Exhibit 10.25

 

FIFTH AMENDMENT AND WAIVER AGREEMENT

 

THIS FIFTH AMENDMENT AND WAIVER AGREEMENT (this “Agreement”), is dated as of
June 14, 2005, by and between Q.E.P. CO., INC., a Delaware corporation with its
chief executive office and principal place of business at 1081 Holland Drive,
Boca Raton, Florida 33487, Q.E.P. - O’TOOL, INC., a Nevada corporation with its
chief executive office and principal place of business at 1070 Mary Crest Road,
Henderson, NV 89014, MARION TOOL CORPORATION, an Indiana corporation with its
chief executive office and principal place of business at 1081 Holland Drive,
Boca Raton, Florida 33487, ROBERTS CONSOLIDATED INDUSTRIES, INC., a Delaware
corporation with its chief executive office and principal place of business at
1081 Holland Drive, Boca Raton, Florida 33487, ROBERTS JAPAN KK, an entity
organized in Japan with its chief executive office and principal place of
business at 1081 Holland Drive, Boca Raton, Florida 33487, ROBERTS HOLDING
INTERNATIONAL, INC., a Delaware corporation with its chief executive office and
principal place of business at 1081 Holland Drive, Boca Raton, Florida 33487,
ROBERTS COMPANY CANADA LIMITED, an entity organized in Ontario, Canada with its
chief executive office and principal place of business at 2070 Steeles Avenue,
Bramalea, Ontario, Canada L6T1A7, ROBERTS HOLLAND B.V., an entity organized in
The Netherlands with its chief executive office and principal place of business
at 3360 AB Sliedrecht, P.O. Box 64, Parallelweg, The Netherlands, ROBERTS U.K.
LIMITED, an entity organized in England with its chief executive office and
principal place of business at Unit 10, Branxholme Industrial Estate, Bailiff
Bridge, Brighouse, West Yorkshire, England, HD6 4EA, ROBERTS GERMANY GmbH, an
entity organized in Germany with its chief executive office and principal place
of business at Dreieichstrasse 10, 64546 Morfelden-Waldorf, Germany, ROBERTS
S.A.R.L., an entity organized in France with its chief executive office and
principal place of business at 25 rue de la Gare, 78370b Plaisir, France, Q.E.P.
STONE HOLDINGS, INC., a Florida corporation with a place of business at 1081
Holland Drive, Boca Raton, Florida 33487, Q.E.P. AUST. PTY. LIMITED, an entity
organized in Australia with a place of business at 32-34 Hydrive Close,
Victoria, Australia 3175, Q.E.P. CHILE LIMITADA, an entity organized in Chile
with a place of business at Av. Recoleta 4464, Huechuraba, Santiago, Chile,
Q.E.P. HOLDING B.V., an entity organized in the Netherlands with its chief
executive office and principal place of business at 3360 AB Sliedrecht,
Parallelweg, The Netherlands, Q.E.P. CO. NEW ZEALAND LIMITED, an entity
organized in New Zealand with a place of business at 67 Dalgety Drive, Manukau
City, Auckland, New Zealand, Q.E.P. ZOCALIS HOLDING L.L.C., a Delaware limited
liability company with a place of business at 1081 Holland Drive, Boca Raton,
Florida 33487, Q.E.P. ZOCALIS S.R.L., an entity organized in Argentina with its
chief executive office and principal place of business at 1607 Villa Adelina,
Buenos Aries, Argentina, BOIARDI PRODUCTS CORPORATION, an Ohio corporation, with
its chief executive office and principal place of business at 453 Main Street,
Little Falls, New Jersey 07424, Q.E.P. CO. U.K. LIMITED, an entity organized in
England with its chief executive office and principal place of business at
Gverest Road, Lytham St Anncs, Lancashire FY8 3AZ, VITREX LIMITED, an entity
organized in England with its chief executive office and principal place of
business at Gverest Road, Lytham St Anncs, Lancashire FY8 3AZ, ROBERTS CAPITOL,
INC., a Florida corporation with a chief executive office and

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principal place of business at 1081 Holland Drive, Boca Raton, Florida 33487,
ROBERTS MEXICANA, S.A. DE C.V., an entity organized in Mexico with its chief
executive office and principal place of business at Poniente 152, numero 935,
Colonia Industrial Vallejo, C.P. 02300, Mexico, D.F., and P.R.C.I. SA, an entity
organized in France with its chief executive office and principal place of
business at 111 Rue du Masdeporaly, Zone Industrielle 34000, Montpellier, France
(all of the foregoing are hereinafter collectively referred to as, the
“Borrower”), FLEET CAPITAL CORPORATION (“FCC”) and HSBC BANK USA, NATIONAL
ASSOCIATION, successor-by-merger to HSBC BANK USA (“HSBC” and together with FCC,
the “Lenders” and each individually a “Lender”), and FLEET CAPITAL CORPORATION,
a Rhode Island corporation with an office at One Landmark Square, Stamford,
Connecticut 06901, as agent for the Lenders, (hereinafter referred to as the
“Agent”).

 

PREAMBLE

 

WHEREAS, pursuant to that certain Second Amended and Restated Loan Agreement
dated as of November 14, 2002 by and among the Borrower, the Lenders and the
Agent (as amended and in effect from time to time, the “Loan Agreement”), the
Lenders made, or agreed to make in the future, certain Loans to the Borrower;

 

WHEREAS, the Borrower has requested Lenders to amend the Loan Agreement in order
to, among other things, amend the leverage and fixed charge coverage covenants;
and

 

WHEREAS, Lenders are willing to amend the Loan Agreement and waive such
requirements subject to and in reliance upon the representations, warranties,
acknowledgments, covenants and agreements of Borrower contained herein.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the mutual promises and covenants contained
herein and acknowledging that Lenders are relying upon the representations,
warranties, acknowledgments, covenants and agreements of Borrower contained
herein, Borrower and Lenders agree as follows:

 

I. Acknowledgments and Affirmations.

 

A. Borrower and Lenders acknowledge and agree that capitalized terms used herein
and without definition shall have the meanings assigned to them in the Loan
Agreement.

 

B. Borrower acknowledges and affirms that:

 

1. As of March 1, 2005, Borrower is legally and validly indebted to Lenders
under the Loan Agreement in the principal amount (including the face amount of
outstanding Letters of Credit) of $ 22,243,181.14 with respect to the Revolving
Loan, $ 2,866,661.00 with respect to the Term Loans, $ 0.00 with respect to the
BV Loans and

 

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CAD $ 2,322,024.02 with respect to the Mortgage Loan, plus interest, fees and
charges accrued and accruing thereon and thereunder, and there is no defense,
offset or counterclaim with respect to any such indebtedness or independent
claim or action against Lenders.

 

2. All indebtedness of Borrower to Lenders whenever and however arising, is
secured by a duly perfected, first priority security interest in the Collateral
(or, in the case of QEP UK, Vitrex, Roberts Mexicana, S.A. de C.V., and P.R.C.I.
SA a second priority security interest in the Collateral which is and shall be
junior only to the liens described in subsection III (ii) of the Fourth
Amendment and Waiver Agreement dated as of March 31, 2005, by and between the
Borrowers, the Lenders and the Agent).

 

C. Borrower represents and warrants that:

 

1. The resolutions previously adopted by the Board of Directors of each Borrower
with respect to the Loan Agreement and provided to Lenders have not in any way
been rescinded or modified and have been in full force and effect since their
adoption to and including the date hereof and are now in full force and effect,
except to the extent that they have been modified or supplemented to authorize
this Agreement and the documents and transactions described herein.

 

2. Each Borrower has the corporate power and authority to enter into this
Agreement and the transactions contemplated herein, and each Borrower has taken
all necessary corporate action to authorize this Agreement and the transactions
contemplated herein.

 

3. Except as amended by this Agreement, all representations, warranties and
covenants contained in the Loan Agreement, and in the schedules and exhibits
attached thereto, are true and correct on and as of the date hereof, are
incorporated herein by reference and, with respect to each Borrower organized
under the laws of any jurisdiction within the United States, Canada, the
Netherlands, Australia or the United Kingdom, are hereby remade, and, with
respect to each other Borrower, are hereby remade to the best of their
knowledge.

 

4. Except for those requirements which are being waived pursuant to Section III
in this Agreement, no Borrower is currently in default under the Loan Agreement,
and no condition exists or has occurred which would constitute a default
thereunder but for the giving of notice or passage of time, or both.

 

D. The consummation of the transactions contemplated herein (a) is not prevented
or limited by, nor does it conflict with or result in a breach of the terms,
conditions or provisions of, any Borrower’s articles of incorporation or bylaws,
or any evidence of indebtedness, agreement or instrument of whatever nature to
which any Borrower is a party or by which any of them is bound, (b) does not
constitute a default under any of the foregoing, and (c) does not violate any
federal, state or local law, regulation or order of any court or agency which is
binding upon any Borrower.

 

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II. Amendments to Loan Agreement. The Loan Agreement is hereby amended as
follows:

 

A. Section 7.4 of the Loan Agreement is hereby deleted and replaced with the
following:

 

Section 7.4 Senior Debt to Trailing EBITDA Ratio. The Borrower, shall maintain
as of the end of each fiscal quarter of the Borrower for the fiscal quarters
ending May 31, 2005 through November 30, 2005 on an annualized quarterly basis,
and thereafter on a rolling four quarter basis, a ratio of (i) Senior Debt to
(ii) trailing twelve-month Earnings Before Interest, Taxes, Depreciation and
Amortization of not more than as set forth in the following table:

 

Fiscal Quarter Ending

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Ratio Not More Than

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5/31/05 – 8/31/05

   3.50:1.0

11/30/05

   3.25:1.0

2/28/06 – 11/30/06

   3.00:1.0

2/28/07 – 5/31/08

   2.75:1.0

 

B. Section 7.7 of the Loan Agreement is hereby deleted and replaced with the
following:

 

Section 7.7 Fixed Charge Coverage Ratio. The Borrower shall maintain on a
year-to-date basis as of the end of each fiscal quarter of the Borrower through
and including the fiscal quarter ending November 30, 2005, and thereafter on a
rolling four quarter basis, a ratio of (i) Earnings Before Interest, Taxes,
Depreciation and Amortization minus unfinanced Capital Expenditures minus all
taxes paid during such period minus all dividends paid during such period, to
(ii) Current Maturities of Long-Term Debt plus Interest Expense of not less than
as set forth in the following table:

 

Testing Period

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Ratio Not Less Than

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Fiscal Year End 2/28/2005

   1.00:1.0

Fiscal Quarter End 5/31/05

   1.10:1.0

Fiscal Quarter End 8/31/05 – 5/31/08

   1.15:1.0

 

The fixed charge coverage ratio for Fiscal Year End February 28, 2005 will be
tested with accounting adjustments totaling $664,000 added back to EBITDA.

 

III. Certain Waivers. The requirements of Section 7.4 of the Loan Agreement are
hereby waived on a one-time basis solely for the fiscal quarters ended May 31,
2004, August 31, 2004, November 30, 2004, and February 28, 2005.

 

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IV. Conditions Precedent.

 

A. The effectiveness of this Agreement shall be subject to the prior
satisfaction of each of the following conditions:

 

1. the Agent shall have received each of the following, in form and substance
satisfactory to the Agent and its counsel:

 

(a) This Agreement, duly executed by Borrower;

 

(b) A certificate, dated as of the date of this Agreement, of the Secretary of
each Borrower certifying the names and true signatures of the officers of such
Borrower authorized to sign this Fifth Amendment and the other documents to be
delivered by it under this Agreement;

 

(c) An amendment fee of $20,000;

 

(d) Receipt by the Agent and the Lenders of (i) the financial information
required pursuant to Section 5.8(a) of the Loan Agreement for the fiscal year
ended February 28, 2005 or (ii) a draft of Borrowers’ audited financial
statements for the fiscal year ended February 28, 2005, in form and substance
satisfactory to Agent and Lenders, together with confirmation from Borrowers’
independent certified public accountants that there will be no material changes
from such draft in the final audited statements for such fiscal year; and

 

(e) All other documents, instruments and agreements that Lender shall reasonably
require in connection with this Agreement, including without limitation those
documents, instruments, and agreements required under previous amendments to the
Loan Agreement which have not yet been delivered to Lender.

 

B. The Loan Documents are hereby amended so as to be consistent with the
amendments set forth in this Agreement.

 

V. Miscellaneous.

 

A. This Agreement shall be governed by and construed in accordance with the laws
of the State of Connecticut (except its conflicts of laws provisions).

 

B. Upon the execution of this Agreement, the Loan Agreement is amended to the
extent this Agreement amends the Loan Agreement. Except as specifically amended
by the terms of this Agreement, all terms and conditions set forth in the Loan
Agreement shall remain in full force and effect.

 

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C. This Agreement may be executed in any number of counterparts, each of which
shall constitute an original and all of which taken together shall constitute
one instrument.

 

[The remainder of this page has been left blank intentionally.]

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and
delivered as of the date first above written.

 

WITNESSES AS TO ALL   BORROWER: BORROWERS         Q.E.P. CO., INC.

/s/

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      By:  

/s/ Marc Applebaum

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            Marc Applebaum             Its Chief Financial Officer

/s/

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          Duly Authorized     Q.E.P.-O’TOOL, INC.     By:  

/s/ Marc Applebaum

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        Marc Applebaum         Its Director, Secretary         Duly Authorized  
  MARION TOOL CORPORATION     By:  

/s/ Marc Applebaum

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        Marc Applebaum         Its Director, Secretary         Duly Authorized  
  ROBERTS CONSOLIDATED INDUSTRIES, INC.     By:  

/s/ Marc Applebaum

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        Marc Applebaum         Its Director, Secretary         Duly Authorized

 

Fifth Amendment Signature Page

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ROBERTS HOLDING INTERNATIONAL INC.

By:  

/s/ Marc Applebaum

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    Marc Applebaum     Its Director, Secretary     Duly Authorized ROBERTS
COMPANY CANADA LIMITED By:  

/s/ Marc Applebaum

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    Marc Applebaum     Its Director, Secretary     Duly Authorized ROBERTS U. K.
LIMITED By:  

/s/ Marc Applebaum

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    Marc Applebaum     Its Director, Secretary     Duly Authorized ROBERTS
GERMANY GmbH By:  

/s/ Marc Applebaum

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    Marc Applebaum     Its Director, Secretary     Duly Authorized ROBERTS
S.A.R.L. By:  

/s/ Marc Applebaum

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    Marc Applebaum     Its Director, Secretary     Duly Authorized

 

Fifth Amendment Signature Page

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ROBERTS JAPAN KK By:  

/s/ Marc Applebaum

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    Marc Applebaum     Its Director, Secretary     Duly Authorized ROBERTS
HOLLAND B.V. By:  

/s/ Marc Applebaum

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    Marc Applebaum     Its Director, Secretary     Duly Authorized Q.E.P.
HOLDING B.V. By:  

/s/ Marc Applebaum

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    Marc Applebaum     Its Director, Secretary     Duly Authorized Q.E.P. STONE
HOLDINGS, INC. By:  

/s/ Marc Applebaum

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    Marc Applebaum     Its Director, Secretary     Duly Authorized Q.E.P. AUST.
PTY. LIMITED By:  

/s/ Marc Applebaum

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    Marc Applebaum     Its Director, Secretary     Duly Authorized

 

Fifth Amendment Signature Page

 

 

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Q.E.P. CO. NEW ZEALAND, LIMITED

By:  

/s/ Marc Applebaum

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    Marc Applebaum     Its President, Director     Duly Authorized Q.E.P. CHILE
LIMITADA By:  

/s/ Marc Applebaum

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    Marc Applebaum     Its Director, Secretary     Duly Authorized Q.E.P.
ZOCALIS HOLDING, L.L.C. By:  

/s/ Marc Applebaum

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    Marc Applebaum     Its Director, Secretary     Duly Authorized Q.E.P.
ZOCALIS S.R.L. By:  

/s/ Marc Applebaum

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    Marc Applebaum     Its Director, Secretary     Duly Authorized BOIARDI
PRODUCTS CORPORATION By:  

/s/ Marc Applebaum

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    Marc Applebaum     Its Director, Secretary     Duly Authorized

 

Fifth Amendment Signature Page

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Q.E.P. CO. U.K. LIMITED By:  

/s/ Marc Applebaum

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    Marc Applebaum     Its Director, Secretary     Duly Authorized VITREX
LIMITED By:  

/s/ Marc Applebaum

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    Marc Applebaum     Its Director, Secretary     Duly Authorized     Duly
Authorized ROBERTS CAPITOL, INC. By:  

/s/ Marc Applebaum

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    Marc Applebaum     Its Director, Secretary     Duly Authorized ROBERTS
MEXICANA, S.A. DE C.V. By:  

/s/ Marc Applebaum

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    Marc Applebaum     Its Director, Secretary     Duly Authorized P.R.C.I. SA
By:  

/s/ Marc Applebaum

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    Marc Applebaum     Its Director, Secretary     Duly Authorized

 

Fifth Amendment Signature Page

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WITNESSES AS TO AGENT:   AGENT:     FLEET CAPITAL CORPORATION

/s/

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  By:  

/s/ Deirdre Z. Sikora

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        Deirdre Z. Sikora         Its Vice President         Duly Authorized

/s/

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        WITNESSES AS TO FCC :   LENDERS:     FLEET CAPITAL CORPORATION

/s/

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  By:  

/s/ Deirdre Z. Sikora

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        Deirdre Z. Sikora         Its Vice President         Duly Authorized

/s/

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        WITNESSES AS TO HSBC :   HSBC BANK USA,     NATIONAL ASSOCIATION    
successor-by-merger to HSBC Bank USA

/s/

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  By:  

/s/

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        Duly Authorized

/s/

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