RELIANT BUILDING PRODUCTS, INC.
0000 XXX Xxxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
November 1, 1999
To the Holders of 10 7/8% Senior Subordinated
Notes due 2004 of Reliant Building Products, Inc.
Identified below:
The term sheet annexed hereto sets forth the principal terms on which you
have agreed in principle to exchange the entire principal amount beneficially
owned by you of the 10 7/8% Senior Subordinated Notes due 2004 (the "Old Notes")
of Reliant Building Products, Inc. (the "Company") for an equal aggregate
principal amount of new notes (the "New Notes") having substantially the terms
set forth therein, together with such other terms and conditions as are
customary in instruments similar to the New Notes and transactions of the type
contemplated.
Our signatures below evidence (i) our mutual non-binding intention to
proceed with negotiations designed to carry out a transaction substantially in
the manner outlined herein and (ii) our mutual intention to proceed
expeditiously with the negotiation of a mutually satisfactory lock-up and
forbearance agreement and other related documentation. Consummation of the
transaction will be subject to the negotiation and execution of definitive
agreements with terms satisfactory to you and the Company, each in your sole
discretion.
Very truly yours,
RELIANT BUILDING PRODUCTS, INC.
By: /s/ Xxxxxxx Xxxxxx
Name: Xxxxxxx Xxxxxx
Title: Senior Vice President
Confirmed as of the date first above written::
Name of Bondholder: Name of Bondholder:
Alliance Capital Management
By: /s/ Xxxxxxx X. Xxxx By:
Name: Xxxxxxx X. Xxxx Name:
Title: Vice President Title:
Principal amount Principal amount
of bonds held: of bonds held:
29,250,000
Name of Custodian: Name of Custodian:
Various
Name of Bondholder: Name of Bondholder:
SunAmerica CBO SunAmerica Life Insurance
By: /s/ Xxxxxx Xxxxx By: /s/ Xxxxxx Xxxxx
Name: Xxxxxx Xxxxx Name: Xxxxxx Xxxxx
Title: Authorized Agent Title: Authorized Agent
Principal amount Principal amount
Of bonds held: of bonds held:
$6,000,000 $1,000,000
Name of Custodian: Name of Custodian:
Chase Texas DeutscheBank
Name of Bondholder: Name of Bondholder:
SunAmerica Inc. Bankers Trust
By: /s/ Xxxxxx Xxxxx By: /s/ Xxxxxx Xxxxx
Name: Xxxxxx Xxxxx Name: Xxxxxx Xxxxx
Title: Authorized Agent Title: Authorized Agent
Principal amount Principal amount
Of bonds held: of bonds held:
$10,400,000 $3,000,000
Name of Custodian: Name of Custodian:
Chase DeutscheBank DeutscheBank
Name of Bondholder: Name of Bondholder:
By: /s/ X. Xxxxx Xxxxxx By:
Name: X. Xxxxx Xxxxxx Name:
Title: Partner Title:
Principal amount Principal amount
Of bonds held: of bonds held:
$6,500,000
Name of Custodian: Name of Custodian:
Chase - Texas Commerce
November 1, 1999
RELIANT BUILDING PRODUCTS, INC.
SUMMARY OF PRINCIPAL TERMS
OF AMENDMENTS APPLICABLE TO
10 7/8% SENIOR SUBORDINATED NOTES DUE 2004
Issuer Reliant Building Products, Inc. (the "Company")
The Exchange Offer and Related Restructuring
The Company intends to make an
offer to all Holders of the Company's outstanding 10 7/8% Senior Subordinated
Notes due 2004 (the "Old Notes") to exchange New Notes (as defined below) for an
equal principal amount of Old Notes (the "Exchange Offer"). In connection with
the Exchange Offer, the Company intends to solicit (the "Solicitation")
consents (the "Consents") to certain proposed amendments (the "Proposed
Amendments") to the Old Indenture. The Company's obligation to accept for
exchange Old -Notes validly tendered pursuant to the Exchange Offer, and the
obligation of each Holder of Old Notes to tender such Old Notes, will be
conditioned upon (i) receipt of valid unrevoked tenders from holders of at
least 95% of the principal amount of the Old Notes outstanding (the "Tender
Condition"), (ii) execution by the Company and the Trustee under the indenture
pursuant to which the Old Notes were issued (the "Old Indenture"), following
receipt of Consents from Holders of at least a majority in principal amount of
the Old Notes outstanding, of a supplemental indenture pro-viding for the
Proposed Amendments (the "Consent Condition"), (iii) satisfaction of the Credit
Agreement Amendment Condition (as defined below), (iv) satisfaction of the
Investment Condition (as defined below), and (v) certain general conditions
to the Exchange Offer and the Solicitation set forth in Exhibit A hereto (the
---------
"General Conditions"). In the event that the Tender Condition is not
satisfied, the Company may elect to file a prepackaged Chapter 11 plan of
reorganization containing substantially the same terms as the Exchange Offer.
New Notes
Up to $70,000,000 aggregate principal amount of Senior
Subordinated Variable Rate Interest Option Notes due 2004 (the "New Notes")
Maturity of New Notes May 1, 2004
-------------
Interest
Interest on the New Notes will accrue and be payable as follows:
(a) On each of the interest payment dates November 1, 1999 and May 1,
2000, interest on the New Notes will be payable, at the option of the Company,
either in cash or by accrual at 10 7/8 % per annum. Accrued interest shall
compound semi-annually.
(b) On each of the interest payment dates November 1, 2000 and May 1,
2001, interest on the New Notes will be payable, at the option of the Company,
either in cash at 10 7/8% per annum or by accrual at 11% per annum. Accrued
interest shall compound semi-annually.
(c) On each of the interest payment dates November 1, 2001 and May 1,
2002, interest on the New Notes will be payable, at the option of the Company,
either in cash at 10 7/8% per annum or by accrual at 11% per annum. Accrued
interest shall compound semi-annually.
(d) On the August 1, 2002 interest payment date, interest on the New Notes
will be payable, at the option of the Company, either in cash at 10.731 % per
annum or by accrual at 11 7/8% per annum.
(e) On each interest payment date commencing November 1, 2002 through and
including May 1, 2004, interest on the New Notes will be payable quarterly in
cash at 10.731% per annum.
(f) All deferred interest shall become payable at the final maturity date
of the New Notes.
Interest Payment Dates
Commencing November 1, 1999 through and including May 1, 2002, semi-annually on
May 1 and November 1. Commencing August 1, 2002 through and including May 1,
2004, quarterly on February 1, May 1, August 1, and November 1. Interest that
is deferred as aforesaid shall be paid in full at the final maturity date of the
New Notes.
Subsidiary Guaranties
The New Notes will be guaranteed (the "Guaranties"),
jointly and severally on a senior subordinated basis, by each of the Company's
direct and indirect Subsidiaries (as defined) on the issue date of the New Notes
and by each direct and indirect Subsidiary of the Company (excluding
Unrestricted Subsidiaries) formed or acquired thereafter. The Guaranties will
be general unsecured obligations of the Guarantors. The Guarantors will also
guarantee all obligations of the Company under the Senior Credit Facility (as
defined), and each Guarantor will grant a security interest in all or
substantially all its assets to secure its guarantee obligations under the
Senior Credit Facility. The obligations of each Guarantor under its Guaranty
will be subordinated in right of payment to the prior payment in full of all
Guarantor Senior Indebtedness (as defined) of such Guarantor to substantially
the same extent as the Notes are subordinated to all existing and future Senior
Indebtedness of the Company.
Ranking
The Notes will be unsecured and will be subordinated to all
existing and future Senior Indebtedness of the Company. The Notes will rank
pari passu with any future senior subordinated indebtedness of the Company and
will rank senior to all other Subordinated Indebtedness of the Company.
Covenants Same as Old Notes
Exchange Offer and Registration Rights
The Company will enter into a Registration Rights
Agreement containing terms customary for transactions of this type with the
holders who exchange Old Notes for New Notes, pursuant to which the Company
will either offer to exchange, pursuant to an effective registration statement,
an equal principal amount of notes having terms substantially identical to the
New Notes except for the transfer restrictions (the "Exchange Notes") or cause
the New Notes to be registered under the Securities Act and, if any such
registration statement is not filed and declared effective or such exchange
offer is not consummated, in each case within certain customary time limits,
then additional interest (in addition to the interest otherwise due on the New
Notes) will be paid by the Company in cash or deferred (in the same manner as
interest otherwise due is paid in cash or deferred) to each holder of New Notes
on account of the first 90-day period immediately following the occurrence of
each such default in an amount equal to $0.05 per week per $1,000 principal
amount of New Notes, increasing by an additional $0.05 per week per $1,000
principal amount of New Notes for each subsequent 90-day period until such
default is cured, up to a maximum amount of additional interest of $0.50 per
week per $1,000 principal amount of New Notes. Such additional interest will
cease accruing on the New Notes when the default in filing such registration
statement or con-summating such exchange offer has been cured.
Transfer Restrictions; Absence of a Public Market for the New Notes
The New Notes will not be registered under the Securities Act and will be
subject to restrictions on transferability and resale. If issued, the
Exchange Notes generally will be freely transferable, but there can be no
assurance as to the development or liquidity of any market for the Exchange
Notes. The Exchange Notes are expected to be eligible for trading in
the PORTAL market. The Company does not intend to apply for listing of the
New Notes or the Exchange Notes on any national securities exchange or for their
quotation through the National Association of Securities Dealers Automated
Quotation System.
Observation Rights
The holders of the New Notes shall be entitled to name
one person as an observer to the Company's Board of Directors, who shall be
entitled to receive notice of and participate in all meetings of the Company's
Board of Directors but who shall not have any voting rights
Consent Fee
20 basis points per $1,000 principal amount of Old Notes as to
which Consents to the Pro-posed Amendments are duly given, payable at the
closing of the Exchange Offer
Expenses
All fees and expenses of the professionals to the Holders of Old
Notes to be paid at closing of restructuring, if not sooner paid.
Certain Definitions
"Credit Agreement Amendment Condition" shall mean the
execution and delivery of that certain Second Amendment and Waiver to the Credit
Agreement, dated as of January 28, 1998, as amended, supplemented or otherwise
modified from time to time thereafter, by and between the Company, as Borrower,
the several banks and other financial institutions or entities from time to
time parties thereto, Chase Securities, Inc. as advisor and arranger, Canadian
Imperial Bank of Commerce, New York Agency, as documentation agent, and Bank of
Texas, National Association, as administrative agent, which shall be in a form
reasonably acceptable to the Holders of Old Notes and their counsel.
"Investment Condition" shall mean an equity investment of $10 million,
which shall be in a form reasonably acceptable to the Holders of Old Notes and
their counsel, from certain entities related to Reliant Partners, L.P. and
Reliant Partners II, L.P., the current controlling stockholders of Reliant's
parent, RBPI Holding Corporation (the "Stockholders"), pursuant to which
investment the Stockholders will acquire from the Company newly issued shares of
common stock in such amount that, after giving effect to such investment the
Stockholders will own substantially all of the common stock of the Company to be
then outstanding other than the common stock to be issued to management, if any.
The obligation of the Stockholders to make the equity investment will be
conditioned upon the satisfaction of the Tender Condition, the Consent
Condition, the Credit Agreement Amendment Condition, and the General
Conditions.
All other capitalized terms used but not defined herein shall have the
meanings given to them in the Old Indenture.
EXHIBIT A
General Conditions
-------------------
For purposes of the Exchange Offer, the "General Conditions" shall be
deemed to have been satisfied unless any of the following conditions shall occur
on or after the date the Exchange Offer is commenced and prior to the acceptance
for exchange of any Old Notes tendered pursuant to the Exchange Offer:
(a) there shall have occurred (i) any general suspension of, or
limitation on prices for, trading in securities in the United States securities
or financial markets, (ii) a material impairment in the trading market for debt
securities, (iii) a declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States (whether or not mandatory),
(iv) any limitation (whether or not mandatory) by any governmental authority
on, or other event having a reasonable likelihood of affecting, the extension
of credit by banks or other lending institutions in the United States, (v) a
commencement of a war, armed hostilities or other national or international
crisis involving the United States or (vi) any significant adverse change in the
United States securities or financial markets generally or in the case of any
of the foregoing existing on the date hereof, a material acceleration or
worsening thereof;
(b) there exists an order, statute, rule, regulation, executive order,
stay, decree, judgment or injunction that shall have been enacted, entered,
issued, promulgated, enforced or deemed applicable by any court or
governmental, regulatory or administrative agency or instrumentality that, in
the reasonable judgment of the Company, would or would be reason-ably likely
to prohibit, prevent or materially restrict or delay consummation of the
Exchange Offer or the Solicitation or that is, or is reasonably likely to be,
materially adverse to the business, operations, properties, conditions
(financial or otherwise), assets, liabilities or prospects of the Company or
its subsidiaries;
(c) there shall have been instituted or be pending any action or
proceeding before or by any court or governmental, regulatory or administrative
agency or instrumentality, or by any other person, which challenges the making
of the Exchange Offer or the Solicitation or the Proposed Amendments or is
reasonably likely to directly or indirectly prohibit, prevent, restrict or
delay the consummation of the Exchange Offer or the Solicitation or the
Proposed Amendments or otherwise adversely affect in any material manner the
Exchange Offer, the Solicitation or the Proposed Amendments; or
(d) the Trustee under the Old Indenture shall have objected in any respect
to, or taken any action that would be reasonably likely to materially and
adversely affect the consummation of the Exchange Offer or the Solicitation
or the Company's ability to effect the Proposed Amendments, or shall have
taken any action that challenges the validity or effectiveness of the
procedures used by the Company in soliciting the Consents (including the form
thereof) or in the making of the Exchange Offer or the acceptance of the Old
Notes or the Consents or the issuance of New Notes in exchange for Old Notes.
