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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-
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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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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;
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(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 xxxxx, 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 xxx 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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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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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
000 Xxxxxxxxx Xxxxxx, 0xx Xxxxx
X.X. Xxx 0000
Xxxxxxx, Xxxxx 00000-0000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx, Xx.
Vice President
with a copy to:
Xxxxxx & Xxxxxx, L.L.P.
000 Xxxxxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attention: F. Xxxxxx Xxxxxxxx, Xx.
If to Borrower:
NCI Building Systems, Inc.
0000 Xxxxxxxx
Xxxxxxx, Xxxxx 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx
Chief Financial Officer
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with a copy to:
Gardere & Xxxxx, L.L.P.
Thanksgiving Tower
0000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attention: Xxxx X. Xxxxxxxx
If to Guarantor:
NCI Holding Corp.
c/o Delaware Corporate Management, Inc.
0000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 0000
X.X. Xxx 0000
Xxxxxxxxxx, Xxxxxxxx 00000
Telephone No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxx
with a copy to:
Gardere & Xxxxx, L.L.P.
Thanksgiving Tower
0000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attention: Xxxx X. Xxxxxxxx
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
XXXXXX 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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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/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
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Title: Vice President and Treasurer
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