Exhibit 10.18
AMENDMENT NO. 2
Amendment No. 2 (this "Amendment"), dated as of December 3,
2004, to that certain Credit and Guaranty Agreement, dated as of June 4, 2004,
as amended (the "Credit Agreement"; capitalized terms used herein and not
defined shall have the meaning set forth in the Credit Agreement), among MAAX
CORPORATION, a Nova Scotia unlimited company ("Company"), BEAUCELAND
CORPORATION, a Nova Scotia unlimited company ("Holdings"), CERTAIN SUBSIDIARIES
OF HOLDINGS, as Guarantors, the Lenders party thereto from time to time, GOLDMAN
SACHS CREDIT PARTNERS L.P., as Joint Lead Arranger and as Syndication Agent,
ROYAL BANK OF CANADA, as Administrative Agent (in such capacity, "Administrative
Agent") and as Collateral Agent, ROYAL BANK OF CANADA, ACTING THROUGH ITS
BUSINESS GROUP RBC CAPITAL MARKETS, as Joint Lead Arranger, and MERRILL LYNCH &
CO., MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, as Joint Lead Arranger
and as Documentation Agent.
WITNESSETH:
WHEREAS, Company desires to amend the Credit Agreement (i) to
permit the issuance by MAAX Holdings, Inc. ("MAAX Holdings"), the sole
shareholder of Holdings, of discount debt securities, the proceeds of which
would be used to fund repurchases of equity interests of MAAX Holdings, to pay a
management bonus and to pay reasonable fees and expenses in connection with such
issuance and (ii) to permit Company and Holdings to distribute to MAAX Holdings
cash dividends to service cash interest and certain mandatory redemption
payments on such debt securities when such amounts become due; and
WHEREAS, pursuant to Section 10.5 of the Credit Agreement,
Company and each of the undersigned Lenders hereby agree to amend the Credit
Agreement as set forth herein.
NOW, THEREFORE, in consideration of the foregoing, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:
SECTION ONE - Amendment. Subject to the satisfaction of the
conditions set forth in Section Two hereof:
(a) The following recital is added to the Credit
Agreement:
"WHEREAS, the Lenders expressly intend that the Obligations
will be structurally senior to (i) all obligations of MAAX Holdings,
including the Permitted MAAX Holdings Notes and any Permitted Holder
Debt, and (ii) all obligations of Holdings other than its Guaranty."
(b) The following definitions are added to Section 1.1 of
the Credit Agreement:
"AMENDMENT EFFECTIVENESS DATE" means the date on which
Amendment No. 2 to this Agreement becomes effective in accordance with
its terms.
"MANDATORY REDEMPTION OBLIGATION" has the meaning given to
such term in the definition of "Permitted MAAX Holdings Notes."
"PERMITTED MAAX HOLDINGS NOTES" means up to U.S.$125.0 million
aggregate gross proceeds of discount debt securities issued by MAAX
Holdings; provided that (i) the proceeds of such issuance may be used
to fund repurchases of equity interests of MAAX Holdings, to pay a
management bonus and to pay reasonable fees and expenses in connection
with such issuance, (ii) no interest shall accrue on such debt
securities prior to the fourth anniversary of the Amendment
Effectiveness Date, (iii) no cash payment (whether of principal,
interest or otherwise) shall be required to be paid in respect of such
debt securities prior to the eighth anniversary of the Amendment
Effectiveness Date; provided that this clause (iii) shall not prohibit
(a) after the fourth anniversary of the Amendment Effectiveness Date,
the payment of interest in cash, (b) not earlier than the last business
day of the first accrual period ending after the fifth anniversary of
the Amendment Effectiveness Date, one or more mandatory redemptions of
such debt securities at 100% of the principal amount thereof in amounts
not exceeding the amounts necessary to avoid such debt securities being
deemed "applicable high yield discount obligations" within the meaning
of Section 163(i)(l) of the Internal Revenue Code (the "MANDATORY
REDEMPTION OBLIGATION"), (c) the accrual of "special interest" for
failure to comply with registration obligations with respect to such
debt securities, which special interest, if accrued prior to the fourth
anniversary of the Amendment Effectiveness Date, is added to accreted
value and not paid in cash and (d) the existence of "change of control
offer" or "asset sale offer" provisions applicable to such debt
securities not more favorable in any material respect to the holders of
such debt securities than the comparable provisions in the Senior
Subordinated Notes Indenture are to the holders of the Senior
Subordinated Notes, (iv) such debt securities shall not be secured by
any collateral and shall not be guaranteed by Holdings or any of its
Subsidiaries, (v) the covenants and events of default applicable to
such debt securities shall not be more restrictive in any material
respect to MAAX Holdings and its Subsidiaries than the Senior
Subordinated Notes Indenture is to Holdings and its Subsidiaries and
(vi) at the time of issuance, the Leverage Ratio shall not be greater
than 1.25 "turns" less than the Leverage Ratio then permitted under
Section 6.8(c).
(c) The definition of "Change of Control" in Section 1.1 of
the Credit Agreement is hereby amended by replacing clause (i) thereof in its
entirety with the following:
"(i) (a) the Permitted Holders shall cease to beneficially own and
control at least 51% on a fully diluted basis of the economic and
voting interests in the Capital Stock of Holdings, (b) the Permitted
Holders shall cease to beneficially own and control more than 28% on a
fully diluted basis of the economic and voting interests in the Capital
Stock of Holdings beneficially owned and controlled by the Permitted
Holders on the Closing Date after giving effect to the Transactions
occurring thereon or (c) Childs shall cease to beneficially own and
control more than 28% on a fully diluted basis of the economic and
voting interests in the Capital Stock of Holdings beneficially owned
and controlled by Childs on the Closing Date after giving effect to the
Transactions occurring thereon;"
(d) The definition of "Consolidated Adjusted EBITDA" in
Section 1.1 of the Credit Agreement is hereby amended by adding at the end of
clause (ii)(e) thereof the following:
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"it being understood that compensation expense which is paid in cash by
MAAX Holdings (which cash is not funded by any of MAAX Holdings'
Subsidiaries) and recorded as expense of Holdings through "push down"
accounting as required by GAAP shall be deemed to be non-cash for such
purpose;"
(e) Section 6.5 of the Credit Agreement is hereby amended by
deleting "and" at the end of clause (f) and deleting the period at the end of
clause (g) and replacing it with the following:
"; and
(h) any dividend, payment or distribution by Company to
Holdings or MAAX Holdings, and if any such amount is paid to Holdings,
the further dividend, payment or distribution of such amount by
Holdings to MAAX Holdings, in each case, which amount is not greater
than the amount necessary, and is used by MAAX Holdings upon receipt
thereof, (i) to pay cash interest on the Permitted MAAX Holdings Notes
then due and payable or (ii) to satisfy its Mandatory Redemption
Obligation; provided that (x) no Default under Section 8.1(a), (f),
(h), (i) or (m) and no Event of Default shall exist and (y) Company
shall be in pro forma compliance with Section 6.8(c) as of any date of
such dividend, payment or distribution, after giving effect to any
borrowings on such date."
(f) The second paragraph of Section 6.12 of the Credit
Agreement is hereby amended and restated in its entirety as follows:
"No Parent Company (other than Holdings) shall (a) incur,
directly or indirectly, any Indebtedness or any other obligation or
liability whatsoever other than (i) the Indebtedness and obligations
under the Related Agreements, each as in effect on the date hereof,
(ii) the Permitted Holder Debt and (iii) in the case of MAAX Holdings,
so long as no Default or Event of Default exists at the time of
issuance, the Permitted MAAX Holdings Notes; (b) create or suffer to
exist any Lien upon any property or assets now owned or hereafter
acquired by it other than the Liens created under any Credit Document
or permitted pursuant to Section 6.2; (c) own any assets other than the
Capital Stock of another Parent Company; (d) engage in any business or
activity other than (i) performing its obligations and activities
incidental thereto under the Credit Documents and the Related
Agreements, and, in the case of MAAX Holdings, the Permitted MAAX
Holdings Notes, (ii) issuing Qualified Capital Stock and (iii) making
dividends and distributions; (e) other than as permitted by Section
6.9, consolidate or amalgamate with or merge with or into, or convey,
transfer or lease all or substantially all its assets to, any Person;
or (f) create or acquire any Subsidiary or make or own any Investment
in any Person other than another Parent Company."
SECTION TWO - Conditions to Effectiveness. This Amendment
shall become effective as of the date first above written when, and only when,
(i) Administrative Agent shall have received counterparts of this Amendment
executed by Company and the Requisite Lenders and (ii) Company shall have
delivered, by wire transfer of immediately available funds, to Administrative
Agent, for the ratable account of each Lender signatory hereto, a fee equal to
(A) in Canadian Dollars, 0.15% of the aggregate principal amount of Tranche A
Term Loans plus the aggregate amount of Revolving Commitments of the Lenders
signatory hereto plus (B) in U.S. Dollars, 0.15% of the
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aggregate principal amount of Tranche B Term Loans of the Lenders signatory
hereto. The effectiveness of this Amendment (other than Sections Five, Six and
Seven hereof) is conditioned upon the accuracy of the representations and
warranties set forth in Section Three hereof.
SECTION THREE - Representations and Warranties; Covenants. In
order to induce the Lenders to enter into this Amendment, the Company represents
and warrants to each of the Lenders and the Agents that after giving effect to
this Amendment, (x) no Event of Default or Default has occurred and is
continuing; and (y) the representations and warranties contained in the Credit
Agreement and in the other Credit Documents are true and correct in all material
respects (and any such representations and warranties that contain a materiality
or Material Adverse Effect qualification are true and correct in all respects)
on and as of the date hereof to the same extent as though made on and as of the
date hereof, except to the extent such representations and warranties
specifically relate to an earlier date, in which case such representations and
warranties were true and correct in all material respects on and as of such
earlier date.
SECTION FOUR - Reference to and Effect on the Credit Agreement
and the Notes. On and after the effectiveness of this Amendment, each reference
in the Credit Agreement to "this Agreement", "hereunder", "hereof" or words of
like import referring to the Credit Agreement, and each reference in the Notes
and each of the other Credit Documents to "the Credit Agreement", "thereunder",
"thereof" or words of like import referring to the Credit Agreement, shall mean
and be a reference to the Credit Agreement, as amended by this Amendment. The
Credit Agreement, the Notes and each of the other Credit Documents, as
specifically amended by this Amendment, are and shall continue to be in full
force and effect and are hereby in all respects ratified and confirmed. Without
limiting the generality of the foregoing, the Collateral Documents and all of
the Collateral described therein do and shall continue to secure the payment of
all Obligations of the Credit Parties under the Credit Documents. The execution,
delivery and effectiveness of this Amendment shall not, except as expressly
provided herein, operate as an amendment or waiver of any right, power or remedy
of any Lender or any Agent under any of the Credit Documents, nor constitute an
amendment or waiver of any provision of any of the Credit Documents.
SECTION FIVE - Costs, Expenses and Taxes. Company agrees to
pay all reasonable costs and expenses of the Agents in connection with the
preparation, execution and delivery of this Amendment and the other instruments
and documents to be delivered hereunder, if any (including, without limitation,
the reasonable fees and expenses of Cahill Gordon & Reindel LLP) in accordance
with the terms of Section 10.2 of the Credit Agreement.
SECTION SIX - Execution in Counterparts. This Amendment may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute but one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Amendment by facsimile shall be effective as delivery of a manually executed
counterpart of this Amendment.
SECTION SEVEN - Governing Law. This Amendment shall be
governed by, and construed in accordance with, the laws of the State of New
York, without regard to the principles of conflicts of laws thereof to the
extent that the application of the laws of another jurisdiction would be
required thereby.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered as of the day and year first above
written.
MAAX CORPORATION
By: /s/ Denis Aubin
-----------------------------------
Name: Denis Aubin
Title: Executive Vice President and
Chief Financial Officer
ROYAL BANK OF CANADA,
as a Lender
By: /s/ John Crawford
-----------------------------------
Name: John Crawford
Title: Attorney-in-fact
GOLDMAN SACHS CANADA CREDIT PARTNERS,
as a Lender
By: /s/ Pedro Ramirez
-----------------------------------
Name: Pedro Ramirez
Title: Attorney Signatory
MERRILL LYNCH CAPITAL CANADA INC.,
as a Lender
By: /s/ Marcelo Cosma
-----------------------------------
Name: Marcelo Cosma
Title: Vice President
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NATIONAL BANK OF CANADA - NEW YORK BRANCH,
as a Lender
By: /s/ Vincent Lima
-----------------------------------
Name: Vincent Lima
Title: Vice President
By: /s/ Jeff Forgach
-----------------------------------
Name: Jeff Forgach
Title: Assistant Vice President
BANK OF MONTREAL, CHICAGO BRANCH,
as a Lender
By: /s/ Bruce A. Pietka
-----------------------------------
Name: Bruce A. Pietka
Title: Vice President
LA CAISSE CENTRALE DESJARDINS DU QUEBEC,
as a Lender
By: /s/ Michel Voyer
-----------------------------------
Name: Michel Voyer
Title: Senior Manager
By: /s/ Sylvain Gascon
-----------------------------------
Name: Sylvain Gascon
Title: Vice President
CITIBANK, N.A., CANADIAN BRANCH,
as a Lender
By: /s/ Isabelle Cote
-----------------------------------
Name: Isabelle Cote
Title: Vice President
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COMERICA BANK, CANADA BRANCH,
as a Lender
By: /s/ Robert Rosen
-----------------------------------
Name: Robert Rosen
Title: Vice President
NATIONAL CITY BANK, CANADA BRANCH,
as a Lender
By: /s/ J. Andrew Riddell
-----------------------------------
Name: J. Andrew Riddell
Title: Vice President
By: /s/ Bill Hines
-----------------------------------
Name: Bill Hines
Title: Senior Vice President &
Principal Officer
GE CANADA FINANCE HOLDINGS COMPANY,
as a Lender
By: /s/ Stephen B. Smith
-----------------------------------
Name: Stephen B Smith
Title: President
NEMEAN CLO, LTD.
By: ING Capital Advisors LLC,
as Investment Manager
By: /s/ Steven Gorski
-----------------------------------
Name: Steven Gorski
Title: Director
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SEQUILS-ING I (HBGM), LTD.
By: ING Capital Advisors LLC,
as Collateral Manager
By: /s/ Steven Gorski
-----------------------------------
Name: Steven Gorski
Title: Director
ARCHIMEDES FUNDING III, LTD.
By: ING Capital Advisors LLC,
as Collateral Manager
By: /s/ Steven Gorski
-----------------------------------
Name: Steven Gorski
Title: Director
ARCHIMEDES FUNDING IV (CAYMAN), LTD.
By: ING Capital Advisors LLC,
as Collateral Manager
By: /s/ Steven Gorski
-----------------------------------
Name: Steven Gorski
Title: Director
ENDURANCE CLO I, LTD.
By: ING Capital Advisors LLC,
as Collateral Manager
By: /s/ Steven Gorski
-----------------------------------
Name: Steven Gorski
Title: Director
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ING-ORYX CLO, LTD.
By: ING Capital Advisors LLC,
as Collateral Manager
By: /s/ Steven Gorski
-----------------------------------
Name: Steven Gorski
Title: Director
EATON VANCE LIMITED DURATION
INCOME FUND
By: Eaton Vance Management,
as Investment Advisor,
as a Lender
By: /s/ Michael B. Botthof
-----------------------------------
Name: Michael B. Botthof
Title: Vice President
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GRAYSON & CO
By: Boston Management and Research,
as Investment Advisor,
as a Lender
By: /s/ Michael B. Botthof
-----------------------------------
Name: Michael B. Botthof
Title: Vice President
SENIOR DEBT PORTFOLIO
By: Boston Management and Research,
as Investment Advisor,
as a Lender
By: /s/ Michael B. Botthof
-----------------------------------
Name: Michael B. Botthof
Title: Vice President
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TOLLI & CO
By: Eaton Vance Management,
as Investment Advisor,
as a Lender
By: /s/ Michael B. Botthof
-----------------------------------
Name: Michael B. Botthof
Title: Vice President
EATON VANCE SENIOR FLOATING-RATE
TRUST
By: Eaton Vance Management,
as Investment Advisor,
as a Lender
By: /s/ Michael B. Botthof
-----------------------------------
Name: Michael B. Botthof
Title: Vice President
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EATON VANCE SENIOR INCOME TRUST
By: Eaton Vance Management,
as Investment Advisor,
as a Lender
By: /s/ Michael B. Botthof
-----------------------------------
Name: Michael B. Botthof
Title: Vice President
EATON VANCE INSTITUTIONAL SENIOR
LOAN FUND
By: Eaton Vance Management,
as Investment Advisor,
as a Lender
By: /s/ Michael B. Botthof
-----------------------------------
Name: Michael B. Botthof
Title: Vice President
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OCTAGON INVESTMENT PARTNERS V, LTD.
By: Octagon Credit Investors, LLC,
as Portfolio Manager,
as a Lender
By: /s/ Andrew D. Gordon
-----------------------------------
Name: Andrew D. Gordon
Title: Portfolio Manager
OCTAGON INVESTMENT PARTNERS III, LTD.
By: Octagon Credit Investors, LLC,
as Portfolio Manager,
as a Lender
By: /s/ Andrew D. Gordon
-----------------------------------
Name: Andrew D. Gordon
Title: Portfolio Manager
OCTAGON INVESTMENT PARTNERS VII, LTD.
By: Octagon Credit Investors, LLC,
as Collateral Manager,
as a Lender
By: /s/ Andrew D. Gordon
-----------------------------------
Name: Andrew D. Gordon
Title: Portfolio Manager
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OPPENHEIMER SENIOR FLOATING RATE FUND,
as a Lender
By: /s/ Lisa Chaffee
-----------------------------------
Name: Lisa Chaffee
Title: Assistant Vice President
HARBORVIEW CLO IV, LTD,
as a Lender
By: /s/ Lisa Chaffee
-----------------------------------
Name: Lisa Chaffee
Title: Assistant Vice President
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HARBORVIEW CLO V, LTD,
as a Lender
By: /s/ Lisa Chaffee
-----------------------------------
Name: Lisa Chaffee
Title: Assistant Vice President
PPM SPYGLASS FUNDING TRUST,
as a Lender
By: /s/ Diana M. Himes
-----------------------------------
Name: Diana M. Himes
Title: Authorized Agent
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PPM MONARCH BAY FUNDING LLC,
as a Lender
By: /s/ Diana M. Himes
-----------------------------------
Name: Diana M. Himes
Title: Assistant Vice President
CANYON CAPITAL CLO 2004-1 LTD.,
as a Lender
By: CANYON CAPITAL ADVISORS LLC,
a Delaware limited liability company,
its Collateral Manager
By: /s/ R. Christian B. Evensen
-----------------------------------
Name: R. Christian B. Evensen
Title: Managing Director
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UBS AG, STAMFORD BRANCH,
as a Lender
By: /s/ Wilfred V. Salor
-----------------------------------
Name: Wilfred V. Salor
Title: Director
If second signature is necessary:
By: /s/ Winslowe Ogbourne
-----------------------------------
Name: Winslowe Ogbourne
Title: Associate Director
GALAXY III CLO, LTD.
By: AIG Global Investment Corp.,
as Investment Advisor,
as a Lender
By: /s/ W. Jeffrey Baxter
-----------------------------------
Name: W. Jeffrey Baxter
Title: Vice President
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GALAXY CLO 2003-1, LTD.
By: AIG Global Investment Corp.,
as Investment Advisor,
as a Lender
By: /s/ W. Jeffrey Baxter
-----------------------------------
Name: W. Jeffrey Baxter
Title: Vice President
SUNAMERICA LIFE INSURANCE COMPANY
By: AIG Global Investment Corp.,
as Investment Advisor,
as a Lender
By: /s/ W. Jeffrey Baxter
-----------------------------------
Name: W. Jeffrey Baxter
Title: Vice President
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THE SUMITOMO TRUST & BANKING CO., LTD,
as a Lender
By: /s/ Elizabeth A. Quirk
-----------------------------------
Name: Elizabeth A. Quirk
Title: Vice President
ACM INCOME FUND INC.
By: /s/ Lisa Wagemann
-----------------------------------
Name: Lisa Wagemann
Title: Administrative Officer
NEW ALLIANCE GLOBAL CDO, LIMITED
By: Alliance Capital Management L.P.,
as Sub-advisor
By: Alliance Capital Management
Corporation, as General Partner
By: /s/ Joel Serebransky
-----------------------------------
Name: Joel Serebransky
Title: Senior Vice President
ING PRIME RATE TRUST
By: ING Investment Management, Co.,
as its Investment Manager
By: /s/ Theodore M. Hong
-----------------------------------
Name: Theodore M. Hong
Title: Vice President
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ING SENIOR INCOME FUND
By: ING Investment Management, Co.,
as its Investment Manager
By: /s/ Theodore M. Hong
-----------------------------------
Name: Theodore M. Hong
Title: Vice President
KZH SOLEIL LLC
By: /s/ Hi Hua
-----------------------------------
Name: Hi Hua
Title: Authorized Agent
KZH SOLEIL-2 LLC
By: /s/ Hi Hua
-----------------------------------
Name: Hi Hua
Title: Authorized Agent
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STANFIELD/RMF TRANSATLANTIC CDO LTD.
By: Stanfield Capital Partners LLC,
as its Collateral Manager,
as a Lender
By: /s/ Christopher A. Bondy
-----------------------------------
Name: Christopher A. Bondy
Title: Partner
STANFIELD CARRERA CLO, LTD.
By: Stanfield Capital Partners LLC,
as its Asset Manager,
as a Lender
By: /s/ Christopher A. Bondy
-----------------------------------
Name: Christopher A. Bondy
Title: Partner
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SUNAMERICA SENIOR FLOATING RATE
FUND, INC.
By: Stanfield Capital Partners LLC,
as Subadvisor,
as a Lender
By: /s/ Christopher A. Bondy
-----------------------------------
Name: Christopher A. Bondy
Title: Partner
STANFIELD CLO LTD.
By: Stanfield Capital Partners LLC,
as its Collateral Manager,
as a Lender
By: /s/ Christopher A. Bondy
-----------------------------------
Name: Christopher A. Bondy
Title: Partner
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GOLDMAN SACHS CREDIT PARTNERS L.P.,
as a Lender
By: /s/ Stephen King
---------------------------------
Name: Stephen King
Title: Authorized Signatory
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