EXECUTION COPY
SECOND AMENDMENT AND WAIVER, dated as of October 1, 1999 (this
"Amendment") to the Credit Agreement, dated as of January 28, 1998, (as amended
by the Amendment and Waiver dated as of March 31, 1999, and as the same may be
further amended, supplemented or otherwise modified from time to time, the
"Credit Agreement") among RELIANT BUILDING PRODUCTS, INC., a Delaware
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corporation (the "Borrower"), the several banks and other financial institutions
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or entities from time to time parties to the Credit Agreement (the "Lenders"),
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CHASE SECURITIES INC., as advisor and arranger (in such capacity, the
"Arranger"), CANADIAN IMPERIAL BANK OF COMMERCE, NEW YORK AGENCY, as
documentation agent (in such capacity, the "Documentation Agent"), and CHASE
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BANK OF TEXAS, NATIONAL ASSOCIATION, as administrative agent (in such capacity,
the "Administrative Agent").
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W I T N E S S E T H :
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WHEREAS, the Borrower and Lenders are parties to the Credit Agreement; and
WHEREAS, the Borrower requests that the Lenders waive compliance with
certain financial covenants contained in the Credit Agreement; and
WHEREAS, the Borrower has requested that the Lenders consent to amendment
of certain financial covenant levels contained in the Credit Agreement; and
WHEREAS, the Borrower has requested that the Lenders amend certain other
provisions contained in the Credit Agreement; and
WHEREAS, the Lenders are willing to agree to the requested amendments and
waiver, but only upon the terms and conditions contained herein;
NOW THEREFORE, in consideration of the premises contained herein, the
parties hereto agree as follows:
I. Waivers to the Credit Agreement
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1. Section 7.1(a) (Consolidated Leverage Ratio). The Lenders hereby
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waive, for the period from October 1, 1999 to and including the Waiver
Termination Date (as defined below) only, any Default or Event of Default
occurring solely because the Borrower exceeds the Consolidated Leverage Ratio of
7.25 to 1.0 as at the end of the second fiscal quarter of Fiscal Year 2000 and
thereafter to and including the Waiver Termination Date.
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2. Section 7.1(b) (Consolidated Interest Coverage Ratio). The Lenders
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hereby waive, for the period from October 1, 1999 to and including the Waiver
Termination Date (as defined below) only, any Default or Event of Default
occurring solely because the Borrower does not meet the minimum Consolidated
Interest Coverage Ratio of 1.40 to 1.0 for the period of four consecutive fiscal
quarters ended with the second fiscal quarter of Fiscal Year 2000.
3. Section 7.1(c) (Maintenance of Minimum EBITDA). The Lenders hereby
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waive, for the period from October 1, 1999 to and including the Waiver
Termination Date (as defined below) only, any Default or Event of Default
occurring solely because the Borrower does not meet the minimum Consolidated
EBITDA of $26,000,000 for the period of four consecutive fiscal quarters ended
with the second fiscal quarter of Fiscal Year 2000.
4. "Waiver Termination Date" means October 31, 1999; provided that if on
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or prior to October 31, 1999 the Borrower has entered into an agreement or
understanding evidenced in a manner reasonably satisfactory to the
Administrative Agent with the holders of the Senior Subordinated Notes pursuant
to which the Senior Subordinated Notes will be restructured the Waiver
Termination Date shall be extended to no later than November 16, 1999.
II. Amendments to the Credit Agreement
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1. Amendment of Section 1.1 (Definitions). Section 1.1 is hereby amended
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as follows:
(a) by amending and restating the following definitions appearing therein to
read in their respective entireties as follows:
"'Borrowing Base': at any date, the amount of the then most recent
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computation of the Borrowing Base, determined by calculating the amount equal
to:
(a) 85% of the Net Amount of Eligible Receivables at such date;
plus
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(b) 50% of the amount of Eligible Inventory at said date, calculated at the
lower of cost (determined on a FIFO basis) or market less the Slow Moving
Reserve then in effect; provided that in no event shall the portion of the
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Borrowing Base attributable to Eligible Inventory exceed 50% of the Borrowing
Base;
plus
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(c) the Cumulative Incremental Availability at such date.
The Borrowing Base will be computed hereunder on a monthly basis (based on all
information reasonably available to the Administrative Agent, including without
limitation, the periodic reports and listings delivered to the Administrative
Agent in accordance with Section 6.2(c)), and a monthly Borrowing Base
Certificate from a Responsible Officer of the Borrower presenting the Borrower's
computation of the Borrowing Base will be periodically delivered to the
Administrative Agent in accordance with Section 6.2(d)."
"'Consolidated EBITDA': for any period, Consolidated Net Income for such
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period plus, without duplication and to the extent reflected as a charge in the
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statement of such Consolidated Net Income for such period, the sum of (a) income
tax expense, (b) interest expense, amortization or writeoff of debt discount and
debt issuance costs and commissions, discounts and other fees and charges
associated with Indebtedness (including the Loans), (c) depreciation and
amortization expense, (d) amortization of intangibles (including, but not
limited to, goodwill) and organization costs, (e) to the extent deducted in
determining such Consolidated Net Income, expenses relating to payments pursuant
to the ▇▇▇▇▇▇ Group Consulting Agreements, not to exceed $3,500,000, in any
fiscal year of the Borrower, (f) to the extent deducted in determining such
Consolidated Net Income, cash expenses relating to the planned closure and
consolidation referred to in the Confidential Information Memorandum of certain
facilities of the Borrower, not to exceed $3,500,000 in the aggregate, (g) any
extraordinary, unusual or non-recurring expenses or losses (including, whether
or not otherwise includable as a separate item in the statement of such
Consolidated Net Income for such period, losses on sales of assets outside of
the ordinary course of business), (h) any other non-cash charges, (i) any charge
or expense incurred in connection with the acquisition or start-up of any sales
program at any Lowe's store or group of Lowe's stores,( including, without
limitation, the purchase of remaining inventory of other manufacturers), not to
exceed $6,000,000 in the aggregate, (j) in the case of any period which includes
the second or third fiscal quarter of Fiscal Year 2000 up to $1,500,000 in
product development costs written off in such fiscal quarters in respect of
product development undertaken prior thereto, (k) in the case of any period
which includes the third or fourth fiscal quarter of Fiscal Year 2000, the costs
incurred in connection with the Second Amendment and Waiver to this Agreement
and the transactions contemplated thereby, including costs incurred in
connection with the restructuring of Indebtedness contemplated thereby and (l)
any expenses incurred on or after April 4, 1998 for year 2000 remediation
programs and implementation of management information system proposals made by
▇. ▇. ▇▇▇▇▇▇▇, not to exceed $4,000,000 in the aggregate, and minus, to the
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extent included in the statement of such Consolidated Net Income for such
period, the sum of (a) interest income, (b) any extraordinary, unusual or
non-recurring income or gains (including, whether or not otherwise includable as
a separate item in the statement of such Consolidated Net Income for such
period, gains on the sales of assets outside of the ordinary course of business)
and (c) any other non-cash income, all as determined on a consolidated basis."
"'Consolidated Interest Expense': for any period, total interest expense
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(including that attributable to Capital Lease Obligations) of the Borrower and
its Subsidiaries for such period with respect to all outstanding Indebtedness of
the Borrower and its Subsidiaries (including, without limitation, all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing and net costs under Interest Rate
Protection Agreements to the extent such net costs are allocable to such period
in accordance with GAAP) but excluding (a) amortization or writeoff of debt
discount and debt issuance costs and commissions, discounts and other fees and
charges associated with Indebtedness (including the Loans) and (b) any such
interest expense in respect of the Senior Subordinated Notes that may be payable
and is paid by the issuance of additional Senior Subordinated Notes."
(b) by adding thereto the following definitions in the appropriate
alphabetical order:
"'Cumulative Incremental Availability': as at any date of determination, the
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amount calculated as follows:
(a) for each date set forth in the chart below which has occurred on or
prior to such date of determination, determine the lesser of (i) the amount set
forth opposite such date below under the caption "Maximum Incremental
Availability" and (ii) the amount borrowed under the Revolving Credit
Commitments on such date below (or, if such date is not a Business Day, the next
succeeding Business Day) to fund the principal payment then due and payable on
the Tranche A Term Loans (as specified in a notice from the Borrower to the
Administrative Agent on or about such date):
Maximum
Date Incremental Availability
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March 31, 2000 $2,000,000
June 30, 2000 $2,000,000
December 31, 2000 $2,000,000
March 31, 2001 $ 500,000
June 30, 2001 $ 500,000
September 30, 2001 $ 500,000
December 31, 2001 $ 500,000
Such lesser amount is the "Incremental Availability Amount" for each such
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date; and
(b) add the Incremental Availability Amounts for all of the dates in the
chart above which have occurred on or prior to such date of determination."
"'Second Amendment Effective Date': as defined in the Second Amendment and
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Waiver to this Agreement."
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2. Amendment of Subsection 7.1(a) (Consolidated Leverage Ratio).
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Subsection 7.1(a) of the Credit Agreement is hereby amended by deleting such
subsection in its entirety and substituting in lieu thereof the following:
"(a) Intentionally Omitted."
3. Amendment of Subsection 7.1(b) (Consolidated Interest Coverage Ratio).
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Subsection 7.1(b) of the Credit Agreement is hereby amended by deleting such
subsection in its entirety and substituting in lieu thereof the following:
"(b) Consolidated Interest Coverage Ratio. Permit Consolidated Interest
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Coverage Ratio for any period of four consecutive fiscal quarters of the
Borrower ending during any period set forth below to be less than the ratio set
forth below opposite such period:
Consolidated Interest
Period Coverage Ratio
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3rd Quarter Fiscal Year 2000- 1.00:1.0
4th Quarter Fiscal Year 2000
1st Quarter Fiscal Year 2001- 1.40:1.0
2nd Quarter Fiscal Year 2001
3rd Quarter Fiscal Year 2001- 1.75:1.0
4th Quarter Fiscal Year 2001
1st Quarter Fiscal Year 2002- 2.00:1.0
Each Fiscal Quarter Thereafter
4. Amendment of Section 7.1(c) (Maintenance of Minimum EBITDA). Section
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7.1(c) is hereby amended by deleting such subsection in its entirety and
substituting in lieu thereof the following:
"(c) Maintenance of Minimum EBITDA. Permit Consolidated EBITDA for any
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period of four consecutive fiscal quarters of the Borrower ending during any
period set forth below to be less than the amount set forth below opposite such
period:
Period Consolidated EBITDA
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3rd Quarter Fiscal Year 2000- $17,000,000
2nd Quarter Fiscal Year 2001
3rd Quarter Fiscal Year 2001- $19,000,000
4th Quarter Fiscal Year 2001
1st Quarter Fiscal Year 2002- $21,000,000
2nd Quarter Fiscal Year 2002
3rd Quarter Fiscal Year 2002- $23,000,000
4th Quarter Fiscal Year 2002
1st Quarter Fiscal Year 2003- $25,000,000
4th Quarter Fiscal Year 2003
Each Fiscal Quarter Thereafter $27,000,000
5. Amendment of Section 7.2 (Limitation on Indebtedness). Section 7.2 of
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the Credit Agreement is hereby amended by inserting the following words after
the phrase "not to exceed $70,000,000" in paragraph (g) thereof:
"plus the aggregate amount of interest expense in respect of the Senior
Subordinated Notes which is paid by the issuance of additional Senior
Subordinated Notes in accordance with the terms of the restructuring of the
Senior Subordinated Notes which occurred on or prior to the Second Amendment
Effective Date"
6. Amendment of Annex A (Pricing Grid). Annex A is hereby amended by
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deleting the Pricing Grid contained therein and replacing it with the Pricing
Grid attached as Schedule I hereto. Interest and commitment fees accrued prior
to the Second Amendment Effective Date and payable thereafter shall be payable
for such period based on the Pricing Grid in effect prior to the Second
Amendment Effective Date, and interest and commitment fees accrued thereafter
shall be payable based on the Pricing Grid as amended hereby.
III. General Provisions
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1. Representations and Warranties. On and as of the date hereof and after
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giving effect to this Amendment and Waiver, the Borrower hereby confirms,
reaffirms and restates the representations and warranties set forth in Section 4
of the Credit Agreement mutatis mutandis, and to the extent that such
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representations and warranties expressly relate to a specific earlier date in
which case the Borrower hereby confirms, reaffirms and restates such
representations and warranties as of such earlier date, provided that the
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references to the Credit Agreement in such representations and warranties shall
be deemed to refer to the Credit Agreement as amended prior to the date hereof
and pursuant to this Amendment and Waiver.
2. Conditions to Effectiveness of Section I of this Amendment and Waiver.
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The waivers contained in Section I of this Amendment and Waiver shall become
effective as of the date on which the following conditions precedent have been
satisfied or waived:
(a) The Administrative Agent shall have received counterparts of this
Amendment, duly executed and delivered by the Borrower and the Required Lenders;
and
(b) Each Guarantor under the Guarantee and Collateral Agreement shall have
consented to this Amendment.
3. Conditions to Effectiveness of Section II of this Amendment and Waiver.
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The amendments contained in Section II of this Amendment and Waiver shall become
effective as of the date (the "Second Amendment Effective Date") on which all of
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the following conditions precedent have been satisfied or waived:
(a) The Administrative Agent shall have received counterparts of this
Amendment, duly executed and delivered by the Borrower and the requisite
Lenders;
(b) Each Guarantor under the Guarantee and Collateral Agreement shall have
consented to this Amendment;
(c) the Control Group shall have advanced $10,000,000 to the Borrower in
the form of either equity or debt that is subordinated to the Obligations, in a
manner reasonably satisfactory to the Administrative Agent and the Required
Lenders; and
(d) the Senior Subordinated Notes and Indebtedness of Holdings shall have
been restructured upon terms and conditions reasonably satisfactory to the
Control Group.
The Lenders parties hereto agree that no mandatory prepayment shall be required
as a result of any of the transactions referred to in paragraphs (c) and (d) of
this Section 3.
4. Continuing Effect; No Other Amendments. Except as expressly amended or
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waived hereby, all of the terms and provisions of the Credit Agreement are and
shall remain in full force and effect. The amendments and waivers provided for
herein are limited to the specific subsections of the Credit Agreement specified
herein and shall not constitute an amendment or waiver of, or an indication of
the Lenders' willingness to amend or waive, any other provisions of the Credit
Agreement or the same subsections for any other date or time period (whether or
not such other provisions or compliance with such subsections for another date
or time period are affected by the circumstances addressed in this Amendment and
Waiver).
5. Expenses. The Borrower agrees to pay and reimburse the Administrative
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Agent for all its reasonable costs and expenses incurred in connection with the
preparation and delivery of this Amendment and Waiver, including, without
limitation, the reasonable fees and disbursements of counsel to the
Administrative Agent.
6. Counterparts. This Amendment and Waiver may be executed by one or more
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of the parties to this Amendment and Waiver on any number of separate
counterparts (including by telecopy), and all of said counterparts taken
together shall be deemed to constitute one and the same instrument.
7. GOVERNING LAW. THIS AMENDMENT AND WAIVER AND THE RIGHTS AND
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OBLIGATIONS OF THE PARTIES UNDER THIS AMENDMENT AND WAIVER SHALL BE GOVERNED BY,
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AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
RELIANT BUILDING PRODUCTS, INC.
By:
Name:
Title:
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, as Administrative Agent,
Swing Line Lender, Issuing Lender
and as a Lender
By:
Name:
Title:
BANKBOSTON, N.A.
By:
Name:
Title:
BALANCED HIGH YIELD FUND I LTD.
by BHF-Bank Aktiengesellschaft acting through
its New York Branch as
attorney-in-fact
By:
Name:
Title:
By:
Name:
Title:
PARIBAS
By:
Name:
Title:
By:
Name:
Title:
ING HIGH INCOME PRINCIPAL
PRESERVATION FUND HOLDINGS,
LDC
By: ING Capital Advisors, LLC
as Investment Advisor
By:
Name:
Title:
NORTHERN LIFE INSURANCE COMPANY
By: ING Capital Advisors, LLC
as Investment Advisor
By:
Name:
Title:
BHF-BANK AKTIENGESELLSCHAFT
By:
Name:
Title:
By:
Name:
Title:
CIBC, INC.
By:
Name:
Title:
FLEET BUSINESS CREDIT CORPORATION
F/k/a Sanwa Business Credit Corporation
By:
Name:
Title:
KEY CORPORATE CAPITAL INC.
By:
Name:
Title:
KZH CYPRESSTREE-1 LLC
By:
Name:
Title:
SENIOR DEBT PORTFOLIO
By: Boston Management and Research as
Investment Advisor
By:
Name:
Title:
▇▇▇ ▇▇▇▇▇▇ CLO II, LIMITED
By: ▇▇▇ ▇▇▇▇▇▇ MANAGEMENT INC., as
Collateral Manager
By:
Name:
Title:
ACKNOWLEDGMENT AND CONSENT
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Each of the undersigned hereby consents to the foregoing Amendment and
hereby confirms, reaffirms and restates that its obligations under or in respect
of the Credit Agreement and the documents related thereto to which it is a party
are and shall remain in full force and effect after giving effect to the
foregoing Amendment:
RBPI HOLDING CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
RELIANT BUILDING PRODUCTS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Senior Vice President
RBP OF ARIZONA, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
RBP CUSTOM GLASS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
RBP OF TEXAS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
RBP TRANS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇ BUILDIERS SUPPLY, INCORPORATED
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
TIMBER TECH, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
CFA HOLDING COMPANY
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
CARE FREE ALUMINUM PRODUCTS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
ULTRA BUILDING SYSTEMS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
ALPINE INDUSTRIES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President