AMENDMENT No. 3 TO INVESTMENT AGREEMENT BY AND BETWEEN NCI BUILDING SYSTEMS, INC. AND CLAYTON, DUBILIER & RICE FUND VIII, L.P. Dated as of October 8, 2009
EXHIBIT 2.1
AMENDMENT No. 3
TO
INVESTMENT AGREEMENT
BY AND BETWEEN
NCI BUILDING SYSTEMS, INC.
AND
XXXXXXX, DUBILIER & RICE FUND VIII, L.P.
BY AND BETWEEN
NCI BUILDING SYSTEMS, INC.
AND
XXXXXXX, DUBILIER & RICE FUND VIII, L.P.
Dated as of October 8, 2009
This AMENDMENT No. 3 (this “Amendment No. 3”), dated as of October 8, 2009, to the
Investment Agreement, dated as of August 14, 2009, by and between NCI BUILDING SYSTEMS, INC., a
Delaware corporation, and XXXXXXX, DUBILIER & RICE FUND VIII, L.P., a Cayman exempted limited
partnership (the “Investor”), as amended by that Amendment, dated August 28, 2009, by and
between the Company and the Investor and by that Amendment No. 2, dated as of August 31, 2009, by
and between the Company and the Investor (as so amended, the “Investment Agreement”).
WHEREAS, Section 13 of the Investment Agreement provides for the amendment of the Investment
Agreement in accordance with the terms set forth therein; and
WHEREAS, capitalized terms not otherwise defined herein shall have the meanings ascribed to
them in the Investment Agreement.
NOW THEREFORE, in consideration of the premises and of the respective representations,
warranties, covenants and conditions contained herein, the parties hereto agree as follows:
Section 1. Definitions; References. Unless otherwise specifically defined herein,
each term used herein shall have the meaning assigned to such term in the Investment Agreement.
Each reference in the Investment Agreement to “hereof,” “herein,” “hereunder,” “hereby”, “hereto”
and “this Agreement” shall, from and after the date hereof, refer to the Investment Agreement as
amended by this Amendment No. 3, and each reference in the Transaction Documents (other than the
Investment Agreement) and in the Disclosure Letter to “the Investment Agreement” shall refer to the
Investment Agreement as amended by this Amendment No. 3.
Section 2. Addition of Exhibit J. A new Exhibit J is hereby added to the Investment
Agreement in the form of Exhibit J attached hereto.
Section 3. Amendment to Section 9(74). The definition of “Form of Amended Credit
Agreement” in Section 9(74) of the Investment Agreement is hereby amended and restated as follows:
(74) “Form of Amended Credit Agreement” means the form attached
hereto as Exhibit A after giving effect to the matters referred to
in Exhibit J, with such additions, modifications, alterations,
corrections or other changes as the Investor deems advisable in its
sole discretion (exercised in good faith) (i) to add, provide or
complete any schedule, annex, exhibit, numerical amount or other
information that is omitted, missing or incomplete, or to modify,
alter, correct or change (including without limitation by deleting
or replacing) any wording that is in brackets, (ii) to cure any
ambiguity, mistake, omission or defect, (iii) to cure any
inconsistency, including with any other provision of the same
agreement or of the ABL Agreement or any other Transaction Document,
(iv) to address a material risk that (x) the Company will be unable
to comply with the terms or conditions of the agreement or (y) by
complying with the terms and conditions of the agreement the Company
will be subject to a material risk of not complying with the terms
and conditions of the ABL Agreement or any other Transaction
Document, (v) to effect the intent evidenced by the form attached
hereto as Exhibit A after giving effect to the matters referred to
in Exhibit J or (vi) to avoid adverse tax consequences to the
Company or any of its Subsidiaries, in each case under clauses (i)
through (vi) above, as determined by the Investor in its sole
discretion (exercised in good faith).
Section 4. Amendment to Section 3(c)(vi). The first sentence of Section 3(c)(vi) of
the Investment Agreement is hereby amended and restated as follows:
The Company shall have duly authorized, executed and delivered the
Amended Credit Agreement for the Term Loan Refinancing (or the
Alternative Term Loan Refinancing, as the case may be) (i) in the
case of the Term Loan Refinancing, in the form of the Form of
Amended Credit Agreement or (ii) in the case of the Alternative Term
Loan Refinancing, on terms and conditions that are (x) no less
favorable (as to each item (other than immaterial items) and in the
aggregate) to the Company and the Investor in its capacity as a
prospective shareholder of the Company than the terms and conditions
contemplated in the Form of Amended Credit Agreement without giving
effect to the matters referred to in Exhibit J, as determined by the
Investor in its sole discretion (exercised in good faith) or (y)
otherwise acceptable to the Investor in its sole discretion
(exercised in good faith).
Section 5. Amendment to Section 6(g)(iii). Section 6(g)(iii) of the Investment
Agreement is hereby amended and restated as follows:
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(iii) In the event the Term Loan Refinancing is not available on the
terms and conditions contemplated in the Form of Amended Credit
Agreement for any reason, the Company shall use its reasonable best
efforts (and the Investor shall use commercially reasonable efforts
to cooperate with the Company in such efforts, including by actively
assisting the Company in its negotiation of related definitive
documentation) to amend and restate the terms of the Credit
Agreement (A) on terms and conditions (x) that are no less favorable
(as to each item (other than immaterial items) and in the aggregate)
to the Company and the Investor as a prospective shareholder of the
Company than the terms and conditions contemplated in the Form of
Amended Credit Agreement without giving effect to the matters
referred to in Exhibit J, as determined by the Investor in its sole
discretion (exercised in good faith) or (y) otherwise acceptable to
the Investor in its sole discretion (exercised in good faith), and
(B) to extend the maturity of $150 million principal amount of the
term loans outstanding under the Credit Agreement (an “Alternative
Term Loan Refinancing”), as promptly as practicable but in any event
no later than the Outside Date.
Section 6. Amendment to Section 6(q). Section 6(q) of the Investment Agreement is
hereby amended and restated as follows:
At the request of the Investor, the Board shall approve (i) the
Amended Credit Documents so long as (A) in the case of the Term Loan
Refinancing, the Amended Credit Agreement is in the form of the Form
of Amended Credit Agreement or (B) in the case of the Alternative
Term Loan Refinancing, the Amended Credit Agreement is on terms and
conditions that are (x) no less favorable (as to each item (other
than immaterial items) and in the aggregate) to the Company and the
Investor in its capacity as a prospective shareholder of the Company
than the terms and conditions contemplated in the Form of Amended
Credit Agreement without giving effect to the matters referred to in
Exhibit J, as determined by the Investor in its sole discretion
(exercised in good faith) or (y) otherwise consented to by the
Company, such consent not to be unreasonably withheld; (ii) the ABL
Documents so long as the ABL Agreement is on terms and conditions
that are no less favorable (as to each item and in the aggregate) to
the Company and the Investor as a prospective shareholder of the
Company than the terms and conditions summarized in the ABL Term
Sheet, as determined by the Investor in its sole discretion
(exercised in good faith) and are otherwise (1) consistent with and
no less favorable to the Company and the Investor in its capacity as
a prospective
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shareholder of the Company than the terms and conditions of
asset-based revolving credit financing transactions for companies
sponsored by CD&R, Inc., as determined by the Investor in its
reasonable discretion (exercised in good faith), or (2) consented to
by the Company, such consent not to be unreasonably withheld and
(iii) the Ancillary Refinancing Agreements are consistent with and
no less favorable (as to each item (other than immaterial items) and
in the aggregate) to the Company and the Investor in its capacity as
a prospective shareholder of the Company than the terms and
conditions of the respective document or agreement for companies
sponsored by CD&R, Inc., as determined by the Investor in its
reasonable discretion (exercised in good faith), or consented to by
the Company, such consent not to be unreasonably withheld.
Section 7. No Further Amendment. Except as expressly amended hereby, the Investment
Agreement is in all respects ratified and confirmed and all the terms, conditions, and provisions
thereof shall remain in full force and effect. This Amendment No. 3 is limited precisely as
written and shall not be deemed to be an amendment to any other term or condition of the Investment
Agreement or any of the documents referred to therein.
Section 8. Effect of Amendment. This Amendment No. 3 shall form a part of the
Investment Agreement for all purposes, and each party thereto and hereto shall be bound hereby.
From and after the execution of this Amendment No. 3 by the parties hereto, any reference to the
Investment Agreement shall be deemed a reference to the Investment Agreement as amended hereby.
This Amendment No. 3 shall be deemed to be in full force and effect from and after the execution of
this Amendment No. 3 by the parties hereto.
Section 9. Miscellaneous. Section 12 (Successors and Assign); Section 13 (Amendments;
Waiver); Section 14 (Headings); Section 15 (Severability); Section 16 (Liability Limitations);
Section 17 (Integration); Section 18 (Governing Law); Section 19 (Counterparts); Section 23
(Specific Performance; Jurisdiction); Section 24 (Waiver of Jury Trial); Section 25
(Interpretation); Section 26 (No Third Party Beneficiaries); and Section 27 (Certain Considerations
Relating to Bankruptcy) of the Investment Agreement shall apply to this Amendment No. 3, mutatis
mutandis.
[Signature Page Follows]
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Please confirm that the foregoing correctly sets forth the agreement between us by signing in
the space provided below for that purpose.
| XXXXXXX, DUBILIER & RICE FUND VIII, L.P. By: CD&R Associates VIII, Ltd., its general partner | ||||
| By: | /s/ Xxxxxxx X. Xxxx | |||
| Name: | ||||
| Title: | Vice President, Treasurer and Assistant Secretary | |||
[Signature Page to the Amendment No. 3 to the Investment Agreement]
| NCI BUILDING SYSTEMS, INC. | ||||
| By: | /s/ Xxxxxx X. Xxxxxxxx | |||
| Name: | ||||
| Title: | Chief Executive Officer | |||
[Signature Page to the Amendment No. 3 to the Investment Agreement]
EXHIBIT J
1. [Intentionally omitted]
2. The definition of the term “Applicable Margin” in the Form of Amended Credit Agreement will
be modified (a) to substitute “5.00% per annum” for “4.00% per annum” with respect to ABR Loans,
and “6.00% per annum” for “5.00% per annum” with respect to Eurocurrency Loans, respectively, in
clause (i) thereof, and (b) to insert the phrase “ending on or after October 30, 2011” after the
phrase “most recently completed fiscal quarter of the Borrower” in clause (ii) thereof.
3. The following definition will be added to the Form of Amended Credit Agreement in
appropriate alphabetical order:
“2009 Tax Refund”: any U.S. federal or state income tax refund received by the
Borrower or any Subsidiary thereof (including the amount of such refund that would have been
received by the Borrower or such Subsidiary but for being utilized to offset any tax liability
otherwise payable by the Borrower or such Subsidiary) to the extent attributable to (and that would
not have been so received but for) any carryback of net operating losses, capital losses, tax
credits or similar tax attributes, if any, of the Borrower and its Subsidiaries for the taxable
year ended on November 1, 2009 to any prior taxable year, provided that, for these
purposes, (i) the amount of any state income tax refund shall be net of U.S. federal income tax
cost thereof to the Borrower or any of its Subsidiaries, (ii) a 2009 Tax Refund shall not include
any refund of state income taxes as a result of an audit or examination of any tax return of the
Borrower or any Subsidiary thereof and (iii) a 2009 Tax Refund shall not include any refund of U.S.
federal income taxes as a result of an audit or examination of any tax return of the Borrower or
any Subsidiary thereof unless the amount of such refund exceeds $4,000,000.
“Tax Refund Calculation Date: (i) each day on which the Borrower or any Subsidiary
receives a 2009 Tax Refund of U.S. federal income taxes and (ii) the last day of any fiscal quarter
of the Borrower if during such fiscal quarter the Borrower and its Subsidiaries have received 2009
Tax Refunds of state income taxes, in the aggregate, in excess of $100,000, provided that
if, during any fiscal quarter, the Borrower and its Subsidiaries have received 2009 Tax Refunds of
state income taxes that, in the aggregate, do not exceed $100,000, then the amount of such 2009 Tax
Refunds received in such fiscal quarter shall be treated as being received by the Borrower and its
Subsidiaries in the immediately following fiscal quarter for the purpose of this clause (ii).
4. The definition of “Excess Cash Flow” in the Form of Amended Credit Agreement will be
modified to delete the words “plus (m)” in the last line thereof and insert in lieu thereof the
words “minus (m) to the extent included in calculating EBITDA for such period, any 2009 Tax Refund
or any portion thereof, plus (n)”.
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5. Section 3.4(c) of the Form of Amended Credit Agreement will be modified to renumber
paragraph (iii) as paragraph (iv).
6. Section 3.4(c) of the Form of Amended Credit Agreement will be modified to insert a new
paragraph (iii) in numerical order as follows:
“(iii) On or before the date (each such date, a “Tax Refund Prepayment Date”) that is 45
calendar days after each Tax Refund Calculation Date, the Borrower shall, in accordance with
Section 3.4(d) and Section 3.4(e), prepay the Term Loans in an amount equal to the Tax Refund
Prepayment Amount (if greater than zero) with respect to such Tax Refund Calculation Date. As used
herein, the term “Tax Refund Prepayment Amount” with respect to any Tax Refund Calculation Date
means the amount equal to the excess of (1) the greater of (x) $10 million and (y) 50% of the
aggregate amount of all 2009 Tax Refunds received by the Borrower and its Subsidiaries from the
date of this Agreement to such Tax Refund Calculation Date over (2) the aggregate principal amount
of Term Loans prepaid pursuant to Section 3.4(a) (other than any principal amount of Term Loans so
prepaid that has previously been applied by the Borrower pursuant to Section 3.4(c)(ii) to reduce
the amount of any prepayment of Term Loans otherwise required pursuant to Section 3.4(c)(ii)),
repurchased pursuant to Section 3.4(b) or prepaid pursuant to this Section 3.4(c)(iii), in each
case from the date of this Agreement to the Tax Refund Prepayment Date corresponding to such Tax
Refund Calculation Date.”
7. Section 3.4(c)(ii) will be modified to insert the phrase “(other than any principal amount
of Term Loans so prepaid that has previously been applied by the Borrower pursuant to Section
3.4(c)(iii) to reduce the amount of any prepayment of Term Loans otherwise required pursuant to
Section 3.4(c)(iii))” after the phrase “the aggregate principal amount of Term Loans prepaid
pursuant to Section 3.4(a)” where it appears twice in Section 3.4(c)(ii).
8. Article VI of the Form of Amended Credit Agreement will be modified to add the following:
“Section 6.11 2009 Tax Refund.
“The Borrower shall use reasonable best efforts to obtain the maximum amount of any
2009 Tax Refund of U.S. federal income taxes and shall use commercially reasonable efforts
to obtain any 2009 Tax Refund of state income taxes, in each case that is legally due to the
Borrower or any Subsidiary thereof, as soon as reasonably practicable and based on positions
determined by the Borrower in good faith and consistent with past practice of the Borrower
and its Subsidiaries in the ordinary course, provided that this Section 6.11 shall
not apply to any 2009 Tax Refund of state income taxes that, in the good faith judgment of
the Borrower, is not expected to be greater than $25,000, and provided,
further, that neither the Borrower nor any Subsidiary thereof shall
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be required to file any tax return prior to the due date (taking into account
applicable extensions) for filing such tax return.”
9. Article VI of the Form of Amended Credit Agreement will be modified to add a new
affirmative covenant that will read as follows:
“Section 6.12 Notice of Any ABL Refinancing.
“If the Borrower shall have determined to replace or refinance the ABL Facility
Agreement, the Borrower shall give notice to the Administrative Agent of such determination
(and the Administrative Agent agrees to so notify the Lenders). The Lenders shall have an
opportunity (for such period of time as the Borrower shall in good faith determine to be
reasonable) to make a proposal to provide such replacement or refinancing of the ABL
Facility Agreement, provided that (i) the Borrower shall not have any obligation to
accept any such proposal or to enter into, continue or consummate any discussions,
negotiations, understanding or agreement with any of the Lenders or any other Person with
respect to any such proposal or any replacement or refinancing of the ABL Facility
Agreement, (ii) if the Borrower elects to enter into any discussions or negotiations with
any of the Lenders or any other Person with respect to any such proposal or any replacement
or refinancing of the ABL Facility Agreement, the Borrower shall have the right in its sole
discretion to suspend, discontinue or terminate such discussions or negotiations at any time
or from time to time, and (iii) notwithstanding any other provision hereof, the Borrower
shall not have any liability to any of the Lenders with respect to any fees, expenses or
other obligations or liabilities that any of the Lenders or any other Person may incur in
making any such proposal or in entering into or continuing any such discussions or
negotiations.”
10. Section 9.10 of the Form of Amended Credit Agreement will be modified to read as follows:
“(a) Subject to the appointment of a successor as set forth herein, the Administrative
Agent and the Collateral Agent may resign or be removed as Administrative Agent or
Collateral Agent, respectively, under this Agreement and the other Loan Documents, as
follows:
| “(i) | The Administrative Agent and the Collateral Agent may resign as Administrative Agent or Collateral Agent, respectively, upon 10 days’ notice to the Lenders and the Borrower. | ||
| “(ii) | If the Administrative Agent or the Collateral Agent is a Defaulting Lender or an Affiliate of a Defaulting Lender, either the Required Lenders or the Borrower |
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| may, upon 10 days’ notice to the Administrative Agent or Collateral Agent, as applicable, remove such agent. | |||
| “(iii) | If an ABL Default Event shall have occurred and be continuing, and the Administrative Agent or Collateral Agent, as applicable, is an Affiliate of or the same Person as the administrative agent or collateral agent under the ABL Facility Agreement, the Required Lenders may, upon 10 days’ notice to the Administrative Agent or Collateral Agent, as applicable, remove such agent. |
“(b) If the Administrative Agent or Collateral Agent shall resign or be removed as
Administrative Agent or Collateral Agent, as applicable, under this Agreement and the other
Loan Documents, then the Required Lenders shall appoint from among the Lenders a successor
agent for the Lenders, which successor agent shall be subject to approval by the Borrower,
whereupon such successor agent shall succeed to the rights, powers and duties of the
Administrative Agent or the Collateral Agent, as applicable, and the term “Administrative
Agent” or “Collateral Agent,” as applicable, shall mean such successor agent effective upon
such appointment and approval, and the former Agent’s rights, powers and duties as
Administrative Agent or Collateral Agent, as applicable, shall be terminated, without any
other or further act or deed on the part of such former Agent or any of the parties to this
Agreement or any holders of the Term Loans. After any retiring Agent’s resignation or
removal as Agent, the provisions of this Article IX shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this Agreement and the
other Loan Documents. Additionally, after any retiring Agent’s resignation as such Agent,
the provisions of this Section shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was such Agent under this Agreement and the other Loan Documents.
“(c) Any successor agent shall be subject to approval by the Borrower, which approval
(i) shall not be unreasonably withheld or delayed in the case of any successor agent that is
a commercial bank with a combined capital and surplus of at least $500,000,000 and (ii) may
otherwise be withheld by the Borrower in its sole discretion. It is understood and agreed
that the Borrower shall have no obligation to pay any fee to any successor agent that is
greater than or in addition to the fees payable to the Administrative Agent on the date
hereof.”
11. The Form of Amended Credit Agreement will be modified to include a definition of “ABL
Default Event” that will provide that an ABL Default Event will have occurred if any of certain
specified major events of default has occurred and is continuing, and the administrative agent or
collateral agent under the ABL Facility Agreement shall have exercised any remedy provided for
thereunder and shall not have rescinded such action (it being understood and agreed that the
definitive wording of such definition shall be determined in accordance with the definition of the
term “Form of Amended Credit Agreement”, including clause (i) of such definition).
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