company.
28
<PAGE> 34
Gross profit increased by $16.8 million, or 18%, compared to fiscal 1996.
Gross profit dollars increased at a slower rate than sales due to price
competition earlier in the year, bad weather in the first half of 1997 which
impacted plant efficiencies and slightly higher raw material costs. In addition,
growth in the component and door sales which have lower gross margins than
building systems impacted gross profit. As a result, the gross margin percentage
in 1997 declined from 27.5% to 26.6%.
Engineering costs increased $2.2 million, or 19%, which was in line with
the growth in metal building systems sales. Selling, general and administrative
costs increased by $10.8 million, or 26%, compared to the prior year. These
expenses increased at a slightly higher rate than sales due to the additional
expenses resulting from the acquisition of ECI, additional sales expense to
support the Classic Metal Homes effort and continued geographic expansion of the
Company's sales and marketing effort.
Interest expense increased $55,000 in 1997 as a result of the $1.5 million
debenture issued in April 1996 being out-standing all of 1997. Other income,
which consists of interest income, increased by $413,000 in fiscal year 1997.
This increase was the result of higher level of cash invested during the year.
Provision for income taxes increased by 7.7% in fiscal year 1997 and
decreased as a percent of sales from 4.5% in 1996 to 4.0% in 1997. During the
year, the Company changed the corporate structure of certain operating units
which reduced the amount of state income paid by these units.
LIQUIDITY AND CAPITAL RESOURCES
At October 31, 1998, the Company had working capital of $58.4 million compared
to $76.8 million on October 31, 1997. The decrease of $18.4 was primarily the
result of the MBCI acquisition. During the year, the Company generated $65.7
million in cash flow from operations before changes in working capital
components.
On May 4, 1998, the Company acquired all of the out-standing capital stock
of Amatek Holdings, Inc. from BTR Australia Limited, a wholly owned subsidiary
of BTR plc, for a purchase price of approximately $593 million, including cash
of $550 million (plus transaction costs) and 1.4 million shares of common stock
valued at $32.2 million. The Company financed the MBCI acquisition by obtaining
a new $600 million senior credit facility from a bank, (as discussed in Note 2
to the audited financial statements).
Loans bear interest, at the Company's option, as follows: (i) base rate
loans at the base rate plus a margin that ranges from 0% to 0.5% and (ii) LIBOR
loans at LIBOR plus a margin that ranges from 0.75% to 2.0%. Base rate is
defined as the higher of NationsBank, N.A.'s prime rate or the overnight Federal
funds rate plus 0.5%, and LIBOR is defined as the applicable London interbank
offered rate adjusted for reserves. Based on its current ratios, the Company is
paying a margin of 0.5% on base rate loans and 1.75% on LIBOR loans. The Company
currently has an interest rate swap agreement in place which caps interest on
LIBOR loans at 5.89% plus the applicable LIBOR margin for the principal amount
of the term loan.
In September 1998, the Company reduced its senior credit facility to $540
million to better reflect future anticipated needs.
Loans under the five-year revolver mature on July 1, 2003. Loans under the
term loan are payable in successive quarterly installments beginning on October
31, 1998 beginning with $7.5 million and gradually increasing to $12.5 million
on the maturity date. As of October 31, the Company had $474.1 million
outstanding under the senior credit facility. The 364-day revolver matures on
April 30, 1999. If the 364-day revolver is not repaid by the Company or extended
by the lenders, the Company has the option to convert it to a three-year term
note. Borrowings under the senior credit facility may be prepaid and the
voluntary reduction of the unutilized portion of the five-year revolver may be
made at any time, in certain agreed upon minimum amounts, without premium or
penalty but subject to LIBOR breakage costs. The Company is required to make
mandatory prepayments on the senior credit facility upon the occurrence of
certain events, including the sale of assets and the issuance and sale of equity
securities, in each case subject to certain limitations.
During the year, the Company spent $18.5 million in capital additions for
plant expansion, and the development of new management information systems, and
$15.5 million for the acquisition of California Finished Metals, Inc., a coil
painting facility located in California. The Company plans to spend
approximately $27 million for capital additions in fiscal 1999. Delays or
cancellation of planned projects could increase or decrease capital spending
from the amounts anticipated at the current time.
Inflation has not significantly affected the Company's financial position
or operations. Metal components and metal building systems sales are affected
more by the availability of funds for construction than interest rates. No
assurance can be given that inflation or interest rates will not fluctuate
significantly, either or both of which could have an adverse effect on the
Company's operations.
Liquidity in future periods will be dependent on internally generated cash
flows, the ability to obtain adequate financing
29
<PAGE> 35
UNAUDITED QUARTERLY FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)
for capital expenditures and expansion when needed and the amount of increased
working capital necessary to support expected growth. Based on current
capitalization, it is expected that future cash flows from operations and the
availability of alternative sources of external financing should be sufficient
to provide adequate liquidity for the foreseeable future.
IMPACT OF THE YEAR 2000 ISSUE
The year 2000 issue is the result of computer programs having been written using
two digits rather than four to define the applicable year. Any computer programs
that have date-sensitive software may recognize a date using "00" as the year
1900 rather than the year 2000. This could result in a system failure or
miscalculations causing disruptions of operations, including, among other
things, a temporary inability to process transactions, send invoices, or engage
in similar normal business activities.
The Company has conducted a review of its computer systems to identify the
systems that could be affected by the year 2000 issue and is implementing its
plan to attempt to ensure that its management information systems ("MIS") and
computer software are year 2000 compliant. This review is part of the Company's
overall upgrade of its MIS, which is currently in progress and includes the
installation of new systems. As a result, the Company has no separate budget for
year 2000 compliance. Expenses relating to reviewing and assessing systems are
included in historical operating expenses as part of management information
expenses and have not been separately identified. Management has completed the
upgrade with respect to a substantial majority of the Company's operations in
1998 and the upgrade for the remaining operating divisions will be completed in
the first six months of 1999. Management believes that with installation of the
new systems, conversion to new software and modifications to existing software,
the year 2000 issue will pose no significant operational problems for the
Company's MIS. The Company expects to complete all new installations,
conversions and necessary systems modifications and conversions by mid-1999.
There can be no assurance, however, that the Company will be able to install
and maintain year 2000 compliant MIS and software.
The Company is currently discussing with its vendors and customers the
possibility of any year 2000 interface difficulties that may affect the Company.
The ability of third parties with whom the Company transacts business to address
adequately their year 2000 issue is, however, outside the Company's control.
To date, the company has not identified any information technology assets
under the control of the Company that present a material risk of not being year
2000 ready or for which a suitable alternative cannot be implemented or is not
being implemented. The Company does not have a contingency plan with respect to
the year 2000 issue if the MIS upgrade is not completed or is delayed beyond the
end of 1999. The failure of the Company to address adequately, and in a timely
manner, the year 2000 issue, including ensuring that the Company's MIS and
software are year 2000 compliant, could have a materially adverse effect on the
Company's business, results of operations and financial condition. As the
Company's MIS upgrade is implemented, the Company may identify assets that
present a risk of a year 2000-related disruption. It is also possible that such
a disruption could have a materially adverse effect on the Company's business,
financial condition and results of operations. In addition, if any third
parties who provide goods or services that are critical to the Company's
business activities fail to appropriately address their year 2000 issues, there
could be a materially adverse effect on the Company's business, result of
operations and financial condition.
MARKET RISK DISCLOSURE
The Company is subject to market risk exposure related to changes in interest
rates on its credit facility, which includes revolving credit notes and term
notes. These instruments carry interest at a pre-agreed upon percentage point
spread from either the prime interest rate or LIBOR. Under its credit facility,
the Company may, at its option, fix the interest rate for certain borrowings
based on a spread over LIBOR for 30 days to 6 months. At October 31, 1998, the
Company had $474.1 million outstanding under its credit facility, of which
$192.5 million is subject to an interest rate swap agreement that effectively
fixes the interest rate at 5.9 percent plus the applicable margin on borrowings
(currently 1.75%). Based on this balance, an immediate change of one percent in
the interest rate would cause a change in interest expense of approximately $2.8
million on an annual basis. The Company's objective in maintaining these
variable rate borrowings is the flexibility obtained regarding early repayment
without penalties and lower overall cost as compared with fixed-rate borrowings.
30
<PAGE> 36
QUARTERLY FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
First Second Third Fourth
Quarter Quarter Quarter Quarter
-------- -------- -------- --------
FISCAL YEAR 1998
<S> <C> <C> <C> <C>
Sales ............................................ $ 97,323 $ 95,349 $229,547 $253,112
Gross profit ..................................... 25,437 26,614 60,716 64,702
Income before income taxes ....................... 9,448 9,981 19,310 23,110
Net income ....................................... 6,052 6,396 11,098 13,772
Net income per common and
common equivalent share - Basic(1) .......... $ .37 $ .39 $ .62 $ .76
Net income per common and
common equivalent share - Diluted(1) ........ $ .35 $ .37 $ .58 $ .73
FISCAL YEAR 1997
Sales ............................................ $ 82,875 $ 91,637 $112,484 $120,755
Gross profit ..................................... 22,410 23,694 29,774 32,466
Income before income taxes ....................... 8,250 8,180 12,653 15,042
Net income ....................................... 5,152 5,183 7,971 9,581
Net income per common and
common equivalent share - Basic(1) .......... $ .32 $ .32 $ .49 $ .59
Net income per common and
common equivalent share - Diluted(1) ........ $ .30 $ .30 $ .47 $ .56
</TABLE>
(1)The sum of the quarterly income per share amounts do not equal the annual
amount reported, as per share amounts are computed independently for each
quarter and for the full year based on the respective weighted average common
shares outstanding.
PRICE RANGE OF COMMON STOCK
The Company's common stock began trading on the NYSE under the symbol "NCS" on
August 13, 1998. The Company's stock previously traded on the Nasdaq National
Market. The following table sets forth the quarterly high and low closing sale
prices of the Company common stock, as reported by the Nasdaq National Market
or the NYSE, as applicable, for the prior two years. The prices quoted represent
prices between dealers in securities, without adjustments for mark-ups,
mark-downs, or commissions, and do not necessarily reflect actual transactions.
<TABLE>
<CAPTION>
Fiscal Year 1997 High Low
- ---------------------------------------------------------------
<S> <C> <C>
January 31 ............................. $ 18.75 $ 13.38
April 30 ............................... $ 19.13 $ 14.75
July 31 ................................ $ 18.94 $ 12.75
October 31 ............................. $ 19.88 $ 16.75
</TABLE>
<TABLE>
<CAPTION>
Fiscal Year 1998 High Low
- ---------------------------------------------------------------
<S> <C> <C>
January 31 ............................. $ 19.78 $ 16.88
April 30 ............................... $ 26.00 $ 18.06
July 31 ................................ $ 32.25 $ 23.13
October 31 ............................. $ 27.38 $ 15.44
</TABLE>
31
<PAGE> 37
CORPORATE DATA
CORPORATE HEADQUARTERS
NCI Building Systems, Inc.
7301 Fairview
Houston, Texas 77041
713/466-7788
PLANT LOCATIONS
Atwater, California
Caryville, Tennessee
Chandler, Arizona
Chester, South Carolina
Douglasville, Georgia
Ennis, Texas
Grapevine, Texas
Hobbs, New Mexico
Houston, Texas (6)
Jackson, Mississippi (2)
Mattoon, Illinois
Tallapoosa, Georgia
Stafford, Texas
Monterrey, Mexico
Oklahoma City, Oklahoma
Converse, Texas
Grand Prairie, Texas
Lubbock, Texas
Rome, New York
Adel, Georgia
Salt Lake City, Utah
Hernando, Mississippi
Memphis, Tennessee
Nicholasville, Kentucky
Atlanta, Georgia
Plant City, Florida
Colonial Heights, Virginia
Shelbyville, Indiana
Omaha, Nebraska
Nampa, Idaho
Tolleson, Arizona
Marietta, Georgia
ANNUAL MEETING
10:00 A.M., March 17, 1999
NCI Building Systems, Inc.
Corporate Offices
7301 Fairview
Houston, Texas 77041
COMMON STOCK TRANSFER AGENT AND REGISTRAR
Harris Trust and Savings Bank
Houston, Texas
LEGAL COUNSEL
Gardere & Wynne, L.L.P.
AUDITORS
Ernst & Young LLP
FORM 10-K
The Company's Annual Report on Form 10-K Report for the year ended October 31,
1998, as filed with the Securities and Exchange Commission, is available without
charge upon request to Robert J. Medlock at the address of the Corporate
Offices. The Company's common stock is traded on the NYSE under the trading
symbol NCS.
NUMBER OF SHAREHOLDERS
As of October 31, 1998, there were 183 share-holders of record of the Company's
common stock. The Company has over 7,900 beneficial shareholders.
32
<PAGE> 1
EXHIBIT 21
NCI BUILDING SYSTEMS, INC.
List of Subsidiaries
NCI Holding Corp. Delaware
NCI Operating Corp. Nevada
Metal Building Components Holding, Inc. Delaware
Metal Coaters Holding, Inc. Delaware
Metal Coaters of California, Inc. Texas
Building Systems de Mexico, S.A. de C.V. Mexico
<PAGE> 1
EXHIBIT 23
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Annual Report (Form 10-K)
of NCI Building Systems, Inc. of our report dated December 8, 1998, included in
the 1998 Annual Report to Shareholders of NCI Building Systems, Inc.
Our audits also included the financial statement schedule of NCI Building
Systems, Inc. listed in Item 14(a). This schedule is the responsibility of the
Company's management. Our responsibility is to express an opinion based on our
audits. In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.
We consent to the incorporation by reference in the Registration Statements
(Form S-8 No. 333-14957 and No. 33-52078) pertaining to the 401(k) Profit
Sharing Plan of NCI Building Systems, Inc. and Registration Statements (Form S-8
No. 333-34899, No. 33-52080 and No. 333-12921) pertaining to the Nonqualified
Stock Option Plan of NCI Building Systems, Inc., of our reports with respect to
the consolidated financial statements and schedule of NCI Building Systems,
Inc., for the year ended October 31, 1998.
/s/ ERNST & YOUNG LLP
ERNST & YOUNG, LLP
Houston, Texas
January 25, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-START> NOV-01-1997
<PERIOD-END> OCT-31-1998
<CASH> 4,599
<SECURITIES> 0
<RECEIVABLES> 101,582
<ALLOWANCES> 2,321
<INVENTORY> 78,001
<CURRENT-ASSETS> 192,570
<PP&E> 208,171
<DEPRECIATION> 28,671
<TOTAL-ASSETS> 823,537
<CURRENT-LIABILITIES> 134,177
<BONDS> 0
0
0
<COMMON> 181
<OTHER-SE> 223,431
<TOTAL-LIABILITY-AND-EQUITY> 823,537
<SALES> 675,331
<TOTAL-REVENUES> 675,331
<CGS> 497,862
<TOTAL-COSTS> 93,475
<OTHER-EXPENSES> (1,236)
<LOSS-PROVISION> 2,625
<INTEREST-EXPENSE> 20,756
<INCOME-PRETAX> 61,849
<INCOME-TAX> 24,531
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 37,318
<EPS-PRIMARY> 2.17
<EPS-DILUTED> 2.05
</TABLE>
