EXHIBIT 10.16
MAAX CORPORATION
US$150,000,000 9 3/4% SENIOR SUBORDINATED NOTES DUE 2012
PURCHASE AGREEMENT
May 27, 2004
Xxxxxxx, Xxxxx & Co.,
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
As representatives of the several Purchasers
named in Schedule I hereto,
c/o Goldman Sachs & Co.
00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
MAAX Corporation, a Nova Scotia unlimited company (the "Company"),
proposes to issue and sell to Xxxxxxx, Xxxxx & Co. and Xxxxxxx Xxxxx & Co.,
Xxxxxxx Xxxxx Xxxxxx, Xxxxxx & Xxxxx Incorporated (the "Representatives") and
the other Purchasers named in Schedule I hereto (the "Purchasers"), in the
respective amounts set forth in Schedule I hereto, an aggregate of
US$150,000,000 principal amount of the 9 3/4% Senior Subordinated Notes due 2012
of the Company specified above (the "Notes"). The Notes will be unconditionally
guaranteed (the "Guarantees") by Beauceland Corporation, a Nova Scotia unlimited
company (the "Parent Guarantor"), the entities listed on Schedule II attached
hereto (the "Subsidiary Guarantors" and together with the Parent Guarantor, the
"Guarantors," and together with the Company, the "Issuers"). The Notes and the
Guarantees are hereinafter collectively referred to in this Purchase Agreement
("Agreement") as the "Securities."
1. The Issuers represent and warrant to, and agree with, each of
the Purchasers that:
(a) A preliminary offering circular, dated May 17, 2004 (the
"Preliminary Offering Circular") and an offering circular, dated May 27,
2004 (the "Offering Circular"), in each case including the Canadian
supplement thereto, have been prepared in connection with the offering of
the Securities. Any reference to the Preliminary Offering Circular or the
Offering Circular shall be deemed to refer to and include any Additional
Issuer Information (as defined in Section 5(f)) furnished by any Issuer
prior to the completion of the distribution of the Securities. As of the
date thereof, the Preliminary
Offering Circular did not, and the Offering Circular and any amendments or
supplements thereto did not as of the date hereof and will not, as of the
Time of Delivery, contain an untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by a
Purchaser through any Representative expressly for use therein;
(b) None of the Issuers nor any of their subsidiaries has
sustained since the date of the latest audited financial statements
included in the Offering Circular any material loss or interference with
its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in
the Offering Circular; and, since the respective dates as of which
information is given in the Offering Circular, there has not been any
change in the capital stock, total debt or long-term debt of the Issuers
or any of their subsidiaries (other than as a result of intercompany
transactions, including, without limitation, capital contributions, debt
repayments, restructurings, amalgamations and wind-ups) or any material
adverse change, or any development involving a prospective material
adverse change, in or affecting the business, management, financial
position, shareholders' or members' equity or results of operations of the
Issuers and their subsidiaries, taken as a whole, otherwise than as set
forth or contemplated in the Offering Circular;
(c) The Company and its subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title to
all personal property owned by them, in each case free and clear of all
liens, encumbrances and defects except such as are described in the
Offering Circular or those that, individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect (as defined
below) and do not interfere with the use made and proposed to be made of
such property by the Company and its subsidiaries; and any real property
and buildings held under lease by the Company and its subsidiaries are
held by them under valid, subsisting and enforceable leases with such
exceptions as could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect and do not interfere with the
use made and proposed to be made of such property and buildings by the
Company and its subsidiaries;
(d) The Company has been duly incorporated and is validly existing
as an unlimited company in good standing under the laws of Nova Scotia,
with power and authority (corporate and other) to own its properties and
conduct its business as described in the Offering Circular, and has been
duly qualified as a foreign company for the transaction of business and is
in good standing under the laws of each other jurisdiction in which it
owns or leases properties or conducts any business so as to require such
qualification, or is subject to no material liability or disability by
reason of the failure to be so qualified in any such jurisdiction; and
each subsidiary of the Company and the Parent Guarantor has been duly
incorporated or organized and is validly existing as a corporation,
limited liability company, unlimited company or partnership in good
standing under the laws of its jurisdiction of organization; the entities
set forth on
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Schedule III are the only direct or indirect subsidiaries of the Company
(the term "subsidiary" as used herein with respect to any person includes
all entities which will become subsidiaries of such person upon
consummation of the transaction contemplated by the Merger Agreement (as
defined below));
(e) At the Time of Delivery, the Company will have an authorized
capitalization as set forth in the Offering Circular, and all of the
issued shares of capital stock of the Company will be duly and validly
authorized and issued and will be fully paid but assessable and all of the
issued shares of capital stock, membership interests or partnership
interests of each subsidiary of the Company will be duly and validly
authorized and issued, will be fully paid and non- assessable (except in
the case of a subsidiary that is a Nova Scotia unlimited company, in which
case the shares are assessable) and (except for directors' qualifying
shares) will be owned directly or indirectly by the Company, free and
clear of all liens, encumbrances, equities or claims (other than the liens
under the Credit Agreement (as defined below));
(f) This Agreement has been duly authorized, executed and
delivered by each of the Issuers;
(g) The Securities have been duly authorized by each of the
Issuers and, when executed, issued and delivered by each of the Issuers
and authenticated by U.S. Bank Trust, N.A., as Trustee (the "Trustee"),
pursuant to this Agreement and the Indenture (as defined below), will have
been duly executed, issued and delivered by each of the Issuers and will
constitute valid and legally binding obligations of the Issuers, entitled
to the benefits provided by the indenture to be dated as of June 4, 2004
(the "Indenture") between the Issuers and the Trustee, under which they
are to be issued, enforceable against each of the Issuers in accordance
with their terms, subject as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles; the
Securities will be in substantially the form contemplated by the
Indenture; the form and issuance of the Securities to be issued under the
Indenture complies with the Companies Act (Nova Scotia); and no
registration, filing or recording of the Indenture under the laws of
Canada or any province thereof is necessary in order to preserve or
protect the validity or enforceability of the Indenture or the Securities
issued thereunder;
(h) The Indenture has been duly authorized by each of the Issuers
and, when executed and delivered by each of the Issuers, will have been
duly executed and delivered by each of the Issuers and (assuming due
authorization, execution, delivery and performance by the Trustee) will
constitute a valid and legally binding obligation of each of the Issuers
enforceable against each of the Issuers in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting creditors'
rights and to general equity principles;
(i) The exchange and registration rights agreement to be dated
June 4, 2004 among the Issuers and the Purchasers (the "Registration
Rights Agreement") has been duly authorized by each of the Issuers and,
when executed and delivered by each of the
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Issuers, will have been duly executed and delivered by each of the Issuers
and will constitute a valid and legally binding obligation of each of the
Issuers, enforceable against each of the Issuers in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights or limiting the availability of, and public
policy against, indemnification and contribution and to general equity
principles;
(j) The exchange securities, with terms substantially identical to
those of the Securities, to be issued in exchange for the Securities in
connection with the exchange offer contemplated by the Registrations
Rights Agreement (the "Exchange Securities") have been duly authorized for
issuance by each of the Issuers and, when executed, issued and delivered
by each of the Issuers and authenticated by the Trustee pursuant to this
Agreement and the Indenture, will have been duly executed, issued and
delivered by each of the Issuers and will constitute valid and legally
binding obligations of each of the Issuers, entitled to the benefits
provided by the Indenture and enforceable in accordance with their terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting creditors'
rights and to general equity principles;
(k) The Credit Agreement, to be dated as of June 4, 2004 among the
Company, the Guarantors, Xxxxxxx Sachs Credit Partners L.P., Royal Bank of
Canada and Xxxxxxx Xxxxx Capital Corporation and the lenders party
thereto, (the "Credit Agreement"), has been duly authorized by each of the
Issuers, and, when executed and delivered by each of the Issuers, will
have been duly executed and delivered by each of the Issuers and will
constitute a valid and legally binding obligation of each of the Issuers,
enforceable against each of the Issuers in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting creditors'
rights and to general equity principles;
(l) The Merger Agreement, dated as of March 10, 2004, among
3087052 Nova Scotia Company, 3087053 Nova Scotia Company, 0000-0000 Xxxxxx
Inc., 0000-0000 Xxxxxx Inc. and MAAX Inc. (the "Merger Agreement") has
been duly authorized, executed and delivered by the parties thereto and
constitutes a valid and legally binding obligation of the parties thereto,
enforceable against the parties thereto in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting creditors'
rights and to general equity principles;
(m) None of the transactions contemplated by this Agreement and to
be performed by each of the Issuers (including, without limitation, the
use of the proceeds from the sale of the Securities) will violate or
result in a violation of Section 7 of the United States Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or any regulation
promulgated thereunder, including, without limitation, Regulations T, U,
and X of the Board of Governors of the Federal Reserve System, in each
case as the same may be in effect or as the same may hereafter be in
effect at the Time of Delivery;
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(n) The issue and sale of the Securities by each of the Issuers
and the compliance by each of the Issuers and their subsidiaries with all
of the provisions of the Securities, the Indenture, the Registration
Rights Agreement, this Agreement, the Credit Agreement and the Merger
Agreement (collectively, the "Transaction Documents") and the transactions
herein and therein contemplated will not (i) conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which any Issuer or any of its
subsidiaries is a party or by which any Issuer or any of its subsidiaries
is bound or to which any of the property or assets of any Issuer or any of
its subsidiaries is subject, (ii) result in any violation of the
provisions of the organizational documents of any Issuer or any of its
subsidiaries, (iii) result in any violation of the provisions of any law
or statute or any order, rule, regulation, judgment or decree of any
court, central bank, stock exchange or governmental agency or body
("Governmental Agency") having jurisdiction over any Issuer or any of its
subsidiaries or any of their properties or assets, except in the case of
clauses (i) and (iii) for such conflicts, breaches, violations, defaults
or liens that, individually or in the aggregate, would not reasonably be
expected to have a material adverse effect on and/or material adverse
developments with respect to the business, management, financial position,
shareholders' or members' equity or results of operations of the Issuers
and their subsidiaries, taken as a whole ("Material Adverse Effect"); and
no consent, approval, authorization, order, registration or qualification
("Governmental Authorizations") of or with any such Governmental Agency is
required for the issue and sale of the Securities or the consummation by
the Issuers of the transactions contemplated by the Transaction Documents,
except for (w) the filing of a registration statement by the Issuers with
the Commission pursuant to the United States Securities Act of 1933, as
amended (the "Act") pursuant to the Registration Rights Agreement, (x) the
filing of any document or financing statement to perfect the liens granted
to the lenders under the Credit Agreement, (y) such Governmental
Authorizations as may be required under state securities or Blue Sky laws
or the private placement or equivalent provisions of the securities laws
of any province of Canada or the laws of any other jurisdiction outside of
the United States, in connection with the purchase and distribution of the
Securities by the Purchasers and (z) competition law filings in Germany
and Austria;
(o) None of the Issuers nor any of their subsidiaries is (i) in
violation of its organizational documents or (ii) in default in the
performance or observance of any obligation, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement, lease
or other agreement or instrument to which it is a party or by which it or
any of its properties may be bound except such defaults that, individually
or in the aggregate, could not reasonably be expected to result in a
Material Adverse Effect;
(p) The statements set forth in the Offering Circular under the
caption "Description of Notes," insofar as they purport to constitute a
summary of the terms of the Securities, the Indenture and the Registration
Rights Agreement, and under the captions "Income Tax Considerations" and
"Underwriting," insofar as they purport to describe the provisions of the
laws and documents referred to therein, are accurate and complete in all
material respects;
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(q) Other than as set forth in the Offering Circular, there are no
legal or governmental proceedings pending to which any Issuer or any of
its subsidiaries is a party or of which any property or assets of any
Issuer or any of its subsidiaries is the subject which, if determined
adversely to any Issuer or any of its subsidiaries, would, individually or
in the aggregate, reasonably be expected to have a Material Adverse
Effect; and, to the best of any Issuer's knowledge, no such proceedings
are threatened or contemplated by Governmental Authorities or threatened
by others;
(r) No stamp or other issuance or transfer taxes or duties and no
capital gains, income, withholding or other taxes are payable by or on
behalf of the Purchasers to the Government of Canada or Nova Scotia or any
political subdivision or taxing authority thereof or therein in connection
with (A) the issuance, sale and delivery by the Issuers to or for the
respective accounts of the Purchasers of the Securities or (B) the sale
and delivery outside Canada by the Purchasers of the Securities to the
initial purchasers thereof;
(s) Each Issuer and each of their subsidiaries have all material
licenses, franchises, permits, authorizations, approvals and orders and
other concessions of and from all Governmental Agencies that are necessary
to own or lease their properties and conduct their businesses as described
in the Offering Circular;
(t) No Issuer nor any of its subsidiaries has taken, directly or
indirectly, any action which was designed to or which has constituted or
which might reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of any Issuer in connection with
the offering of the Securities;
(u) When the Securities are issued and delivered pursuant to this
Agreement, the Securities will not be of the same class (within the
meaning of Rule 144A under the Act) as securities which are listed on a
national securities exchange registered under Section 6 of the Exchange
Act or quoted in a U.S. automated inter-dealer quotation system;
(v) No Issuer is, nor immediately after giving effect to the
offering and sale of the Securities, will be, an "investment company," or
an entity "controlled by an investment company," as such terms are defined
in the United States Investment Company Act of 1940, as amended (the
"Investment Company Act") and the rules and regulations thereunder;
(w) Neither any Issuer nor any person acting on its behalf (other
than the Purchasers as to whom the Issuers make no representation) has
offered or sold the Securities by means of any general solicitation or
general advertising within the meaning of Rule 502(c) under the Act or,
with respect to Securities sold outside the United States to non-U.S.
persons (as defined in Rule 902 under the Act), by means of any directed
selling efforts within the meaning of Rule 902 under the Act and the
Issuers, any affiliate of any Issuer and any person acting on its or their
behalf has complied with and will implement the "offering restriction"
within the meaning of such Rule 902;
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(x) Within the preceding six months, none of the Issuers or any
other person acting on behalf of any Issuer has offered or sold to any
person any Securities or any securities of the same or a similar class as
the Securities other than the Securities offered or sold to the Purchasers
hereunder. The Issuers will take reasonable precautions designed to insure
that any offer or sale, direct or indirect, in the United States or to any
U.S. person (as defined in Rule 902 under the Act) of any Securities or
any substantially similar security issued by any Issuer, within six months
subsequent to the date on which the distribution of the Securities has
been completed (as notified to the Company by Xxxxxxx, Sachs & Co.), is
made under restrictions and other circumstances reasonably designed not to
affect the status of the offer and sale of the Securities in the United
States and to U.S. persons contemplated by this Agreement as transactions
exempt from the registration provisions of the Act;
(y) KPMG LLP, which has certified certain financial statements
included in the Offering Circular as set forth in its report included
therein, is an independent public accounting firm as required by the Act
and the rules and regulations of the Commission thereunder;
(z) Except as described in the Offering Circular and except such
matters as would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect,
(i) no Issuer nor any of its subsidiaries is in violation of
any federal, state, provincial, local or foreign
statute, law, rule, regulation, ordinance, code, policy
or rule of common law or any judicial or administrative
order, consent, decree or judgment thereof, including
any judicial or administrative order, consent, decree or
judgment relating to pollution or protection of human
health, the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or
subsurface strata) or wildlife, including, without
limitation, laws and regulations relating to the release
or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous
substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the
manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous
Materials (collectively, "Environmental Laws"),
(ii) the Issuers and their subsidiaries have all permits,
authorizations and approvals required under any
applicable Environmental Laws and are in compliance with
their requirements,
(iii) there are no pending or, to the knowledge of the
Issuers, threatened administrative, regulatory or
judicial actions, suits, demands, demand letters,
claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any
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Environmental Law against any of the Issuers or any of
their subsidiaries;
(iv) no Issuer nor any of its subsidiaries is conducting any
response or other corrective action at any location
pursuant to any applicable Environmental Laws;
(v) there are no events or circumstances that could
reasonably be expected to form the basis of an order for
clean-up or remediation, or an action, suit or
proceeding by any private party or governmental body or
agency, against or affecting, or which could result in
liability of, any Issuer or any of its subsidiaries
relating to Hazardous Materials or Environmental Laws;
(aa) The Issuers and their subsidiaries own or possess adequate
rights to use all material patents, patent applications, trademarks,
service marks, trade names, trademark registrations, service xxxx
registrations, copyrights and licenses necessary for the conduct of their
businesses as described in the Offering Circular, except where the failure
to have such rights would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect and the Issuers
have no knowledge of any reason to believe that the conduct of the
businesses of the Issuers and their subsidiaries will conflict with, and,
except as disclosed in the Preliminary Offering Circular and the Offering
Circular, have not received any notice of any claim of conflict with, any
such rights of others which, individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect;
(bb) Subject to the lack of audited financial statements of Xxxx
Plastics Company, Inc., the financial statements, including the notes
thereto, included in the Offering Circular comply as to form in all
material respects with the applicable accounting requirements of the Act,
the Exchange Act, and the rules and regulations of the Commission
thereunder, and present fairly in all material respects the financial
position of the entities to which they relate as of the dates indicated
and their results of operations, cash flows and shareholders' equity for
the periods specified; said financial statements have been prepared in
conformity with generally accepted accounting principles as applied in the
United States, applied on a consistent basis throughout the periods
involved except as noted therein; the unaudited pro forma consolidated
financial statements of Parent Guarantor and its subsidiaries and the
related notes thereto included in the Offering Circular present fairly the
information shown therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial
statements and have been properly compiled on the bases described therein;
and the assumptions used in the preparation thereof are reasonable and the
adjustments made therein are appropriate to give effect to the
transactions and circumstances referred to therein; the information, to
the extent derived from the audited financial statements included in the
Offering Circular, set forth under the captions "Summary--Summary
Historical and Pro Forma Consolidated Financial Data" and "Selected
Historical Financial Data" included in the
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Offering Circular fairly present the information set forth therein on a
basis consistent with that of the audited financial statements included in
the Offering Circular; and the other statistical and market and
industry-related data included in the Offering Circular present fairly the
information included therein, and are based upon or derived from sources
that the Company believes to be reliable and accurate.
(cc) No Issuer has, or, as a result of consummation of the
transactions herein contemplated will have, incurred debts beyond its
ability to pay as they mature; the present fair saleable value of the
assets of each Issuer exceeds the amount required to pay the probable
liability on its existing debts (whether matured or unmatured, liquidated
or unliquidated, absolute, fixed or contingent), as they become absolute
and matured, and, as a result of consummation of the transactions herein
contemplated, will exceed such amount; no Issuer has or, as a result of
consummation of the transactions herein contemplated will have,
unreasonably small capital for it to carry on its business as proposed to
be conducted; no Issuer is incurring obligations or making transfers under
any evidence of indebtedness with the intent to hinder, delay or defraud
any entity to which it is or will become indebted;
(dd) No labor disturbance by the employees of any Issuer or any of
their subsidiaries exists or, to the best of each Issuer's knowledge, is
imminent which individually or in the aggregate, would reasonably be
expected to have a Material Adverse Effect; except as disclosed in the
Offering Circular, none of the Issuers or their subsidiaries is party to a
collective bargaining agreement; and there are no unfair labor practice
complaints pending against any Issuer or any of its subsidiaries or, to
the best of each of the Issuers' knowledge, threatened against them which,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect;
(ee) No "prohibited transaction" (as defined in Section 406 of the
Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"), or Section
4975 of the Internal Revenue Code of 1986, as amended from time to time
(the "Code")), or "accumulated funding deficiency" (as defined in Section
302 of ERISA) or any of the events set forth in Section 4043(c) of ERISA
(other than events with respect to which the 30-day notice requirement
under Section 4043 of ERISA has been waived or any event described in
Section 4043(c)(9) or 4043(c)(11) that may result from the offering of the
Securities or the transactions contemplated by the Merger Agreement) has
occurred with respect to any "employee benefit plan," (as defined in
Section 3(3) of ERISA), or any "employee benefit plan" of any entity which
is considered one employer with any Issuer or any subsidiary of any Issuer
under Section 4001 of ERISA or Section 414 of the Code (an "ERISA
Affiliate"); no fact or circumstance exists which could result in any
pension plan being wound up (in whole or in part), being subject to an
accelerated funding or special payment obligation, being less than fully
funded on a going concern or solvency basis or being required to repay to
the plan any expenses, amounts withdrawn from the plan or amounts applied
to contribution holidays; each employee benefit plan is in compliance in
all material respects with its terms and applicable law, including ERISA
and the Code and has been established, administered, funded and invested
in material compliance with its terms and all applicable law; and no
Issuer nor any ERISA Affiliate has participated in any multiemployer plan
(as defined in Section 3(37) of ERISA or the comparable provisions of the
applicable legislation of any other jurisdiction) for which it would incur
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a material liability if it were to completely or partially withdraw
(within the meaning of Section 4201 or 9203 of ERISA or the comparable
provisions of the applicable legislation of any other jurisdiction) from
any such plan; no Issuer nor any ERISA Affiliate has incurred or expects
to incur liability under Title IV of ERISA or the comparable provisions of
the applicable legislation of any other jurisdiction with respect to the
termination of, or withdrawal from any "pension plan" (as defined in
Section 3(2) of ERISA); and each "pension plan" for which any Issuer would
have any liability that is intended to be qualified under Section 401(a)
of the Code is so qualified in all material respects and, to the best of
each Issuer's knowledge, nothing has occurred, whether by action or by
failure to act, which could cause the loss of such qualification;
(ff) Each of the Parent Guarantor and its subsidiaries (i) makes
and keeps books and records which are accurate in all material respects
and (ii) maintains internal accounting controls which provide reasonable
assurance that (A) transactions are executed in accordance with
management's authorization, (B) transactions are recorded as necessary to
permit preparation of its financial statements and to maintain
accountability for its assets, (C) access to its financial assets is
permitted only in accordance with management's authorization and (D) the
reported accountability for its assets is compared with existing assets at
reasonable intervals;
(gg) In connection with the sale and distribution of the Notes in
Canada, the Company acknowledges and agrees that: (i) in accordance with
applicable securities laws of certain of the provinces of Canada, certain
contractual rights of action for rescission and damages as set forth in
the Offering Circular used in Canada (being the Offering Circular, as
supplemented for use in making offers and sales in certain provinces of
Canada) under the heading "Rights of Action for Damages or Rescission"
will be granted by the Company to purchasers who acquire the Notes from
the Purchasers or their affiliates in Canada, and (ii) such Canadian
purchasers shall be entitled to exercise such contractual rights of action
against the Company in accordance with their terms. The Company agrees to
make all private placement or similar filings required to be made with
securities regulatory authorities in Canada with respect to the offering,
sale and distribution of the Notes to the Purchasers or their affiliates
and the initial resales or first trades of the Notes by the Purchasers to
purchasers in Canada, including, without limitation, any required reports
of the trades constituting such initial resales or first trades (to the
extent the necessary information is provided by the Purchasers to the
Company); and to pay all filing or other fees (other than fees relating to
the filing of a prospectus) applicable in connection therewith; and
(hh) The Transaction Documents conform in all material respects to
the descriptions thereof in the Offering Circular.
2. Subject to the terms herein set forth, the Company agrees to
issue and sell to each of the Purchasers, and, subject to the terms and
conditions herein set forth, each of the Purchasers agrees, severally and not
jointly, to purchase from the Company, at a purchase price of 97.25% of the
principal amount thereof, plus accrued interest, if any, from June 4, 2004 to
the Time of Delivery hereunder, the principal amount of Securities set forth
opposite the name of such Purchaser in Schedule I hereto.
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3. Upon the authorization by you of the release of the
Securities, the several Purchasers propose to offer the Securities for sale upon
the terms and conditions set forth in this Agreement and the Offering Circular
and each Purchaser hereby represents and warrants to, and agrees with the
Issuers that:
(a) It has solicited and will solicit offers for the Securities
only from and will offer and sell the Securities only (i) to persons who
it reasonably believes are "qualified institutional buyers" ("QIBs")
within the meaning of Rule 144A under the Act in transactions meeting the
requirements of Rule 144A and (ii) through its selling agents, outside the
United States, to non-U.S. persons in reliance on Regulation S under the
Act;
(b) It is an institutional "accredited investor" within the
meaning of Rule 501 under the Act;
(c) It has not solicited and will not solicit offers for, or offer
or sell, the Securities by any form of general solicitation or general
advertising, including but not limited to the methods described in Rule
502(c) under the Act or in any manner involving a public offering within
the meaning of Section 4(2) of the Act;
(d) The Securities have not been and will not be registered under
the Act and may not be offered or sold within the United States or to, or
for the account or benefit of, U.S. persons except in accordance with
Regulation S under the Act or pursuant to an exemption from the
registration requirements of the Act. Each Purchaser represents that it
has offered and sold the Securities, and will offer and sell the
Securities (i) as part of their distribution at any time and (ii)
otherwise until 40 days after the later of the commencement of the
offering and the Time of Delivery, only in accordance with Rule 903 of
Regulation S or Rule 144A under the Act. Accordingly, each Purchaser
agrees that neither it, its affiliates nor any persons acting on its or
their behalf has engaged or will engage in any directed selling efforts
with respect to the Securities, and it and they have complied and will
comply with the offering restrictions requirement of Regulation S. Each
Purchaser agrees that, at or prior to confirmation of sale of Securities
(other than a sale pursuant to Rule 144A), it will have sent to each
distributor, dealer or person receiving a selling concession, fee or other
remuneration that purchases Securities from it during the restricted
period a confirmation or notice to substantially the following effect:
"The Securities covered hereby have not been registered under the
U.S. Securities Act of 1933 (the "Securities Act") and may not be
offered and sold within the United States or to, or for the account
or benefit of, U.S. persons (i) as part of their distribution at any
time or (ii) otherwise until 40 days after the later of the
commencement of the offering and the closing date, except in either
case in accordance with Regulation S (or Rule 144A if available)
under the Securities Act. Terms used above have the meaning given to
them by Regulation S."
Terms used in this paragraph have the meanings given to them by
Regulation S.
-11-
Notwithstanding the foregoing, Securities in registered form may be
offered, sold and delivered by the Purchasers in the United States and to
U.S. persons pursuant to clause (a)(i) of this Section 3 without delivery
of the written statement required by this clause (d);
(e) Each Purchaser further represents and agrees that (i) it has
not offered or sold and will not offer or sell any Securities to persons
in the United Kingdom except to persons whose ordinary activities involve
them in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their businesses or otherwise in
circumstances which have not resulted and will not result in an offer to
the public in the United Kingdom within the meaning of the Public Offers
of Securities Regulations 1995, (b) it has complied, and will comply, with
all applicable provisions of the Financial Services Act of 1986 of Great
Britain with respect to anything done by it in relation to the Securities
in, from or otherwise involving the United Kingdom, and (c) it has issued
or passed on and will issue or pass on in the United Kingdom any document
received by it in connection with the issuance of the Securities only to a
person who is of a kind described in Article 11(3) of the Financial
Services Xxx 0000 (Investment Advertisements) (Exemptions) Order 1996 of
Great Britain or is a person to whom the document may otherwise lawfully
be issued or passed on; and
(f) Each Purchaser agrees that it will not offer, sell or deliver
any of the Securities in any jurisdiction outside the United States except
(A) under circumstances that will result in compliance with the applicable
laws thereof, and except as otherwise set forth herein, that it will take
at its own expense whatever action is required to permit its purchase and
resale of the Securities in such jurisdictions (B) in Canada, by way of
private placement or other exemptions from the prospectus requirements.
Each Purchaser understands that no action has been taken to permit a
public offering in any jurisdiction outside the United States where action
would be required for such purpose. Each Purchaser agrees not to cause any
advertisement of the Securities to be published in any newspaper or
periodical or posted in any public place and not to issue any circular
relating to the Securities, except in any such case with the
Representatives' express written consent and then only at its own risk and
expense.
4. a) The Securities to be purchased by each Purchaser
hereunder will be represented by one or more definitive global Securities in
book-entry form that will be deposited by or on behalf of the Company with The
Depository Trust Company ("DTC") or its designated custodian. The Company will
deliver the Securities to Xxxxxxx, Xxxxx & Co. for the account of each
Purchaser, against payment by or on behalf of such Purchaser of the purchase
price therefor by wire transfer, payable to the order of the Company in Federal
(same day) funds, by causing DTC to credit the Securities to the account of
Xxxxxxx, Sachs & Co. at DTC. The Company will cause the certificates
representing the Securities to be made available to Xxxxxxx, Xxxxx & Co. for
checking at least twenty-four hours prior to the Time of Delivery (as defined
below) at the office of DTC or its designated custodian (the "Designated
Office"). The time and date of such delivery and payment shall be 9:30 a.m., New
York City time, on June 4, 2004 or such other time and date as Xxxxxxx, Sachs &
Co. and the Company may agree upon in writing. Such time and date are herein
called the "Time of Delivery."
-12-
(a) The documents to be delivered at the Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including the
cross-receipt for the Securities and any additional documents requested by the
Purchasers pursuant to Section 7(i) hereof, will be delivered at such time and
date at the offices of Xxxx Xxxxxxx LLP at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000-0000 (the "Closing Location"), and the Securities will be delivered at the
Designated Office, all at the Time of Delivery. A meeting will be held at the
Closing Location at 3:00 p.m., New York City time, on the New York Business Day
next preceding the Time of Delivery, at which meeting the final drafts of the
documents to be delivered pursuant to the preceding sentence will be available
for review by the parties hereto. For the purposes of this Section 4, "New York
Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in New York are generally
authorized or obligated by law or executive order to close.
5. The Issuers, jointly and severally, agree with each of the
Purchasers:
(a) To prepare the Offering Circular, including the Canadian
supplement thereto, in a form approved by you; to make no amendment or any
supplement to the Offering Circular without your prior consent (which
consent shall not be unreasonably withheld) promptly after reasonable
notice thereof; and to furnish you with such copies thereof as you may
reasonably request;
(b) Promptly, from time to time, to take such action as you may
reasonably request to qualify the Securities for offering and sale under
the securities laws of such jurisdictions as you may reasonably request
and to comply with such laws so as to permit the continuance of sales and
dealings therein in such jurisdictions for as long as may be necessary to
complete the distribution of the Securities therein, provided that in
connection therewith, no Issuer shall be required to (i) qualify as a
foreign corporation in any jurisdiction wherein it would not otherwise be
required to qualify but for the requirements of Section 3(c)(vi) of the
Registration Rights Agreement, (ii) consent to general service of process
in any such jurisdiction, (iii) take any other action that would subject
it to general service of process or to taxation in excess of a nominal
amount in respect of doing business in any jurisdiction in which it is not
otherwise subject, (iv) make any changes to its organizational documents
or any agreement between it and its equityholders or (v) file a prospectus
in Canada;
(c) To furnish the Purchasers with three copies of the Offering
Circular and each amendment or supplement thereto signed by an authorized
officer of the Company with the independent accountants' report(s) in the
Offering Circular, and any amendment or supplement containing amendments
to the financial statements covered by such report(s), signed by the
accountants, and additional written and electronic copies thereof in such
quantities as you may from time to time reasonably request, and if, at any
time prior to the completion of the resale by the Purchasers of the
Securities, any event shall have occurred as a result of which the
Offering Circular as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances
under which they were made when such Offering Circular is delivered, not
misleading, or, if for any other reason it shall be necessary or desirable
during such same
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period to amend or supplement the Offering Circular, to notify you and
upon your request to prepare and furnish without charge to each Purchaser
and to any dealer in securities as many written and electronic copies as
you may from time to time reasonably request of an amended Offering
Circular or a supplement to the Offering Circular which will correct such
statement or omission or effect such compliance;
(d) For a period of 180 days from the date of the Offering
Circular, not to offer, sell, contract to sell, grant any option to
purchase, issue any instrument convertible into or exchangeable for, or
otherwise transfer or dispose of (or enter into any transaction or device
which is designated to, or could be expected to, result in the disposition
in the future of), any Securities or any securities of the Company that
are substantially similar to the Securities except
(i) the Exchange Securities in exchange for the Securities
in connection with the exchange offer contemplated by
the Registrations Rights Agreement or
(ii) with the prior written consent of the Representatives;
(e) Not to be or become, at any time prior to the expiration of
two years after the Time of Delivery or, if earlier, until such time as
the Securities are no longer restricted securities (as defined in Rule 144
under the Securities Act), an open-end investment company, unit investment
trust, closed-end investment company or face-amount certificate company
that is or is required to be registered under Section 8 of the Investment
Company Act;
(f) To comply with the reporting and information covenant in the
Indenture;
(g) If requested by you, to use all commercially reasonable
efforts to cause the Securities to be eligible for the PORTAL trading
system of the National Association of Securities Dealers, Inc.;
(h) During a period of five years from the date of the Offering
Circular, so long as any of the Securities then remain outstanding, to
furnish to you copies of all reports or other communications (financial or
other) and to deliver to you (i) as soon as they are available, copies of
any reports and financial statements furnished to or filed with the
Commission, applicable securities regulatory authorities in Canada or any
securities exchange on which the Securities or any class of securities of
the Company, Parent Guarantor or MAAX Holdings, Inc. ("Holdings") is
listed; and (ii) such additional information concerning the business and
financial condition of the Parent Guarantor and its subsidiaries as you
may from time to time reasonably request (such financial statements to be
on a consolidated basis to the extent the accounts of the Parent Guarantor
and its subsidiaries are consolidated in reports furnished to its
shareholders generally or to the Commission);
(i) To do and perform all things required to be done and performed
under the Transaction Documents prior to and after the Time of Delivery;
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(j) To comply with all agreements set forth in the representation
letters of the Company to DTC relating to the approval of the Securities
by DTC for "book entry" transfer; and
(k) To use the net proceeds received by them from the sale of the
Securities pursuant to this Agreement in the manner specified in the
Offering Circular under the caption "Use of Proceeds."
6. The Issuers, jointly and severally, covenant and agree with
the several Purchasers that the Issuers will pay or cause to be paid the
following:
(i) the fees, disbursements and expenses of the Issuers'
counsel and accountants in connection with the issue of
the Securities and all other expenses in connection
with the preparation, printing and filing of the
Preliminary Offering Circular and the Offering Circular
(in each case, including the Canadian supplement
thereto) and any amendments and supplements thereto and
the mailing and delivering of copies thereof to the
Purchasers and dealers;
(ii) the cost of printing or producing any Agreement among
Purchasers, this Agreement, the Indenture, the
Registration Rights Agreement, the Blue Sky and legal
investment surveys, closing documents (including any
compilations thereof) and any other documents in
connection with the offering, purchase, sale and
delivery of the Securities;
(iii) all expenses in connection with the qualification of
the Securities and the Exchange Securities for offering
and sale under state securities laws as provided in
Section 5(b) hereof, including the fees and
disbursements of counsel for the Purchasers in
connection with such qualification and in connection
with the Blue Sky and legal investment surveys;
(iv) any fees charged by securities rating services for
rating the Securities and the Exchange Securities;
(v) the cost of preparing the Securities;
(vi) the fees and expenses of the Trustee and any agent of
the Trustee and the fees and disbursements of counsel
for the Trustee in connection with the Indenture and
the Securities;
(vii) any cost incurred in connection with the designation of
the Securities for trading in PORTAL; and
(viii) all other costs and expenses incident to the
performance of their obligations hereunder which are
not otherwise specifically provided for in this
Section; provided that payment of "roadshow
-15-
expenses" shall be as set forth in the Engagement
Letter dated March 10, 2004 among the Purchasers and
X.X. Childs Associates, L.P., Borealis Private Equity
Limited Partnership, Borealis (QLP) Private Equity
Limited Partnership, Ontario Municipal Employees
Retirement Board and 3087052 Nova Scotia Company. It is
understood, however, that, except as provided in this
Section, and Sections l(gg), 8 and 11 hereof, the
Purchasers will pay all of their own costs and
expenses, including the fees of their counsel, transfer
taxes on resale of any of the Securities by them, and
any advertising expenses connected with any offers they
may make.
7. The obligations of the Purchasers hereunder shall be subject
to the condition that all representations and warranties and other statements of
the Issuers herein are, at and as of the Time of Delivery, true and correct, the
condition that the Issuers shall have performed all of their obligations
hereunder theretofore to be performed, and the following additional conditions:
(a) Xxxxxx Xxxxxx & Xxxxxxx llp, counsel for the Purchasers, shall
have furnished to you such opinion or opinions, dated the Time of
Delivery, as you may reasonably request, and such counsel shall have
received such papers and information as they may reasonably request to
enable them to pass upon such matters;
(b) The Purchasers shall have received written opinions, dated the
Time of Delivery, in form and substance satisfactory to you, from:
(i) Xxxx Xxxxxxx LLP, as U.S. counsel for the Issuers, in
the form of Annex I hereto;
(ii) Fasken Xxxxxxxxx XxXxxxxx LLP, Canadian counsel for the
Issuers, in the form of Annex II hereto;
(iii) XxXxxxx Xxxxxx, Nova Scotia counsel for the Issuers, in
the form of Annex III hereto;
(iv) Xxxx Xxxxxxx LLP, as California counsel for the
Issuers, in the form of Annex IV hereto;
(v) Xxxxxx & Xxxxxxx LLP, Minnesota counsel for the
Issuers, in the form of Annex V hereto;
(vi) Xxxx Xxxxx LLP, Pennsylvania counsel for the Issuers,
in the form of Annex VI hereto;
(vii) Beers Mallers Backs & Salin, LLP, Indiana counsel for
the Issuers, in the form of Annex VII hereto; and
(viii) Xxxxxx Pepper & Shefelman PLLC, Washington counsel for
the Issuers, in the form of Annex VIII hereto.
-16-
(c) On the date of the Offering Circular prior to the execution of
this Agreement and also at the Time of Delivery, KPMG LLP shall have
furnished to you a letter or letters, dated the respective dates of
delivery thereof, in form and substance satisfactory to you, to the effect
set forth in Annex IX hereto;
(d) i) Neither the Issuers nor any of their subsidiaries shall
have sustained since the date of the latest audited financial statements
included in the Offering Circular any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in
the Offering Circular, and (ii) since the respective dates as of which
information is given in the Offering Circular there shall not have been
any change in the capital stock, total debt or long-term debt of any
Issuer or any of its subsidiaries (other than as a result of intercompany
transactions, including without limitation, capital contributions, debt
repayments, restructurings, amalgamations and wind-ups) or any change, or
any development involving a prospective change, in or affecting the
general affairs, management, financial position, shareholders' equity or
results of operations of the Issuers and their subsidiaries, otherwise
than as set forth or contemplated in the Offering Circular, the effect of
which, in any such case described in clause (i) or (ii), is in the
judgment of the Representatives so material and adverse as to make it
impracticable or inadvisable to proceed with the offering or the delivery
of the Securities on the terms and in the manner contemplated in this
Agreement and in the Offering Circular;
(e) On or after the date hereof (i) no downgrading shall have
occurred in the rating accorded any debt or preferred stock of the Parent
Guarantor or any of its subsidiaries by any "nationally recognized
statistical rating organization," as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Act, and (ii) no such
organization shall have publicly announced that it has under surveillance
or review, with possible negative implications, its rating of any such
debt or preferred stock;
(f) On or after the date hereof there shall not have occurred any
of the following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange or the Toronto Stock
Exchange; (ii) a general moratorium on commercial banking activities in
New York or Canada is declared by the relevant authorities, or a material
disruption in commercial banking or securities settlement or clearance
services in the United States or Canada; (iii) a change or development
involving a prospective change in Canadian taxation affecting the Company,
the Securities or the transfer thereof; (iv) the outbreak or escalation of
hostilities involving the United States or Canada, or the declaration by
the United States or Canada of a national emergency or war or (v) the
occurrence of any other calamity or crisis or any change in financial,
political or economic conditions or currency exchange rates or controls in
the United States, Canada or elsewhere, if the effect of any such event
specified in clause (iii), (iv) or (v) in the judgment of the
Representatives makes it impracticable or inadvisable to proceed with the
offering or the delivery of the Securities on the terms and in the manner
contemplated in the Offering Circular;
(g) The Securities have been designated for trading on PORTAL;
-17-
(h) The Issuers shall have furnished or caused to be furnished to
you at the Time of Delivery certificates of officers of the Issuers
satisfactory to you that the representations and warranties of the Issuers
herein are true and correct in all material respects (to the extent not
otherwise qualified by materiality or Material Adverse Effect) as if made
on and as of such Time of Delivery, that the Issuers have performed or
complied in all material respects (to the extent not otherwise qualified
by materiality or Material Adverse Effect) with all of their obligations
hereunder to be performed at or prior to such Time of Delivery, as to the
matters set forth in subsection (d) of this Section and as to such other
matters as you may reasonably request;
(i) Prior to or simultaneous with the Time of Delivery, the
Issuers shall have entered into the Credit Agreement on terms no less
favorable to the Issuers than as described in the Offering Circular, and
the Purchasers shall have received counterparts, conformed as executed, of
the Credit Agreement and such other documentation as they reasonably deem
necessary to evidence the consummation thereof and the conditions to
initial borrowing under the Credit Agreement shall be satisfied;
(j) Prior to or simultaneous with the Time of Delivery, the
Issuers shall have received proceeds from an equity investment (the
"Equity Financing") from its sponsors, certain consultants and members of
management as described in the Offering Circular, and the Purchasers shall
have received counterparts, conformed as executed, of any documentation
evidencing the Equity Financing and such other documentation as they
reasonably deem necessary to evidence the consummation thereof;
(k) Prior to or simultaneous with the Time of Delivery, each of
the transactions contemplated in the Merger Agreement shall have been, or
shall substantially simultaneously be, consummated without any material
amendment or material waiver after the date hereof of any provision of the
Merger Agreement or any related document executed in connection with the
transactions contemplated in the Merger Agreement (other than any such
amendment or waiver approved by the Representatives, such approval not to
be unreasonably withheld), and the Initial Purchasers shall have received
satisfactory evidence thereof. Notwithstanding any other provision of this
Agreement, the articles of amalgamation evidencing the amalgamation
contemplated by the Merger Agreement need not be filed prior to or
simultaneous with the Time of Delivery; provided that the Company has
entered into escrow arrangements satisfactory to the Representatives that
provide for the escrow of the proceeds of the sale of the Securities and
the initial borrowings under the Credit Agreement (if required by the
Representatives), until the earlier of (i) the certificate of amalgamation
is issued by the Enterprise Registrar acting under the Companies Act
(Quebec) or (ii) such Enterprise Registrar shall have provided a
certificate delivered to the Representatives confirming that a certificate
attesting the amalgamation will be prepared as of June 4, 2004 in
accordance with Section 123.119 of the Companies Act (Quebec) and will be
provided as soon as practicable;
(l) Prior to or simultaneously with the Time of Delivery, the
Issuers shall have redeemed or repurchased all outstanding debt of the
Issuers and their subsidiaries, except as set forth in the Offering
Circular;
-18-
(m) Prior to or simultaneously with the Time of Delivery, the
Issuers shall have redeemed all outstanding preferred stock of the Issuers
and their subsidiaries, if any (other than preferred stock held by the
Issuers and as permitted by Section 6.1(b) of the Credit Agreement); and
(n) The Issuers shall have delivered executed copies of the
Securities, the Indenture and the Registration Rights Agreement to the
Purchasers.
8. b) The Issuers, jointly and severally, will indemnify and
hold harmless each Purchaser against any losses, claims, damages or liabilities,
joint or several, to which such Purchaser may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Offering
Circular or the Offering Circular, or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact necessary to make the statements therein not misleading, and
will reimburse each Purchaser for any legal or other expenses reasonably
incurred by such Purchaser in connection with investigating or defending any
such action or claim as such expenses are incurred; provided, however, that the
Issuers shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any Preliminary
Offering Circular or the Offering Circular or any such amendment or supplement
in reliance upon and in conformity with written information furnished to the
Company by or on behalf of any Purchaser through any Representative expressly
for use therein.
(a) Each Purchaser will indemnify and hold harmless the Issuers
against any losses, claims, damages or liabilities to which the Issuers may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Offering Circular or the Offering Circular, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in any Preliminary Offering Circular or the Offering
Circular or any such amendment or supplement in reliance upon and in conformity
with written information furnished to the Company by or on behalf of such
Purchaser through any Representative expressly for use therein; and will
reimburse the Issuers for any legal or other expenses reasonably incurred by the
Issuers in connection with investigating or defending any such action or claim
as such expenses are incurred.
(b) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the
-19-
indemnifying party shall be entitled to participate therein and, to the extent
that it shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel reasonably satisfactory to
such indemnified party (who shall not, except with the consent of the
indemnified party, be counsel to the indemnifying party), and, after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party shall not be liable to such
indemnified party under such subsection for any legal expenses of other counsel
or any other expenses, in each case subsequently incurred by such indemnified
party, in connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the written consent of the
indemnified party, effect the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or threatened action or claim
in respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential party to such
action or claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability arising out of
such action or claim and (ii) does not include a statement as to, or an
admission of, fault, culpability or a failure to act, by or on behalf of any
indemnified party.
(c) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Issuers on the one hand and the Purchasers on
the other from the offering of the Securities. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law or if the indemnified party failed to give the notice required under
subsection (c) above, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Issuers on the one hand and the Purchasers on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Issuers on the one hand and the Purchasers on the other shall be deemed to be in
the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Issuers bear to the total underwriting
discounts and commissions received by the Purchasers. The relative fault shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by any Issuer on the one hand or
the Purchasers on the other and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The Issuers and the Purchasers agree that it would not be just and equitable if
contribution pursuant to this subsection (d) were determined by pro rata
allocation (even if the Purchasers were treated as one entity for such purpose)
or by any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this subsection (d),
no
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Purchaser shall be required to contribute any amount in excess of the amount by
which the total price at which the Securities underwritten by it and distributed
to investors were offered to investors exceeds the amount of any damages which
such Purchaser has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. The Purchasers'
obligations in this subsection (d) to contribute are several in proportion to
their respective underwriting obligations and not joint.
(d) The obligations of the Issuers under this Section 8 shall be
in addition to any liability which the Issuers may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who controls
any Purchaser within the meaning of the Act; and the obligations of the
Purchasers under this Section 8 shall be in addition to any liability which the
respective Purchasers may otherwise have and shall extend, upon the same terms
and conditions, to each officer and director of each Issuer and to each person,
if any, who controls each Issuer within the meaning of the Act.
9. c) If any Purchaser shall default in its obligation to
purchase the Securities which it has agreed to purchase hereunder, you may in
your discretion arrange for you or another party or other parties to purchase
such Securities on the terms contained herein. If within thirty-six hours after
such default by any Purchaser you do not arrange for the purchase of such
Securities, then the Issuers shall be entitled to a further period of thirty-six
hours within which to procure another party or other parties satisfactory to you
to purchase such Securities on such terms. In the event that, within the
respective prescribed periods, you notify the Issuers that you have so arranged
for the purchase of such Securities, or the Issuers notify you that it has so
arranged for the purchase of such Securities, you or the Issuers shall have the
right to postpone the Time of Delivery for a period of not more than seven days,
in order to effect whatever changes may thereby be made necessary in the
Offering Circular, or in any other documents or arrangements, and the Issuers
agree to prepare promptly any amendments to the Offering Circular which in your
opinion may thereby be made necessary. The term "Purchaser" as used in this
Agreement shall include any person substituted under this Section with like
effect as if such person had originally been a party to this Agreement with
respect to such Securities.
(a) If, after giving effect to any arrangements for the purchase
of the Securities of a defaulting Purchaser or Purchasers by you and the Issuers
as provided in subsection (a) above, the aggregate principal amount of such
Securities which remains unpurchased does not exceed one-eleventh of the
aggregate principal amount of all the Securities, then the Issuers shall have
the right to require each non-defaulting Purchaser to purchase the principal
amount of Securities which such Purchaser agreed to purchase hereunder and, in
addition, to require each non-defaulting Purchaser to purchase its pro rata
share (based on the principal amount of Securities which such Purchaser agreed
to purchase hereunder) of the Securities of such defaulting Purchaser or
Purchasers for which such arrangements have not been made; but nothing herein
shall relieve a defaulting Purchaser from liability for its default.
(b) If, after giving effect to any arrangements for the purchase
of the Securities of a defaulting Purchaser or Purchasers by you and the Issuers
as provided in subsection (a) above, the aggregate principal amount of
Securities which remains unpurchased exceeds one-eleventh of the aggregate
principal amount of all the Securities, or if the Issuers shall not exercise the
right described in subsection (b) above to require non-defaulting
-21-
Purchasers to purchase Securities of a defaulting Purchaser or Purchasers, then
this Agreement shall thereupon terminate, without liability on the part of any
non-defaulting Purchaser or any Issuer, except for the expenses to be borne by
the Issuers and the Purchasers as provided in Section 6 hereof and the indemnity
and contribution agreements in Section 8 hereof; but nothing herein shall
relieve a defaulting Purchaser from liability for its default.
10. The respective indemnities, agreements, representations,
warranties and other statements of the Issuers and the several Purchasers, as
set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless of
any investigation (or any statement as to the results thereof) made by or on
behalf of any Purchaser or any controlling person of any Purchaser, any Issuer
or any officer or director or controlling person of any Issuer and shall survive
delivery of and payment for the Securities.
11. If this Agreement shall be terminated pursuant to Section 9
hereof, no Issuer shall then be under any liability to any Purchaser except as
provided in Section 8 hereof and, as to any non-defaulting Purchaser, in Section
6 hereof; but, if for any other reason, the Securities are not delivered by or
on behalf of the Issuers as provided herein, the Issuers will, jointly and
severally, reimburse the Purchasers through you for all out-of-pocket expenses
approved in writing by you, including fees and disbursements of counsel,
reasonably incurred by the Purchasers in making preparations for the purchase,
sale and delivery of the Securities but no Issuer shall then be under further
liability to any Purchaser except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of
the Purchasers, and the parties hereto shall be entitled to act and rely upon
any statement, request, notice or agreement on behalf of any Purchaser made or
given by the Representatives.
All statements, requests, notices and agreements hereunder shall be
in writing, and if to the Purchasers shall be delivered or sent by mail or
facsimile transmission to you as the Representatives c/o Goldman, Xxxxx & Co.,
00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Registration Department;
and if to any Issuer shall be delivered or sent by mail or facsimile
transmission to the address of the Company set forth in the Offering Circular,
Attention: Secretary; provided, however, that any notice to a Purchaser pursuant
to Section 8(c) hereof shall be delivered or sent by mail or facsimile
transmission to such Purchaser at its address set forth in its Purchasers'
Questionnaire, or document constituting such Questionnaire, which address will
be supplied to the Company by you upon request. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Purchasers, the Issuers and, to the extent provided in Sections
8 and 10 hereof, the officers and directors of each Issuer and each person who
controls any Issuer or any Purchaser, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement, other than as set forth in
the first sentence of Section 1(gg). No purchaser of any of the Securities from
any Purchaser shall be deemed a successor or assign by reason merely of such
purchase.
-22-
14. Each Issuer irrevocably (i) agrees that any legal suit, action
or proceeding against any Issuer brought by any Purchaser or by any person who
controls any Purchaser arising out of or based upon this Agreement or the
transactions contemplated hereby may be instituted in any New York Court, (ii)
waives, to the fullest extent it may effectively do so, any objection which it
may now or hereafter have to the laying of venue of any such proceeding and
(iii) submits to the non-exclusive jurisdiction of such courts in any such suit,
action or proceeding. The Issuers have appointed National Registered Agents,
Inc., 875 Avenue of the Americas, Xxxxx 000, Xxx Xxxx, Xxx Xxxx, 00000, as their
authorized agent (the "Authorized Agent") upon whom process may be served in any
such action arising out of or based on this Agreement or the transactions
contemplated hereby which may be instituted in any New York Court by any
Purchaser or by any person who controls any Purchaser, expressly consent to the
jurisdiction of any such court in respect of any such action, and waive any
other requirements of or objections to personal jurisdiction with respect
thereto. Such appointment shall be irrevocable. Each Issuer, jointly and
severally, represents and warrants that the Authorized Agent has agreed to act
as such agent for service of process and agrees to take any and all action,
including the filing of any and all documents and instruments, that may be
necessary to continue such appointment in full force and effect as aforesaid.
Service of process upon the Authorized Agent and written notice of such service
to any Issuer shall be deemed, in every respect, effective service of process
upon the Issuer.
15. In respect of any judgment or order given or made for any
amount due hereunder that is expressed and paid in a currency (the "judgment
currency") other than United States dollars, each Issuer will, jointly and
severally, indemnify each Purchaser against any loss incurred by such Purchaser
as a result of any variation as between (i) the rate of exchange at which the
United States dollar amount is converted into the judgment currency for the
purpose of such judgment or order and (ii) the rate of exchange at which a
Purchaser is able to purchase United States dollars with the amount of judgment
currency actually received by such Purchaser. The foregoing indemnity shall
constitute a separate and independent obligation of each Issuer and shall
continue in full force and effect notwithstanding any such judgment or order as
aforesaid. The term "rate of exchange" shall include any premiums and costs of
exchange payable in connection with the purchase of or conversion into United
States dollars.
16. Time shall be of the essence of this Agreement.
17. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
18. This Agreement may be executed by any one or more of the
parties hereto in any number of counterparts, each of which shall be deemed to
be an original, but all such respective counterparts shall together constitute
one and the same instrument.
19. The Issuers are authorized, subject to applicable law, to
disclose any and all aspects of this potential transaction that are necessary to
support any U.S. federal income tax benefits expected to be claimed with respect
to such transaction, and all materials of any kind (including tax opinions and
other tax analyses) related to those benefits, without the Purchasers imposing
any limitation of any kind.
-23-
If the foregoing is in accordance with your understanding, please
sign and return to us five counterparts hereof, and upon the acceptance hereof
by you, on behalf of each of the Purchasers, this letter and such acceptance
hereof shall constitute a binding agreement between each of the Purchasers and
the Issuers. It is understood that your acceptance of this letter on behalf of
each of the Purchasers is pursuant to the authority set forth in a form of
Agreement among Purchasers, the form of which shall be submitted to the Issuers
for examination upon request, but without warranty on your part as to the
authority of the signers thereof.
Very truly yours,
MAAX CORPORATION
By: /s/ Xxxxx X. Xxxx
------------------
Name: Xxxxx X. Xxxx
Title: Secretary
BEAUCELAND CORPORATION, as
Parent Guarantor
By: /s/ Xxxxx X. Xxxx
------------------
Name:Xxxxx X. Xxxx
Title: Secretary
-24-
4200217 Canada Inc., a Canada corporation
By: /s/ Xxxxx X. Xxxx
--------------------
Name: Xxxxx X. Xxxx
Title: Secretary
-25-
MAAX HOLDING CO., a Delaware corporation
MAAX-KSD CORPORATION, a Pennsylvania, corporation
PEARL BATHS, INC. a Minnesota corporation
MAAX-HYDRO SWIRL MANUFACTURING CORP., a Washington corporation
MAAX MIDWEST, INC., an Indiana corporation
MAAX SPAS (ARIZONA), INC., a California corporation
XXXX PLASTICS COMPANY INC., an Indiana corporation
MAAX CANADA INC., a Canada corporation
CUISINE EXPERT - C.E. CABINETS INC., a Canada corporation
0000-0000 XXXXXX INC., a Quebec company
MAAX SPAS (ONTARIO) INC., a Canada corporation
MAAX SPAS (B.C.) INC., a Canada corporation
By: /s/ Xxxxx Xxxxx
------------------
Name: Xxxxx Xxxxx
Title: Director & Officer
-26-
MAAX LLC, a Delaware limited liability company, its
---------
By: /s/ Xxxxx Xxxxx
---------------
Name: Xxxxx Xxxxx
Title: Secretary
-27-
Accepted as of the date hereof:
Xxxxxxx, Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
By: /s/ Xxxxxxx, Sachs & Co.
---------------------------
(Xxxxxxx, Xxxxx & Co.)
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
By: /s/ Xxxx Xxxxxxxxx
----------------------------
Name: Xxxx Xxxxxxxxx
Title: Managing Director
On behalf of each of the Purchasers listed in Schedule I
-28-
SCHEDULE I
PRINCIPAL AMOUNT
OF SECURITIES TO BE
PURCHASER PURCHASED
Xxxxxxx, Sachs & Co........................................... US$ 70,500,000.00
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated............ 49,500,000.00
RBC Capital Markets Corporation............................... 30,000,000.00
-------------------
Total.................................... US$ 150,000,000.00
===================
SCHEDULE II
GUARANTORS
GUARANTOR JURISDICTION OF ORGANIZATION STOCKHOLDER
------------------------------------ ---------------------------- -------------------
Beauceland Corporation Nova Scotia MAAX Holdings, Inc.
MAAX Holding Co. Delaware MAAX Corporation
MAAX-KSD Corporation Pennsylvania MAAX Holding Co.
MAAX-HYDRO SWIRL Manufacturing Corp. Washington MAAX Holding Co.
Pearl Baths, Inc. Minnesota MAAX Holding Co.
MAAX Midwest, Inc. Indiana MAAX Holding Co.
MAAX Spas (Arizona), Inc. California MAAX Holding Co.
Xxxx Plastics Company Inc. Indiana MAAX Holding Co.
MAAX LLC Delaware MAAX Canada Inc.
4200217 Canada Inc. Canada MAAX Canada Inc.
MAAX Canada Inc. Canada MAAX Corporation
Cuisine Expert - C.E. Cabinets Inc. Canada MAAX Canada Inc.
0000-0000 Xxxxxx Inc. Quebec 4200217 Canada Inc.
MAAX Spas (Ontario) Inc. Canada MAAX Canada Inc.
MAAX Spas (B.C.) Inc. Canada MAAX Canada Inc.
SCHEDULE III
SUBSIDIARIES
SUBSIDIARY JURISDICTION OF ORGANIZATION STOCKHOLDER
------------------------------------ ---------------------------- -----------------------------
4200217 Canada Inc. Canada MAAX Canada Inc.
MAAX Canada Inc. Canada MAAX Corporation
Cuisine Expert - C.E. Cabinets Inc. Canada MAAX Canada Inc.
MAAX Spas (Ontario) Inc. Canada MAAX Canada Inc.
MAAX Spas (B.C.) Inc. Canada MAAX Canada Inc.
0000-0000 Xxxxxx Inc. Quebec 4200217 Canada Inc.
MAAX Holding Co. Delaware MAAX Corporation
MAAX-KSD Corporation Pennsylvania MAAX Holding Co.
Pearl Baths, Inc. Minnesota MAAX Holding Co.
MAAX-HYDRO SWIRL Manufacturing Corp. Washington MAAX Holding Co.
MAAX Midwest, Inc. Indiana MAAX Holding Co.
MAAX Spas (Arizona), Inc. California MAAX Holding Co.
Xxxx Plastics Company Inc. Indiana MAAX Holding Co.
MAAX (2004) LLC Delaware MAAX Hungary Services
Limited Liability Company
MAAX Canada Inc.
MAAX Europe Holding B.V. Netherlands MAAX Canada Inc.
Halero B.V. Netherlands MAAX Europe Holding B.V.
SaniNova B.V. Netherlands Halero B.V.
MAAX Luxembourg S.A.R.L. Luxembourg MAAX Canada Inc.
** MAAX LLC Delaware MAAX Canada Inc.
MAAX Hungary Services Limited Hungary MAAX Luxembourg S.A.R.L.
Liability Company MAAX Canada Inc.
* MAAX Delaware Co. Delaware
* MAAX Capital Co. Delaware
* MAAX Europe LLC Delaware
* 4200209 Canada Inc. Canada
SUBSIDIARY JURISDICTION OF ORGANIZATION STOCKHOLDER
------------------------------------ ---------------------------- -----------------------------
* 3087052 Nova Scotia Company Nova Scotia
* 3087053 Nova Scotia Company Nova Scotia
* 0000-0000 Xxxxxx Inc. Quebec
* 0000-0000 Xxxxxx Inc. Quebec
* MAAX Finance Quebec Quebec
* These entities will be dissolved, liquidated, amalgamated or wound-up in
connection with the consummation of the transactions.
ANNEX I
[Form of Opinion of Xxxx Xxxxxxx LLP, U.S. counsel for the Issuers]
ANNEX II
[Form of Opinion of Fasken Xxxxxxxxx XxXxxxxx LLP,
Canadian counsel for the Issuers]
ANNEX III
[Form of Opinion of XxXxxxx Xxxxxx, Nova Scotia counsel for the Issuers]
ANNEX IV
[Form of Opinion of Xxxx Xxxxxxx LLP, California counsel for the Issuers]
ANNEX V
[Form of Opinion of Xxxxxx & Xxxxxxx LLP, Minnesota counsel for the Issuers]
ANNEX VI
[Form of Opinion of Xxxx Xxxxx LLP, Pennsylvania counsel for the Issuers]
ANNEX VII
[Form of Opinion of Beers Mallers Backs & Salin, LLP,
Indiana counsel for the Issuers]
ANNEX VIII
[Form of Opinion of Xxxxxx Pepper & Shefelman PLLC,
Washington counsel for the Issuers]
ANNEX IX
[Form of Comfort Letter]
