EXECUTION COPY
EXHIBIT 2.1
3087052 NOVA SCOTIA COMPANY
- AND -
3087053 NOVA SCOTIA COMPANY
- AND -
0000-0000 XXXXXX INC.
- AND -
0000-0000 XXXXXX INC.
- AND -
MAAX INC.
MERGER AGREEMENT
MARCH 10, 2004
TABLE OF CONTENTS
Page
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ARTICLE 1 INTERPRETATION...................................................................... 2
1.1 Definitions.................................................................... 2
1.2 Interpretation Not Affected by Headings, etc................................... 10
1.3 Currency....................................................................... 11
1.4 Number, etc.................................................................... 11
1.5 Date For Any Action............................................................ 11
1.6 Entire Agreement............................................................... 11
1.7 Knowledge...................................................................... 11
ARTICLE 2 AMALGAMATION........................................................................ 12
2.1 Terms of Amalgamation.......................................................... 12
2.2 Implementation Steps by MAAX................................................... 12
2.3 MAAX Circular.................................................................. 12
2.4 Securities and Corporate Compliance............................................ 12
2.5 Preparation of Filings......................................................... 13
ARTICLE 3 REPRESENTATIONS AND WARRANTIES...................................................... 14
3.1 Representations and Warranties of MAAX......................................... 14
3.2 Representations and Warranties of the Newco Parties............................ 14
3.3 Investigation.................................................................. 14
3.4 Survival....................................................................... 14
ARTICLE 4 REGULATORY APPROVALS................................................................ 14
4.1 Applications................................................................... 14
4.2 Obtaining of Appropriate Regulatory Approvals.................................. 15
ARTICLE 5 COVENANTS........................................................................... 15
5.1 Recommendation of Amalgamation................................................. 15
5.2 Debt Financing................................................................. 15
5.3 General........................................................................ 17
5.4 Operation of Business.......................................................... 19
5.5 Covenants of the Newco Parties................................................. 22
5.6 Covenants Regarding Non-Solicitation........................................... 23
5.7 Notice by MAAX of Superior Proposal Determination.............................. 24
5.8 Access to Information.......................................................... 25
5.9 Insurance Coverage............................................................. 26
ARTICLE 6 CONDITIONS.......................................................................... 26
6.1 Mutual Conditions Precedent.................................................... 26
6.2 Additional Conditions Precedent to the Obligations of the Newco Parties........ 27
6.3 Additional Conditions Precedent to the Obligations of MAAX..................... 29
6.4 Notice and Cure Provisions..................................................... 30
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TABLE OF CONTENTS
(continued)
Page
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6.5 Satisfaction of Conditions..................................................... 30
ARTICLE 7 AMENDMENT AND TERMINATION........................................................... 31
7.1 Amendment...................................................................... 31
7.2 Termination.................................................................... 31
7.3 Termination Fee................................................................ 33
7.4 Expenses....................................................................... 34
ARTICLE 8 GENERAL............................................................................. 34
8.1 Notices........................................................................ 34
8.2 Assignment..................................................................... 37
8.3 Cooperation / Further Assurances............................................... 37
8.4 Expenses....................................................................... 37
8.5 Public Announcements........................................................... 37
8.6 Governing Law.................................................................. 37
8.7 Forum; Jurisdiction............................................................ 38
8.8 Invalidity of Provisions....................................................... 38
8.9 Counterparts................................................................... 38
8.10 Investigation by Parties....................................................... 38
8.11 Time........................................................................... 38
8.12 Amendments..................................................................... 38
8.13 Specific Performance and other Equitable Rights................................ 38
8.14 No Third Parties Beneficiaries................................................. 38
8.15 Waiver......................................................................... 39
SCHEDULES
Schedule 1.1.4 Amalgamation Agreement
Schedule 1.1.5 Appropriate Regulatory Approvals
Schedule 1.1.19 Derivative Contracts
Schedule 1.1.46 Senior Employees
Schedule 1.1.57 Third Party Consents
Schedule 3.1 Representations and Warranties of MAAX
Schedule 3.1.1(d) Collective Agreements
Schedule 3.1.3(a) Capitalization
Schedule 3.1.3(c) MAAX Options and MAAX Rights
Schedule 3.1.10 Licenses
Schedule 3.1.15 Material Contracts
Schedule 3.1.19 Encumbrances
Schedule 3.1.25 Non-Arm's Length Transactions
Schedule 3.1.27(a) Employee Plans
Schedule 3.1.28(a) Real Properties
Schedule 3.1.28(b) Leased Properties
Schedule 3.1.30 Intellectual Property Rights
Schedule 3.1.31 Insurance
Schedule 3.1.33 Product Warranties
Schedule 3.2 Representations and Warranties of the Newco Parties
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MERGER AGREEMENT
MEMORANDUM OF AGREEMENT made as of the 10th day of March, 2004, between
3087052 NOVA SCOTIA COMPANY, a company governed under the laws of the Province
of Nova Scotia (hereinafter referred to as "NEWCO") and 3087053 NOVA SCOTIA
COMPANY, a company governed under the laws of the Province of Nova Scotia
(hereinafter referred to as "NEWCO II") and 0000-0000 XXXXXX INC., a company
governed under the laws of the Province of Quebec (hereinafter referred to as
"SUBCO") and 0000-0000 XXXXXX INC., a company governed under the laws of the
Province of Quebec (hereinafter referred to as "SUBCO II") AND MAAX INC., a
company governed under the laws of the Province of Quebec (hereinafter referred
to as "MAAX").
WHEREAS Newco was incorporated under the Companies Act (Nova Scotia) on
March 5, 2004;
WHEREAS Newco II was incorporated under the Companies Act (Nova Scotia)
on March 5, 2004 and is a wholly-owned Subsidiary of Newco;
WHEREAS Subco was incorporated under Part IA of the Companies Act
(Quebec) by certificate of incorporation dated February 27, 2004 and is a
wholly-owned Subsidiary of Newco II;
WHEREAS Subco II was incorporated under Part IA of the Companies Act
(Quebec) by certificate of incorporation dated March 5, 2004 and is a
wholly-owned Subsidiary of Newco;
WHEREAS MAAX was amalgamated under Part IA of the Companies Act
(Quebec) by certificate of amalgamation dated August 1, 1990;
WHEREAS Newco, Newco II, Subco, Subco II and MAAX wish to enter into a
merger agreement providing for the amalgamation of Subco, Subco II and MAAX
under Part IA of the Companies Act (Quebec) on and subject to the terms and
conditions of this Agreement, the result of which shall be the acquisition of
control of MAAX and its subsidiaries;
WHEREAS, as a result of such amalgamation, Newco II will hold all of
the issued and outstanding common shares in the share capital of the company
resulting from the amalgamation;
WHEREAS, Newco II covenants and agrees to issue to Newco, upon such
amalgamation, and Newco agrees to receive, additional shares in the share
capital of Newco II in consideration for the cancellation of all common shares
and redeemable preferred shares of Subco II held by Newco;
NOW THEREFORE this Agreement witnesses that, in consideration of the
respective covenants and agreements herein contained, the parties hereto
covenant and agree as follows:
ARTICLE 1
INTERPRETATION
1.1 DEFINITIONS. In this Agreement, unless there is something in the
subject matter or context inconsistent therewith, the following terms shall have
the following meanings, respectively:
1.1.1 "AFFILIATES" has the meaning ascribed thereto in the
Securities Act;
1.1.2 "AMALCO" means the company resulting from the Amalgamation;
1.1.3 "AMALGAMATION" means an amalgamation between Subco, Subco II
and MAAX under Part IA of the Companies Act giving effect to the transactions
described in the Amalgamation Agreement;
1.1.4 "AMALGAMATION AGREEMENT" means the agreement between Subco,
Subco II, Newco II and MAAX dated the date hereof in relation to the
transactions contemplated hereby attached hereto as Schedule 1.1.4;
1.1.5 "APPROPRIATE REGULATORY APPROVALS" (individually, an
"APPROPRIATE REGULATORY APPROVAL") means those sanctions, rulings, consents,
orders, exemptions, permits, declarations, filings and other approvals
(including the lapse, without objection, of a prescribed time under a statute,
rule or regulation that states that a transaction may be implemented if a
prescribed time lapses following the giving of notice without an objection being
made) of Governmental Entities, regulatory agencies or self-regulatory
organizations, as set out on Schedule 1.1.5 hereto;
1.1.6 "ARTICLES OF AMALGAMATION" means the articles confirming the
Amalgamation required under the Companies Act to be filed with the Enterprise
Registrar;
1.1.7 "BOARD OF DIRECTORS" means the board of directors of MAAX;
1.1.8 "BUSINESS DAY" means any day, other than a Saturday, Sunday or
a statutory holiday in the Province of Quebec, the Province of Ontario or in the
State of Massachusetts, on which banks are open for business in the City of
Montreal, the City of Toronto and the City of Boston;
1.1.9 "CAPITAL LEASE" means any lease of any property (whether real,
personal or mixed) by MAAX or any of its Subsidiaries as lessee that, in
accordance with GAAP, either would be required to be classified and accounted
for as a capital lease on a balance sheet of such Person or would otherwise be
disclosed as such in a note to such balance sheet;
1.1.10 "CAPITALIZED LEASE OBLIGATIONS" means, as of any date, the
amount of the obligation of MAAX or any of its Subsidiaries as lessee under a
Capital Lease that, in accordance with GAAP, would appear on a balance sheet of
such lessee in respect of such Capital Lease or otherwise be disclosed as such
in a note to such balance sheet;
1.1.11 "CERTIFICATE OF AMALGAMATION" means the certificate issued by
the Enterprise Registrar attesting to the Amalgamation pursuant to Section
123.119 of the Companies Act;
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1.1.12 "CIRCULAR" means the notice of the MAAX Meeting and
accompanying management information circular in the French and English
languages, including all schedules thereto, to be prepared and sent by MAAX to
Shareholders in connection with the MAAX Meeting;
1.1.13 "CLAIMS" includes claims, demands, accusations, notices,
proceedings, complaints, actions, suits, causes of action, assessments or
reassessments, charges, judgments, grievances, debts, liabilities, expenses,
costs, damages or losses (including loss of value), professional fees (including
fees and charges of legal counsel on a solicitor and his or her own client
basis) and all costs incurred in investigating or pursuing any of the foregoing
or any proceeding relating to any of the foregoing (including the costs of
enforcement of this Agreement);
1.1.14 "COMPANIES ACT" means the Companies Act (Quebec) as now in
effect and as it may be amended from time to time prior to the Effective Date;
1.1.15 "CONFIDENTIALITY AGREEMENT" means collectively (i) the letter
agreement dated November 7, 2003, as amended from time to time, between MAAX and
Ontario Municipal Employees Retirement Board, (ii) the letter agreement dated
October 14, 2003, as amended from time to time, between MAAX, Borealis Private
Equity Limited Partnership and Borealis (QLP) Private Equity Limited
Partnership, and (iii) the letter agreement dated November 21, 2003, as amended
from time to time, between MAAX and X.X. Childs Associates, L.P., relating to
the confidentiality of negotiations and information;
1.1.16 "CONTRACTS" (individually, a "CONTRACT") means all written
outstanding contracts and agreements (including quotations, purchase orders and
rebates), Collective Agreements (as defined in Schedule 3.1 hereto), leases
(including the Real Property Leases (as defined in Schedule 3.1 hereto)), deeds,
indentures, instruments, entitlements, commitments, undertakings and orders made
by or to which MAAX or any of its Subsidiaries is a party or by which MAAX or
any of its Subsidiaries is bound or under which MAAX or any of its Subsidiaries
has, or will have, any rights or obligations and includes rights to use,
franchises, license agreements and agreements for the purchase and sale of
assets or shares;
1.1.17 "DEBT COMMITMENT LETTER" means the executed commitment letter
from Xxxxxxx Sachs Credit Partners L.P., Xxxxxxx Xxxxx Capital Corporation and
Royal Bank of Canada to Borealis Private Equity Limited Partnership, Borealis
(QLP) Private Equity Limited Partnership, Ontario Municipal Employees Retirement
Board and X.X. Childs Associates, L.P. and Newco dated March 10, 2004,
committing to provide debt facilities to finance in part the transactions
contemplated herein, a copy of which has been delivered to MAAX prior to the
execution of this Agreement;
1.1.18 "DEBT FINANCING" means (i) the senior secured term loan
facilities, (ii) the senior secured revolving credit facility and (iii) the
issuance by MAAX of unsecured senior subordinated notes or the senior
subordinated increasing rate bridge loans, as the case may be, in connection
with the transactions contemplated herein, as described in the Debt Commitment
Letter;
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1.1.19 "DERIVATIVE CONTRACTS" means all Contracts involving foreign
exchange, currency swaps, interest rate swaps, cap or collar agreements or other
similar agreements or arrangements designed to alter risk arising from
fluctuations in currency values or interest rates, in each case whether
contingent or matured, used by or binding MAAX or its Subsidiaries, the whole as
set forth in Schedule 1.1.19 attached hereto;
1.1.20 "DISCLOSURE LETTER" means the letter dated as of the date
hereof delivered by MAAX to Newco and Newco II prior to the execution of this
Agreement;
1.1.21 "EFFECTIVE DATE" means the date shown on the Certificate of
Amalgamation;
1.1.22 "EFFECTIVE TIME" means 8:30 a.m. on the Effective Date;
1.1.23 "ENCUMBRANCES" means pledges, liens (statutory or otherwise),
charges, security interests, leases, offers to lease, pledges, privileges,
license agreements, title retention agreements, mortgages, hypothecs, trust
deeds, assignments by way of security, security interests, conditional sales
contracts or other title retention agreements, or other similar interests or
instruments charging, or creating a security interest in, or against title,
restrictions, development or similar agreements, easements, servitudes,
rights-of-way, restrictive covenants, title defects, restrictions, executions,
tax arrears, permissions, options or adverse Claims, encroachments or
encumbrances of any kind or character whatsoever or however arising, or any
agreement to enter into or create any of the foregoing, on or affecting all or
any part of any of the assets of MAAX or any of its Subsidiaries or any interest
therein, or any direct or indirect interest in MAAX or any of its Subsidiaries,
including any conditional sale or other title retention agreement, any financing
lease having substantially the same economic effect as any of the foregoing, the
filing of any financing statement, and mechanic's, materialmen's and other
similar liens, legal hypothecs and encumbrances;
1.1.24 "ENTERPRISE REGISTRAR" means the enterprise registrar acting
under the Companies Act;
1.1.25 "GAAP" means the generally accepted accounting principles
stated in the Handbook of the Canadian Institute of Chartered Accountants,
including the accounting recommendations and interpretations contained therein;
1.1.26 "GOVERNMENTAL ENTITY" (collectively, the "GOVERNMENTAL
ENTITIES") means any (a) multinational, federal, provincial, state, regional,
municipal, local or other government, governmental or public department, central
bank, court, tribunal, arbitral body, commission, board, bureau or agency,
domestic or foreign, (b) any subdivision, agent, commission, board, or authority
of any of the foregoing, or (c) any quasi-governmental or private body
exercising any regulatory, expropriation or taxing authority under or for the
account of any of the foregoing;
1.1.27 "GUARANTEED INDEBTEDNESS" means, with respect to MAAX or any
of its Subsidiaries, any obligation guaranteeing or providing indemnification or
insurance with respect to, any indebtedness, lease, dividend, or other
obligation (a "PRIMARY OBLIGATION") of any other Person (the "PRIMARY OBLIGOR")
in any manner, including any obligation or arrangement of such Person:
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(a) to purchase or repurchase any such primary
obligation;
(b) to advance or supply funds (i) for the purchase or
payment of any such primary obligation or (ii) to maintain working
capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency or any balance sheet condition of
the primary obligor;
(c) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of
such primary obligation; or
(d) to indemnify the owner of such primary obligation
against Loss in respect thereof;
1.1.28 "INCONSISTENT TRANSACTION" has the meaning ascribed thereto in
Section 5.6.1;
1.1.29 "INDEBTEDNESS" in relation to MAAX or any of its Subsidiaries
means:
(a) all indebtedness of MAAX or any of its Subsidiaries
for borrowed money or for the deferred purchase price of property or
services (including reimbursement and all other obligations with
respect to surety bonds, letters of credit, note purchase obligations
and bankers' acceptances, whether or not matured);
(b) all obligations of MAAX or any of its Subsidiaries
evidenced by notes, bonds, debentures or similar instruments or
covenants to create the same;
(c) all indebtedness of MAAX or any of its Subsidiaries
created or arising under any conditional sale or other title retention
agreements with respect to acquired property (even if the rights and
remedies of the seller or lender under such agreement in the event of
default are limited to repossession or sale of such property);
(d) all Capitalized Lease Obligations of MAAX or any of
its Subsidiaries and obligations under sale leasebacks of MAAX or any
of its Subsidiaries;
(e) all Guaranteed Indebtedness of MAAX or any of its
Subsidiaries;
(f) all Purchase-Money Indebtedness of MAAX or any of its
Subsidiaries;
(g) all obligations of MAAX or any of its Subsidiaries
under commodity purchase or option agreements or other commodity price
hedging arrangements, in each case whether contingent or matured;
(h) all obligations of MAAX or any of its Subsidiaries
under Derivative Contracts;
(i) all obligations of MAAX or any of its Subsidiaries
under factoring Contracts; and
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(j) all indebtedness of MAAX or any of its Subsidiaries
of the type referred to in the preceding items of this definition
secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any
Encumbrance upon or in property (including accounts and contract
rights) owned by MAAX or any of its Subsidiaries, even if MAAX or any
of its Subsidiaries has not assumed or become liable for the payment of
such Indebtedness;
1.1.30 "LAWS" (individually, a "LAW") means all laws, statutes,
codes, ordinances, decrees, rules, regulations, by-laws, statutory rules,
principles of law, published policies and guidelines, judicial or arbitral or
administrative or ministerial or departmental or regulatory judgments, orders,
decisions, rulings or awards and terms and conditions of any grant of approval,
permission, authority or License of any Governmental Entity, self-regulatory
authority or statutory body (including The Toronto Stock Exchange or any other
stock exchange) and the term "applicable" with respect to such Laws and in the
context that refers to one or more Persons, means that such Laws apply to such
Person or Persons or its or their business, undertaking, property or securities
and emanate from a Person having legal jurisdiction over the Person or Persons
or its or their business, undertaking, property or securities;
1.1.31 "LOSS" means any and all loss, liability, damage, cost,
expense, charge, fine, penalty or assessment, resulting from or arising out of
any Claim, including the costs and expenses of any action, suit, proceeding,
demand, assessment, judgment, settlement or compromise relating thereto and all
interest, punitive damages, fines and penalties and reasonable legal fees and
expenses incurred in connection therewith, including loss of profits and
consequential damages;
1.1.32 "MAAX MEETING" means the special meeting of Shareholders
(including any adjournment thereof) that is to be convened to consider and, if
deemed advisable, to approve the Amalgamation;
1.1.33 "MAAX OPTIONS" means the Share purchase options outstanding
and unexercised at any given date and granted under any stock option plans
established by MAAX and any of its Subsidiaries, as the case may be, including
the stock option plan for the benefit of senior executives and management of
MAAX and its Subsidiaries adopted by the Board of Directors on June 3, 1987 and
ratified by the Shareholders on June 6, 1988, as amended by By-Law No. 5 adopted
on April 15, 1993, by resolutions of the Board of Directors dated June 28, 1995
and April 29, 1996 and by By-Law No. 7 adopted on April 28, 1998;
1.1.34 "MAAX RIGHTS" means all outstanding options (other than MAAX
Options) granted by MAAX or any of its Subsidiaries to acquire shares in the
share capital of MAAX or any of its Subsidiaries (including the stock
compensation plan for employees of MAAX and its Subsidiaries dated March 25,
2002), and other securities, rights, warrants, calls, instruments, shareholder
agreements, voting trusts, voting agreements, pooling agreements, shareholder
rights plans, agreements or commitments of any character whatsoever, written or
verbal, (other than this Agreement) established by MAAX or any of its
Subsidiaries requiring the issuance, acquisition, sale or transfer by MAAX of
any shares in the share capital of MAAX or any of its Subsidiaries or any
securities convertible or exchangeable into, or exercisable for, shares in the
share capital of MAAX or any of its Subsidiaries or entitling the holder thereof
to acquire, or
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have a Claim against MAAX or any of its Subsidiaries in respect of, shares in
the share capital of MAAX or any of its Subsidiaries or other securities of MAAX
or any of its Subsidiaries;
1.1.35 "MATERIAL ADVERSE CHANGE" means any change or changes in (or
any condition, event, circumstance or development involving a prospective
change) the business (including a material loss of business from an important
customer), operations, affairs, assets, liabilities (including any contingent
liabilities that may arise through outstanding, pending or threatened litigation
or otherwise), capitalization, results of operations, cash flows, condition
(financial or otherwise), Licenses (as defined in Schedule 3.1 hereto), rights,
privileges of MAAX or any of its Subsidiaries which has or could reasonably be
expected to materially and adversely change MAAX and its Subsidiaries, taken as
a whole, other than any such change or changes (i) which arises out of a matter
that has been publicly disclosed prior to the date of this Agreement or
otherwise disclosed in the Disclosure Letter, or (ii) contemplated by Section
6.2.15;
1.1.36 "MATERIAL ADVERSE EFFECT" means the effect of a Material
Adverse Change;
1.1.37 "MATERIAL FACT" has the meaning ascribed thereto in the
Securities Act (Ontario);
1.1.38 "MEETING DATE" means any date on which the MAAX Meeting
occurs;
1.1.39 "NEWCO PARTIES" means collectively Newco, Newco II, Subco and
Subco II;
1.1.40 "OUT-OF-POCKET FEES" has the meaning ascribed thereto in
Section 7.4.1;
1.1.41 "PERMITTED ENCUMBRANCES" means:
(a) applicable municipal by-laws, development agreements,
subdivision agreements, site plan agreements and building restrictions
which do not in the aggregate materially adversely affect the use or
value of the Real Property affected thereby and provided the same have
been complied with in all material respects up to the Effective Date
including the posting of any required security for performance of
obligations thereunder,
(b) any registered easements, servitudes, rights-of-way,
licenses, agreements, restrictive covenants, restrictions that run with
the land and other minor Encumbrances (including easements,
rights-of-way and agreements for railways, sewers, drains, gas and
water mains or electric light and power or telephone,
telecommunications or cable conduits, poles, wires and cables) which do
not materially adversely affect the use or value of the Real Property
affected thereby and provided the same have been complied with in all
material respects up to the Effective Date;
(c) defects or irregularities in title to the Real
Properties which are of a minor nature and do not materially adversely
affect the use or value of the Real Property affected thereby;
(d) reservations, limitations, provisos, conditions or
exceptions, if any, expressed in any original grants of land by a
Governmental Entity which do not materially adversely affect the use or
value of the Real Property affected thereby and
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provided the same have been complied with in all material respects up
to the Effective Date;
(e) encumbrances of mechanics, labourers, workmen,
builders, contractors, suppliers of material or architects or other
similar encumbrances incidental to construction, maintenance or repair
operations which have either been registered or filed pursuant to Laws
against the Real Properties or MAAX or any of its Subsidiaries or not
yet registered or filed and which, in any such case, relate to
obligations not due and payable;
(f) statutory encumbrances relating to obligations not
due and payable;
(g) Encumbrances for Taxes, assessments, Governmental
Entity charges or levies not due and payable as at the Effective Date;
(h) Encumbrances for public utilities not due and payable
as at the Effective Date;
(i) rights of equipment lessors under equipment Contracts
provided the terms of such equipment Contracts have been complied with
in all material respects up to the Effective Date;
(j) financing statements and other similar registrations
evidencing the rights of equipment lessors under equipment Contracts in
and to the equipment and vehicles which are subject to such Contracts
provided the terms of such equipment Contracts have been complied with
in all material respects up to the Effective Date; and
(k) any privilege in favour of any lessor, licensor or
permitter for rent to become due or for other obligations or acts, the
performance of which is required under Contracts so long as the payment
of or the performance of such other obligation or act is not delinquent
and provided that such Encumbrances or privileges do not adversely
affect the use or value of the assets affected thereby;
(l) any right of expropriation, access, use or any other
right conferred or reserved by or in any of the Laws where any of the
Real Properties are located;
1.1.42 "PERSON" includes any individual, firm, partnership, joint
venture, venture capital fund, association, trust, trustee, executor,
administrator, legal personal representative, estate, group, body corporate,
corporation, unincorporated association or organization, Governmental Entity,
syndicate or other entity, whether or not having legal status;
1.1.43 "PURCHASE-MONEY INDEBTEDNESS" means, with respect to MAAX or
any of its Subsidiaries, all obligations (i) consisting of the deferred purchase
price of any property, conditional sale obligations, obligations under any title
retention agreement and other purchase money obligations, in each case, where
the maturity of such obligation does not exceed the anticipated useful life of
the property or (ii) incurred to finance the acquisition of such property,
including additions and improvements;
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1.1.44 "REAL PROPERTIES" (individually, a "REAL PROPERTY") has the
meaning ascribed thereto in Section 3.1.28(b) of Schedule 3.1 attached hereto;
1.1.45 "SECURITIES ACT" means the Securities Act (Quebec), as now in
effect and as it may be amended from time to time prior to the Effective Date;
1.1.46 "SENIOR EMPLOYEE" means any employee of MAAX or any of its
Subsidiaries listed in Schedule 1.1.46 attached hereto;
1.1.47 "SENIOR MANAGEMENT" has the meaning ascribed thereto in
Section 1.7;
1.1.48 "SHAREHOLDER" (collectively, the "SHAREHOLDERS") means a
registered holder of the Shares, from time to time;
1.1.49 "SHARES" (individually, a "SHARE") means all common shares in
the share capital of MAAX;
1.1.50 "SUBSIDIARY" (collectively, the "SUBSIDIARIES") has the
meaning ascribed thereto in the Securities Act;
1.1.51 "SUPERIOR PROPOSAL" means a bona fide unsolicited offer or
proposal for an Inconsistent Transaction made to MAAX in writing and duly
authorized by the board of directors of the Person making the offer or proposal
(i) to purchase or otherwise acquire, directly or indirectly (including by means
of a take-over bid, amalgamation, plan of arrangement, business combination,
purchase of assets (including transfer of assets in favour of an income trust)
or similar transaction), all the Shares or assets of MAAX, (ii) that to the
extent it offers cash consideration, is fully financed (subject to usual terms
and conditions on the drawing of such financing), (iii) that the Board of
Directors determines in good faith (after consultation with financial advisors
and after receiving advice of outside counsel with respect to the Board of
Directors' fiduciary duties) would, if consummated in accordance with its terms,
result in a transaction (x) more favourable to the Shareholders than the
transactions contemplated by this Agreement, having regard to all circumstances,
and (y) having a value per Share greater than $22.50 and (z) that the Board of
Directors intends to recommend to the Shareholders;
1.1.52 "SUPPORT AND VOTING AGREEMENTS" means collectively (i) the
agreement between the Newco Parties, Xx. Xxxxxxx Xxxxxx and Gestion Camada Inc.,
(ii) the agreement between the Newco Parties and Xx. Xxxxx Xxxxxx, (iii) the
agreement between the Newco Parties and Ms. Xxxxx-France Xxxxxx, (iv) the
agreement between the Newco Parties and Mr. Xxxxx Xxxxxx, and (v) the agreement
between the Newco Parties, Mr. Xxxxxxx Xxxxxxx and Gestion Sori Inc., in all
cases, dated the date hereof in relation to the transactions contemplated by
this Agreement;
1.1.53 "SUPPORTING SHAREHOLDERS" means Xx. Xxxxxxx Xxxxxx, Gestion
Camada Inc., Xx. Xxxxx Xxxxxx, Ms. Xxxxx-France Xxxxxx, Mr. Xxxxx Xxxxxx, Mr.
Xxxxxxx Xxxxxxx and Gestion Sori Inc. being those Shareholders that have entered
into the Support and Voting Agreements;
1.1.54 "TAIL PERIOD" has the meaning ascribed thereto in Section
7.3.1;
9
1.1.55 "TARGET COMPLETION DATE" means June 1, 2004, provided that the
Target Completion Date may be extended by either party from time to time by
notice in writing until July 1, 2004 if as of that date, any of the conditions
set forth in Sections 6.1 or 6.2 have not been satisfied, have not been waived
and the party requesting the extension is not in breach under this Agreement and
is making commercially reasonable efforts to cause all such conditions to be
satisfied. The Target Completion Date may be further extended by either party
until the later of (i) August 1, 2004, if as of that date any of the conditions
set forth in Sections 6.1 or 6.2 for which the Newco Parties are not responsible
(including receipt of all Appropriate Regulatory Approvals and Third Party
Consents) have not been satisfied or have not been waived by the Newco Parties
and if the party requesting the extension is not in breach under this Agreement
and is making commercially reasonable efforts to cause all such conditions to be
satisfied or (ii) up to 45 days from the delivery by MAAX to the Newco Parties
of all financial statements required in connection with the Debt Financing as
set forth in Section 5.2.1(h) other than supplemental information required under
items (i) and (ii) thereof;
1.1.56 "TAX" and "TAXES" includes any taxes, duties, fees, premiums,
assessments, imposts, levies and other charges of any kind whatsoever imposed by
any Governmental Entity, including all interest, penalties, fines, additions to
tax or other additional amounts imposed by any Governmental Entity in respect
thereof, and including those levied on, or measured by, or referred to as,
income, gross receipts, profits, capital, transfer, land transfer, sales, goods
and services, harmonized sales, use, local, value-added, excise, stamp,
withholding, business, franchising, property, development, occupancy, employer
health, payroll, employment, health, social services, education and social
security taxes, all surtaxes, all customs duties and import and export taxes,
countervail and anti-dumping, all license agreements, franchise and registration
fees and all employment insurance, health insurance and Canada, Quebec and other
Governmental Entity pension plan premiums or contributions;
1.1.57 "TAX RETURNS" (individually, a "TAX RETURN") shall mean all
returns, reports, forms, declarations, statements, information, estimates,
schedules, filings or documents (including any related or supporting
information) filed or required by any Governmental Entity to be filed with
respect to Taxes, including all information returns, Claims for refund, amended
returns, declarations of estimated Tax, and requests for extensions of time to
file any of the preceding items;
1.1.58 "THIRD PARTY CONSENTS" means all third party consents,
approvals or waivers (other than the Appropriate Regulatory Approvals) necessary
or otherwise required to consummate the transactions contemplated by this
Agreement or the Amalgamation as set forth in Schedule 1.1.58 and as may be
supplemented by MAAX at any time prior to the Effective Date, upon notice to the
Newco Parties.
1.2 INTERPRETATION NOT AFFECTED BY HEADINGS, ETC. The division of this
Agreement into Articles, Sections, Schedules and other portions and the
insertion of headings are for convenience of reference only and shall not affect
the construction or interpretation hereof. Unless otherwise indicated, all
references to an "Article", "Section" or "Schedule" followed by a number and/or
a letter refer to the specified Article, Section or Schedule of this Agreement.
The terms "this Agreement", "hereof", "herein" and "hereunder" and similar
expressions refer to this
10
Agreement (including the Schedules hereto) and not to any particular Article,
Section or other portion hereof and include any agreement or instrument
supplementary or ancillary hereto.
1.3 CURRENCY. All sums of money referred to in this Agreement are expressed
in Canadian dollars.
1.4 NUMBER, ETC. Unless the context otherwise requires, words importing the
singular shall include the plural and vice versa and words importing any gender
shall include all genders.
1.5 DATE FOR ANY ACTION. In the event that any date on which any action is
required to be taken hereunder by any of the parties hereto is not a Business
Day, such action shall be required to be taken on the next succeeding day which
is a Business Day.
1.6 ENTIRE AGREEMENT. This Agreement, the Amalgamation Agreement and the
Confidentiality Agreement (which shall terminate on the Effective Date)
constitute the entire agreement between the parties hereto pertaining to the
terms of the Amalgamation and ancillary arrangements and supersede all other
prior agreements, understandings, negotiations and discussions, whether oral or
written, between the parties hereto with respect to the terms of the
Amalgamation and such arrangements, including the Letter of Expression of
Interest signed by Borealis Private Equity Limited Partnership, Borealis (QLP)
Private Equity Limited Partnership, Ontario Municipal Employees Retirement
Board, X.X. Childs Associates, L.P. and MAAX dated December 19, 2003, as amended
on January 8, 2004, January 12, 2004, January 13, 2004, January 16, 2004,
February 3, 2004, February 19, 2004 and February 28, 2004.
1.7 KNOWLEDGE. Where any representation or warranty contained in this
Agreement is expressly qualified by reference to the "knowledge" of MAAX, it
shall be deemed to refer to the actual knowledge of each of MAAX and any of its
Subsidiaries, Xx. Xxxxxxx Xxxxxx, Chairman of the Board of Directors and of the
Executive Committee of MAAX, Xx. Xxxxx Xxxxxx, President and Chief Executive
Officer of MAAX, Xxxxxxx Xxxxxxx, Executive Vice-President and Chief Financial
Officer of MAAX, Ms. Xxxxx-France Xxxxxx, Executive Vice-President, Sales of
MAAX, Mr. Xxxxx Xxxxxx, Executive Vice-President, Operations of MAAX, Xx. Xxx
Xxxxxx, Vice-President and General Manager, Kitchen Cabinets of MAAX, Xx. Xxxxxx
Xxxxxx, Corporate Vice-President, Finance of MAAX, Xx. Xxxxxxx Xxxxxxx,
Corporate Vice-President, Marketing and R&D of MAAX, Xx. Xxxxx Xxxx,
Vice-President and General Manager, Spas of MAAX, Xx. Xxxx Xxxxxxxx,
Vice-President and General Manager, Bathroom Products of MAAX, Mr. Xxx Xxxxxxx,
Vice-President and General Manager of MAAX KSD, Xxxxx Xxx Kloppers, SaniNova's
General Manager, Xxxxxx Xxxxxxxx, Corporate Vice President, Information
Technology, Xxxx-Xxxxxxxx Xxxxx, Corporate Environmental Manager of MAAX and
Xxxx Xxxxxxx, Corporate Secretary of MAAX (collectively, the "SENIOR
MANAGEMENT") and to the knowledge they would have had, in their respective areas
of responsibilities, if they had conducted a diligent inquiry into the relevant
subject matter. MAAX confirms that it has made due and diligent inquiry of such
Persons (including appropriate officers of MAAX and its Subsidiaries) as it
considers necessary as to the matters that are the subject of such
representations and warranties.
11
ARTICLE 2
AMALGAMATION
2.1 TERMS OF AMALGAMATION.
2.1.1 Subject to the terms and conditions contained herein, MAAX,
Subco and Subco II agree that they shall amalgamate under Part IA of the
Companies Act on the terms and conditions set forth in the Amalgamation
Agreement.
2.1.2 Newco hereby agrees to the cancellation of all common shares
and redeemable preferred shares of Subco II held by it upon the Amalgamation in
consideration for the allotment and issuance of shares in the share capital of
Newco II (and Newco II hereby agrees to so allot and issue such shares in
consideration for such agreement) having an aggregate value equal to the fair
market value of all issued and outstanding common shares and redeemable
preferred shares of Subco II held by Newco immediately prior to the
Amalgamation, on the basis of one issued, fully paid and assessable common share
of Newco II for each issued and outstanding common share and redeemable
preferred share of Subco II.
2.2 IMPLEMENTATION STEPS BY MAAX. MAAX covenants and agrees in favour of
the Newco Parties that MAAX shall:
2.2.1 convene and hold the MAAX Meeting no later than May 7, 2004;
and
2.2.2 subject to obtaining the approval of (i) at least two-thirds
of the votes cast on a resolution approving the by-law relating to the
Amalgamation by the Shareholders, present in person or represented by proxy at
the MAAX Meeting and (ii) any other required Shareholders approval to comply
with any securities Laws, as soon as reasonably practicable thereafter, and
subject to the satisfaction or waiver of the other conditions herein contained
in favour of each party, file with the Enterprise Registrar the Articles of
Amalgamation, and such other documents as may be required under the Companies
Act to give effect to the Amalgamation.
2.3 MAAX CIRCULAR. MAAX shall use commercially reasonable efforts to
prepare the Circular together with any other documents required by the
Securities Act or other applicable Laws in connection with the Amalgamation and
MAAX shall cause the Circular and other documentation required in connection
with the MAAX Meeting to be sent to each Shareholder (and other Person) and
filed as required by applicable Laws as soon as reasonably practicable and in
any event no later than 25 days after the date of this Agreement, provided that
the Circular and other documentation required in connection with the
Amalgamation shall not be sent, except with Newco and Newco II's prior written
consent, which consent shall not be unreasonably withheld. Newco, Newco II and
their counsels shall be given reasonable opportunity to review and comment upon
draft versions of the Circular prior to its being sent to each Shareholder (and
other Person) and filed as required by applicable Laws and MAAX shall consider
such comments in good faith.
2.4 SECURITIES AND CORPORATE COMPLIANCE. MAAX shall (with Newco, Newco II
and their counsels) diligently do all such acts and things as may be necessary
to comply with National Instrument 54-101 in relation to the MAAX Meeting and,
without limiting the generality of the
12
foregoing, shall, in consultation with Newco and Newco II, use commercially
reasonable efforts to accelerate the timing contemplated by such instrument.
2.5 PREPARATION OF FILINGS.
2.5.1 Newco, Newco II and MAAX shall cooperate in:
(a) the preparation of any application for the orders and
the preparation of any other documents reasonably deemed by the Newco
Parties or MAAX to be necessary to discharge their respective
obligations under applicable Laws in connection with the Amalgamation
and all other matters contemplated by this Agreement; and
(b) the taking of all such action as may be required
under applicable Laws in connection with the Amalgamation and all other
matters contemplated by this Agreement.
2.5.2 MAAX shall furnish to Newco and Newco II all such information
concerning it, its Subsidiaries and the Shareholders as may be required in
connection with Sections 2.3 and 2.4 and the foregoing provisions of this
Section 2.5, and covenants that no information furnished by it in connection
with such actions or otherwise in connection with the Amalgamation will contain
any untrue statement of a material fact or omit to state a material fact
required to be stated in any such document or necessary in order to make any
information so furnished for use in any such document not misleading in light of
the circumstances in which it is furnished or to be used.
Newco and Newco II shall furnish to MAAX all such information concerning the
Newco Parties as may be required in connection with Sections 2.3 and 2.4 and the
foregoing provisions of this Section 2.5, and covenants that no information
furnished by them in connection with such actions or otherwise in connection
with the Amalgamation will contain any untrue statement of a material fact or
omit to state a material fact required to be stated in any such document or
necessary in order to make any information so furnished for use in any such
document not misleading in light of the circumstances in which it is furnished
or to be used.
2.5.3 MAAX shall promptly notify Newco and Newco II if at any time
before the Effective Time it becomes aware that the Circular or an application
for any order referred to in Section 2.5.1(a) contains any misrepresentation
that is likely to affect the value of the market price of the Shares or any
untrue statement of a material fact or omits to state a material fact required
to be stated therein or necessary to make the statements contained therein not
misleading in light of the circumstances in which they are made, or that
otherwise requires an amendment or supplement to the Circular or such
application. In any such event, MAAX shall prepare a supplement or amendment to
the Circular or such other document, as required and as the case may be, and, if
required, shall cause the same to be distributed to Shareholders and/or filed
with the relevant securities regulatory authorities, provided that such document
shall not be sent, except with Newco and Newco II's prior written consent, which
consent shall not be unreasonably withheld. Newco, Newco II and their counsels
shall be given reasonable opportunity to review and comment upon draft versions
of any such supplement or amendment to the Circular or any such other document
prior to its being sent to each Shareholder (and other
13
Person) and filed as required by applicable Laws and MAAX shall consider such
comments in good faith.
2.5.4 MAAX shall ensure that the Circular complies with all
applicable Laws and, without limiting the generality of the foregoing, that the
Circular does not contain any misrepresentation that is likely to affect the
value of the market price of the Shares or any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements contained therein not misleading in light of the
circumstances in which they are made (other than with respect to any information
relating to and provided by Newco and Newco II). Without limiting the generality
of the foregoing, MAAX shall ensure that the Circular provides Shareholders with
information in sufficient detail to permit them to form a reasoned judgment
concerning the matters to be placed before them at the MAAX Meeting.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
3.1 REPRESENTATIONS AND WARRANTIES OF MAAX. MAAX represents and warrants to
and in favour of the Newco Parties as set forth in Schedule 3.1 and acknowledges
that the Newco Parties are relying upon such representations and warranties in
connection with the matters contemplated by this Agreement.
3.2 REPRESENTATIONS AND WARRANTIES OF THE NEWCO PARTIES. The Newco Parties
represent and warrant to and in favour of MAAX as set forth in Schedule 3.2 and
acknowledge that MAAX is relying upon such representations and warranties in
connection with the matters contemplated by this Agreement.
3.3 INVESTIGATION. Any investigation by a party hereto or its advisors
shall not mitigate, diminish or affect the representations and warranties of the
other parties to this Agreement.
3.4 SURVIVAL. For greater certainty, the representations and warranties of
each of MAAX and the Newco Parties contained herein shall survive the execution
and delivery of this Agreement and shall terminate on the earlier of the
termination of this Agreement in accordance with its terms and the day after the
Effective Date.
ARTICLE 4
REGULATORY APPROVALS
4.1 APPLICATIONS.
4.1.1 MAAX and the Newco Parties covenant and agree to proceed
diligently, in a coordinated fashion, to apply for, and obtain the Appropriate
Regulatory Approvals including, without limitation, filing, within 14 days from
the date hereof, any appropriate applications under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976 (United States), Competition Act (Canada) and
Investment Canada Act.
4.1.2 Without limiting the generality of Section 4.1.1, MAAX and the
Newco Parties covenant and agree with each other (i) to take promptly all
actions reasonably necessary to cause the filings required by the parties and
their respective Subsidiaries to obtain all Appropriate
14
Regulatory Approvals to be made as soon as possible; (ii) to comply at the
earliest practicable date with any request for additional information received
by any party or its Subsidiaries from any Governmental Entities, including
without limitation, the Competition Bureau, the Federal Trade Commission, the
Antitrust Division of the Department of Justice or Industry Canada in connection
with obtaining any Appropriate Regulatory Approval; and (iii) to cooperate with
each other in connection with their respective filings with respect to obtaining
any Appropriate Regulatory Approval and in connection with resolving any
investigation or other inquiry concerning the transactions contemplated by this
Agreement commenced by any of the Governmental Entity mentioned in (ii) above.
4.2 OBTAINING OF APPROPRIATE REGULATORY APPROVALS. For purposes of this
Agreement, no Appropriate Regulatory Approval shall be considered to have been
obtained unless it is on terms satisfactory to Newco and Newco II, acting
reasonably. In addition, no Appropriate Regulatory Approval shall be considered
to have been obtained if an appeal, stop-order or proceedings seeking a
stop-order or any revocation proceedings has been instituted from the granting
of any Appropriate Regulatory Approval and remains outstanding on the Effective
Date.
ARTICLE 5
COVENANTS
5.1 RECOMMENDATION OF AMALGAMATION. MAAX hereby covenants and agrees that
it will, through its Board of Directors:
5.1.1 unanimously recommend in the Circular and at the MAAX Meeting
that Shareholders vote all of their Shares in favour of the Amalgamation and
MAAX, through its Board of Directors, shall publicly reconfirm such
recommendation upon the reasonable request in writing from time to time of Newco
or Newco II. All public comment by MAAX in relation to the Amalgamation shall be
made in accordance with Section 8.5 and shall be consistent with and supportive
of such recommendation. MAAX shall not act or fail to act in any way that might
reasonably be expected to discourage the Shareholders from voting in favour of
the Amalgamation or that might reasonably encourage the Shareholders to vote
against the Amalgamation;
5.1.2 not withdraw its recommendation that Shareholders vote in
favour of the Amalgamation as set out in Section 5.1.1; and
5.1.3 use commercially reasonable efforts to cause the senior
officers of MAAX and its Subsidiaries to support the Amalgamation and vote the
Shares held by them at the MAAX Meeting in favour of the Amalgamation.
5.2 DEBT FINANCING.
5.2.1 MAAX hereby also covenants and agrees in favour of the Newco
Parties that from the date hereof until the earlier of (i) the Effective Date,
or (ii) this Agreement having been terminated pursuant to Article 7 hereof, MAAX
shall use commercially reasonable efforts to perform, and shall cause its
Subsidiaries to use commercially reasonable efforts to perform, all obligations
required to be performed by MAAX or any of its Subsidiaries under this Agreement
in connection with the implementation of the Debt Financing and shall use
commercially
15
reasonable efforts to do all such other acts and things as may be necessary in
order to implement and make effective, as soon as reasonably practicable, the
Debt Financing and, without limitation, MAAX shall, and where appropriate shall
cause its Subsidiaries to:
(a) cooperate in the preparation of an information
package regarding MAAX and its Subsidiaries, including, without
limitation, the delivery of all information relating to the
transactions contemplated hereby, deemed reasonably necessary by the
lenders under the Debt Commitment Letter to complete the syndication of
the Debt Financing;
(b) cooperate in the presentation of an information
package acceptable to the lenders under the Debt Commitment Letter in
lender meetings and other communications with prospective lenders in
connection with the syndication of the Debt Financing, including,
without limitation, direct contact between Senior Management and
representatives of the Newco Parties with prospective lenders and
participation of such persons in lender meetings;
(c) cooperate in the preparation of a version of the
information package and presentation in connection with the syndication
of the Debt Financing that does not contain material non-public
information concerning MAAX and its Subsidiaries;
(d) cooperate with respect to the implementation, on the
Effective Date or prior thereto, in contemplation of the closing of the
Debt Financing, of the security interests, claims and hypothecs in all
assets, including, without limitation, all personal, real, mixed
moveable and immoveable property, of MAAX and its Subsidiaries;
(e) cooperate in the pay-off and retiring of such
existing Indebtedness of and related security interests, claims and
hypothecs granted by MAAX and/or any of its Subsidiaries, as may be
designated by Newco or Newco II, and shall, without limitation, give
timely pre-payment notice as may be applicable and provide Newco and
Newco II, at least three days prior to the Effective Date, with
estimated balance, penalties, fees, per diem and other particulars as
may be required by Newco or Newco II to effect payment on the Effective
Date;
(f) cooperate in the preparation of a prospectus,
offering memorandum or private placement memorandum suitable for use in
a customary "high-yield road show" and the participation of the senior
management of MAAX and its Subsidiaries and representatives of the
Newco Parties in the road show;
(g) cooperate in the rating agency process, as reasonably
requested by the lenders;
(h) prepare any financial statements of MAAX or any of
its predecessors or Subsidiaries, whether audited or not, (including
internal unaudited monthly financial statements) which are consistent
with customary "high-yield" disclosure documents as mutually agreed by
the respective accounting experts of MAAX and the Newco Parties in the
letter addressed to Newco (or any of its Affiliates) and delivered to
MAAX prior to the execution of this Agreement and supplemented, as the
case may be (i) to comply with the United States Securities and
Exchange Commission rules and regulations or (ii) as
16
may otherwise reasonably be required by the lenders under the Debt
Commitment Letter; and, in any event, which shall include audited
historical consolidated financial statements of (x) MAAX for the three
years ended February 29, 2004, prepared under both GAAP and United
States generally accepted accounting principles, and (y) Xxxx Plastics
Company, Inc. for the period of five months and 24 days ended October
24, 2002 under United States generally accepted accounting principles,
in each case with a clean audit opinion from KPMG LLP, on or prior to
April 26, 2004;
(i) take all necessary actions regarding the
implementation of internal procedures required for the reporting,
commencing after the Effective Date, of internal unaudited monthly
financial statements; and
(j) cause its auditors to deliver comfort letters as the
lenders may reasonably request and to consent to the use of their
auditors' report relating to the audited financial statements referred
to in Section 5.2.1(h) for any period covered by such audited financial
statements.
5.2.2 MAAX hereby agrees and acknowledges that the information
regarding the Debt Financing and information provided by MAAX and its
Subsidiaries to the lenders under the Debt Commitment Letter in connection with
the Debt Financing may be disseminated to potential lenders and other Persons
through one or more internet sites and hereby authorizes the use of its and its
Subsidiaries' logos in connection with any such dissemination. MAAX and MAAX's
counsel shall be given reasonable opportunity to review and comment on any such
information and on the presentation of any such information through one or more
internet sites prior to the public dissemination of such information through one
or more internet sites.
5.3 GENERAL. MAAX hereby also covenants and agrees in favour of the Newco
Parties that, from the date hereof until the earlier of (i) the Effective Date,
or (ii) this Agreement having been terminated pursuant to Article 7 hereof, MAAX
shall perform, and shall cause its Subsidiaries to perform, all obligations
required to be performed by MAAX or any of its Subsidiaries under this Agreement
and shall do all such other acts and things as may be necessary in order to
consummate and make effective, as soon as reasonably practicable, the
transactions contemplated hereby and, without limitation, MAAX shall, subject to
Sections 5.6 and 5.7, and where appropriate shall cause its Subsidiaries to:
5.3.1 use commercially reasonable efforts to cause the conditions in
Section 6.1 and Section 6.2 to be satisfied on or prior to the Target Completion
Date;
5.3.2 use commercially reasonable efforts to promptly update
Schedule 1.1.57 and obtain all Third Party Consents;
5.3.3 use commercially reasonable efforts to assist the Newco
Parties to successfully complete the transactions contemplated by this
Agreement, including co-operating with the Newco Parties, by making all
requisite regulatory filings and in obtaining all requisite regulatory approvals
(whether before or after the Effective Date), including the Appropriate
Regulatory Approvals, and making submissions and giving evidence in relation
thereto, in mailing or otherwise making and successfully completing the
Amalgamation;
17
5.3.4 effect all necessary registrations, filings and submissions of
information required by Governmental Entities from MAAX or any of its
Subsidiaries;
5.3.5 provide lists of Shareholders of all classes and series of
securities of MAAX prepared by MAAX or the transfer agent of MAAX and a list of
holders of MAAX Options and MAAX Rights (with full particulars as to, among
others, the purchase, exercise or conversion price, vesting and expiry date)
prepared by MAAX (as well as a security position listing from each depository,
including The Canadian Depository for Securities Limited) and deliver such lists
to Newco and Newco II within two Business Days after execution of this Agreement
and obtain and deliver to Newco and Newco II thereafter on a weekly basis (or as
otherwise reasonably requested by Newco or Newco II) during the term of this
Agreement supplemental lists setting out any changes thereto, all such
deliveries to be both in printed form and, if available, in computer-readable
format;
5.3.6 notify Newco and Newco II forthwith upon becoming aware of any
notice regarding any MAAX Options and MAAX Rights, and corresponding information
for each of its Subsidiaries, and inform Newco and Newco II of all information
(including the identity of the giver thereof) known to it regarding such notice;
5.3.7 not amend the Circular and any other documents prepared in
connection with the MAAX Meeting, including not change the date of, or adjourn,
the MAAX Meeting without the consent of Newco and Newco II which consent shall
not be unreasonably withheld;
5.3.8 use commercially reasonable efforts to obtain the approval of
the Shareholders to the Amalgamation and cooperate with Newco and Newco II upon
Newco or Newco II's request, in soliciting proxies on behalf of management of
MAAX pursuant to the Circular (and in accordance with the Companies Act);
5.3.9 not to retain any dealer-manager to solicit proxies from
Shareholders in respect of the MAAX Meeting without the written consent of Newco
and Newco II, which consent shall not be unreasonably withheld;
5.3.10 provide or cause to be provided to Newco and Newco II all
proxy return information with respect to the MAAX Meeting on a timely basis upon
request by Newco or Newco II;
5.3.11 except as specifically permitted pursuant to this Agreement
and except as required in the ordinary and regular course of business,
immediately cease to provide and cause its Subsidiaries to cease to provide, to
any person (other than the Newco Parties) access to MAAX's and its Subsidiaries'
information, properties, books, records, agreements or commitments;
5.3.12 defend all lawsuits or other legal, regulatory or other
proceedings, including, without limitation, use commercially reasonable efforts
to have lifted or rescinded any injunction or restraining order or other order
relating to MAAX or any of its Subsidiaries, challenging or affecting this
Agreement, the Amalgamation or the consummation of the transactions contemplated
by this Agreement;
18
5.3.13 use commercially reasonable efforts to comply promptly with
all requirements which applicable Laws may impose on MAAX or its Subsidiaries
with respect to the transactions contemplated hereby;
5.3.14 not, and cause each of its Subsidiaries not to, enter into any
transaction or perform any act which would (i) interfere or be inconsistent with
the successful completion of the Amalgamation, (ii) render incorrect any of the
representations and warranties set forth herein if such representations and
warranties were made at a date subsequent to such transaction or act and all
references to the date hereof were to such later date, or (iii) adversely affect
MAAX's ability to perform and comply with its covenants and agreements under
this Agreement;
5.3.15 promptly advise, first orally and then in writing, Newco and
Newco II of (i) any fact, event or any change occurring after the date hereof
that would render any representation or warranty of MAAX contained in this
Agreement, if made on or as of the date of such event or the Effective Date,
untrue or incorrect; (ii) any Material Adverse Change; (iii) any breach by MAAX
or any of its Subsidiaries of any covenant or agreement contained in this
Agreement or (iv) any death, disability, resignation, termination of employment
or other departure of any Senior Employee of MAAX or any of its Subsidiaries;
5.3.16 provide such information and take such actions as may be
provided in the Disclosure Letter; and
5.3.17 on or prior to the Effective Date, MAAX shall, and shall cause
each of its Subsidiaries to, take such actions as are necessary to facilitate or
implement, effective immediately prior to or after the closing of the
transactions contemplated by this Agreement, such reorganization of the capital,
assets or liabilities of MAAX or any of its Subsidiaries, including the
liquidation of inactive holding companies, as Newco or Newco II may reasonably
require, in accordance with the outline of the preliminary reorganization plan
prepared by Newco Parties' tax advisors (a copy of which has been delivered to
MAAX prior to the execution of this Agreement), as may be modified from time to
time by the Newco Parties with the consent of MAAX, which consent shall not be
unreasonably withheld; provided that in the case of irreversible actions, MAAX
shall only be required to effect such irreversible action if there is certainty
that the transactions contemplated by this Agreement will be consummated.
5.4 OPERATION OF BUSINESS. MAAX hereby covenants and agrees from the date
hereof until the earlier of (i) the Effective Date or (ii) the date this
Agreement is terminated pursuant to Article 7 hereof, (except as has been
publicly disclosed by MAAX prior to the date of this Agreement or has been
disclosed in the Disclosure Letter or as Newco and Newco II shall otherwise
consent) that it shall:
5.4.1 carry on, and shall cause its Subsidiaries to carry on,
business only in the ordinary and regular course consistent with past practice;
5.4.2 not, and shall cause each of its Subsidiaries not to, take any
action (directly or indirectly) with respect to any of the following, except to
the extent contemplated by or necessary to give effect to the transactions and
obligations under this Agreement:
19
(a) any take-over bid, tender offer, issuer bid, merger,
amalgamation (other than the Amalgamation), plan of arrangement,
reorganization (including transfer of assets in favour of an income
trust) or other business combination or similar transaction or the
acquisition of all or a material portion of the Shares, assets or
business of any Person, involving MAAX or any of its Subsidiaries;
(b) directly or indirectly reduce the stated capital of
MAAX or any of its Subsidiaries;
(c) the sale, lease, transfer, Encumbrance or other
disposition of any of MAAX's and its Subsidiaries' assets including,
without limitation, all personal, movable, real, immovable and mixed
property of MAAX and its Subsidiaries, other than (i) Permitted
Encumbrances, in the case of Encumbrances and (ii) in the ordinary and
regular course of business consistent with past practice, in all other
cases;
(d) any joint venture, strategic alliance, non
competition or similar restrictive covenant or other transaction with
strategic implications for MAAX or a Subsidiary of MAAX, as the case
may be, or which may have a material and adverse effect on Newco and
Newco II;
(e) making of any change in its debt or equity
capitalization (including, but not limited to, any increase in the
amount or maturity of its consolidated borrowings) or any conversion of
short term borrowings into long term borrowings other than accessing
existing credit facilities in the ordinary and regular course of
business;
(f) any change in its accounting methods, principles and
practices;
(g) incurring any Indebtedness guaranteeing any
indebtedness, making any loans, advances or capital contributions to,
or other investments in, any other Person, or the issuance or sale of
any debt securities, other than in the ordinary and regular course of
business consistent with past practice;
(h) the declaration or payment of any dividend or the
declaration, authorization or making of any distribution of, on or in
respect of any of its securities whether payable in cash, securities or
otherwise, including any dividend or distribution under any existing
programs of MAAX or any of its Subsidiaries, other than MAAX's regular
$0.07 per Share semestrial dividend consistent with past practice;
(i) the amendment of the articles or by-laws of MAAX or
the constating documents of any of its Subsidiaries;
(j) the split, combination or reclassification of any
shares of its share capital or the allotment, reservation, setting
aside, issuance, authorization, purchase, redemption, delivery,
Encumbrance or disposition of, or any proposal relating thereto, any
shares in its share capital, any securities or any MAAX Options or MAAX
Rights (including the acceleration of any vesting periods except for
the purposes of complying with Section 6.2.8), except for the issuance
of Shares pursuant to fully vested MAAX Options granted prior to the
date hereof;
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(k) instituting, cancelling or modifying in any material
respect any pension plan or other employee benefit arrangement of MAAX;
(l) commencing to undertake a substantial expansion of
its business facilities or an expansion that is out of the ordinary and
regular course of business consistent with prior practice in light of
current market and economic conditions;
(m) other than in the ordinary course of business, (i)
entering into any new material line of business or (ii) incurring or
committing to any capital expenditures or any liabilities or
obligations in connection therewith;
(n) adopting a plan of complete or partial liquidation,
consolidation, restructuring, recapitalization or other restructuring;
(o) transferring or licensing to any Person or otherwise
extending, amending or modifying any rights to intellectual property
owned by MAAX or any of its Subsidiaries, other than in the ordinary
course of business; and
(p) preventing, delaying or impeding the consummation of
the Amalgamation or the other transactions contemplated hereby.
5.4.3 not amend, vary or modify, or take any other action under any
pension plan, other employee benefit arrangement of MAAX or any stock option
plan of MAAX and its Subsidiaries, except as, in the opinion of MAAX's counsel,
is necessary to comply with applicable Laws or required by existing provisions
of such plans or arrangements, with the prior consent of Newco and Newco II
which consent shall not be unreasonably withheld;
5.4.4 not, and shall not permit any of its Subsidiaries to, (i)
grant to any employee or officer of MAAX or any of its Subsidiaries any increase
in compensation or in severance or termination pay (whether or not payable in
cash) or enter into any employment agreement with any Senior Employees or any
agreement to pay severance amounts for termination or termination packages; or
(ii) hire any additional Senior Employees;
5.4.5 not acquire or agree to acquire any Shares or other
outstanding securities, whether by public or private transaction, pursuant to
any normal course or substantial issuer bid, or otherwise, or any shares or
other outstanding securities of any of its Subsidiaries;
5.4.6 except as otherwise contemplated hereby or in the ordinary and
regular course of business, not, and shall not permit any of its Subsidiaries
to, enter into, amend or terminate existing Contracts having a term in excess of
one year and/or involve obligations of more than $100,000 for MAAX or any of its
Subsidiaries;
5.4.7 not violate or fail to perform any material obligation or duty
imposed upon it or any of its Subsidiaries by any applicable Laws;
5.4.8 pay all debts and Taxes when due and payable;
21
5.4.9 subject to Section 5.9.2, use commercially reasonable efforts
to keep in force all insurance policies on terms at least as favourable as
current terms;
5.4.10 not commence any litigation or proceeding or settle or
compromise any litigation except in the ordinary and regular course of business
consistent with past practice and except for any settlement or compromise having
an aggregate cost to MAAX or any of its Subsidiaries of not more than $100,000;
5.4.11 use commercially reasonable efforts to expedite the completion
of its audited financial statements for the financial year ended February 29,
2004 and any other financial statement referred to in Section 5.2.1(h), together
with an unqualified auditors' report thereon and deliver such financial
statements and such other information by April 26, 2004;
5.4.12 not prepare or file any Tax Returns inconsistent with past
practice nor, on any such Tax Returns, take any position, make any election, or
adopt any method that is inconsistent with positions taken, elections made or
methods used in preparing or filing similar Tax Returns in prior periods, and
not amend any Tax Returns;
5.4.13 make or rescind any express or deemed Tax election related to
Taxes or change any of its or their methods of reporting income or deductions
for Tax purposes or make a request for a Tax ruling or enter into any agreement
with any taxing authority;
5.4.14 cause each of its Subsidiaries to use commercially reasonable
efforts to preserve intact in all material respects their respective business
organizations and goodwill and to keep available in all material respects the
services of their respective officers and Senior Employees and to maintain in
all material respects satisfactory relationships with suppliers, distributors,
customers and others with whom they have business relationships;
5.4.15 use commercially reasonable efforts to maintain and preserve,
and shall cause its Subsidiaries to use commercially reasonable efforts to
maintain and preserve, on a basis consistent with the ordinary and regular
course of business and past practice, all personal, movable, real, immovable and
mixed property of MAAX and its Subsidiaries material to the conduct of its
business and keep such property in good repair, working order and condition; and
5.4.16 use commercially reasonable efforts to maintain good business
relationship with National Bank of Canada in order to allow MAAX to keep in
place after Effective Time, upon the same terms and conditions, the (i) Interest
Rate SWAP Transaction Agreement entered into between MAAX and National Bank of
Canada on November 5, 2002, (ii) Foreign Exchange Forward Contracts entered into
between MAAX and its Subsidiaries and National Bank of Canada on June 6, 2002
and March 19, 2003 and (iii) Factoring Agreement entered into between MAAX and
Sodex (a subsidiary of National Bank of Canada) on February 1, 2004.
5.5 COVENANTS OF THE NEWCO PARTIES. The Newco Parties hereby covenant that,
from the date hereof until the earlier of (i) the Effective Date, or (ii) this
Agreement having been terminated pursuant to Article 7 hereof, they shall:
5.5.1 use commercially reasonable efforts to successfully complete
the transactions contemplated hereby, including co-operating with MAAX, by
making all requisite regulatory
22
filings and in obtaining all requisite regulatory approvals (whether before or
after the Effective Date), including the Appropriate Regulatory Approvals, and
making submissions and giving evidence in relation thereto, in mailing or
otherwise making and successfully completing the Amalgamation; and
5.5.2 use commercially reasonable efforts to cause the conditions in
Sections 6.1 and 6.3 to be satisfied prior to the Target Completion Date.
The Newco Parties also covenant that if the conditions precedent to the issuance
of the Notes (as defined in the Debt Commitment Letter) are met and the Notes
are not issued on the Effective Date, Newco shall, or will cause one or more of
its Affiliates to, draw down on the Bridge Loans (as defined in the Debt
Commitment Letter) to the extent the conditions for funding set forth in the
Debt Commitment Letter have been met.
5.6 COVENANTS REGARDING NON-SOLICITATION.
5.6.1 MAAX shall not, directly or indirectly, through any officer,
director, employee, representative or agent of MAAX or any of its Subsidiaries,
take any action of any kind which might reduce the likelihood of, or interfere
with, the completion of the Amalgamation, including, but not limited to, any
action to (i) solicit, assist, initiate or encourage (including by way of
furnishing non-public information, soliciting proxies (within the meaning of the
Securities Act) or entering into any form of agreement or arrangement) any
inquiries, submissions, proposals or offers regarding any merger, amalgamation
(other than the Amalgamation), take-over bid, sale of material assets (including
transfer of assets in favour of an income trust or any lease, long-term supply
agreement or other arrangement having the same economic effect as a sale) or
material sale of Shares or rights or interests therein or thereto or similar
transactions involving MAAX or any of its Subsidiaries, or a proposal to do so,
other than with the Newco Parties (each, an "INCONSISTENT TRANSACTION"); (ii)
participate in any discussions or negotiations regarding any Inconsistent
Transaction; (iii) withdraw or modify in a manner adverse to Newco and Newco II
the approval of the Board of Directors of the transactions contemplated hereby;
(iv) approve or recommend any Inconsistent Transaction; or (v) cause MAAX to
enter into any agreement related to any Inconsistent Transaction.
Notwithstanding the preceding part of this Section 5.6.1 and any other provision
of this Agreement, nothing shall prevent the Board of Directors prior to the
filing of the Articles of Amalgamation from complying with MAAX's disclosure
obligations under applicable Laws with respect to the MAAX Meeting and the
Amalgamation or from considering, participating in any discussions or
negotiations, or entering into a confidentiality agreement on substantially the
same terms as the Confidentiality Agreement, including a standstill undertaking
for a period of 18 months and providing information pursuant to Section 5.6.3,
regarding an unsolicited bona fide Inconsistent Transaction in writing that did
not otherwise result from a breach of this Section 5.6 and that the Board of
Directors determines, constitutes a Superior Proposal.
5.6.2 MAAX hereby represents and warrants in favour of the Newco
Parties that as of this date, there is no current Inconsistent Transaction and
hereby agrees and undertakes to promptly notify Newco and Newco II, at first
orally and then in writing, of all future Inconsistent Transactions, of which
MAAX's directors or Senior Management are or become aware, or any
23
amendments to the foregoing, or any request for non-public information relating
to MAAX or any of its Subsidiaries in connection with an Inconsistent
Transaction or for access to the properties, books or records of MAAX or any of
its Subsidiaries by any Person that informs MAAX or such Subsidiary that such
Person is considering making, or has made, an Inconsistent Transaction. Such
notice shall include a description of the material terms and conditions of any
proposal and provide such details of the proposal, inquiry or contact as Newco
or Newco II may reasonably request including the identity of the Person making
such proposal, inquiry or contact.
MAAX further agrees and undertakes to request forthwith and use commercially
reasonable efforts to cause all Persons who have executed a confidentiality
agreement within the period of 12 months preceding the date hereof in connection
with an Inconsistent Transaction, (i) to destroy all confidential MAAX
information and confirm to MAAX in writing such destruction; or (ii) to return
all confidential MAAX information to MAAX.
5.6.3 If MAAX receives a request for material non-public information
from a Person who proposes a bona fide Inconsistent Transaction in writing in
respect of MAAX (the existence and content of which have been disclosed to Newco
and Newco II), and the Board of Directors determines that such proposal
constitutes a Superior Proposal then, and only in such case, the Board of
Directors may, subject to the execution by such Person of a non-disclosure
agreement on substantially the same terms as the Confidentiality Agreement,
provide such Person with access to information regarding MAAX or any of its
Subsidiaries; provided, however, that the Person making the Inconsistent
Transaction shall not be precluded under such non-disclosure agreement from
making the Inconsistent Transaction, and provided further that MAAX sends a copy
of any such non-disclosure agreement to Newco and Newco II promptly upon its
execution and that Newco and Newco II are provided with a list of or, in the
case of information that was not previously made available to Newco and Newco
II, copies of any information provided to such Person.
5.6.4 MAAX shall use commercially reasonable efforts to ensure that
its officers, directors, employees, representatives and agents and its
Subsidiaries and their officers, directors, employees, representatives and
agents and any financial advisors or other advisors or representatives retained
by it are aware of the provisions of this Section 5.6, and it shall be
responsible for any breach of this Section 5.6 by its financial advisors or
other advisors or representatives.
5.7 NOTICE BY MAAX OF SUPERIOR PROPOSAL DETERMINATION.
5.7.1 Subject to Section 5.6, MAAX shall not, accept, approve,
recommend or enter into any agreement relating to an Inconsistent Transaction
(other than a non-disclosure agreement contemplated by Section 5.6.3) and the
Board of Directors shall not withdraw, modify or amend, in a manner adverse to
Newco and Newco II, its recommendation that Shareholders vote in favour of the
Amalgamation unless the Board of Directors shall have determined in good faith
that the Inconsistent Transaction constitutes a Superior Proposal and unless it
has provided Newco and Newco II with notice in writing that (i) there is a
Superior Proposal together with documentation detailing in all material respects
the Superior Proposal including a true and final copy of the agreement relating
to the Inconsistent Transaction and (ii) MAAX is proposing itself to accept,
approve, recommend or enter into an agreement relating to such Inconsistent
24
Transaction. The above referred notice has to be provided at least three
Business Days prior to the date on which the Board of Directors proposes to
accept, approve, recommend or enter into any agreement relating to such
Inconsistent Transaction.
5.7.2 During the three Business Day period which is after the notice
referred to in Section 5.7.1, MAAX acknowledges that the Newco Parties shall
have the opportunity, but not the obligation, to offer to amend the terms of
this Agreement and the Amalgamation. The Board of Directors shall review any
amendment proposed by the Newco Parties to the terms of this Agreement in good
faith in order to determine, in its discretion in the exercise of its fiduciary
duties, whether the Newco Parties' amendment to the terms of this Agreement
(upon acceptance by MAAX) would result in the Inconsistent Transaction not being
a Superior Proposal. If the Board of Directors so determines, MAAX shall enter
into an amendment to this Agreement with the Newco Parties reflecting the Newco
Parties' amended proposal.
5.7.3 If MAAX provides Newco and Newco II with the notice referred
to in Section 5.7.1 on a date that is less than three Business Days before the
MAAX Meeting and the Newco Parties have not made an offer to amend the terms of
this Agreement and the Amalgamation as set forth in Section 5.7.2, then, subject
to applicable Law, MAAX may or, at Newco or Newco II's request shall, postpone
or adjourn the MAAX Meeting to a date that is at least five Business Days but
not more than ten Business Days after the scheduled date of the MAAX Meeting.
5.7.4 MAAX shall promptly reaffirm its recommendation of the
Amalgamation by press release after (i) any Inconsistent Transaction (which is
determined not to be a Superior Proposal) is publicly announced or made or (ii)
the Newco Parties and MAAX enter into an amended agreement under Section 5.7.2;
any such press release shall be prepared in accordance with Section 8.5.
5.7.5 MAAX also acknowledges and agrees that each successive
amendment of any Inconsistent Transaction shall constitute a new Inconsistent
Transaction for purposes of this Section 5.7.
5.8 ACCESS TO INFORMATION. Notwithstanding the pre-agreement investigation
of MAAX conducted by or on behalf of Newco and Newco II, MAAX shall give Newco,
Newco II and their authorized agents (including prospective lenders) reasonable
ongoing access during the term of this Agreement, upon reasonable notice to
MAAX, to all of MAAX's and its Subsidiaries' material information, senior
personnel, material properties, books, records, agreements and commitments, as
Newco or Newco II may reasonably require, on and subject to the terms set forth
in the Confidentiality Agreement. In addition, MAAX shall co-operate with Newco,
Newco II and any such authorized persons in their review and furnish such
persons with all material information with respect to MAAX and its Subsidiaries
and their ongoing operations and activities as Newco, Newco II or any authorized
person may reasonably request, provided that Newco and Newco II shall designate
the individual or individuals to co-ordinate such access and further provided
that Newco and Newco II shall not disrupt the normal business operations of MAAX
or its Subsidiaries. MAAX's obligations under this Section are subject to any
legally binding obligations of confidentiality in favour of any third party. The
provisions of the
25
Confidentiality Agreement shall continue to apply, mutatis mutandis, to all
information so provided to Newco and Newco II.
5.9 INSURANCE COVERAGE.
5.9.1 From and after the Effective Date, Newco and Newco II shall
cause MAAX or any successor to MAAX to indemnify and hold harmless all past and
present officers and directors of MAAX and of its Subsidiaries to the same
extent and in the same manner such persons are indemnified as of the date of
this Agreement by MAAX and its Subsidiaries pursuant to their respective
governing Laws and the articles, by-laws or other constating documents of MAAX
and its Subsidiaries and existing indemnity agreements for acts or omissions
occurring at or prior to the Effective Date.
5.9.2 Notwithstanding Section 5.9.1, MAAX intends to purchase
run-off insurance, for such term and such premium(s) as may be considered
reasonable by it (but which in any event shall not exceed six years from the
Effective Date and total premium(s) in excess of $615,000), for its past and
present directors and officers in respect of all matters relating to the period
when they were directors and/or officers.
5.9.3 In the absence of the run-off insurance described in Section
5.9.2, Newco and Newco II shall use commercially reasonable efforts to cause
MAAX or any successor to MAAX to provide coverage (but shall not be required to
do so if premiums exceed 125% of current premiums), for an aggregate period of
not less than six years from the Effective Date, for MAAX's current and former
directors and officers under an insurance and indemnification policy for events
occurring prior to the Effective Date that is substantially similar to MAAX's
existing policy.
ARTICLE 6
CONDITIONS
6.1 MUTUAL CONDITIONS PRECEDENT. The respective obligations of the parties
hereto to complete the Amalgamation and the other transactions contemplated by
this Agreement shall be subject to the satisfaction, on or before the Effective
Date, of the following conditions precedent, each of which may be waived only by
the mutual consent of Newco, Newco II and MAAX:
6.1.1 a quorum of Shareholders at the MAAX Meeting shall have been
present and the Amalgamation shall have been approved at the MAAX Meeting by (i)
at least two-thirds of the votes cast on a resolution approving the by-law
relating to the Amalgamation by Shareholders, present in person or represented
by proxy at the MAAX Meeting and (ii) any other required Shareholders approval
to comply with any securities Laws;
6.1.2 the Appropriate Regulatory Approvals shall have been obtained
in accordance with Article 4 and shall be in full force and effect and shall not
be the subject of any appeal, stop-order or proceedings seeking a stop-order or
any revocation proceedings;
6.1.3 there shall not be in force any order or decree restraining or
enjoining the consummation of the transactions contemplated by this Agreement
and there shall be no proceeding, of a judicial or administrative nature or
otherwise in progress (or threatened in
26
writing by a Governmental Entity) that relates to or results from the
transactions contemplated by this Agreement that would, if successful, result in
an order or ruling that would (i) reasonably be expected to cease trade, enjoin,
prohibit or impose material limitations or conditions on the completion of the
Amalgamation in accordance with its terms or (ii) otherwise be inconsistent with
the Appropriate Regulatory Approvals which have been obtained; and
6.1.4 this Agreement shall not have been terminated pursuant to
Article 7.
6.2 ADDITIONAL CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE NEWCO
PARTIES. The obligations of the Newco Parties to complete the transactions
contemplated by this Agreement shall also be subject to the satisfaction, on or
before the Effective Date, of each of the following conditions precedent (each
of which is for the Newco Parties' exclusive benefit and may be waived by the
Newco Parties and any one or more of which, if not satisfied or waived, will
relieve the Newco Parties of any obligation under this Agreement):
6.2.1 all acts, undertakings, obligations, agreements and covenants
of MAAX under this Agreement or under the Amalgamation Agreement to be performed
on or before the Effective Date shall have been duly performed in all material
respects by MAAX and the Newco Parties shall have received a certificate of MAAX
addressed to the Newco Parties and dated as of the Effective Date, signed on
behalf of MAAX by the Chief Executive Officer and Chief Financial Officer of
MAAX, without personal liability, confirming same;
6.2.2 all representations and warranties of MAAX under this
Agreement shall be true and correct in all material respects or, where such
representations and warranties are qualified by materiality, true and correct in
all respects, on the Effective Date as if made on and as of such date (except to
the extent such representations and warranties speak as of an earlier date, in
which event such representations and warranties shall be true and correct in all
material respects or, where such representations and warranties are qualified by
materiality, true and correct in all respects, as of such earlier date, or
except as affected by transactions contemplated or permitted by this Agreement)
and the Newco Parties shall have received a certificate of MAAX, addressed to
the Newco Parties and dated on each of such dates, signed on behalf of MAAX by
the Chief Executive Officer and Chief Financial Officer of MAAX, without
personal liability, confirming the same;
6.2.3 the written opinion dated the date hereof delivered by the
financial advisors to the independent committee of the Board of Directors
concluding that the consideration provided under the Amalgamation is fair, from
a financial point of view, to the Shareholders shall not have been modified or
withdrawn;
6.2.4 the Board of Directors shall have adopted all necessary
resolutions and all other necessary corporate action shall have been taken by
MAAX and the Subsidiaries, to permit the Amalgamation and the other transactions
contemplated hereby;
6.2.5 the Board of Directors shall have made and shall not have
modified or amended, in a manner adverse to Newco and Newco II, prior to the
MAAX Meeting, an affirmative unanimous recommendation that Shareholders vote in
favour of the Amalgamation;
27
6.2.6 MAAX shall have entered into an employment agreement (which
shall provide, among others, for eligibility under the share option plan) and a
share ownership agreement with Xx. Xxxxx Xxxxxx, in accordance with the executed
term sheet delivered to MAAX prior to the execution of this Agreement;
6.2.7 MAAX shall have entered into non-competition agreements
(containing non-solicitation and non-disparagement provisions) with each of Xx.
Xxxxxxx Xxxxxx, Ms. Xxxxx-France Xxxxxx, Mr. Xxxxx Xxxxxx and Mr. Xxxxxxx
Xxxxxxx, having a duration of five years and covering North America, in
accordance with the executed term sheets delivered to them prior to the
execution of this Agreement;
6.2.8 all MAAX Options and MAAX Rights shall have been exercised,
accelerated, surrendered, terminated or otherwise dealt with in a manner
satisfactory to Newco and Newco II, acting reasonably;
6.2.9 all Third Party Consents shall have been obtained;
6.2.10 between the date hereof and the Effective Date, there shall
not have occurred, in the judgment of Newco and Newco II, acting reasonably, a
Material Adverse Change;
6.2.11 between the date hereof and the Effective Date, there shall
not have occurred, in the judgment of Newco and Newco II, acting reasonably,
with respect to MAAX or any of its Subsidiaries, a breach, default or event
permitting third parties to exercise rights against any of MAAX and its
Subsidiaries which has or could reasonably be expected to have a Material
Adverse Change as a result of Amalgamation becoming effective;
6.2.12 Newco and Newco II shall be satisfied that (i) no action, suit
or proceeding shall have been taken or instituted (or threatened in writing to
be taken or instituted by a Governmental Entity) before or by any domestic or
foreign arbitrator, court or tribunal or Governmental Entity or by any elected
or appointed public official or private Person in Canada or elsewhere, whether
or not having the force of Law, and (ii) no Law shall have been proposed,
enacted, promulgated or applied, in the case of (i) or (ii) above:
(a) to cease trade, enjoin, prohibit or impose material
limitations or conditions on the completion of the Amalgamation or the
right of Newco II to own or exercise full rights of ownership of all of
the outstanding Shares and all of the outstanding shares of MAAX's
Subsidiaries owned by MAAX;
(b) which, if the Amalgamation was completed, could in
Newco and Newco II's reasonable judgment, materially and adversely
affect MAAX and its Subsidiaries considered on a consolidated basis; or
(c) to prohibit or restrict the completion of the
Amalgamation in accordance with the provisions herein;
6.2.13 at the Effective Date, there shall not exist any prohibition
at Law against Newco II owning or exercising full rights of ownership of all of
the outstanding shares of Amalco;
28
6.2.14 the conditions to funding under the Debt Commitment Letter
shall have been satisfied and Newco and Newco II shall have received on or prior
to the Effective Date the full proceeds of the Debt Financing as contemplated
under the Debt Commitment Letter or on terms and conditions which are, in the
reasonable judgment of Newco and Newco II, no less favourable to Newco and Newco
II than those set forth in the Debt Commitment Letter; and
6.2.15 there shall not have occurred any event of national or
international consequence or any Law which materially adversely affects or may
materially adversely affect the financial markets in Canada or the United States
or the financial condition of MAAX or its Subsidiaries, taken as a whole.
The Newco Parties may not rely on the failure to satisfy any of the above
conditions precedent as a basis for non-compliance by the Newco Parties with its
obligations under this Agreement if the condition precedent would have been
satisfied but for a default by the Newco Parties in complying with its
obligations hereunder.
6.3 ADDITIONAL CONDITIONS PRECEDENT TO THE OBLIGATIONS OF MAAX. The
obligations of MAAX to complete the transactions contemplated by this Agreement
shall also be subject to the satisfaction, on or before the Effective Date, of
each of the following conditions precedent (each of which is for the exclusive
benefit of MAAX and may be waived by MAAX and any one or more of which, if not
satisfied or waived, will relieve MAAX of any obligation under this Agreement):
6.3.1 all acts, undertakings, obligations, agreements and covenants
of the Newco Parties under this Agreement or under the Amalgamation Agreement to
be performed on or before the Effective Date shall have been duly performed in
all material respects by the Newco Parties and MAAX shall have received a
certificate of the Newco Parties addressed to MAAX and dated as of the Effective
Date, signed on behalf of the Newco Parties by the President and Secretary of
each of the Newco Parties without personal liability, confirming same;
6.3.2 all representations and warranties of the Newco Parties under
this Agreement shall be true and correct in all material respects or, where such
representations and warranties are qualified by materiality, true and correct in
all respects, on the Effective Date as if made on and as of such date (except to
the extent such representations and warranties speak as of an earlier date, in
which event such representations and warranties shall be true and correct in all
material respects or, where such representations and warranties are qualified by
materiality, true and correct in all respects, as of such earlier date, or
except as affected by transactions contemplated or permitted by this Agreement)
and MAAX shall have received a certificate of the Newco Parties, addressed to
MAAX and dated on each of such dates, signed on behalf of the Newco Parties by
the President and Secretary of each of the Newco Parties, without personal
liability, confirming the same; and
6.3.3 the board of directors of Newco, Newco II, Subco, Subco II and
Amalco, as the case may be, shall have adopted all necessary resolutions, and
all other necessary corporate action shall have been taken by Newco, Newco II,
Subco, Subco II and Amalco, as the case may be, to permit the Amalgamation and
the redemption of the redeemable preferred shares to be
29
issued to the Shareholders upon the Amalgamation in accordance with the Articles
of Amalgamation.
6.3.4 Newco and Newco II shall have subscribed and fully paid for
redeemable preferred shares of Subco II and Subco, respectively, in an amount
equal to the total redemption price of Amalco's redeemable preferred shares or
shall otherwise have provided evidence reasonably acceptable to MAAX that Amalco
will, at the Effective Time, have legally available funds for the redemption and
payment in full of all its redeemable preferred shares outstanding as a result
of the Amalgamation.
MAAX may not rely on the failure to satisfy any of the above conditions
precedent as a basis for non-compliance by MAAX with its obligations under this
Agreement if the condition precedent would have been satisfied but for a default
by MAAX in complying with its obligations hereunder.
6.4 NOTICE AND CURE PROVISIONS. Newco and Newco II, on the one hand, and
MAAX, on the other hand, will give prompt notice to the other of the occurrence,
or failure to occur, at any time from the date hereof until the Effective Date,
of any event or state of facts which occurrence or failure would, or would be
likely to:
6.4.1 constitute a material breach of any of its representations or
warranties contained herein or which would cause such representations and
warranties to be untrue or incorrect in any material respect on the Effective
Date; or
6.4.2 result in the failure to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by the other hereunder
prior to the Effective Date.
Neither Newco, Newco II nor MAAX may elect not to complete the Amalgamation or
the other transactions contemplated hereby pursuant to any of the conditions
precedent contained in Sections 6.1, 6.2 or 6.3, or exercise any termination
right arising therefrom, unless forthwith and in any event prior to the filing
of the Articles of Amalgamation with the Enterprise Registrar, the Newco Parties
or MAAX, as the case may be, have delivered a written notice to the other
specifying in reasonable detail all breaches of covenants, representations and
warranties or other matters which the Newco Parties or MAAX, as the case may be,
are asserting as the basis for the non-fulfilment of the applicable condition
precedent or the exercise of the termination right, as the case may be. If any
such notice is delivered, provided that the Newco Parties or MAAX, as the case
may be, are proceeding diligently to cure such matter, if such matter is
susceptible to being cured, the other may not terminate this Agreement until the
later of the Target Completion Date and the expiration of a period of 30 days
from such notice.
6.5 SATISFACTION OF CONDITIONS. The conditions precedent set out in
Sections 6.1, 6.2 and 6.3 shall be conclusively deemed to have been satisfied,
waived or released when, with the agreement of Newco, Newco II and MAAX, a
Certificate of Amalgamation is issued by the Enterprise Registrar.
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ARTICLE 7
AMENDMENT AND TERMINATION
7.1 AMENDMENT. This Agreement may, at any time and from time to time before
or after the holding of the MAAX Meeting but not later than the date of filing
of the Articles of Amalgamation with the Enterprise Registrar, be amended by
mutual written agreement of the parties hereto, and any such amendment may,
without limitation:
7.1.1 change the time for performance of any of the obligations or
acts of the parties;
7.1.2 waive any inaccuracies or modify any representation or
warranty contained herein or in any document delivered pursuant hereto;
7.1.3 waive compliance with or modify any of the covenants herein
contained and waive or modify performance of any of the obligations of the
parties; and
7.1.4 waive compliance with or modify any conditions precedent
herein contained;
provided that, notwithstanding the foregoing, the terms of this Agreement shall
not be amended in a manner materially prejudicial to the Shareholders without
the approval of the Shareholders given in the same manner as required by Law for
the approval of the Amalgamation.
7.2 TERMINATION.
7.2.1 Termination by MAAX. MAAX, when not in default in any material
respect in the performance of its obligations under this Agreement (including
when a condition contained in Section 6.1 is not satisfied without any default
by MAAX) may, without prejudice to any other rights, terminate this Agreement by
written notice to Newco and Newco II if:
(a) any condition contained in Section 6.1 or 6.3 is not
satisfied by the Target Completion Date to the satisfaction of MAAX,
acting reasonably;
(b) any representation or warranty of the Newco Parties
in this Agreement shall not have been as of the date hereof, as of the
date on which the Circular is mailed and as of the Target Completion
Date, true and correct in all material respects or, where such
representation or warranty is qualified by materiality, true and
correct in all respects;
(c) the Newco Parties fail to comply in any material
respect with any of their obligations under this Agreement;
(d) for any reason other than the default of MAAX
hereunder or the Supporting Shareholders pursuant to the Support and
Voting Agreements, the Effective Date has not occurred on or before the
Target Completion Date; or
(e) Newco and Newco II have been notified in writing by
MAAX of a Superior Proposal in accordance with Section 5.7 and the
Newco Parties have not made an offer to amend the terms of this
Agreement under Section 5.7.2 or, if the Newco Parties have made such
an offer, the Newco Parties and MAAX have not entered into an
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amended agreement in accordance with Section 5.7.2, provided that MAAX
has fulfilled its obligation to pay the amount required under Section
7.3 at the time of such termination of this Agreement.
7.2.2 Termination by the Newco Parties. The Newco Parties, when not
in default in any material respect in the performance of their obligations under
this Agreement (including when a condition in Section 6.1 is not satisfied
without any default by the Newco Parties), may, without prejudice to any other
rights, terminate this Agreement by written notice to MAAX if:
(a) any condition contained in Section 6.1 or 6.2 is not
satisfied by the Target Completion Date to the satisfaction of Newco
and Newco II, acting reasonably;
(b) any representation or warranty of MAAX in this
Agreement shall not have been as of the date hereof, as of the date on
which the Circular is mailed and as of the Target Completion Date, true
and correct in all material respects or, where such representation or
warranty is qualified by materiality, true and correct in all respects;
(c) MAAX fails to comply in any material respect with any
of its obligations under this Agreement;
(d) for any reason other than the default of the Newco
Parties hereunder or pursuant to the Support and Voting Agreements, the
Effective Date has not occurred on or before the Target Completion
Date;
(e) Newco and Newco II have been notified in writing by
MAAX of a Superior Proposal in accordance with Section 5.7 and the
Newco Parties have not made an offer to amend the terms of this
Agreement under Section 5.7.2 or, if the Newco Parties have made such
an offer, the Newco Parties and MAAX have not entered into an amended
agreement in accordance with Section 5.7.2; or
(f) Newco and Newco II become entitled to any payment
under Article 7.
7.2.3 Mutual Termination. This Agreement may, at any time before or
after the holding of the MAAX Meeting but not later than the Effective Time:
(a) be terminated by the mutual agreement of MAAX, Newco
and Newco II (without further action on the part of the Shareholders if
terminated after the holding of the MAAX Meeting);
(b) be terminated by Newco or Newco II, or the one hand,
or by MAAX, on the other hand, by written notice to the other upon the
failure of the Shareholders to approve the Amalgamation at the MAAX
Meeting (except where the failure of the Shareholders to approve the
Amalgamation is due to the failure of such party to comply with its
obligations under this Agreement); or
(c) be terminated by Newco or Newco II, on the one hand,
or by MAAX, on the other hand, by written notice to the other upon
receipt of a Governmental Entity's
32
final, non-appealable order permanently restraining, enjoining or
otherwise prohibiting the transactions contemplated hereby.
7.2.4 Effect of Termination. In the case of any termination of this
Agreement pursuant to this Article 7, this Agreement shall be of no further
force and effect except for Sections 7.3, 7.4, 8.1, 8.4 and 8.6, which shall
continue in full force and effect, and provided that no termination of this
Agreement and no payment of any fee or any expense reimbursement under Sections
7.3 and 7.4 shall relieve any party from liability for any breach of this
Agreement or affect the obligations of the parties under the Confidentiality
Agreement.
7.3 TERMINATION FEE.
7.3.1 If (i) the Board of Directors fails to unanimously recommend
to Shareholders that they vote in favour of the Amalgamation; or (ii) having
made the recommendation referred to in clause (i) above, the Board of Directors
subsequently modifies (in a manner adverse to Newco and Newco II) or withdraws
such recommendation made by the Board of Directors that Shareholders vote in
favour of the Amalgamation or fails to reconfirm same after a request to do so
by Newco or Newco II as contemplated in Section 5.1; or (iii) a third party
commences a take over bid for MAAX and the Board of Directors fails to issue a
statement within 10 days thereof that recommends rejection of the take over bid;
(iv) MAAX breaches in any material respect any of its obligations contained in
Section 5.1.1 or 5.1.2; or (v) MAAX terminates this Agreement pursuant to
Section 7.2.1(e) or the Newco Parties terminate this Agreement pursuant to
Section 7.2.2(e); or (vi) at any time during the period from the date hereof to
the date which is six months following the termination of this Agreement (the
"TAIL PERIOD"), subject to Section 7.3.2, any Person (other than the Newco
Parties) enters into any definitive agreement with MAAX with respect to any
merger, amalgamation (other than the Amalgamation), take-over bid, acquisition
of material assets (including transfer of assets in favour of an income trust or
any lease, long-term supply agreement or other arrangement having the same
economic effect as a sale) or material acquisition of Shares or rights or
interests therein or thereto or similar transactions involving MAAX or any of
its Subsidiaries; then, in any such event, MAAX shall pay to Newco and Newco II
in cash a termination fee of $0.5625 per Share, on a fully diluted basis, within
two Business Days after notice by Newco or Newco II or, in the case of
termination by MAAX pursuant to Section 7.2.1(e), at the time of such
termination by MAAX.
7.3.2 Notwithstanding the foregoing, the termination fee shall not
be payable by MAAX in connection with any event referred to in Section 7.3.1(vi)
above occurring during the Tail Period if, prior to termination of the
Agreement:
(a) the Newco Parties are in breach in any material
respect of any of their obligations under this Agreement; or
(b) provided that MAAX is not in breach in any material
respect of any of its obligation under this Agreement, either (i) a
condition contained in any of Sections 6.1.1, 6.1.2, 6.2.6 and 6.2.14
was not satisfied, fulfilled or waived, as the case may be, or (ii) the
condition contained in Section 6.2.9 was not satisfied, fulfilled or
waived with respect to existing third party financing sources of MAAX
or any of its Subsidiaries.
33
7.4 EXPENSES.
7.4.1 Subject to Section 7.4.2, if the Newco Parties terminate this
Agreement for any reason (other than by reason of any of the conditions
contained in Sections 6.2.6 and 6.2.14 not being satisfied, fulfilled or waived,
as the case may be), provided that the Newco Parties are not then in breach in
any material respect of any of their obligations under this Agreement, the Newco
Parties shall send a notice to MAAX (which shall include reasonable information
evidencing the payment by the Newco Parties of the relevant fees or expenses)
describing all reasonable out-of-pocket third party fees and expenses
(including, without limitation (A) all fees and expenses payable to legal
counsel, accountants and other professional advisors to the Newco Parties,
including financial advisors, (B) all solicitation, printing and mailing costs,
(C) all regulatory filing fees, and (D) travel expenses) (the "OUT-OF-POCKET
FEES") incurred by the Newco Parties or on their behalf in connection with this
Agreement and the Amalgamation and MAAX shall reimburse the Newco Parties for up
to the first $3,000,000 of the Out-of-Pocket Fees in excess of the first
$1,000,000.
7.4.2 Notwithstanding Section 7.4.1, if the Agreement is terminated
by reason (a) of the breach by MAAX in any material respect of any of its
obligations under this Agreement, or (b) that any representation or warranty
made by MAAX to the Newco Parties in this Agreement is not true and correct in
all material respects or, where such representation or warranty is qualified by
materiality, true and correct in all respects at the date hereof, or (c) of the
condition contained in Section 6.2.9 not being satisfied, fulfilled or waived,
except with respect to existing third party financing sources of MAAX or any of
its Subsidiaries, provided that in any such case the Newco Parties are not then
in breach in any material respect of any of their obligations under this
Agreement, then MAAX shall, not later then 30 days after the transmission of a
notice to MAAX (which shall include reasonable information evidencing the
payment by the Newco Parties of the relevant fees or expenses), reimburse the
Newco Parties for the Out-of-Pocket Fees incurred by the Newco Parties or on
their behalf in connection with this Agreement and the Amalgamation, provided
that such fees and expenses shall not in any event exceed a maximum aggregate
amount of $3,750,000.
7.4.3 No expense reimbursement shall be payable pursuant to this
Section 7.4 in the event that the termination fee is paid to Newco and Newco II
pursuant to Section 7.3. For more certainty, no Out-of-Pocket Fees may be taken
into account more than once for the purposes of Sections 7.4.1 and 7.4.2 and
MAAX shall in no circumstances be required or called upon to reimburse or pay
indemnity for an Out-of-Pocket Fee more than once thereunder.
ARTICLE 8
GENERAL
8.1 NOTICES. All notices and other communications which may or are required
to be given pursuant to any provision of this Agreement shall be given or made
in writing and shall be deemed to be validly given if served personally, by
telecopy or e-mail, in each case addressed to the particular party at:
34
8.1.1 the Newco Parties, as follows:
3087052 Nova Scotia Company and
3087053 Nova Scotia Company
c/o X.X. Childs Associates, L.P.
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
Telecopier: (000) 000-0000
E-mail: xxxxxx@xxxxxxxx.xxx
Telephone: (000) 000-0000
With a copy to:
Borealis Capital Corporation
0 Xxxxxxxx Xxxxxx Xxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx, X0X 0X0
Attention: Andre La Forge
Telecopier: (000) 000-0000
E-mail: xxxxxxxx@xxxxxxxx-xxxxxxx.xxx
Telephone: (000) 000-0000
Ontario Municipal Employees Retirement Board
Xxx Xxxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Xxxxxxx Xxxxxx
Telecopier: (000) 000-0000
E-mail: xxxxxxx@xxxxx.xxx
Telephone: (000) 000-0000
35
X.X. Childs Associates, L.P.
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
Telecopier: (000) 000-0000
E-mail: xxxxxx@xxxxxxxx.xxx
Telephone: (000) 000-0000
Fasken Xxxxxxxxx DuMoulin LLP
000 Xxxxxx Xxxxxxxx
Xxxxx 0000
Xxxxxxxx, Xxxxxx X0X 0X0
Attention: Xxxxxx Xxxx
Telecopier: (000) 000-0000
E-mail: xxxxx@xxx.xxxxxx.xxx
Telephone: (000) 000-0000
Xxxx Xxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxx
Telecopier: (000) 000-0000
E-mail: xxxxxx@xxxxxxxxxxx.xxx
Telephone: (000) 000-0000
8.1.2 MAAX, as follows:
MAAX Inc.
000 Xxxxxxx
Xxxxxx-Xxxxx, Xxxxxx X0X 0X0
Attention: Xxxxxxx Xxxxxxx, Chairman of the Independent
Committee and Xxxx Xxxxxxx, Corporate Secretary
Telecopier: (000) 000-0000 and (000) 000-0000
E-mail: xxxxxxxx@xxxx.xxx
Telephone: (000) 000-0000
36
With a copy to:
Xxxxxx Xxxxxx Gervais LLP
1000 de la Xxxxxxxxxxx Xxxxxx Xxxx
Xxxxx 000
Xxxxxxxx, Xxxxxx X0X 0X0
Attention: F.R. Xxxxx and H. Xxxx Xxxxxx
Telecopier: (000) 000-0000
E-mail: xxxxxx@xxxxxxxxx.xxx and
xxxxxxx@xxxxxxxxx.xxx
Telephone: (000) 000-0000
or at such other address of which any party may, from time to time, advise the
other parties by notice in writing given in accordance with the foregoing. The
date of receipt of any such notice shall be deemed to be the date of delivery,
telecopying or e-mailing thereof.
8.2 ASSIGNMENT. This Agreement shall not be assigned by any party hereto
without the prior written consent of the other parties, except that Newco or
Newco II may assign this Agreement to any of its wholly-owned Affiliates without
the prior consent of MAAX.
8.3 COOPERATION / FURTHER ASSURANCES. Each of the parties hereto agrees to
cooperate in good faith and to take all reasonable steps and actions after the
date hereof, as are not adverse to the party requested to take any such step or
action, to complete the Amalgamation and the other transactions contemplated
hereby. Each party hereto shall, from time to time, and at all times hereafter,
at the request of another party hereto, but without further consideration, do
all such further acts and execute and deliver all such further documents and
instruments as shall be reasonably required in order to fully perform, carry out
or better evidence the terms and intent hereof.
8.4 EXPENSES. Except as otherwise provided in Article 7, each of the
parties shall pay its own legal, financial, advisory, accounting and other costs
and expenses incurred in connection with the preparation, execution and delivery
of this Agreement and the Amalgamation and any other costs and expenses
whatsoever and howsoever incurred.
8.5 PUBLIC ANNOUNCEMENTS. Except to the extent required by Law, no public
announcement or press release concerning the matters referred to in this
Agreement may be made by the Newco Parties or MAAX without the prior consent of
the other party. Except to the extent required by Law, no copy of this Agreement
may be provided by the Newco Parties or MAAX to any other person, except their
respective directors, officers, employees, advisors or prospective lenders,
without the prior consent of the other party. The provisions of this Agreement
may be summarized in the Circular, and in any material change report filed by
MAAX in connection with the public announcement of the Amalgamation.
8.6 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the Laws of the Province of Quebec and the Laws of Canada
applicable therein.
37
8.7 FORUM; JURISDICTION. The parties hereby submit to the exclusive
jurisdiction of the competent court in the judicial district of Montreal,
Province of Quebec for any dispute, disagreement, controversy or Claim arising
out of or in connection with the transactions contemplated by this Agreement.
8.8 INVALIDITY OF PROVISIONS. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any Law, all
other conditions and provisions of this Agreement shall nevertheless remain in
full force and effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that the transactions contemplated hereby are fulfilled to the fullest extent
possible.
8.9 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together shall be deemed to constitute one and the same instrument.
8.10 INVESTIGATION BY PARTIES. No investigations made by or on behalf of
either party or any of their respective authorized agents at any time shall have
the effect of waiving, diminishing the scope of or otherwise affecting any
representation, warranty or covenant made by the other party in or pursuant to
this Agreement.
8.11 TIME. Time shall be of the essence of this Agreement.
8.12 AMENDMENTS. This Agreement may not be modified, amended, altered or
supplemented except in the manner contemplated herein and upon the execution and
delivery of a written agreement executed by all parties, save and except Section
2.1.2 which may be amended by Newco and Newco II without the consent of any of
the other parties.
8.13 SPECIFIC PERFORMANCE AND OTHER EQUITABLE RIGHTS. Each of the parties
recognizes and acknowledges that the Newco Parties would not have agreed to
pursue the Amalgamation, and MAAX would not have agreed to recommend that
Shareholders vote in favour of the Amalgamation, unless this Agreement was
executed and, accordingly, acknowledges and agrees that a breach by a party of
any obligation in this Agreement will cause the other party to sustain injury
for which it would not have an adequate remedy at Law for money damages.
Therefore, each of the parties agrees that in the event of any such breach, the
aggrieved party shall be entitled to specific performance of such obligation and
provisional interlocutory and permanent injunctive relief and other equitable
remedies in addition to any other remedy to which it may be entitled, at Law or
in equity, and the parties further agree to waive any requirement for the
securing or posting of any bond in connection with the obtaining of any such
injunctive relief or other equitable remedies.
8.14 NO THIRD PARTIES BENEFICIARIES. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
Person any right, benefit or remedy of any nature whatsoever
38
under or by reason of this Agreement, other than under Section 5.9 (which are
intended to be for the benefit of the Persons covered thereby and may be
enforced by such Persons at any time).
8.15 WAIVER. No waiver, whether by conduct or otherwise, of any of the
provisions of this Agreement shall be deemed to constitute a waiver of any other
provisions (whether or not similar) nor shall such waiver constitute a
continuing waiver unless otherwise expressly provided in an instrument duly
executed by the parties to be bound thereby.
(Signatures on next page)
39
IN WITNESS WHEREOF the parties hereto have executed this Agreement as
of the date first written above.
3087052 NOVA SCOTIA COMPANY 3087053 NOVA SCOTIA COMPANY
Per: /s/ Xxxxx X. Xxxx Per: /s/ Xxxxx X. Xxxx
-------------------------------- -------------------------------
Xxxxx X. Xxxx Xxxxx X. Xxxx
Secretary Secretary
9139-4460 QUEBEC INC. 0000-0000 XXXXXX INC.
Per: /s/ Xxxxx X. Xxxx Per: /s/ Xxxxx X. Xxxx
-------------------------------- --------------------------------
Xxxxx X. Xxxx Xxxxx X. Xxxx
Secretary Secretary
MAAX INC.
Per: /s/ Xxxxxxx Xxxxxx
--------------------------------
Xxxxxxx Xxxxxx
Chairman of the Board of Directors
40
