EXHIBIT 10.35
AMENDMENT NO. 6
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AMENDMENT NO. 6 (this "Amendment"), dated as of May 30, 2006,
to that certain Credit and Guaranty Agreement, dated as of June 4, 2004, as
amended (the "Credit Agreement"; capitalized terms used herein and not defined
shall have the meaning set forth in the Credit Agreement), among MAAX
CORPORATION, a Nova Scotia unlimited company ("Company"), BEAUCELAND
CORPORATION, a Nova Scotia unlimited company ("Holdings"), CERTAIN SUBSIDIARIES
OF HOLDINGS, as Guarantors, the Lenders party thereto from time to time, XXXXXXX
XXXXX CREDIT PARTNERS L.P., as Joint Lead Arranger and as Syndication Agent,
ROYAL BANK OF CANADA, as Administrative Agent (in such capacity, "Administrative
Agent") and as Collateral Agent, ROYAL BANK OF CANADA, ACTING THROUGH ITS
BUSINESS GROUP RBC CAPITAL MARKETS, as Joint Lead Arranger, and XXXXXXX XXXXX &
CO., XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED, as Joint Lead Arranger
and as Documentation Agent.
W I T N E S S E T H :
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WHEREAS, pursuant to Section 10.5 of the Credit Agreement,
Company and Administrative Agent hereby agree to the amendments and waivers of
the Credit Agreement as set forth herein.
NOW, THEREFORE, in consideration of the foregoing, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:
SECTION ONE - Amendments. Subject to the satisfaction of the
conditions set forth in Section Three hereof:
(i) The definitions of Applicable Margin and Applicable
Revolving Commitment Fee Percentage in Section 1.1 of the Credit Agreement are
hereby amended and restated in their entirety to read:
"Applicable Margin" and "Applicable Revolving Commitment Fee
Percentage" mean (i) with respect to all Loans that are Eurodollar Rate Loans,
Canadian Eurodollar Rate Loans or BA Discount Rate Loans and the Applicable
Revolving Commitment Fee Percentage, (a) from the Closing Date until the date of
delivery of the Compliance Certificate and the financial statements for the
second fiscal quarter commencing after the Closing Date, a percentage, per
annum, determined by reference to the following table as if the Leverage Ratio
then in effect were in excess of 4.50:1.00; and (b) thereafter, a percentage,
per annum, determined by reference to the Leverage Ratio in effect from time to
time as set forth below:
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Applicable Margin Applicable Revolving
Leverage for Tranche A Term Loans Applicable Margin Commitment
Ratio and Revolving Loans for Tranche B Term Loans Fee Percentage
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> 5.50:1.00 2.75% 3.00% 0.50%
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< 5.50:1.00 2.50% 3.00% 0.50%
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> 5.25:1.00
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< 5.25:1.00 2.50% 2.75% 0.50%
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> 4.50:1.00
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< 4.50:1.00 2.25% 2.75% 0.50%
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> 3.50:1.00
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< 3.50:1.00 2.00% 2.50% 0.40%
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> 2.50:1.00
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< 2.50:1.00 1.75% 2.50% 0.35%
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and (ii) with respect to Loans that are Base Rate Loans or Prime Rate Loans, an
amount equal to (a) the Applicable Margin for Eurodollar Rate Loans as set forth
in clause (i)(a) or (i)(b) above, as applicable, minus (b) 0.75% per annum;
provided that notwithstanding the foregoing the Applicable Margin for all Loans
shall be calculated as if the Leverage Ratio in effect were in excess of
5.50:1.00 from June 1, 2006 until financial statements and a Compliance
Certificate related to a fiscal period ended after June 1, 2006 indicating a
Leverage Ratio less than or equal to 5.50:1.00 have been delivered pursuant to
Section 5.1(d). No change in the Applicable Margin or the Applicable Revolving
Commitment Fee Percentage shall be effective until three Business Days after the
date on which Administrative Agent shall have received the applicable financial
statements and a Compliance Certificate pursuant to Section 5.1(d) calculating
the Leverage Ratio. At any time Company has not submitted to Administrative
Agent the financial statements and a Compliance Certificate calculating the
Leverage Ratio as and when required under Section 5.1(d), the Applicable Margin
and the Applicable Revolving Commitment Fee Percentage shall be determined as if
the Leverage Ratio were in excess of 5.50:1.00 until such financial statements
and Compliance Certificate are delivered to Administrative Agent. Within one
Business Day of receipt of the financial statements and Compliance Certificate
calculating the Leverage Ratio under Section 5.1(d), Administrative Agent shall
give each Lender telefacsimile or telephonic notice (confirmed in writing) of
the Applicable Margin and the Applicable Revolving Commitment Fee Percentage in
effect from the day that is three Business Days after such receipt.
(ii) The following definition is hereby added to Section
1.1 of the Credit Agreement:
"Amendment No. 6 Effective Date" has the meaning given to such
term in Amendment No. 6 to this Agreement.
"Applicable Fiscal Quarter" as defined in Section 8.2(a).
"Cure Amount" as defined in Section 8.2(a).
"Cure Right" as defined in Section 8.2(a).
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"Not Otherwise Applied" means, with reference to any amount of
Cash proceeds of any transaction or event, that such amount (a) was not required
to be applied to prepay the Loans pursuant to Section 2.16 and (b) was not
previously applied in determining the permissibility of a transaction under the
Credit Documents where such permissibility was (or may have been) contingent on
receipt of such amount or utilization of such amount for a specified purpose
(including Sections 6.5(e), 6.7(f) and 6.9(h)). Company shall promptly notify
Administrative Agent of any application of such amount as contemplated by clause
(b) above.
"Kitchen Cabinet Business" means the business and assets of
Company and its Subsidiaries related to the manufacture and marketing of
semi-custom, stock and customized kitchen cabinets.
(iii) Section 2.16(a) of the Credit Agreement is hereby
amended and restated to add the following after "Fiscal Year":
that do not involve the sale of any part of the Kitchen
Cabinet Business
(iv) Section 2.17(b) is hereby amended by adding the
following after the semicolon in the clause first thereof:
provided, that notwithstanding the foregoing, prepayments of
Term Loans pursuant to Section 2.16(a) that result from sales of all or any part
of the Kitchen Cabinet Business shall be applied to prepay Term Loans on a pro
rata basis (in accordance with the respective outstanding principal amounts
thereof) and shall be further applied to the then next two scheduled
Installments of principal of the Tranche A Term Loans and Tranche B Term Loans
to the full extent thereof and thereafter shall be further applied on a pro rata
basis to the remaining scheduled Installments of principal of the Tranche A Term
Loans and Tranche B Term Loans to the full extent thereof;
(v) Section 5.1(d) of the Credit Agreement is hereby
amended to add the following at the end thereof:
and, if such Compliance Certificate demonstrates an Event of
Default of any covenant under Section 6.8(a), (b) or (c), any of the Permitted
Holders and/or members of management of any Parent Company, Holdings or its
Subsidiaries may deliver, together with such Compliance Certificate, notice of
an intent to cure such Event of Default pursuant to Section 8.2 or evidence that
such Event of Default has been so cured; provided that the delivery of such a
notice shall in no way affect or alter the occurrence, existence or continuation
of any such Event of Default or the rights, benefits, powers and remedies of the
Administrative Agent and the Lenders under any Loan Document;
(vi) Section 6.9 of the Credit Agreement is hereby amended
by:
(1) inserting the words "or proceeds of any capital
contribution made by Holdings to the common equity of the
Company utilizing (directly or indirectly) proceeds
received by MAAX Holdings from any issuance of Qualified
Capital Stock to, or capital contribution from, one or
more Permitted Holders or members of management of any
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Parent Company, Holdings or its Subsidiaries" following
each reference to "Parent Company" in clause (h); and
(2) deleting the "and" at the end of clause (n) and deleting
the period at the end of clause (o) and replacing it with
the following:
; and
(p) the sale of all or any part of the Kitchen
Cabinet Business.
(vii) Section 8.1(c) of the Credit Agreement is hereby
amended by adding before the word "or" at the end thereof the following:
provided that any Event of Default under Section 6.8(a), (b)
or (c) may be cured pursuant to Section 8.2;
(viii) A new Section, Section 8.2, entitled "Company's Right
to Cure" is hereby added to the Credit Agreement to read:
(a) In the event of any breach of any covenant set forth
in Section 6.8(a), (b) or (c) as of the last day of any Fiscal Quarter
(the "Applicable Fiscal Quarter"), Company shall have the right to cure
such breach as follows (the "Cure Right"):
(1) At any time on or prior to the tenth (10th)
day after the date on which financial statements are required to be
delivered for the Applicable Fiscal Quarter (including as part of a
Fiscal Year) hereunder (or with respect to the Fiscal Quarter ended May
31, 2006, at any time on or prior to July 15, 2006), Company shall
receive a cash contribution to its common equity capital from Holdings
(the amount of such cash, the "Cure Amount"), which cash is Not
Otherwise Applied and was received by Holdings upon issuance of
Qualified Capital Stock to any Parent Company or one or more Permitted
Holders and/or members of management of any Parent Company, Holdings or
its Subsidiaries, or as a cash contribution to its common equity
capital from MAAX Holdings utilizing the proceeds of the issuance by
MAAX Holdings of Qualified Capital Stock to one or more Permitted
Holders and/or members of management of any Parent Company, Holdings or
its Subsidiaries;
(2) Consolidated Adjusted EBITDA for the
Applicable Fiscal Quarter shall be increased by an amount equal to the
Cure Amount, and the covenants set forth in Section 6.8(a), (b) and (c)
shall be recalculated after giving effect to such increase;
(3) If, after giving effect to the foregoing
recalculations, Company shall be in compliance with all covenants set
forth in Sections 6.8(a), 6.8(b) and 6.8(c), Company shall be deemed to
be in compliance with such covenants as of the relevant date of
determination with the same effect as though there had been no failure
to comply therewith at such date, and the applicable breach of such
covenant(s) and the resulting Event of Default that had occurred shall
be deemed cured for purposes of this Agreement; and
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(4) To the extent the Applicable Fiscal Quarter
is included in a subsequent period of four Fiscal Quarters in
calculating compliance with the covenants set forth in Sections 6.8(a),
6.8(b) and 6.8(c), the Consolidated Adjusted EBITDA for the Applicable
Fiscal Quarter as increased by the Cure Amount pursuant to clause (2)
above shall be used in such calculation.
(b) In each period of eight consecutive Fiscal Quarters,
there shall be at least four consecutive Fiscal Quarters in which the
Cure Right is not used and the Cure Right may be used no more than
twice during each period of four consecutive Fiscal Quarters.
(c) In no event will the Cure Amount for (i) the Fiscal
Quarter ended May 31, 2006 be greater than U.S.$7.0 million and (ii)
any other Fiscal Quarter be greater than 120% of the amount required
for purposes of curing the non-compliance with the covenants set forth
in Sections 6.8(a), 6.8(b) and 6.8(c).
(d) The parties hereby acknowledge that this Section 8.2
shall not result in any adjustment to any amounts other than the amount
of the Consolidated Adjusted EBITDA referred to in Section 8.2(a).
SECTION TWO - Waivers. (a) The Lenders hereby waive any
Default or Event of Default caused solely by the failure of Company to comply
with Section 6.8(a), (b) or (c) as of the last day of the Fiscal Quarter ended
May 31, 2006; provided that (x) if on or prior to July 15, 2006 (1) MAAX
Holdings has not received at least U.S.$7.0 million in cash as proceeds from its
issuance of Qualified Capital Stock to, or as proceeds of a contribution to its
common equity from, one or more Permitted Holders and/or members of management
of any Parent Company, Holdings or its Subsidiaries, or (2) Holdings has not
received at least U.S.$7.0 million in cash from MAAX Holdings as a contribution
to its common equity, or (3) Company has not received at least U.S.$7.0 million
in cash from Holdings as a contribution to its common equity, then such waiver
shall be terminated and the failure of Company to comply with Section 6.8(a),
(b) or (c) as of the last day of the Fiscal Quarter ended May 31, 2006 shall
constitute an Event of Default and (y) until clause (x) is complied with, the
Total Utilization of Revolving Commitments shall not exceed Can$30.0 million.
(b) The Lenders hereby waive any Default that may be
caused solely by the failure of Company to comply with Section 4.18(1) of the
Senior Subordinated Notes Indenture with respect to the filing of its annual
report for the Fiscal Year ended February 28, 2006, but only so long as no
"Event of Default" under and as defined in the Senior Subordinated Notes
Indenture results therefrom.
SECTION THREE - Conditions to Effectiveness. This Amendment
shall become effective (the date of such effectiveness, the "Amendment No. 6
Effective Date") when, and only when, (i) Administrative Agent shall have
received (x) counterparts of this Amendment executed by Company and
Administrative Agent and (y) consents to this Amendment from the Requisite
Lenders and (ii) Company shall have delivered, by wire transfer of immediately
available funds, to Administrative Agent, for the ratable account of each Lender
consenting hereto, a fee equal to (A) in Canadian Dollars, 0.125% of the
aggregate principal amount of Tranche A Term Loans plus the aggregate amount of
Revolving Commitments of such Lenders plus (B) in U.S. Dollars, 0.125% of the
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aggregate principal amount of Tranche B Term Loans of such Lenders. The
effectiveness of this Amendment (other than Sections Six, Seven and Eight
hereof) is conditioned upon the accuracy of the representations and warranties
set forth in Section Four hereof.
SECTION FOUR - Representations and Warranties; Covenants. In
order to induce the Lenders to consent to this Amendment, the Company represents
and warrants to each of the Lenders and the Agents that after giving effect to
this Amendment, (x) no Event of Default or Default has occurred and is
continuing; and (y) the representations and warranties contained in the Credit
Agreement and in the other Credit Documents are true and correct in all material
respects (and any such representations and warranties that contain a materiality
or Material Adverse Effect qualification are true and correct in all respects)
on and as of the date hereof to the same extent as though made on and as of the
date hereof, except to the extent such representations and warranties
specifically relate to an earlier date, in which case such representations and
warranties were true and correct in all material respects on and as of such
earlier date.
SECTION FIVE - Reference to and Effect on the Credit Agreement
and the Notes. On and after the effectiveness of this Amendment, each reference
in the Credit Agreement to "this Agreement", "hereunder", "hereof" or words of
like import referring to the Credit Agreement, and each reference in the Notes
and each of the other Credit Documents to "the Credit Agreement", "thereunder",
"thereof" or words of like import referring to the Credit Agreement, shall mean
and be a reference to the Credit Agreement, as amended or waived by this
Amendment. The Credit Agreement, the Notes and each of the other Credit
Documents, as specifically amended or waived by this Amendment, are and shall
continue to be in full force and effect and are hereby in all respects ratified
and confirmed. Without limiting the generality of the foregoing, the Collateral
Documents and all of the Collateral described therein do and shall continue to
secure the payment of all Obligations of the Credit Parties under the Credit
Documents. The execution, delivery and effectiveness of this Amendment shall
not, except as expressly provided herein, operate as an amendment or waiver of
any right, power or remedy of any Lender or any Agent under any of the Credit
Documents, nor constitute an amendment or waiver of any provision of any of the
Credit Documents.
SECTION SIX - Costs, Expenses and Taxes. Company agrees to pay
all reasonable costs and expenses of the Agents in connection with the
preparation, execution and delivery of this Amendment and the other instruments
and documents to be delivered hereunder, if any (including, without limitation,
the reasonable fees and expenses of Xxxxxx Xxxxxx & Xxxxxxx LLP) in accordance
with the terms of Section 10.2 of the Credit Agreement.
SECTION SEVEN - Execution in Counterparts. This Amendment may
be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute but one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Amendment by facsimile shall be effective as delivery of a manually executed
counterpart of this Amendment.
SECTION EIGHT - Governing Law. This Amendment shall be
governed by, and construed in accordance with, the laws of the State of New
York, without regard to the principles of conflicts of laws thereof to the
extent that the application of the laws of another jurisdiction would be
required thereby.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered as of the day and year first above
written.
MAAX CORPORATION
By: /s/ XXXXX XXXXX
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Name: Xxxxx Xxxxx
Title: Executive Vice President and
Chief Financial Officer
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ROYAL BANK OF CANADA, as Administrative Agent
By: /s/ XXX XXXXXX
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Name: Xxx Xxxxxx
Title: Manager Agency
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