JOINDER TO LOAN DOCUMENTS
AND AMENDMENT TO LOAN DOCUMENTS
(Thermo-Shield)
THIS JOINDER TO LOAN DOCUMENTS AND AMENDMENT TO LOAN DOCUMENTS
(the "Joinder Agreement") is made and entered into as of July 8, 1999, by and
among [i] THERMOVIEW INDUSTRIES, INC., a Delaware corporation ("ThermoView"),
[ii] AMERICAN HOME DEVELOPERS CO., INC., a California corporation ("American
Home"), [iii] FIVE STAR BUILDERS, INC., a California corporation, successor
in interest to American Home Remodeling ("Five Star"), [iv] KEY HOME CREDIT,
INC., a Delaware corporation ("Key Home"), [v] KEY HOME MORTGAGE, INC., a
Delaware corporation ("Key Home Mortgage"), [vi] XXXXXXXX SIDING AND WINDOW,
INC., a North Dakota business corporation ("Xxxxxxxx Siding"), [vii] PRIMAX
WINDOW CO., a Kentucky corporation ("Primax"), [viii] PRECISION WINDOW MFG.,
INC., a Missouri corporation ("Precision"), [ix] ROLOX, INC., a Kansas
corporation ("Rolox"), [x] TD WINDOWS, INC., a Kentucky corporation ("TD
Windows"), [xi]THERMAL LINE WINDOWS, INC., a North Dakota corporation,
formerly known as Ice Inc., successor in interest to Thermal Line Windows,
LLP, and Blizzard Enterprises, Inc. ("Thermal Line"), [xii] THERMOVIEW OF
MISSOURI, INC., a Missouri corporation ("ThermoView-Missouri"), [xiii]
THERMO-TILT WINDOW COMPANY, a Delaware corporation ("Thermo-Tilt"), [xiv]
XXXXXX CONSTRUCTION, INC., a Missouri corporation ("Xxxxxx") (ThermoView,
American Home, Five Star, Key Home, Key Home Mortgage, Xxxxxxxx Siding,
Primax, Rolox, TD Windows, Thermal Line, ThermoView-Missouri Thermo-Tilt, and
Xxxxxx individually are referred to in this Joinder Agreement as an "Original
Borrower" and collectively are referred to in this Joinder Agreement as the
"Original Borrowers"), [xv] THERMO-SHIELD OF AMERICA (ARIZONA), INC., an
Arizona corporation ("TSAAI"), [xvi] THERMO-SHIELD OF AMERICA (MICHIGAN),
INC., a Michigan corporation ("TSAMI"), [xvii] THERMO-SHIELD COMPANY, LLC, an
Illinois limited liability company ("TSC"), [xviii] THERMO-SHIELD OF AMERICA
(WISCONSIN), LLC, a Wisconsin limited liability company ("TSAW"), (TSAAI,
TSAMI, TSC and TSAW each are referred to herein as a "Thermo-Shield Acquired
Entity" and collectively the "Thermo-Shield Acquired Entities"), [xix]
THERMOVIEW ADVERTISING GROUP, INC., a Delaware corporation ("TAG") (TAG and
the Thermo-Shield Acquired Entities are sometimes referred to herein
individually as a "Joined Entity" and collectively as the "Joined Entities"),
and [xx] PNC BANK, NATIONAL ASSOCIATION, a national banking association (the
"Bank").
RECITALS:
A. The Original Borrowers and the Bank are parties to a
certain Loan Agreement, dated as of August 31, 1998 (the "Loan Agreement")
(certain capitalized terms used in this Joinder Agreement have the meanings
set forth for them in the Loan Agreement unless expressly otherwise defined
herein), pursuant to which, among other things, the Bank established a
$15,000,000.00 Committed Line of Credit in favor of the Original Borrowers.
B. As a condition of including the EBITDA of any Acquired
Entity in the calculation of the Commitment Limit, the Original Borrowers
agreed to cause each such Acquired Entity to join in the Loan Agreement, the
Note, the Security Agreement and the other Loan Documents promptly upon being
acquired by any of the Original Borrowers.
C. The Original Borrowers have acquired the Thermo-Shield
Acquired Entities and certain other assets used by the Thermo-Shield Acquired
Entities (collectively referred to in this Joinder Agreement as the
"Thermo-Shield Acquisition").
D. The Original Borrowers have formed TAG.
E. The Original Borrowers desire to have the EBITDA of the
Joined Entities used in the calculation of the Commitment Limit.
F. The Original Borrowers have also requested that the
Bank amend the Loan Agreement as more particularly described in this Joinder
Agreement.
G. The Bank has agreed to allow the EBITDA of the Joined
Entities to be used in the calculation of the Commitment Limit provided the
Joined Entities and the Original Borrowers enter into this Joinder Agreement,
and subject to the other provisions of the Loan Documents, the Joined
Entities have each agreed to join in, as applicable, the Loan Agreement, the
Note, the Pledge Agreement, and the Security Agreement, and Original
Borrowers and the Bank have each agreed to modify the Loan Agreement and the
other Loan Documents as hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements set forth in this Joinder Agreement and for
other good and valuable consideration, the mutuality, receipt and sufficiency
of which are hereby acknowledged, the Original Borrowers, the Joined Entities
and the Bank hereby agree as follows:
ARTICLE 1
JOINDER TO LOAN AGREEMENT
Subject to delivery to the Bank of each of the "Joinder
Agreement Documents" more particularly described in Article 9 of this Joinder
Agreement:
1.1 Each of the Joined Entities are hereby joined as a Borrower to
the Loan Agreement.
1.2 Each of the Joined Entities covenants and agrees to comply
with:
A. All of the covenants contained in the "Affirmative
Covenants" Section of the Loan Agreement from the date of execution of this
Joinder Agreement until all Obligations have been fully paid and any
commitments of the Bank to the Borrowers have been terminated;
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B. All of the covenants contained in the "Negative
Covenants" Section of the Loan Agreement from the date of execution of this
Joinder Agreement until all Obligations have been fully paid and any
commitments of the Bank to the Borrowers have been terminated; and
C. All of the other terms, conditions, covenants,
agreements and obligations of each Borrower to be performed under and
pursuant to the Loan Agreement.
1.3 Each of the Joined Entities makes, as of the date of this
Joinder Agreement, all of the representations and warranties contained in the
"Representations and Warranties" Section of the Loan Agreement, which shall
be continuing in nature and remain in full force and effect until the
Obligations are paid in full, and which shall be true and correct.
1.4 Each of the Joined Entities acknowledges its respective
receipt of a complete copy of the Loan Agreement and each and every other
presently existing Loan Document referred to or referenced in the Loan
Agreement.
ARTICLE 2
JOINDER TO NOTE
Subject to delivery to the Bank of each of the "Joinder Agreement
Documents" more particularly described in Article 9 of this Joinder Agreement:
2.1 Each of the Joined Entities are hereby joined as a Borrower to
the Note and each jointly and severally promises and agrees to pay the
indebtedness evidenced thereby in accordance with the provisions thereof.
2.2 Without limitation of Section 2.1 above, each of the Joined
Entities promises and agrees to pay to the order of the Bank, the aggregate
principal sum of Fifteen Million and No/100 Dollars ($15,000,000.00), or so much
thereof as may be advanced under the Note, together with interest thereon as
provided in the Note, in lawful money of the United States of America, in the
manner set forth in the Note, on or before the Expiration Date as that term is
defined in the Note.
2.3 Each of the Joined Entities covenants and agrees to comply with
all of the other terms, conditions, covenants, agreements and obligations of
each Borrower to be performed under and pursuant to the Note.
2.4 Each of the Joined Entities acknowledges its respective receipt
of a complete copy of the Note and each and every other Loan Document referred
to or referenced in the Note.
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ARTICLE 3
JOINDER TO SECURITY AGREEMENT
Subject to delivery to the Bank of each of the "Joinder
Agreement Documents" more particularly described in Article 9 of this Joinder
Agreement:
3.1 Each of the Joined Entities are hereby joined as a Borrower to
the Security Agreement.
3.2 Each of the Joined Entities hereby assigns and grants to the
Bank, as a secured party, a continuing lien on and security interest in the
Collateral.
3.3 Each of the Joined Entities makes, as of the date of this
Joinder Agreement, all of the representations and warranties contained in the
"Representations and Warranties" Section of the Security Agreement, which
shall be continuing in nature and remain in full force and effect until the
Obligations are paid in full, and which shall be true and correct.
3.4 Each of the Joined Entities covenants and agrees to comply
with:
A. The covenants contained in the "Grantors' Covenants"
and the "Covenants for Accounts" Sections of the Security Agreement from the
date of execution of this Joinder Agreement until all Obligations have been
fully paid and any commitments of the Bank to the Grantors have been
terminated;
B. The covenants contained in the "Negative Pledge; No
Transfer" Section of the Security Agreement from the date of execution of
this Joinder Agreement until all Obligations have been fully paid and any
commitments of the Bank to the Grantors have been terminated; and
C. All of the other terms, conditions, covenants,
agreements and obligations of each Borrower to be performed under and
pursuant to the Security Agreement.
3.5 Each of the Joined Entities acknowledges its respective
receipt of a complete copy of the Security Agreement and each and every other
Loan Document referred to or referenced in the Security Agreement.
ARTICLE 4
JOINDER TO PLEDGE AGREEMENT
Subject to delivery to the Bank of each of the "Joinder
Agreement Documents" more particularly described in Article 9 of this Joinder
Agreement:
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4.1 TSAAI and TSAMI are each hereby joined as a Pledgor to the
Pledge Agreement.
4.2 TSAAI and TSAMI each assigns and grants to the Bank, as a
secured party, a continuing lien on and security interest in the Collateral.
4.3 TSAAI and TSAMI each makes, as of the date of this Joinder
Agreement, all of the representations and warranties contained in the
"Representations and Warranties" Section of the Pledge Agreement, which shall
be continuing in nature and remain in full force and effect until the
Obligations are paid in full, and which shall be true and correct.
4.4 TSAAI and TSAMI each covenants and agrees to comply with:
A. The covenants contained in the "Covenants" Section of
the Pledge Agreement from the date of execution of this Joinder Agreement
until all Obligations have been fully paid and any commitments of the Bank to
the Pledgors have been terminated;
B. All of the other terms, conditions, covenants,
agreements and obligations of each Borrower to be performed under and
pursuant to the Pledge Agreement.
4.5 TSAAI and TSAMI each acknowledges its respective receipt of a
complete copy of the Pledge Agreement and each and every other Loan Document
referred to or referenced in the Pledge Agreement.
4.6 From and after the Effective Date, each reference in the
Pledge Agreement or any other Loan Document to the term "Pledgor" shall mean
and be deemed a reference to each of ThermoView, TSAAI and TSAMI.
ARTICLE 5
AMENDMENT TO SECURITY AGREEMENT
Subject to delivery to the Bank of each of the "Joinder
Agreement Documents" more particularly described in Article 9 of this Joinder
Agreement, the Security Agreement is hereby amended by substituting EXHIBIT
"A"TO SECURITY AGREEMENT which is attached to and made a part of this Joinder
Agreement for EXHIBIT "A" TO SECURITY AGREEMENT originally attached to and
made a part of the Security Agreement.
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ARTICLE 6
AMENDMENT TO PLEDGE AGREEMENT
Subject to delivery to the Bank of each of the "Joinder
Agreement Documents" more particularly described in Article 9 of this Joinder
Agreement, the Pledge Agreement is hereby amended as follows:
6.1 Thermo-Shield of America (Arizona), Inc., an Arizona
corporation ("TSAAI"), Thermo-Shield of America (Michigan), Inc., a Michigan
corporation ("TSAMI"), Thermo-Shield Company, LLC, an Illinois limited
liability company ("TSC"), Thermo-Shield of America (Wisconsin), LLC, a
Wisconsin limited liability company ("TSAW"), and ThermoView Advertising
Group, Inc., a Delaware corporation ("TAG"), are each added as a Borrower in
the "Obligations Secured" Section of the Pledge Agreement. July 8, 1999
6.2 By adding a new Section 3.7 to the Pledge Agreement reading in
its entirety as follows:
3.7. The membership interests in each of TSC and TSAW
that are being pledged pursuant to this Agreement constitute one hundred
percent (100%) of the membership interests of each of TSC and TSAW.
6.3 EXHIBIT "A"TO PLEDGE AGREEMENT, which is attached to and made
a part of this Joinder Agreement, is substituted for EXHIBIT "A" TO PLEDGE
AGREEMENT originally attached to and made a part of the Pledge Agreement.
ARTICLE 7
AMENDMENT TO LOAN AGREEMENT
Subject to delivery to the Bank of each of the "Joinder
Agreement Documents" more particularly described in Article 9 of this Joinder
Agreement, the Loan Agreement is hereby amended as follows:
7.1 By deleting Section 4B. of the Loan Agreement and substituting
a new Section 4B. reading in its entirety as follows:
B. FINANCIAL INFORMATION.
[1] MONTHLY INFORMATION. Commencing with the month ending
June 30, 1999, Borrowers will deliver to Bank as soon as practicable
after the end of each month, but in any event within thirty (30) days
thereafter: [i] an unaudited
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consolidated balance sheet of Borrowers at the end of such month;
[ii] unaudited consolidated statements of income, retained earnings and
cash flows of Borrowers for such month and for the portion of such year
ending with such month; [iii] an acquisition pipeline report; and
[iv] a report (now known as the Earn-Out Forecast) detailing all
anticipated payments for all Earn-Outs, as that term is defined in
this Agreement.
[2] QUARTERLY INFORMATION. Borrowers will deliver to Bank as
soon as practicable after the end of each of the first three quarterly
fiscal periods in each fiscal year of ThermoView, but in any event
within forty-five (45) days thereafter, [i] an unaudited consolidated
balance sheet of Borrowers as at the end of such quarter, and [ii]
unaudited consolidated statements of income, retained earnings and cash
flows of Borrowers for such quarter and (in the case of the second and
third quarters) for the portion of the fiscal year ending with such
quarter, setting forth in comparative form in each case the projected
consolidated figures for such period and the actual consolidated figures
for the comparable period of the prior fiscal year. Such statements
shall be [a] prepared in accordance with GAAP consistently applied, [b]
in reasonable detail, [c] certified by the principal financial or
accounting officer of ThermoView and [d] accompanied by a statement in
reasonable detail, certified by the Chief Executive Officer or Chief
Financial Officer of ThermoView showing the calculations used in
determining compliance with each of the financial covenants set forth in
this Agreement.
[3] ANNUAL INFORMATION. Borrowers will deliver to Bank as
soon as practicable after the end of each fiscal year of Borrowers, but
in any event within ninety (90) days thereafter, [i] an audited
consolidated balance sheet of Borrowers as at the end of such year, and
[ii] audited consolidated statements of income, retained earnings and
cash flows of Borrowers for such year; setting forth in each case in
comparative form the figures for the previous year. Such statements
shall be [a] prepared in accordance with GAAP consistently applied,
[b] in reasonable detail and [c] certified by Ernst & Young LLP or such
other firm of independent certified public accountants of recognized
national standing selected by ThermoView and reasonably acceptable to
Bank.
[4] FILINGS. Borrowers will deliver to Bank, promptly upon
their becoming available, one copy of each report, notice or proxy
statement sent by ThermoView to its stockholders generally, and of each
regular or periodic report (pursuant to the Securities Exchange Act of
1934, as amended, and all rules and regulations promulgated thereunder)
and any registration statement, prospectus or other writing (other than
transmittal letters) (including, without limitation, by electronic
means) pursuant to the Securities Act of 1933, as amended, and all rules
and regulations promulgated thereunder, filed by Company with [i] the
U.S. Securities and Exchange Commission, or any successor thereto or
[ii] any securities exchange on which shares of Common Stock of Company
are listed.
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[5] CUSTOMER COMPLAINTS; OTHER INFORMATION. ThermoView will
promptly notify Bank of any material customer complaints concerning any
Borrower's products and services. If requested by Bank, ThermoView will
deliver to Bank such other information respecting any such Borrower's
business, financial condition or prospects as Bank may, from time to
time, reasonably request.
7.2 By deleting Section 4C. of the Loan Agreement and substituting a
new Section 4C. reading in its entirety as follows:
C. ANNUAL FINANCIAL STATEMENTS. Intentionally deleted.
7.3 By deleting Xxxxxxx 0X. of the Loan Agreement and substituting a
new Section 4I. reading in its entirety as follows:
I. FINANCIAL COVENANTS. Comply with each of the following financial
covenants, determined in accordance with GAAP:
[1] FUNDED DEBT TO MODIFIED BORROWER EBITDA. The ratio,
calculated as of the end of each fiscal quarter of Borrowers beginning September
30, 1999 (each a "CALCULATION DATE"), of the consolidated (and combined, if
applicable) Funded Debt of Borrowers as of each Calculation Date divided by the
consolidated (and combined, if applicable) Modified Borrower EBITDA for
Borrowers for the four (4) fiscal quarters of Borrowers immediately preceding
the applicable Calculation Date shall not be greater than 4.25 to 1.00.
[2] SENIOR DEBT TO MODIFIED BORROWER EBITDA. The ratio as of
each Calculation Date of the consolidated (and combined, if applicable) Senior
Debt of Borrowers as of each Calculation Date divided by the consolidated (and
combined, if applicable) Modified Borrower EBITDA for Borrowers for the four (4)
fiscal quarters of Borrowers immediately preceding the applicable Calculation
Date shall not be greater than 3.50 to 1.00.
[3] FIXED CHARGE COVERAGE. The ratio as of each Calculation
Date of the consolidated (and combined, if applicable) Modified Borrower EBITDA
LESS the amount of any cash taxes ("CASH TAXES") LESS the amount of all
Earn-Outs, as that term is defined herein, not financed with the proceeds of
loans or other borrowings from any person or entity ("UNFINANCED EARN-OUTS")
LESS the amount of any Capital Expenditures, as that term is defined herein, of
the Borrowers not financed with the proceeds of loans or other borrowings from
any person or entity ("UNFINANCED CAPITAL EXPENDITURES"), which Cash Taxes,
Unfinanced Earn-Outs, and Unfinanced Capital Expenditures were incurred during
the immediately preceding four (4) fiscal quarters of the Borrowers, divided by
the sum of , for the same period, consolidated (and combined, if applicable)
current maturities of Funded Debt for Borrowers PLUS any and all dividends paid
or accrued by the Borrowers PLUS all consolidated interest expenses paid or
accrued by the Borrowers, shall not be less than 1.25 to 1.00 as of the
Calculation Date occurring on September 30, 1999, and thereafter until, but not
including, the Calculation Date occurring on December 31, 1999; 1.50 to 1.00 as
of the Calculation Date occurring on December 31, 1999, and thereafter until,
but not including, the Calculation Date occurring on March 31, 2000 ; 1.75 to
1.00 as of the Calculation Date occurring
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on March 31, 2000, and as of all Calculation Dates thereafter.
For purposes of each of the above financial covenants, the
following terms shall have the following meanings:
[a] "BASE EARNINGS" is defined as the consolidated
(and combined, if applicable) sum of all earnings before interest,
taxes, depreciation and amortization LESS any extraordinary gain, PLUS
expenses, calculated and estimated by Borrowers in a manner and amount
acceptable to Bank in each case, incurred by each Borrower, if and to
the extent applicable, that reasonably are expected no longer to be
incurred because of operating efficiencies realized as a result of and
following each such entity having become a Borrower ("NON-RECURRING
EXPENSES"), and before giving effect to the Corporate Income and
Corporate Overhead, each hereinafter defined.
[b] "CAPITAL EXPENDITURES" is defined as all payments
for any fixed assets, or improvements or for replacements, substitutions
or additions thereto, that have a useful life of more than one year and
which are required to be capitalized under GAAP.
[c] "EBITDA" is defined as the sum of [i] Base
Earnings of Borrowers, PLUS [ii] an amount, representing certain
non-cash charges to income incurred by Borrowers on or before July 8,
1999, in respect of stock options heretofore issued by Borrowers (the
"STOCK OPTION CHARGES"), not to exceed [a] $6,120,000 for the
Calculation Date occurring on September 30, 1999, until, but not
including, the Calculation Date occurring on December 31, 1999, [b]
$620,000 for the Calculation Date occurring on December 31, 1999, until,
but not including, the Calculation Date occurring on March 31, 2000, and
[c] $0.00 for all Calculation Dates occurring on and after March 31,
2000.
[d] "FUNDED DEBT" is defined as the consolidated (and
combined, if applicable) sum of all line borrowings, plus current (i.e.
less than or equal to one (1) year) and non-current maturities of long
term debt of each of the Borrowers (including but not limited to any
obligations of any Borrower that are determined based on the future
performance of any Acquired Entity ("EARN-OUTS") and which Earn-Outs are
not paid in full within thirty (30) days of the date when due and
payable (including after any applicable requirement for notice and an
opportunity to cure expressly provided in the applicable instrument or
document governing such obligation) ("MATURED EARN-OUTS")) to the Bank
or any other person or entity. For purposes of this calculation, Funded
Debt shall be deemed to include, at all times, the actual principal
amount of the GE Subordinated Debt due and owing without regard to any
carrying value thereof shown on the books and records of the Borrowers.
[e] "SENIOR DEBT" is defined as all Funded Debt that
is not Subordinated Debt.
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[f] "SUBORDINATED DEBT" is defined as all Funded Debt
the payment of which and security for which have been subordinated to
all indebtedness of whatsoever nature of any Borrower to the Bank
pursuant to documentation acceptable in form and substance to the Bank.
[g] "MODIFIED BORROWER EBITDA" is defined as the
EBITDA of the Borrowers for which both the Funded Debt to Modified
Borrower EBITDA and Senior Debt to Modified Borrower EBITDA financial
covenants are being calculated, except without giving effect to the
EBITDA of any Borrower (each an "UNAUDITED BORROWER") for which the Bank
has not received both [a] audited financial statements in form and
detail acceptable to the Bank, as well as [b] other due diligence
information concerning such Borrower as Bank may request, in form and
substance acceptable to the Bank plus [i] fifty percent (50%) of the
EBITDA of each Unaudited Borrower.
7.4 By deleting Section 4J. of the Loan Agreement and substituting a
new Section 4J. reading in its entirety as follows:
J. NET WORTH. Borrowers will maintain at all times a
consolidated (and combined, if applicable) minimum Net Worth in an amount
equal to ninety percent (90%) of Borrowers' actual book net worth as
indicated in Borrowers' consolidated (and combined, if applicable) Financial
Statements dated as of March 31, 1999 (the "BASE NET WORTH"), plus, for each
fiscal year of Borrowers ending after June 30, 1999, an amount equal to the
sum of [i] seventy-five percent (75%) of Borrowers' consolidated (and
combined, if applicable) net income (without giving effect to losses) for
each such fiscal year and [ii] one hundred percent (100%) of the net proceeds
of any equity offering for Borrowers for each such fiscal year. As used in
this financial covenant the parties agree that the [i] term "Net Worth" means
stockholders' equity in the Borrowers and [ii] Base Net Worth as of March 31,
1999, was $35,939,958.40 (i.e. ninety percent (90%) of $39,922,176).
7.5 By deleting Section 4N. of the Loan Agreement and substituting
a new Section 4N. reading in its entirety as follows:
N. FINANCIAL PROJECTIONS; BUDGET. Within fifteen
(15) days prior to the beginning of each fiscal year of ThermoView
provide the Bank with the following:
[1] projected consolidated balance sheets of
each Borrower, if any, for such fiscal year, on a monthly basis;
[2] projected consolidated cash flow
statements of each Borrower, if any, including summary details of
cash disbursements, for such fiscal year, on a monthly basis;
[3] projected consolidated income statements
of each Borrower, if any, for such fiscal year, on a monthly
basis; and
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[4] an annual budget for each Borrower for
such fiscal year;
in each case, approved by the Board of Directors of each Borrower,
together with appropriate supporting details.
7.6 By deleting Section 4O. of the Loan Agreement and substituting a
new Section 4O. reading in its entirety as follows:
O. KEY-MAN LIFE INSURANCE. Provide the Bank with evidence of
key-man life insurance insuring the lives of Xxxxxx Xxxxxxx and Xxxxxx
Xxxxxxxx who are members of the Borrowers' executive management on or
before July 31, 1999.
7.7 By adding a new Section 4R. to the Loan Agreement reading in its
entirety as follows:
R. THERMO-SHIELD - AMERICAN NATIONAL BANK. Pay in full that
certain loan from American National Bank to TSC and cause all liens
associated with such loan to be released on or before August 9, 1999,
and until such payment in full and termination of the associated liens
the EBITDA of TSC shall be excluded for purposes of calculating the
Borrowers' compliance with the financial covenants contained herein.
7.8 By deleting Section 5A. of the Loan Agreement and substituting a
new Section 5A. reading in its entirety as follows:
A. INDEBTEDNESS. Incur any indebtedness for borrowed
money (including but not limited to capitalized leases) other than:
[i] the Loan and any subsequent indebtedness to the Bank; [ii] existing
indebtedness disclosed on the Historical Financial Statements referred
to in the "Financial Statements" Section of this Agreement; [iii]
subordinated indebtedness (the "GE SUBORDINATED DEBT") to GE Capital
Equity Investments, Inc. ("GE") issued pursuant to that certain
Securities Purchase Agreement dated as of July 8, 1999 (the "GE
AGREEMENT"), and the Loan Documents, as that term is defined in the GE
Agreement, executed and delivered by the Borrowers in connection with
the GE Agreement (collectively, the "GE LOAN DOCUMENTS") and [iv]
indebtedness that is subordinated in form and substance acceptable to
the Bank.
7.9 By deleting Section 5B. of the Loan Agreement and substituting a
new Section 5B. reading in its entirety as follows:
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B. LIENS AND ENCUMBRANCES. Except for [i] liens and
encumbrances in favor of the Bank, [ii] liens and encumbrances in favor
of GE pursuant to the GE Loan Documents, and [iii] except as provided in
the "Title to Assets" Section of this Agreement, create, assume or
permit to exist any mortgage, pledge, encumbrance or other security
interest or lien upon any assets now owned or hereafter acquired or
enter into any arrangement for the acquisition of property subject to
any conditional sales agreement.
7.10 By deleting Section 5F. of the Loan Agreement and substituting a
new Section 5F. reading in its entirety as follows:
F. CHANGE IN BUSINESS, MANAGEMENT OR OWNERSHIP.
Except for the issuance of [i] the 10% Cumulative Convertible Series A
Preferred Stock ("SERIES A PREFERRED STOCK"), [ii] the 10% Cumulative
Convertible Series B Preferred Stock ("SERIES B PREFERRED STOCK"), [iii]
the 9.6% Cumulative Convertible Series C Preferred Stock ("SERIES C
PREFERRED STOCK"), and [iv] the Cumulative Convertible Series D
Preferred Stock ("SERIES D PREFERRED STOCK") on terms and conditions
acceptable to the Bank, make or permit any material change [a] in the
nature of its respective business as carried on as of the date hereof,
[b] in the composition of its respective current executive management,
or [c] in its respective equity ownership.
7.11 By deleting Section 5G. of the Loan Agreement and substituting a
new Section 5G. reading in its entirety as follows:
G. DIVIDENDS. Except for those dividends payable
pursuant to [i] the Series A Preferred Stock, [ii] the Series B
Preferred Stock, [iii] the Series C Preferred Stock, and [iv] the Series
D Preferred Stock, declare or pay any dividends on or make any
distribution with respect to any class of its equity or ownership
interest, or purchase, redeem, retire or otherwise acquire any of its
equity, except for the amount of federal and state income tax of the
principals of any Borrower attributable to the earnings of any such
Borrower where any such Borrower is an S corporation.
7.12 By adding a new Section 5H. to the Loan Agreement reading in its
entirety as follows:
H. CHANGE IN GE LOAN DOCUMENTS. Make or permit any
change in or modification to the GE Loan Documents without the Bank's
prior written consent, provided such consent is not unreasonably
withheld as to any change in or modification to the GE Loan Documents
which is not adverse to the Bank. It is understood and agreed that any
change in or modification to [i] any of the covenants contained in
Sections 5.1(h) or 5.2(e) of the GE Agreement or [ii] the GE Loan
Documents that results in such GE Loan Documents being more restrictive
than such GE Loan Documents are as of July 8, 1999, will be deemed to be
adverse and
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any such purported adverse change in or modification to the GE Loan
Documents will be void.
7.13 By adding a new Section 5I. to the Loan Agreement reading in its
entirety as follows:
I. AGREEMENTS REGARDING LOAN DOCUMENTS. Enter into
any agreement with GE or any other person or entity prohibiting or
otherwise restricting the amendment or other modification of this
Agreement or any of the other Loan Documents.
7.14 By deleting Section 6C. of the Loan Agreement and substituting a
new Section 6C. reading in its entirety as follows:
C. OTHER DEFAULT. The occurrence of an Event of
Default as defined in the Note, any of the Security Documents, or the GE
Loan Documents.
7.15 By substituting the CAPITAL STRUCTURE SCHEDULE which is attached
to and made a part of this Joinder Agreement for the CAPITAL STRUCTURE SCHEDULE
originally attached to and made a part of the Loan Agreement.
7.16 By substituting the ENCUMBRANCES SCHEDULE which is attached to
and made a part of this Joinder Agreement for the ENCUMBRANCES SCHEDULE
originally attached to and made a part of the Loan Agreement.
ARTICLE 8
WAIVER OF COVENANT DEFAULT
Subject to delivery to the Bank of each of the "Joinder Agreement
Documents" more particularly described in Article 9 of this Joinder Agreement,
the Bank hereby grants a waiver of Borrowers' non-compliance with the financial
covenants contained in the Section 4I and Section 4J of the Loan Agreement and
of the Events of Default that would otherwise result from a violation of those
Sections, solely for the period January 1, 1999 to July 8, 1999. The Borrowers
agree that they will hereafter comply fully with these provisions, as amended,
and all other provisions of the Loan Agreement and the Loan Documents, which
remain in full force and effect.
ARTICLE 9
CONDITIONS PRECEDENT
9.1 The joinder of, as applicable, each of the Joined Entities to
each of the Loan Agreement, the Note, the Pledge Agreement and the Security
Agreement and the modifications to the Security Agreement, the Pledge
Agreement and the Loan Agreement described in Articles 1 through 8 of this
Joinder Agreement shall become effective on that date (the "Effective Date")
on
13
which each of the following documents (collectively, the "Joinder Agreement
Documents") has been executed by each of the parties to them and delivered to
the Bank and when the Bank determines to its satisfaction that each other
condition set forth below has been fulfilled:
A This Joinder Agreement, duly executed by each of the
Original Borrowers, each of the Joined Entities, and the Bank;
B Certified Resolutions of, as applicable, the Board of
Directors or managers of each of the Joined Entities authorizing the
execution and delivery by, as applicable, each of the Joined Entities of this
Joinder Agreement;
C Certified Resolutions of the Board of Directors of [i]
ThermoView, [ii] American Home, [iii] American Home Remodeling, [iv] Five
Star, [v] Key Home, [vi] Xxxxxxxx Siding, [vii] Primax, [viii] Rolox, [ix] TD
Windows, [x] Thermo View-Missouri, and [xi] Thermo-Tilt, and [xii] Xxxxxx,
authorizing the execution and delivery by each of those entities of this
Joinder Agreement (the "Resolutions");
D UCC-1 Financing Statement naming TSAAI as the Debtor
and the Bank as the Secured Party for filing in the Office of the Secretary
of State of Arizona.
E UCC-1 Financing Statement naming TSAMI as the Debtor
and the Bank as the Secured Party for filing in the Office of the Secretary
of State of Michigan.
F UCC-1 Financing Statements naming TSC as the Debtor and
the Bank as the Secured Party for filing in [i] the Office of the Secretary
of State of Illinois and [ii] the Office of the Secretary of State of Indiana.
G UCC-1 Financing Statement naming TSAW as the Debtor and
the Bank as the Secured Party for filing in the Office of the Secretary of
State of Wisconsin.
H UCC-1 Financing Statement naming TAG as the Debtor and
the Bank as the Secured Party for filing in the Office of the Jefferson
County, Kentucky, Court Clerk.
I Landlord Waivers executed by each landlord of each of
the Joined Entities;
J Stock Certificates evidencing ThermoView's ownership of
3,000 shares of the common stock of TSAAI;
K Stock Certificates evidencing ThermoView's ownership of
1,000 shares of the common stock of TSAMI;
L Stock Certificates evidencing ThermoView's ownership of
100 shares of the common stock of TAG;
14
M Stock Powers executed by ThermoView;
N Opinion of Xxxxxx & Xxxxxxxx, counsel to the Joined
Entities;
O Financial Statements of each of the Thermo-Shield
Acquired Entities for the last two (2) fiscal years of each of the Thermo-Shield
Acquired Entities [i] prepared on an audited basis in accordance with GAAP by an
independent certified public accountant chosen by the Borrowers and acceptable
to the Bank and [ii] containing the unqualified opinion of such independent
certified public accountant and its examination shall have been made in
accordance with GAAP consistently applied from period to period; and
P A completed ThermoView Industries, Inc. Draw Test
certificate, in the form attached to this Joinder Agreement as the DRAW TEST
CERTIFICATE EXHIBIT, dated as of the date of this Joinder Agreement.
ARTICLE 10
OTHER STIPULATIONS
10.1 Upon the Effective Date, [i] the provisions of Articles 1
through 7 of this Joinder Agreement shall become effective and modify or
supersede and replace the applicable provisions of the Loan Agreement and the
other Loan Documents recited as being modified by them and each of the Joined
Entities shall be joined as a party to the Loan Agreement, the Note, and the
Security Agreement, and [ii] the provisions of Articles 8 and 9 of this
Joinder Agreement shall become effective and modify or supersede and replace
the applicable provisions of the Loan Agreement and the other Loan Documents
recited as being modified by them or waive compliance with certain provisions
of the Loan Agreement and the other Loan Documents for the period set forth
herein. From and after the Effective Date each reference to the "Loan
Agreement" and the "Loan Documents" or words of like import shall mean and be
deemed a reference to, as applicable, the Loan Agreement and Loan Documents
as modified by this Joinder Agreement but, except as modified by this Joinder
Agreement and the other Joinder Agreement Documents, the Loan Agreement and
the other Loan Documents shall remain in full force and effect in the same
form as existed immediately prior to the Effective Date.
10.2 If each of the Joinder Agreement Documents has not been fully
executed and delivered to the Bank on or before July 9, 1999, this Joinder
Agreement shall be voidable at any time prior to the delivery of each of such
Joinder Agreement Document upon notice given by any Borrower to the Bank.
10.3 This Joinder Agreement and the other Joinder Agreement
Documents contain the final, complete and exclusive agreement of the parties
to them with regard to their subject matter, may not be amended except in
writing signed by each of the parties to them, shall be binding upon and
inure to the benefit of the respective successors and assigns of each of the
parties to them
15
(subject to applicable provisions of, as applicable, the Loan Agreement and
the Loan Documents), and shall be construed in accordance with and otherwise
governed in all respects by the laws of the Commonwealth of Kentucky. This
Joinder Agreement may be executed in counterparts, and all counterparts
collectively shall constitute but one original document. Each of the
Original Borrowers and each of the Joined Entities hereby agrees to reimburse
the Bank for all costs and expenses incurred by the Bank in connection with
the preparation, negotiation, documentation, execution and delivery of this
Joinder Agreement and the other Joinder Agreement Documents, including but
not limited to the reasonable fees of legal counsel to Bank.
10.4 Each of the Original Borrowers join in this Joinder Agreement
for the purpose of consenting to the provisions of the foregoing Joinder
Agreement, and each of the Original Borrowers confirms and agrees that its
and their respective obligations under, as applicable, the Note and the other
Loan documents shall be unimpaired by this Joinder Agreement and that no
Original Borrower has any defenses or set offs against the Bank, or its
respective officers, directors, employees, agents or attorneys with respect
to, as applicable, the Note or the other Loan Documents and that all of the
terms, conditions and covenants in the Loan Documents remain unaltered and in
full force and effect and are hereby ratified and confirmed.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
16
IN WITNESS WHEREOF, the parties hereto have caused this Joinder
Agreement to be duly executed as of the day and year first above written.
"ORIGINAL BORROWERS"
THERMOVIEW INDUSTRIES, INC.,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Xxxxxx X. Xxxxxxxx, President
AMERICAN HOME DEVELOPERS CO., INC., a California
corporation
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Xxxxxx X. Xxxxxxxx, President
FIVE STAR BUILDERS, INC., a California
corporation, successor in interest to American Home
Remodeling
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Xxxxxx X. Xxxxxxxx, President
KEY HOME CREDIT, INC., a
Delaware corporation
By: /s/ Leigh Xxx Xxxxxx
------------------------------------
Leigh Xxx Xxxxxx, President
KEY HOME MORTGAGE, INC., a Delaware
corporation
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Xxxxxx X. Xxxxxxxx, President
XXXXXXXX SIDING AND WINDOW, INC., a
North Dakota business corporation
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Xxxxxx X. Xxxxxxxx, President
PRIMAX WINDOW CO., a Kentucky corporation
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Xxxxxx X. Xxxxxxxx, President
PRECISION WINDOW MFG., INC., a Missouri
corporation
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Xxxxxx X. Xxxxxxxx, President
ROLOX, INC. a Kansas corporation
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Xxxxxx X. Xxxxxxxx, President
TD WINDOWS, INC. a Kentucky corporation
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Xxxxxx X. Xxxxxxxx, President
THERMAL LINE WINDOWS, INC. a
North Dakota corporation, formerly known as Ice
Inc., successor in interest to Blizzard Enterprises,
Inc. and Thermal Line Windows, LLP
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Xxxxxx X. Xxxxxxxx, President
THERMOVIEW OF MISSOURI, INC., a
Missouri corporation
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Xxxxxx X. Xxxxxxxx, President
THERMO-TILT WINDOW COMPANY, a
Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Xxxxxx X. Xxxxxxxx, President
XXXXXX CONSTRUCTION, INC., a Missouri
corporation
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Xxxxxx X. Xxxxxxxx, President
"THERMO-SHIELD ACQUIRED ENTITIES"
THERMO-SHIELD OF AMERICA (ARIZONA), INC., an Arizona
corporation
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Xxxxxx X. Xxxxxxxx, President
THERMO-SHIELD OF AMERICA
(MICHICAN), INC., a Michigan corporation
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Xxxxxx X. Xxxxxxxx, President
THERMO-SHIELD COMPANY, LLC,
an Illinois limited liability company
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Xxxxxx X. Xxxxxxxx, Manager and President
THERMO-SHIELD OF AMERICA
(WISCONSIN), LLC, a Wisconson limited liability company
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Xxxxxx X. Xxxxxxxx, Manager and President
"BANK"
PNC BANK, NATIONAL ASSOCIATION, a national banking
association
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------
Xxxxxxx X. Xxxxxxx, Vice President
ATTACHMENTS:
- EXHIBIT A TO SECURITY AGREEMENT
- EXHIBIT A TO PLEDGE AGREEMENT
- CAPITAL STRUCTURE SCHEDULE
- DRAW TEST CERTIFICATE EXHIBIT
- ENCUMBRANCES SCHEDULE
EXHIBIT "A"
TO SECURITY AGREEMENT
Address of each Grantor's chief executive office, including the County, for
each Grantor named in A through P) below is 0000 Xxxx Xxxx, Xxxxxxxxxx,
Xxxxxxxxx Xxxxxx, Xxxxxxxx 00000.
1. ThermoView
2. American Home
3. American Home Remodeling
4. Blizzard Enterprises
5. Five Star
6. Ice
7. Key Home
8. Key Home Mortgage
9. Xxxxxxxx Siding
10. Primax
11. Rolox
12. TD Windows
13. Thermal Line
14. ThermoView-Missouri
15. Thermo-Tilt
16. Xxxxxx
17. XXXXX
00. TSAMI
19. TSC
20. TSAW
21. TAG
Address for books and records, if different:
22. ThermoView
23. American Home
00000 Xxxxxxx Xxxx., Xxxxxx 000 xxx 000
Xxxxxxxx Xxxxx, XX 00000
24. American Home Remodeling
00000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
25. Blizzard Enterprises
0000 00xx Xxxxxx XX
Xxx 000
Xxxxxx, XX 00000
26. Five Star
0000 Xxxxxx Xxxxx Xx
Xxxxx 000
Xxx Xxxxx, XX 00000
27. Ice
0000 00xx Xxxxxx XX
Xxx 000
Xxxxxx, XX 00000
28. Key Home
0000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
29. Key Home Mortgage
0000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
30. Xxxxxxxx Siding
0000 Xxxx Xxxx Xxxxx
X.X. Xxx 000
Xxxxxx, XX 00000
31. Primax
0000 Xxxx Xxxxxx Xxxx
Xxxxxxxxxx, XX 00000
32. Rolox
0000 Xxxx Xxxxxx
Xxxxxxxxx, XX 00000
33. TD Windows
0000 Xxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
34. Thermal Line
0000 00xx Xxxxxx X.X.
Xxx 000
Xxxxxx, XX 00000
35. ThermoView-Missouri
0000 Xxxxxxx
Xx. Xxxxx, XX 00000
36. Thermo-Tilt
0000 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
37. Xxxxxx
00000 Xxxxxxxxx Xxxxx
Xxxxx Xxxx, Xxxxxxxx 00000
38. TSAAI
0000 X. Xxxxxxxxxx Xxxxx
Xxxxx #00, Xxxxx, Xxxxxxx 00000
39. TSAMI
00000 Xxxxxxxxx Xxxxx
Xxxxxxxxxx Xxxxx, Xxxxxxxx _____
40. TSC
0000 Xxxx 00xx Xxxxxx 000 Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000 Wheeling, Illinois _____
41. TSAW
0000 X. 00xx Xxxxxx
Xxx Xxxxx, Xxxxxxxxx _____
42. TAG
0000 Xxxxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Addresses of other Collateral locations, including Counties and name and address
of landlord or owner if location is not owned by the applicable Grantor:
A ThermoView
43. American Home
44. American Home Remodeling
45. Blizzard Enterprises
46. Five Star
47. Ice
48. Key Home
49. Key Home Mortgage
50. Xxxxxxxx Siding
51. Primax
52. Rolox
53. TD Windows
54. Thermal Line
55. ThermoView-Missouri
56. Thermo-Tilt
57. Xxxxxx
58. XXXXX
00. TSAMI
60. TSC
61. TSAW
62. TAG
[See attached schedule.]
Other names or tradenames now or formerly used by the Grantors:
A ThermoView
63. American Home
64. American Home Remodeling
[DBA Pacific Exteriors]
65. Blizzard Enterprises
66. Five Star
67. Ice
68. Key Home
69. Key Home Mortgage
70. Xxxxxxxx Siding
[Xxxxxxxx Construction and Steel Siding]
71. Primax
72. Rolox
[Rolox at Kansas City, MO and Rolox at Wichita]
73. TD Windows
[Allhom Eagle Windows and Doors, Inc.]
74. Thermal Line
75. ThermoView-Missouri
[NuView Industries, Inc.]
76. Thermo-Tilt
77. Xxxxxx
78. XXXXX
00. XXXXX
00. XXX
00. TSAW
82. TAG
EXHIBIT A
TO
PLEDGE AGREEMENT
QUANTITY DESCRIPTION OF SECURITIES CERTIFICATE NUMBER(S)
-------- ------------------------- ---------------------
100 Shares of the Common Stock 2
of American Home
100 Shares of the Common Stock 2
of Five Star
100 Shares of the Common Stock 2
of Key Home
100 Shares of the Common Stock 2
of Key Home Mortgage
24,408 Shares of the Common Stock 2
of Xxxxxxxx Siding
300 Shares of the Series A Common 7
Stock of Precision
11,250 Shares of the Series B Common 11
Stock of Precision
100 Shares of the Common Stock 2
of Primax
100 Shares of the Common Stock 2
of Rolox
100 Shares of the Common Stock 1
of TD Windows
100 Shares of the Common Stock 1
of ThermoView-Missouri
QUANTITY DESCRIPTION OF SECURITIES CERTIFICATE NUMBER(S)
-------- ------------------------- ---------------------
100 Shares of the Common Stock 11
of Thermo-Tilt
1,000 Shares of the Common Stock 3
of Thermal Line
16,875 Shares of the Common Stock 12
of Xxxxxx
3,000 Shares of the Common Stock A4
of TSAAI
1,000 Shares of the Common Stock A3
of TSAMI
100 Shares of the Common Stock ___
of TAG
1% Membership Interest in TSC N/A
1% Membership Interest in TSAW N/A
99% Membership Interest in TSC N/A
99% Membership Interest in TSAW
CAPITAL STRUCTURE SCHEDULE
TO AGREEMENT
ThermoView Industries, Inc.
COMPANY AUTHORIZED SHARES ISSUED AND OUTSTANDING
------- ----------------- ----------------------
ThermoView - Common 100,000,000 14,513,726
ThermoView - Preferred 50,000,000 3,386,000
American Home 1,000 100
Five Star 1,000 100
Key Home 10,000 100
Xxxxxxxx Siding 25,000 24,408
Precision 15,000 Series A 300
15,000 Series B 11,250
Primax 1,000 100
Rolox 1,000 100
TD Windows 1,000 100
Thermal Line 2,500 voting common 1,000
47,500 non-voting common 0
Thermo-Tilt 20,000,000 2,000,100*
ThermoView-Missouri 1,000 100
Key Home Mortgage 10,000 100
Xxxxxx Construction, Inc. 30,000 16,875
Precision Window Mfg., Inc. 15,000 voting common 300
15,000 non-voting common 11,250
TSAAI 50,000 voting common 3,000
Series A
50,000 non-voting common 0
Series B
TSAMI
60,000 voting common 1,000
TAG 1,000 100
* 5,381,475 shares were canceled for the 100 shares of Thermo-Tilt and
2,000,000 shares of Thermo-Tilt are uncertificated
** 2,980,000 shares of Series A Preferred Stock, 400,000 shares of Series B
Preferred Stock, and 6,000 shares of Series C Preferred Stock
DRAW TEST CERTIFICATE EXHIBIT
TO
JOINDER AGREEMENT
(Attach Form of Draw Test Certificate)
ENCUMBRANCES SCHEDULE
TO
AGREEMENT
(Describe additional Liens and Encumbrances - See Attached Schedule)
THERMOVIEW ADVERTISING GROUP, INC.,
a Delaware corporation
By: /s/ Xxxxxxxx X. Xxxxxxx
-----------------------------------------
Xxxxxxxx X. Xxxxxxx, Secretary
