UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
June 2, 2011
Date of report (Date of earliest event reported)
IMAX Corporation
(Exact Name of Registrant as Specified in Its Charter)
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Canada
(State or Other Jurisdiction of Incorporation)
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0-24216
(Commission File Number)
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98-0140269
(I.R.S. Employer Identification Number) |
2525 Speakman Drive, Mississauga, Ontario, Canada, L5K 1B1
(Address of Principal Executive Offices) (Postal Code)
(905) 403-6500
(Registrant’s Telephone Number, Including Area Code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions (see General
Instruction A.2. below):
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Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communication pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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| Item 1.01 |
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Entry into a Material Definitive Agreement |
On June 2, 2011, IMAX Corporation (the “Company”) amended and restated the terms of its
existing senior secured credit facility (the “Prior Credit Facility”). The amended and restated
facility (the “New Credit Facility”), with a scheduled maturity of October 31, 2015, has a maximum
borrowing capacity of $110 million, consisting of revolving asset-based loans of up to $50 million,
subject to a borrowing base calculation (as described below) and including a sublimit of $20
million for letters of credit, and a revolving term loan of up to $60 million. The Prior Credit
Facility had a maximum borrowing capacity of $75 million. Certain of the Company’s subsidiaries
will serve as guarantors (the “Guarantors”) of the Company’s obligations under the New Credit
Facility. The New Credit Facility is collateralized by a first priority security interest in
substantially all of the present and future assets of the Company and the Guarantors.
The terms of the New Credit Facility are set forth in the Second Amended and Restated Credit
Agreement (the “Credit Agreement”), dated June 2, 2011, among the Company, Wells Fargo Capital
Finance Corporation (Canada), as agent, lender, sole lead arranger and sole bookrunner, (“Wells
Fargo”) and Export Development Canada, as lender (“EDC”, together with Wells Fargo, the “Lenders”)
and in various collateral and security documents entered into by the Company and the Guarantors.
Each of the Guarantors has also entered into a guarantee in respect of the Company’s obligations
under the New Credit Facility.
The revolving asset-based portion of the New Credit Facility permits maximum aggregate
borrowings equal to the lesser of:
(i) $50.0 million, and
(ii) a collateral calculation based on the percentages of the book values of the Company’s net
investment in sales-type leases, financing receivables, certain trade accounts receivable, finished
goods inventory allocated to backlog contracts and the appraised values of the expected future cash
flows related to operating leases and the Company’s owned real property, reduced by certain
accruals and accounts payable and subject to other conditions, limitations and reserve right
requirements.
The Company borrowed $29.6 million from the revolving term loan portion of the New Credit
Facility to repay $15 million in outstanding indebtedness under the revolving portion of the Prior
Credit Facility and $14.6 million in outstanding indebtedness under the term loan portion of the
Prior Credit Facility.
The revolving portion of the New Credit Facility bears interest, at the Company’s option, at
(i) LIBOR plus a margin of 2.00% per annum, or (ii) Wells Fargo’s prime rate plus a margin of 0.50%
per annum, The revolving term loan portion of the New Credit Facility also bears interest at the
Company’s option, at (i) LIBOR plus a margin of 2.00% per annum, or (ii) Wells Fargo’s prime rate
plus a margin of 0.50% per annum.
The New Credit Facility provides that the Company will be required to maintain a ratio of
funded debt (as defined in the Credit Agreement) to EBITDA (as defined in the Credit Agreement) of
not more than 2:1. The Company will also be required to maintain a Fixed Charge Coverage Ratio (as
defined in the Credit Agreement) of not less than 1.1:1.0. At all times under the terms of the New
Credit Facility, the Company is required to maintain minimum Excess Availability of not less than
$5.0 million and minimum Cash and Excess Availability of not less than $15.0 million.
The New Credit Facility contains typical affirmative and negative covenants, including
covenants that limit or restrict the ability of the Company and the guarantors to: incur certain
additional indebtedness; make certain loans, investments or guarantees; pay dividends; make certain
asset sales; incur certain liens or other encumbrances; conduct certain transactions with
affiliates and enter into certain corporate transactions.
The New Credit Facility also contains customary events of default, including upon an
acquisition or change of control or upon a change in the business and assets of the Company or a
Guarantor that in each case is reasonably expected to have a material adverse effect on the Company
or a guarantor. If an event of default occurs and is continuing under the New Credit Facility, the
Lenders may, among other things, terminate their commitments and require immediate repayment of all
amounts owed by the Company.
On June 2, 2011, the Company issued a press release announcing its entry into the New Credit
Facility. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated
herein by reference.
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