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MASONITE INTERNATIONAL INC.
·
6-K
Dec 31, 5:31 PM ET
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MASONITE INTERNATIONAL INC. 6-K
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17
(a) Effective as of the Forbearance Effective Date, the Noteholders agree that, until the expiration of the Forbearance Period (as defined below), they (both individually and collectively) will forbear from exercising, and shall direct the applicable Indenture Trustee and any broker or other Person that holds the Notes on behalf of such Noteholders, and by signature hereto so direct the applicable Indenture Trustee pursuant to Sections 502, 507 and 512 of the applicable Indenture and such brokers or other Persons, not to exercise, any rights and remedies against Holdings, the U.S. Issuer, the Canadian Issuer, or the Subsidiaries that are available under the applicable Indenture and/or applicable law solely with respect to the Interest Defaults and the Financial Reporting Defaults; provided, however, the Noteholders shall be entitled to assert a right to the accrual of default interest to the extent provided under the applicable Indenture during the Forbearance Period but may not seek any remedy or take any action with respect thereto during the Forbearance Period; provided, however, that nothing herein shall restrict, impair or otherwise affect the exercise of the Noteholders’ rights under this First Amended and Restated Agreement, and provided further that no such forbearance shall constitute a waiver with respect to any Defaults (other than the Interest Defaults and Financial Reporting Defaults) or any other Events of Default under the applicable Indenture.
(b) As used herein, the term “Forbearance Period” shall mean the period beginning on the Forbearance Effective Date and ending upon the occurrence of a Termination Event. As used herein, “Termination Event” shall mean the earlier to occur of (i) January 31, 2009; and (ii) two (2) Business Days after the delivery by Paul, Weiss, as counsel to the Noteholder Group, to the applicable Issuer and the applicable Indenture Trustee a written notice terminating the Forbearance Period (the “Termination Notice”), which notice may be delivered at any time but only upon or after the occurrence of any Forbearance Default; provided, however, that notwithstanding the foregoing, this First Amended and Restated Agreement shall immediately terminate upon the occurrence of a Forbearance Default under subsections (A) and (F) below, without the need for delivery of the Termination Notice or any other notice. As used herein, the term “Forbearance Default” shall mean: (A) the valid acceleration of all indebtedness arising under (i) the U.S. Indenture, (ii) the Canadian Indenture or (iii) that certain credit agreement dated as of April 6, 2005 (as amended or modified, the “Credit Agreement”), among the Issuers, as borrowers, Holdings, as guarantor, certain lenders and The Bank of Nova Scotia, as Administrative Agent; (B) the failure of the Issuers and Holdings to engage in good faith negotiations with the Noteholder Group regarding a potential restructuring transaction which determination shall be made by the holders of a majority in principal amount of the Notes issued under the Indentures in good faith and their reasonable discretion; (C) the occurrence of any Default or Event of Default other than the Interest Defaults and Financial Reporting Defaults; (D) the failure of the U.S. Issuer, the Canadian Issuer, Holdings or the Subsidiaries to comply with any material term, condition, covenant or agreement set
forth in this First Amended and Restated Agreement; (E) the failure of any representation or warranty made by the U.S. Issuer, the Canadian Issuer, Holdings or the Subsidiaries under this First Amended and Restated Agreement to be true and correct in all material respects as of the date when made; (F) the commencement by or against the U.S. Issuer, the Canadian Issuer, Holdings, or any Subsidiary of a case under title 11 of the United States Code, the Companies’ Creditors Arrangement Act or any other act that seeks relief under any comparable liquidation, reorganization or insolvency regime or proceeding that is not, in the case of proceedings commenced against the U.S. Issuer, the Canadian Issuer, Holdings or the Subsidiaries, dismissed within five (5) Business Days of commencement; or (G) the U.S. Issuer, the Canadian Issuer, Holdings, or the Subsidiaries pays any management, sponsor or consulting fees to the stockholders of Masonite Holding Corp. or their affiliates.
(c) Upon the occurrence of a Termination Event, the agreement of the Noteholders hereunder to forbear, and to direct the applicable Indenture Trustee and any broker or other Person that holds the Notes on behalf of such Noteholders, to forbear, from exercising rights and remedies in respect of the Interest Defaults and Financial Reporting Defaults, shall immediately terminate without the requirement of any demand, presentment, protest, or notice of any kind (other than, where required, a Termination Notice), all of which the Issuers, Holdings, and the Subsidiaries hereby waive. The Issuers, Holdings, and the Subsidiaries agree that, upon the occurrence of, and at any time after, the occurrence of a Termination Event, the Noteholders or the Indenture Trustees, as applicable, may proceed, subject to the terms of the applicable Indenture and/or applicable law, to exercise any or all rights and
remedies under the applicable Indenture and/or applicable law, including, without limitation, the rights and remedies on account of the Interest Defaults and Financial Reporting Defaults and any other Defaults or Events of Default that may then exist. Without limiting the generality of the foregoing, upon the occurrence of a Termination Event, if any Default or Event of Default (including the Interest Defaults and Financial Reporting Defaults) exists at such time, the Noteholders or the Indenture Trustees, as applicable, may, upon such notice or demand as is specified by the applicable Indenture or applicable law, and subject to the terms of the applicable Indenture and/or applicable law, (x) collect and/or commence any legal or other action to collect any or all of the obligations of the Issuers, Holdings and the Subsidiaries under the applicable Indenture, or the Subsidiary Guarantees; and (y) take any other enforcement action or otherwise exercise any or all rights and remedies provided to them under the applicable Indenture, the applicable Guarantors and/or applicable law, all of which rights and remedies are fully reserved.
(d) The Issuers, Holdings, and the Subsidiaries acknowledge that the Noteholders have made no assurances whatsoever concerning any possibility of any extension of the Forbearance Period, any other forbearance or similar arrangement or any other limitations on the exercise of their rights, remedies and privileges under or otherwise in connection with the applicable Indenture and/or applicable law.
(e) The Issuers, Holdings, and the Subsidiaries acknowledge and agree that any forbearance, waiver or consent that the Noteholders may make on or after the date hereof has been made by the Noteholders in reliance upon, and in
consideration for, the covenants, agreements, representations and warranties of the Issuers, Holdings, and the Subsidiaries hereunder.
(a) The Issuers, Holdings, and the Subsidiaries represent, warrant and covenant as follows:
(i) Except for the Interest Defaults and Financial Reporting Defaults, no other Default or Event of Default has occurred and is continuing.
(ii) The execution, delivery and performance by the Issuers, Holdings, and the Subsidiaries of this First Amended and Restated Agreement:
(1) are within their corporate or limited partnership powers, as applicable;
(2) have been duly authorized by all necessary corporate or limited partnership action, as applicable, including the consent of the holders of its equity interests where required;
(3) do not and will not (A) contravene their certificate of incorporation or by-laws or limited partnership or other constituent documents, (B) violate any (i) applicable material requirement of law or (ii) material order or decree of any governmental authority or arbitrator applicable to them, (C) materially conflict with or result in the breach of, or constitute a default under, or result in or permit the termination or acceleration of, any material contractual obligation of the Company or the Subsidiaries, or (D) result in the creation or imposition of any material lien or encumbrance upon any of the material property of the Company or the Subsidiaries; and
(4) do not and will not require the consent of, authorization by, or approval of any governmental authority, other than those which prior to the Forbearance Effective Date will have been obtained or made and copies of which prior to the Forbearance Effective Date will have been delivered to counsel to the Noteholder Group and each of which on the Forbearance Effective Date will be in full force and effect or as would not be material.
(b) Each Noteholder represents, severally and not jointly, as follows:
(i) As of the date hereof, each Noteholder either (A) is the sole legal and beneficial owner of the principal amount of Notes set forth opposite its name on the signature pages hereto, or (B) has the investment or voting discretion with respect to such Notes and has the power and authority to bind the beneficial owner(s) of such Notes to the terms of this First Amended and Restated Agreement.
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