EXHIBIT 10.23
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STOCKHOLDERS AGREEMENT
Dated as of ▇▇▇▇▇ ▇, ▇▇▇▇
▇▇ and Among
AMH HOLDINGS, INC.,
ASSOCIATED MATERIALS HOLDINGS INC.
and
THE STOCKHOLDERS SIGNATORY HERETO
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TABLE OF CONTENTS
Page
ARTICLE I CERTAIN DEFINITIONS............................................2
Section 1.1 Certain Definitions........................................2
ARTICLE II TRANSFER OF EQUITY SECURITIES..................................8
Section 2.1 Restrictions...............................................8
Section 2.2 Permitted Transfers........................................9
Section 2.3 Sales by Harvest Subject to Tag-Along Rights..............10
Section 2.4 Grant to Harvest of Drag-Along Rights.....................12
Section 2.5 Grant of Preemptive Rights to Stockholders................13
ARTICLE III REGISTRATION RIGHTS...........................................14
Section 3.1 Required Registration.....................................14
Section 3.2 Incidental Registration...................................16
Section 3.3 Registration Procedures...................................17
Section 3.4 Preparation; Reasonable Investigation.....................20
Section 3.5 Rights of Requesting Holders..............................20
Section 3.6 Registration Expenses.....................................20
Section 3.7 Indemnification; Contribution.............................20
Section 3.8 Holdback Agreements; Registration Rights to Others........22
Section 3.9 Availability of Information...............................23
Section 3.10 Additional Registration Rights............................23
ARTICLE IV BOARD OF DIRECTORS OF THE COMPANY.............................23
Section 4.1 Board of Directors........................................23
Section 4.2 Observation Rights........................................25
ARTICLE V CERTAIN REGULATORY MATTERS....................................25
Section 5.1 Regulatory Problem........................................25
ARTICLE VI MISCELLANEOUS.................................................26
Section 6.1 Entire Agreement..........................................26
Section 6.2 Captions..................................................26
Section 6.3 Counterparts..............................................26
Section 6.4 Notices...................................................26
Section 6.5 Successors and Assigns; Additional Stockholders...........27
Section 6.6 GOVERNING LAW.............................................28
Section 6.7 Submission to Jurisdiction................................28
Section 6.8 Remedies; Jury Trial......................................29
Section 6.9 Benefits Only to Parties..................................29
Section 6.10 Termination; Survival of Benefits.........................29
Section 6.11 Publicity.................................................29
Section 6.12 Confidentiality...........................................30
Section 6.13 Expenses..................................................30
Section 6.14 Stockholder Rights........................................30
Section 6.15 Amendments; Waivers.......................................30
Section 6.16 Transaction with Affiliates...............................30
ARTICLE VII TERMINATION OF HOLDINGS STOCKHOLDERS AGREEMENT................31
Section 7.1 Termination of Holdings Stockholders Agreement.............31
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STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT (this "Agreement"), dated as of March 4, 2004,
by and among AMH Holdings, Inc., a Delaware corporation (the "Company"),
Associated Materials Holdings, Inc., a Delaware corporation ("Holdings"),
Harvest Partners III, L.P., a Delaware limited partnership, Harvest Partners III
Beteiligungsgesellschaft Burgerlichen Rechts (mit Haftungsbeschrankung), a
German limited liability partnership, Harvest Partners IV, L.P., a Delaware
limited partnership, and Harvest Partners IV GmbH & Co. KG, a German limited
partnership, (each, a "Harvest Fund" and, collectively, the "Harvest Funds"),
the financial investors listed on Schedule I attached hereto (each, a "Financial
Investor" and, collectively, the "Financial Investors") and certain stockholders
of the Company listed on the Executive Signature Page hereto (each, an
"Executive" and collectively the "Executives" and, together with the Harvest
Funds and the Financial Investors, the "Stockholders").
W I T N E S S E T H :
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WHEREAS, Holdings, the Company and the Stockholders have entered into
a Restructuring Agreement (the "Restructuring Agreement"), dated as of March 4,
2004, pursuant to which the Stockholders exchanged all of their capital stock of
Holdings, representing all of the existing issued and outstanding capital stock
of Holdings, for capital stock of the Company, representing all of the then
issued and outstanding capital stock of the Company (the "Initial Exchange"),
and the Company subsequently exchanged all of the capital stock of Holdings
received by it in the Initial Exchange for 1,000 shares of Class A Common Stock,
par value $0.01 per share, of Holdings (the "Second Exchange" and, together with
the Initial Exchange, the "Restructuring");
WHEREAS, upon consummation of the Restructuring, the Stockholders own
Equity Securities in the amounts set forth in Schedule II attached hereto;
WHEREAS, the Company has assumed and adopted an equity compensation
plan for certain members of management and key employees of the Company, and the
Stock Options (as such term is defined herein) issued pursuant to such plan
shall be subject to, and have the benefit of, the terms of this Agreement;
WHEREAS, Holdings and the Stockholders are party to an Amended and
Restated Stockholders Agreement (the "Holdings Stockholders Agreement"), dated
as of April 19, 2002, which Holdings and the Stockholders desire to terminate
herewith; and
WHEREAS, the Company and the Stockholders each desire to enter into
this Agreement to, inter alia, regulate and limit certain rights relating to the
Equity Securities and to limit the sale, assignment, transfer, encumbrance or
other disposition of such Equity Securities and to provide for the consistent
and uniform management of the Company as set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants set forth
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
Section 1.1 Certain Definitions. For purposes of this Agreement, the
following terms shall have the following meanings:
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with or, with respect to ▇▇▇▇▇▇ Capital Private Equity Fund III,
L.P., GE Capital Equity Capital Group, Inc. and Private Equity Portfolio Fund
II, LLC, advised or managed by, such Person. For purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling",
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such Person,
whether through the ownership of voting securities, by agreement or otherwise.
"Agreement" shall have the meaning set forth in the preamble to this
Agreement.
"Applicable Law" shall mean, with respect to any Person, all
provisions of laws, statutes, ordinances, rules, regulations, permits or
certificates of any Governmental Authority applicable to such Person or any of
its assets or property, and all judgments, injunctions, orders and decrees of
all courts, arbitrators or Governmental Authorities in proceedings or actions in
which such Person is a party or by which any of its assets or properties are
bound.
"Associated" shall mean Associated Materials Incorporated, a Delaware
corporation and a wholly owned subsidiary of Holdings.
"Board" shall mean the Board of Directors of the Company.
"Business Day" shall mean any day except a Saturday, a Sunday or any
other day on which commercial banks in New York, New York are required or
authorized by Applicable Law to close.
"Common Equity Securities" shall mean, at any time, all Common Stock
and all other securities, Options, warrants and other rights to purchase or
otherwise acquire Common Stock, to the extent convertible or exchangeable for
Common Stock at such time at an exercise price equal to or less than the fair
market value of the Common Stock at such time; provided, that for purposes of
calculating the number of Common Equity Securities held by a Stockholder or
outstanding at any time, all Common Equity Securities other than Common Stock
shall represent such number of shares of Common Stock into which such Common
Equity Securities may be converted or exchanged at an exercise price equal to or
less than the fair market value of the Common Stock at such time.
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"Common Stock" shall mean the Class A common stock of the Company,
$0.01 par value per share, and the Class B common stock of the Company, $0.01
par value per share.
"Company" shall have the meaning set forth in the preamble to this
Agreement.
"Demand Notice" shall have the meaning set forth in Section 3.1(b) of
this Agreement.
"Equity Securities" shall mean, collectively, the Common Equity
Securities and the Preferred Equity Securities.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC promulgated thereunder.
"Financial Investor" and "Financial Investors" shall have the meanings
set forth in the preamble to this Agreement.
"Governmental Authority" shall mean any federal, state, municipal or
other governmental department, board, bureau, agency or instrumentality, or any
court, in each case whether of the United States of America or foreign.
"Harvest Fund" and "Harvest Funds" shall have the meanings set forth
in the preamble to this Agreement.
"Holders' Counsel" shall have the meaning set forth in the definition
of "Registration Expenses".
"Holdings" shall have the meaning set forth in the preamble to this
Agreement.
"Holdings Stockholders Agreement" shall have the meaning set forth in
the fourth recital of this Agreement.
"Incentive Securities" shall mean and include, at any time, (i) all
Stock Options and (ii) all shares of Common Stock or Preferred Stock issued upon
the exercise of Stock Options.
"Incidental Registration" shall have the meaning set forth in Section
3.2(a) of this Agreement.
"Initial Exchange" shall have the meaning set forth in the first
recital of this Agreement.
"Management Stockholder" and "Management Stockholders" shall mean each
of the members of management of the Company or its subsidiaries that, from time
to time, become party to this Agreement pursuant to Section 6.5(b) hereto.
"NASDAQ" shall mean The Nasdaq Stock Market, Inc.
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"New Securities" shall mean any Equity Securities, whether authorized
now or in the future, and any rights, options or warrants to purchase any Equity
Securities ("Options"), provided, that "New Securities" shall not include (i)
Equity Securities sold in a Public Offering or in a transaction pursuant to Rule
144A of the Securities Act, (ii) Equity Securities issued as consideration in
any merger or recapitalization of the Company or issued as consideration for the
acquisition of another Person or assets of another Person, (iii) any issuance of
Equity Securities to any Person which is determined by the Board to be
strategically beneficial to the operations of the Company (other than solely as
a source of capital); provided, that any issuance pursuant to this clause (iii)
rendering proceeds in excess of $10.0 million to the Company shall be subject to
approval by the Requisite Disinterested Holders, (iv) Equity Securities issued
to a commercial bank, commercial leasing company or other Person whose principal
business is the extension of financing to third parties as part of any financing
transaction, so long as such Equity Securities are not the only security
component of such financing transaction or (v) Incentive Securities; provided,
that in the event any of the Harvest Funds or any of their respective Affiliates
are to participate in any issuance contemplated by any of clauses (i) through
(v), such issuance shall be subject to approval by the Requisite Disinterested
Holders.
"New Securities Price" shall have the meaning set forth in Section 2.5
of this Agreement.
"Non-Qualified Person" shall mean any Person who is (i) directly or
indirectly engaged in any business which the Board determines to be competing
with the businesses of the Company or any of its Subsidiaries, (ii) any material
customer or supplier of the Company or any of its Subsidiaries, (iii) an adverse
party in any legal or arbitration proceeding with the Company or any of its
Subsidiaries, (iv) designated by the Board from time to time as a Person whose
equity ownership in the Company would, in the reasonable determination of the
Board, be adverse to the Company or its businesses and (v) an Affiliate of any
Person described in clauses (i) or (iv), unless otherwise determined by the
Board.
"Options" shall have the meaning set forth in the definition of New
Securities.
"Other Drag Stockholders" shall have the meaning set forth in Section
2.4(a);
"Other Tag Stockholders" shall have the meaning set forth in Section
2.3(a) of this Agreement.
"Participant" shall have the meaning set forth in Section 2.3(b) of
this Agreement.
"Permitted Transfer" shall have the meaning set forth in Section
2.2(a) of this Agreement.
"Permitted Transferee" shall have the meaning set forth in Section
2.2(a) of this Agreement.
"Person" shall mean and include natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, joint stock
companies, joint ventures, associations, companies, trusts, banks, trust
companies, land trusts, business trusts or other
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organizations, whether or not legal entities, and governments and agencies and
political subdivisions thereof.
"Preemptive Exercise Notice" shall have the meaning set forth in
Section 2.5(a) of this Agreement.
"Preemptive Notice" shall have the meaning set forth in Section 2.5(a)
of this Agreement.
"Preferred Equity Securities" shall mean, at any time, all Preferred
Stock and all other securities, Options, warrants and other rights to purchase
or otherwise acquire Preferred Stock to the extent convertible or exchangeable
for Preferred Stock at such time at an exercise price equal to or less than the
fair market value of the Preferred Stock at such time; provided, that for
purposes of calculating the number of Preferred Equity Securities held by a
Stockholder or outstanding at any time, all Preferred Equity Securities other
than Preferred Stock shall represent such number of shares of Preferred Stock
into which such Preferred Equity Securities may be converted or exchanged at an
exercise price equal to or less than the fair market value of the Common Stock
at such time.
"Preferred Stock" shall mean the 8.0% Series A Cumulative Redeemable
Preferred Stock of the Company, $0.01 par value per share.
"Pro Rata Amount" shall mean, at any time, with respect to any
Stockholder and any transaction, the quotient (expressed as a percentage)
obtained by dividing (i) the number of Equity Securities held by such
Stockholder at such time by (ii) the aggregate number of Equity Securities
outstanding at such time.
"Public Offering" shall mean a sale of Common Stock through an
underwritten public offering pursuant to an effective registration statement
filed with the SEC.
"Registrable Securities" shall mean, at any time:
(i) any shares of Common Stock; and
(ii) any securities issued or issuable in respect of shares of Common
Stock (including, without limitation, by way of stock dividend, stock
split, distribution, exchange, combination, merger, recapitalization,
reorganization or otherwise).
As to any particular Registrable Securities once issued, such
Registrable Securities shall cease to be Registrable Securities:
(i) when a registration statement with respect to the sale of such
securities shall have become effective under the Securities Act and such
securities shall have been disposed of in accordance with such registration
statement;
(ii) when such securities shall be eligible to be distributed by the
holder thereof to the public pursuant to Rule 144(k) under the Securities
Act (or any successor provision) without any time or volume limitations; or
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(iii) when such securities shall have ceased to be outstanding.
"Registration" shall mean each Required Registration and each
Incidental Registration.
"Registration Expenses" shall mean, with respect to the Company, all
expenses incident to the Company's performance of or compliance with Article III
including, without limitation, all registration and filing fees, fees and
expenses of compliance with securities or blue sky laws (including reasonable
fees and disbursements of counsel in connection with blue sky qualifications of
the Registrable Securities), expenses of printing certificates for the
Registrable Securities in a form eligible for deposit with the Depository Trust
Company, messenger and delivery expenses, internal expenses (including, without
limitation, all salaries and expenses of its officers and employees performing
legal or accounting duties), and fees and disbursements of counsel for the
Company and its independent certified public accountants (including the expenses
of any management review, cold comfort letters or any special audits required by
or incident to such performance and compliance), securities acts liability
insurance (if the Company elects to obtain such insurance), the reasonable fees
and expenses of any special experts retained by the Company in connection with
such registration, fees and expenses of other Persons retained by the Company,
the fees and expenses of one (1) counsel and applicable local counsel (the
"Holders' Counsel") which represents all holders of Registrable Securities to be
included in the relevant Registration, selected by the holders of a majority of
the Registrable Securities to be included in such Registration (except that,
where a Registration is a Required Registration, such selection may only be made
by the Harvest Fund requesting such Required Registration); but not including
any underwriting fees, discounts or commissions attributable to the sale of
securities or fees and expenses of counsel representing the holders of
Registrable Securities included in such Registration (other than the Holders'
Counsel and applicable local counsel) incurred in connection with the sale of
Registrable Securities.
"Regulated Stockholder" shall mean any Stockholder that (i) directly
or indirectly, due to its ownership by an entity subject to Regulation Y of the
Board of Governors of the Federal Reserve System, 12 C.F.R. Part 225 (or any
successor to such regulation) ("Regulation Y"), is subject to the provisions of
Regulation Y and holds shares of Equity Securities.
"Regulatory Problem" shall mean, with respect to any Regulated
Stockholder, any set of facts, events or circumstances the existence of which
would cause such Regulated Stockholder to be in violation of any law,
regulation, rule or other requirement of any Governmental Authority (Including,
without limitation, Regulation Y).
"Required Registration" shall have the meaning set forth in Section
3.1(a) of this Agreement.
"Requisite Disinterested Holders" shall mean, at any time, the holders
of at least fifty percent (50%) of the Equity Securities held by Financial
Investors at such time.
"Requisite Holders" shall mean, at any time, and with respect to any
registration and related public offering, the holders of at least fifty percent
(50%) of the Registrable
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Securities proposed to be included in such Public Offering before giving effect
to any cut-back provisions contained herein.
"Response Deadline" shall have the meaning set forth in Section 2.3(b)
of this Agreement.
"Restructuring" shall have the meaning set forth in the first recital
of this Agreement.
"Restructuring Agreement" shall have the meaning set forth in the
first recital of this Agreement.
"Sale of the Business" shall mean any transaction or series of
transactions (whether structured as a stock sale, merger, consolidation,
reorganization, asset sale or otherwise), which results in the sale or transfer
of all or substantially all of the assets (determined based on value) of the
Company and its Subsidiaries or of beneficial ownership or control of a majority
of the Common Stock or the capital stock of Holdings or Associated to a Person,
other than a Harvest Fund or any of its Affiliates.
"SEC" shall mean, at any time, the Securities and Exchange Commission
or any other federal agency at such time administering the Securities Act.
"Second Exchange" shall have the meaning set forth in the first
recital of this Agreement.
"Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations of the SEC promulgated thereunder.
"Stock Options" shall mean all options to purchase Equity Securities
granted to members of management and key employees of the Company pursuant to a
stock option or similar equity plan approved by the Board.
"Stockholder" shall mean each Harvest Fund, each Financial Investor,
each Management Stockholder and each other Person that becomes a Stockholder
pursuant to Section 2.2(b) or Section 6.5(b) of this Agreement.
"Subsidiary" shall mean, with respect to any Person at any time, any
corporation, partnership, business trust, joint stock company, association,
limited liability company or other business entity of which (i) if a
corporation, a majority of the total voting power of stock entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors or trustees thereof is at such time owned or controlled, directly or
indirectly, by that Person or one or more of the other Subsidiaries of that
Person or a combination thereof, or (ii) if a partnership, limited liability
company, business trust, joint stock company, association or other business
entity other than a corporation, a majority of the partnership, membership or
other similar ownership interests thereof is at such time owned or controlled,
directly or indirectly, by that Person or one or more of the other Subsidiaries
of that Person or a combination thereof. For purposes hereof, a Person or
Persons shall be deemed to have a majority ownership interest in a partnership,
limited liability company, business trust, joint stock company, association or
other business
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entity other than a corporation if such Person or Persons shall be allocated a
majority of the partnership, association or other business entity gains or
losses or shall be or control the managing director, manager, a general partner
or the trustee of such partnership, limited liability company, business trust,
joint stock company, association or other business entity.
"TGF" shall have the meaning set forth in Section 2.3(b) of this
Agreement.
"Transfer" shall have the meaning set forth in Section 2.1(a) of this
Agreement.
"Transfer Notice" shall have the meaning set forth in Section 2.3(a)
of this Agreement.
"Weston Presidio" shall have the meaning set forth in the Section
4.1(a) of this Agreement.
ARTICLE II
TRANSFER OF EQUITY SECURITIES
Section 2.1 Restrictions.
(a) No Stockholder shall, directly or indirectly, (i) sell, assign, or
in any other manner, other than by way of a pledge or grant of security
interest, transfer any Equity Securities to any Person (each such action, a
"Transfer"), except pursuant to a Permitted Transfer, or (ii) pledge or grant a
security interest in any Equity Securities to any Person.
(b) From and after the date hereof until this Agreement is terminated,
all certificates or other instruments representing Equity Securities held by any
of the Stockholders shall bear a legend which shall substantially state as
follows:
"The securities represented by this certificate are subject to and have
the benefit of a Stockholders Agreement, dated as of March 4, 2004, as
the same may be amended from time to time. A copy of such Stockholders
Agreement has been filed in the chief executive office of the Company
where the same may be inspected daily during business hours."
(c) In addition to the legend required by Section 2.1(b) above, all
certificates representing Equity Securities held by any of the Stockholders
shall bear a legend which shall substantially state as follows:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Securities Act"), and such securities may not be offered, sold,
pledged or otherwise transferred except (i) pursuant to an effective
registration statement under the Securities Act or pursuant to an
exemption from the registration requirements of the Securities Act and
(ii) in accordance with any applicable securities laws of any State of
the United States."
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Notwithstanding the foregoing provisions of this Section 2.1(c), the legend
required by this Section 2.1(c) shall be removed from any such certificates
representing Equity Securities (i) when and so long as such Equity Securities
shall have been effectively registered under the Securities Act and disposed of
pursuant thereto or (ii) when the Company shall have received an opinion of
counsel reasonably satisfactory to it that such Equity Securities may be freely
transferred at any time without registration thereof under the Securities Act
and that such legend may be removed.
(d) Each Stockholder agrees that it will not effect any Transfer of
Equity Securities unless such Transfer is made (i) pursuant to an effective
registration statement under the Securities Act or pursuant to an exemption from
the registration requirements of the Securities Act, (ii) in accordance with any
applicable securities laws of any State of the United States and (iii) in
accordance with any other Applicable Laws.
(e) The Company agrees that it will not cause or permit any Transfer
of any Equity Securities to be made on its books unless such Transfer is a
Permitted Transfer and has been made in accordance with the terms hereof.
(f) Notwithstanding the foregoing, prior to the consummation of a
Public Offering, the Company may refuse to Transfer any Equity Securities if
making such Transfer would cause the number of recordholders of such Equity
Securities to exceed 475.
Section 2.2 Permitted Transfers.
(a) Notwithstanding anything to the contrary contained herein (but
only to the extent in compliance with Section 2.1(d) and 2.1(f)), a Stockholder
may at any time effect any of the following Transfers (each a "Permitted
Transfer," and each transferee of such Stockholder in respect of such Transfer,
a "Permitted Transferee"):
(i) any Transfer of any or all Equity Securities held by a Stockholder
following such Stockholder's death by will or intestacy to such
Stockholder's legal representative, heir or legatee;
(ii) any Transfer of any or all Equity Securities held by a
Stockholder as a gift or gifts during such Stockholder's lifetime to such
Stockholder's spouse, children, grandchildren or a trust for the benefit of
such Stockholder or any of the foregoing;
(iii) any Transfer of any or all Equity Securities held by a Harvest
Fund or a Financial Investor to any Affiliate of such Person (other than a
Non-Qualified Person); provided that any such Affiliate shall Transfer such
Equity Securities to the Stockholder from whom such Equity Securities were
originally received or acquired within five (5) days after ceasing to be an
Affiliate of such Stockholder;
(iv) any Transfer by (x) a Harvest Fund so long as Section 2.3 is
complied with or (y) a Harvest Fund or any Financial Investor to the
partners, members or beneficiaries of such Harvest Fund or Financial
Investor upon the liquidation or dissolution of such Harvest Fund or, as
the case may be, such Financial Investor in accordance with its controlling
fund documents;
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(v) any Transfer of any or all Equity Securities held by a Stockholder
which is made pursuant to (x) Section 2.3 or (y) Section 2.4;
(vi) any Transfer of any or all Equity Securities held by a
Stockholder which is made pursuant to Article III;
(vii) any Transfer by a Management Stockholder to the Company; or
(viii) any Transfer not described in any of clauses (i) through (vii)
above if permitted by the Board; provided, however, that if such Transfer
is by a Harvest Fund, such Transfer must be approved by the Requisite
Disinterested Holders.
(b) In any Transfer referred to in Section 2.2(a) (other than clauses
(iv)(x), (v)(x) (to the extent such Transfer is made as part of a transaction
which is a Sale of the Business), (v)(y) and (vi) thereof), the Permitted
Transferee shall agree in writing to be bound by all the provisions of this
Agreement and shall execute and deliver to the Company a counterpart to this
Agreement. Each Permitted Transferee (other than a Permitted Transferee who
received the relevant Equity Securities in a Transfer pursuant to Section
2.2(a)(iv)(x), Section 2.2(a)(v)(x) (to the extent such Transfer is made as part
of a transaction which is a Sale of the Business) or Section 2.2(a)(v)(y) or
Section 2.2(a)(vi)) shall hold such shares of Equity Securities subject to the
provisions of this Agreement as a "Stockholder" hereunder as if such Permitted
Transferee were an original signatory hereto and shall be deemed to be a party
to this Agreement.
(c) In any Transfer by a Harvest Fund to a Permitted Transferee which
is made pursuant to Section 2.2(a)(iii) or Section 2.2(a)(iv)(y), such Permitted
Transferee shall thereafter be a "Harvest Fund". In any Transfer by a Financial
Investor to a Permitted Transferee pursuant to Section 2.2(a)(iii) or Section
2.2(a)(iv)(y), such Permitted Transferee shall thereafter be a "Financial
Investor". In any Transfer by a Management Stockholder to a Permitted Transferee
pursuant to Section 2.2(a)(i) or Section 2.2(a)(ii), such Permitted Transferee
shall thereafter be a "Management Stockholder".
Section 2.3 Sales by Harvest Subject to Tag-Along Rights.
(a) In the event that a Harvest Fund proposes to effect a Transfer
(other than a Permitted Transfer described in Section 2.2(a)(iii) or Section
2.2(a)(iv)(y)) of Equity Securities, such Harvest Fund shall promptly give
written notice (the "Transfer Notice") to the Company and each of the other
Stockholders which are not a Harvest Fund (the "Other Tag Stockholders") at
least twenty (20) days prior to the scheduled consummation of such Transfer. The
Transfer Notice shall describe in reasonable detail the proposed Transfer
including, without limitation, the identity of the proposed purchaser, the type
and number of shares of Equity Securities to be sold, the purchase price of each
such share of Equity Securities to be sold, the form of consideration, the
amount of any escrow, the nature of any significant other arrangements
(representations and warranties, indemnifications, etc.) and the date such
proposed sale is expected to be consummated.
(b) Each of the Other Tag Stockholders shall have the right,
exercisable upon delivery of an irrevocable written notice to the applicable
Harvest Fund within ten (10) Business Days after receipt of the Transfer Notice
(the "Response Deadline"), to participate in such
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proposed Transfer on the same terms and conditions as set forth in the Transfer
Notice including, without limitation, the making of representations and
warranties as to due incorporation, existence and good standing, power and
authority of such Other Tag Stockholder, and ownership of the Equity Securities,
the granting of all indemnifications (other than The Texas Growth Fund II - 1998
Trust ("TGF") which shall provide insurance in form and substance satisfactory
to the Harvest Funds with respect to all such indemnifications) and
participating in any escrow arrangements to the extent of their respective pro
rata portion and similar agreements agreed to by the applicable Harvest Fund,
provided that the indemnification obligation of any Other Tag Stockholder to a
proposed transferee with respect to the breach of any representation or warranty
concerning the Company shall be limited to the lesser of its respective pro rata
portion of the obligation and the net proceeds to be received by such Other Tag
Stockholder in connection with such Transfer. Each Other Tag Stockholder
electing to participate in the Transfer described in the Transfer Notice (each,
a "Participant") shall indicate in its notice of election to the applicable
Harvest Fund the maximum number of Equity Securities it desires to Transfer.
Each such Participant shall be entitled to Transfer a number and type of Equity
Securities equal to such holder's pro rata portion of the total number and type
of Equity Securities to be Transferred, as set forth in the Transfer Notice, up
to such maximum number. For purposes of this Section 2.3(b) and Section 2.3(c),
"pro rata portion" shall mean for each Participant a fraction, the numerator of
which is the number of Equity Securities of the type included in such Transfer
held by such Participant immediately prior to the Transfer proposed in the
Transfer Notice and the denominator of which is the total number of Equity
Securities of the type included in such Transfer outstanding immediately prior
to the Transfer proposed in the Transfer Notice held by the Harvest Funds and
the Other Tag Stockholders collectively. In the event that any Stockholder does
not elect to sell all of its respective pro rata portion, the Equity Securities
which were available for sale by such non-electing Stockholders but are not
being so sold (the "Excess Tag Securities") shall automatically be deemed to be
accepted for sale by (i) each Stockholder who indicated in their written
response to the Transfer Notice a desire to participate in the sale of Equity
Securities in excess of its pro rata portion and (ii) each Harvest Fund. Unless
otherwise agreed by all of the Stockholders participating in the purchase of
Excess Tag Securities, each Stockholder who indicated to sell more than its pro
rata portion shall sell a number of Excess Tag Securities equal to the lesser of
(x) the number of Excess Tag Securities indicated in the written response to the
Transfer Notice or, in the case of a Harvest Fund, the Transfer Notice, if any,
and (y) an amount equal to the product of (A) the aggregate number of Excess Tag
Securities and (B) a fraction, the numerator of which is the number of Equity
Securities of the type included in such Transfer held at such time by such
Stockholder and the denominator of which is the aggregate number of Equity
Securities of the type included in such Transfer held at such time by all
Stockholders who participate in the purchase of Excess Tag Securities. No holder
of Equity Securities (other than the type of Equity Securities proposed to be
Transferred by the applicable Harvest Fund) shall be entitled to sell Equity
Securities (other than the type of Equity Securities proposed to be Transferred
by the applicable Harvest Fund) pursuant to this Section 2.3, but shall be
permitted to convert or exercise its applicable portion of such Equity
Securities which are then so exercisable or convertible for the type of Equity
Securities proposed to be Transferred by the applicable Harvest Fund
concurrently with, and subject to, the consummation of the proposed Transfer.
(c) Each Participant shall effect its participation in the Transfer by
delivering to the applicable Harvest Fund (to hold in trust as agent for such
Participant), at least three (3)
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Business Days prior to the date scheduled for such Transfer as set forth in the
Transfer Notice, one or more certificates or other instruments, as applicable,
in proper form for transfer, which represent the number of Equity Securities
which such Participant desires to Transfer in accordance with Section 2.3(b).
Such certificate or certificates or other instruments, as applicable, shall be
delivered by the applicable Harvest Fund to such Permitted Transferee on the
date scheduled for such Transfer in consummation of the Transfer pursuant to the
terms and conditions specified in the Transfer Notice and such Permitted
Transferee shall remit to each such Participant its pro rata portion of the net
sale proceeds (taking into account transaction costs and expenses incurred by
such Harvest Fund in connection with such Transfer and transaction costs and
expenses incurred by each Participant in connection with such Transfer) to which
such Participant is entitled by reason of its participation in such sale. The
Harvest Funds' sale of Equity Securities in any sale proposed in a Transfer
Notice shall be effected on terms and conditions not more favorable than those
set forth in such Transfer Notice and applicable to the other Participants. In
the event the proposed Transfer is not consummated within twenty (20) business
days of the date scheduled for such Transfer, the applicable Harvest Fund shall
promptly return all certificates and/or instruments received from Participants.
(d) The exercise or non-exercise of the rights of any of the Other
Stockholders hereunder to participate in one or more Transfers of Equity
Securities made by a Harvest Fund shall not adversely affect their rights to
participate in subsequent Transfers of Equity Securities subject to this Section
2.3.
Section 2.4 Grant to Harvest of Drag-Along Rights.
(a) At any time after the Restructuring, at the written request of any
Harvest Fund, each of the other Stockholders (the "Other Drag Stockholders")
agrees to vote all of its shares of Common Stock, at a special or annual meeting
of Stockholders or by written consent in lieu of a meeting, in favor of and, if
applicable, shall sell its pro rata portion of the amount of any type of Equity
Securities to be Transferred in connection with, a Sale of the Business. In
order to effect the foregoing covenant, each Other Drag Stockholder hereby
grants to each Harvest Fund with respect to all of such Stockholder's shares of
Common Stock an irrevocable proxy (which is deemed to be coupled with an
interest) for the term of this Agreement with respect to any stockholder vote or
action by written consent solely to effect such Sale of the Business in
compliance with this Section 2.4.
(b) The Company and the Other Drag Stockholders each hereby agree to
cooperate fully (including by waiving any other appraisal rights to which such
Other Drag Stockholder may be entitled under Applicable Law and each such
Stockholder does hereby waive all such appraisal rights) with the Harvest Fund
and the purchaser in any such Sale of the Business and, to execute and deliver
all documents (including purchase agreements) and instruments as the applicable
Harvest Fund and such purchaser request to effect such Sale of the Business
including, without limitation, the making of representations and warranties as
to due incorporation, existence and good standing, power and authority of such
Other Drag Stockholder, and ownership of Equity Securities and the granting of
all indemnifications (other than TGF which shall provide insurance in form and
substance satisfactory to the Harvest Funds with respect to all such
indemnifications) and the execution of all agreements (including, without
limitation, participating in any escrow arrangements to the extent of their
respective pro rata
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portion) and similar arrangements which the applicable Harvest Funds is making
or executing, provided that the indemnification obligation of any Other
Stockholder to proposed purchaser with respect to the breach of any
representation or warranty concerning the Company shall be limited to the lesser
of the pro rata portion of the obligation and the net proceeds to be received by
such Other Stockholder in connection with such Sale of the Business. The Harvest
Funds agree that upon such Sale of the Business each Stockholder shall receive
its pro rata portion of the net proceeds (taking into account transaction costs
and expenses incurred by the Harvest Funds in connection with such Sale of the
Business, reasonable transaction costs and expenses incurred by each other
Stockholder in connection with such Sale of the Business and the costs and
expenses described in Section 2.4(c)) and such sale shall be on the same terms
and conditions as afforded to the Harvest Funds. For purposes of Section 2.4(a)
and 2.4(b), "pro rata portion" shall mean with respect to each Stockholder and
each type of Equity Securities to be Transferred in such Sale of the Business a
fraction, the numerator of which is the number of such Equity Securities held by
such Stockholder immediately prior to such Sale of the Business and the
denominator of which is the total number of such Equity Securities outstanding
immediately prior to such Sale of the Business
(c) It is understood and agreed that in consideration of investment
banking services provided by any Person (including the Harvest Funds or any of
their respective Affiliates) a reasonable fee may be paid in an amount that is
customary and equivalent to a fee arrangement negotiated on an "arms-length"
basis; provided, that, if any such fee is payable to any Harvest Fund or any of
its Affiliates, such fee shall be consistent with the terms of the amended and
restated management agreement entered into by and between Harvest Partners, Inc.
and Associated Materials Incorporated as of the date hereof.
Section 2.5 Grant of Preemptive Rights to Stockholders.
(a) In the event that, at any time, the Company shall decide to
undertake an issuance of New Securities, the Company shall at such time deliver
to each Stockholder written notice of the Company's decision, describing the
amount, type and terms (including the exercise price and expiration date thereof
in the case of any Options) of such New Securities, the purchase price per New
Security (the "New Securities Price") to be paid by the purchasers of such New
Securities and the other terms upon which the Company has decided to issue such
New Securities including, without limitation, the expected timing of such
issuance, which shall not be less than twenty (20) Business Days after the date
upon which such notice is given (the "Preemptive Notice"). Each Stockholder
shall have ten (10) Business Days from the date on which they receive the
Preemptive Notice to agree by written notice to the Company (a "Preemptive
Exercise Notice") to purchase up to their Pro Rata Amount of such New Securities
for the New Securities Price and upon the general terms specified in the
Preemptive Notice by giving written notice to the Company and stating therein
the quantity of New Securities to be purchased by any such Stockholder. In the
event that in connection with such a proposed issuance of New Securities, such
Stockholder shall for any reason fail or refuse to give such written notice to
the Company within such ten (10) Business Days period, such Stockholder shall,
for all purposes of this Section 2.5, be deemed to have refused (in that
particular instance only) to purchase any of such New Securities and to have
waived (in that particular instance only) all of its rights under this Section
2.5 to purchase any of such New Securities. In the event that any Stockholder
does not elect to purchase all of its respective Pro Rata Amount of such
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New Securities, the New Securities which were available for purchase by such
non-electing Stockholders (the "Excess New Securities") shall automatically be
deemed to be accepted for purchase by the Stockholders who indicated in their
Preemptive Exercise Notice a desire to participate in the purchase of New
Securities in excess of their Pro Rata Amount. Unless otherwise agreed by all of
the Stockholders participating in the purchase of such New Securities, each
Stockholder who indicated to purchase more than its Pro Rata Amount shall
purchase a number of Excess New Securities equal to the lesser of (x) the number
of Excess New Securities indicated in the Preemptive Exercise Notice, if any,
and (y) an amount equal to the product of (A) the aggregate number of Excess New
Securities and (B) a fraction, the numerator of which is the number of Equity
Securities held at such time by such Stockholder and the denominator of which is
the aggregate number of Equity Securities held at such time by all Stockholders
who participate in the purchase of Excess New Securities.
(b) In the event any New Securities to be issued by the Company are
not subject to a Preemptive Exercise Notice, the Company shall be free to issue
such New Securities to any Person, provided that (x) the price per New Security
at which such New Securities are being issued to and purchased by such Person is
not less than the New Securities Price, (y) the other terms and conditions
pursuant to which such Person purchases such New Securities are substantially
equivalent to the terms set forth in the Preemptive Notice, and (z) such
issuance of New Securities takes place within ninety (90) days of the Preemptive
Notice. After expiration of the 90-day period, any New Securities to be issued
by the Company shall be subject to this Section 2.5.
ARTICLE III
REGISTRATION RIGHTS
Section 3.1 Required Registration.
(a) If the Company shall be requested in writing, which writing shall
specify the number of Registrable Securities to be sold and the intended method
of disposition thereof (a "Demand Request") (i) at any time by any one or more
Harvest Fund to effect a registration under the Securities Act of Registrable
Securities held by such Harvest Fund and (ii) subject to Section 3.1(g), once
after the date which is eighteen (18) months after the date of the Company's
initial Public Offering and provided that, at such time, the Company is eligible
to file a registration statement on Form S-3, by Stockholders (other than any
Harvest Fund) that are holders of at least 40% of the Equity Securities
outstanding at such time (each, a "Required Registration"), then the Company
shall promptly use its commercially reasonable efforts to effect such Required
Registration.
(b) Piggyback Rights. Upon receipt by the Company of a Demand Request,
the Company shall deliver a written notice (a "Demand Notice") to each of the
other Stockholders stating that the Company intends to comply with a Demand
Request and informing each such Stockholder of its right to include Registrable
Securities in such Required Registration. Within ten (10) Business Days after
receipt of a Demand Notice, each such other Stockholder shall have the right to
request in writing that the Company include all or a specific portion of the
Registrable Securities held by such other Stockholder in such Required
Registration.
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(c) Postponement. The Company may postpone any Required Registration
for a reasonable period of time, not to exceed one hundred eighty (180) days
once in every twelve (12) month period, if the Board determines in good faith
that such Required Registration would (A) require the disclosure of a material
transaction or other matter and such disclosure would be disadvantageous to the
Company or (B) adversely affect a material financing, acquisition, disposition
of assets or stock, merger or other comparable transaction.
(d) Time for Filing and Effectiveness. As promptly as practicable
after a Demand Request but in no event later than the date which is sixty (60)
days after such Demand Request, the Company shall file with the SEC the Required
Registration with respect to all Registrable Securities to be so registered, and
shall use its reasonable efforts to cause such Required Registration to become
effective as promptly as practicable after the filing thereof, but in no event
later than the day which is one hundred twenty (120) days after the date of the
Demand Request. The Company will use its reasonable efforts to keep any Required
Registration filed pursuant to this Section 3.1 effective for the period
beginning on the date on which the Required Registration is declared effective
and ending on the earlier of (i) the date of full distribution of the
Registrable Securities included in such Required Registration and (ii) the date
that is one hundred eighty (180) days from the date of first effectiveness.
(e) Selection of Underwriters. In the event that the Registrable
Securities to be registered pursuant to a Required Registration are to be
disposed of in an underwritten Public Offering, the underwriters of such Public
Offering shall be one or more underwriting firms of nationally recognized
standing selected by the Board.
(f) Priority on Required Registrations. In the event that, in the case
of any Required Registration, the managing underwriter for the Public Offering
contemplated by Section 3.1(e) shall advise the Company in writing (with a copy
to each holder of Registrable Securities requesting a sale) that, in such
underwriter's opinion, the amount of securities requested to be included in such
Required Registration would adversely affect the Public Offering and sale
(including pricing) of such Registrable Securities, the Company shall include in
such Required Registration the number of Registrable Securities that the Company
is so advised should be sold in such Public Offering, and each Stockholder which
requested to include Registrable Securities in such Required Registration shall
be entitled to include its pro rata share of Registrable Securities, based upon
the number of Registrable Securities requested to be included by such
Stockholders in such Required Registration; provided, however, that if such
managing underwriter shall advise the Company that, in such underwriter's
opinion, the inclusion of Registrable Securities held by Management Stockholders
would adversely affect the offering and sale (including pricing) of such
securities, then the number of Registrable Securities held by such Management
Stockholders to be included in such Public Offering may be disproportionately
reduced to avoid such adverse result.
(g) In the event that, after a Stockholder or Stockholders have made a
Demand Request pursuant to Section 3.1(a)(ii), less than 50% of the Registrable
Securities proposed to be included in the Public Offering, if any, by such
Stockholder or Stockholders are sold in such Public Offering pursuant to Section
3.1(f), such Demand Request shall be deemed not to have been a Demand Request,
provided that in no event shall the Stockholders (other than any Harvest Fund)
be entitled to more than two (2) Demand Request pursuant to Section 3.1(a)(ii).
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Section 3.2 Incidental Registration.
(a) Filing of Registration Statement. If the Company at any time
proposes to register, for its own account or the account of another Person
(other than any Harvest Fund), any of its securities (an "Incidental
Registration") under the Securities Act (other than pursuant to a registration
statement on Form S-4 or Form S-8 or any successor forms thereto and other than
pursuant to Section 3.1 hereof), for sale to the public in a Public Offering
(other than the Company's initial Public Offering), it will at each such time
give prompt written notice to all Stockholders of its intention to do so, which
notice shall be given at least fifteen (15) Business Days prior to the date that
a registration statement relating to such registration is proposed to be filed
with the SEC. Upon the written request of any Stockholder to include Registrable
Securities held by it under such registration statement (which request shall (i)
be made within ten (10) Business Days after the receipt of any such notice, and
(ii) specify the Registrable Securities intended to be included by such holder),
the Company will use its reasonable efforts to effect the registration of all
Registrable Securities that the Company has been so requested to register by
such Stockholder; provided, however, that if, at any time after giving written
notice of its intention to register any securities and prior to the effective
date of the registration statement filed in connection with such registration,
the Company shall determine for any reason to terminate such registration
statement and not to register such securities, the Company may, at its election,
give written notice of such determination to each such holder and, thereupon,
shall be relieved of its obligation to register any Registrable Securities of
such Persons in connection with such registration.
(b) Selection of Underwriters. Notice of the Company's intention to
register such securities shall designate the proposed underwriters of such
Public Offering and shall contain the Company's agreement to use its reasonable
efforts, if requested to do so, to arrange for such underwriters to include in
such underwriting the Registrable Securities that the Company has been so
requested to sell pursuant to this Section 3.2, it being understood that the
holders of Registrable Securities shall have no right to select different
underwriters for the disposition of their Registrable Securities.
(c) Priority on Incidental Registrations. If the managing underwriter
for the Public Offering contemplated by this Section 3.2 shall advise the
Company in writing that, in such underwriter's opinion, the number of securities
requested to be included in such Incidental Registration would adversely affect
the Public Offering and sale (including pricing) of such securities the Company
shall include in such Incidental Registration the number of securities that the
Company is so advised should be sold in such Public Offering, in the following
amounts and order of priority:
(i) first, securities proposed to be sold by the Company for its own
account or such other Person if the registration is pursuant to a
registration rights agreement with the Company;
(ii) second, the Registrable Securities requested to be registered by
Stockholders pro rata among such Stockholders on the basis of the number of
Registrable Securities requested to be sold by such Stockholders pursuant
to this Section 3.2 provided, however, that if such managing underwriter
shall advise the Company that, in
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such underwriter's opinion, the inclusion of Registrable Securities held by
Management Stockholders would adversely affect the offering and sale
(including pricing) of such securities, then the number of Registrable
Securities held by such Management Stockholders to be included in such
Public Offering may be disproportionately reduced to avoid such adverse
result; and
(iii) all other Registrable Securities and securities proposed to be
sold for the account of any other Person.
Section 3.3 Registration Procedures. The Company will use its
reasonable efforts to effect each Required Registration pursuant to Section 3.1
and each Incidental Registration pursuant to Section 3.2, and to cooperate with
the sale of such Registrable Securities in accordance with the intended method
of disposition thereof as quickly as possible, and the Company will as
expeditiously as possible:
(a) subject, in the case of an Incidental Registration, to the proviso
to Section 3.2(a), prepare and file with the SEC the registration statement and
use its reasonable efforts to cause the Registration to become effective;
provided, however, that, to the extent practicable, the Company will furnish to
the holders of the Registrable Securities covered by such registration statement
and their counsel, copies of all such documents proposed to be filed and any
such holder shall have the opportunity to comment on any information pertaining
solely to such holder and its plan of distribution that is contained therein and
the Company shall make the corrections reasonably requested by such holder with
respect to such information prior to filing any such registration statement or
amendment.
(b) subject, in the case of an Incidental Registration, to the proviso
to Section 3.2(a), prepare and file with the SEC such amendments and
post-effective amendments to any registration statement and any prospectus used
in connection therewith as may be necessary to keep such registration statement
effective and to comply with the provisions of the Securities Act with respect
to the disposition of all Registrable Securities covered by such registration
statement until such time as all of such Registrable Securities have been
disposed of in accordance with the intended methods of disposition by the seller
or sellers thereof set forth in such registration statement and cause the
prospectus to be supplemented by any required prospectus supplement, and as so
supplemented to be filed pursuant to Rule 424 under the Securities Act;
(c) furnish, upon request, to each holder of Registrable Securities to
be included in such Registration and the underwriter or underwriters, if any,
without charge, at least one signed copy of the registration statement and any
post-effective amendment thereto, and such number of conformed copies thereof
and such number of copies of the prospectus (including each preliminary
prospectus and each prospectus filed under Rule 424 under the Securities Act),
any amendments or supplements thereto and any documents incorporated by
reference therein, as such holder or underwriter may reasonably request in order
to facilitate the disposition of the Registrable Securities being sold by such
holder (it being understood that the Company consents to the use of the
prospectus and any amendment or supplement thereto by each holder of Registrable
Securities covered by such registration statement and the underwriter or
underwriters, if any, in connection with the Public Offering and sale of the
Registrable Securities covered by the prospectus or any amendment or supplement
thereto);
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(d) notify each holder of the Registrable Securities to be included in
such Registration and the underwriter or underwriters, if any:
(i) of any stop order or other order suspending the effectiveness of
any registration statement, issued or threatened by the SEC in connection
therewith, and take all reasonable actions required to prevent the entry of
such stop order or to remove it or obtain withdrawal of it at the earliest
possible moment if entered;
(ii) when such registration statement or any prospectus used in
connection therewith, or any amendment or supplement thereto, has been
filed and, with respect to such registration statement or any
post-effective amendment thereto, when the same has become effective;
(iii) of any written request by the SEC for amendments or supplements
to such registration statement or prospectus; and
(iv) of the receipt by the Company of any notification with respect to
the suspension of the qualification of any Registrable Securities for sale
under the applicable securities or blue sky laws of any jurisdiction;
(e) if requested by the managing underwriter or underwriters or any
holder of Registrable Securities to be included in such Registration in
connection with any sale pursuant to a registration statement, promptly
incorporate in a prospectus supplement or post-effective amendment such
information relating to such underwriting as the managing underwriter or
underwriters or such holder reasonably requests to be included therein; and make
all required filings of such prospectus supplement or post-effective amendment
as soon as practicable after being notified of the matters incorporated in such
prospectus supplement or post-effective amendment;
(f) on or prior to the date on which a Registration is declared
effective, use its reasonable efforts to register or qualify, and cooperate with
the holders of Registrable Securities to be included in such Registration, the
underwriter or underwriters, if any, and their counsel, in connection with the
registration or qualification of the Registrable Securities covered by such
Registration for offer and sale under the securities or "blue sky" laws of each
state and other jurisdiction of the United States as any such holder or
underwriter reasonably requests in writing; use its reasonable efforts to keep
each such registration or qualification effective, including through new
filings, or amendments or renewals, during the period such registration
statement is required to be kept effective; and do any and all other acts or
things necessary or advisable to enable the disposition of the Registrable
Securities in all such jurisdictions reasonably requested covered by such
Registration; provided, however, that the Company shall not be required to
qualify generally to do business in any jurisdiction where it is not then so
qualified or to take any action which would subject it to general service of
process in any such jurisdiction where it is not then so subject;
(g) in connection with any sale pursuant to a Registration, cooperate
with the holders of Registrable Securities to be included in such Registration
and the managing underwriter or underwriters, if any, to facilitate the timely
preparation and delivery of certificates (not
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bearing any restrictive legends) representing securities to be sold under such
Registration, and enable such securities to be in such denominations and
registered in such names as the managing underwriter or underwriters, if any, or
such holders may request;
(h) use its reasonable efforts to cause the Registrable Securities to
be registered with or approved by such other governmental agencies or
authorities within the United States and having jurisdiction over the Company or
any Subsidiary as may be necessary to enable the seller or sellers thereof or
the underwriter or underwriters, if any, to consummate the disposition of such
securities;
(i) use its reasonable efforts to obtain:
(A) at the time of effectiveness of each Registration, a "comfort
letter" from the Company's independent certified public accountants
covering such matters of the type customarily covered by "cold comfort
letters" as the holders of a majority of the Registrable Securities to be
included in such Registration and the underwriters reasonably request; and
(B) at the time of any underwritten sale pursuant to the registration
statement, a "bring-down comfort letter," dated as of the date of such
sale, from the Company's independent certified public accountants covering
such matters of the type customarily covered by comfort letters as the
Requisite Holders and the underwriters reasonably request;
(j) use its reasonable efforts to obtain, at the time of effectiveness
of each Registration and at the time of any sale pursuant to each Registration,
an opinion or opinions addressed to the holders of the Registrable Securities to
be included in such Registration and the underwriter or underwriters, if any, in
customary form and scope from counsel for the Company;
(k) notify each seller of Registrable Securities covered by such
Registration, upon discovery that, or upon the happening of any event as a
result of which, the prospectus included in such Registration, as then in
effect, includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and promptly prepare and file with the SEC and furnish
to such seller or holder a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers or prospective purchasers of such securities, such
prospectus shall not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances under which
they are made;
(l) otherwise comply with all applicable rules and regulations of the
SEC, and make generally available to its security holders (as contemplated by
Section 11(a) under the Securities Act) an earnings statement satisfying the
provisions of Rule 158 under the Securities Act no later than ninety (90) days
after the end of the twelve (12) month period beginning with the first month of
the Company's first fiscal quarter commencing after the effective date of the
registration statement, which statement shall cover said twelve (12) month
period;
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(m) provide and cause to be maintained a transfer agent and registrar
for all Registrable Securities covered by each Registration from and after a
date not later than the effective date of such Registration;
(n) use its reasonable efforts to cause all Registrable Securities
covered by each Registration to be listed subject to notice of issuance, prior
to the date of first sale of such Registrable Securities pursuant to such
Registration, on each securities exchange on which the Common Stock are then
listed, and admitted to trading on NASDAQ, if the Common Stock or any such other
securities of the Company are then admitted to trading on NASDAQ; and
(o) enter into such agreements (including underwriting agreements in
customary form) and take such other actions as the Requisite Holders shall
reasonably request in order to expedite or facilitate the disposition of such
Registrable Securities.
The Company may require each holder of Registrable Securities that will be
included in such Registration to furnish the Company with such information in
respect of such holder of its Registrable Securities that will be included in
such Registration as the Company may reasonably request in writing and as is
required by Applicable Law.
Section 3.4 Preparation; Reasonable Investigation. In connection with
the preparation and filing of each registration statement registering
Registrable Securities under the Securities Act, the Company shall give the
holders of such Registrable Securities so registered, their underwriters, if
any, and their respective counsel and accountants access to its books and
records and an opportunity to discuss the business of the Company with its
officers and the independent public accountants who have certified its financial
statements as shall be necessary, in the opinion of such holders' or such
underwriters' to conduct a reasonable investigation within the meaning of
Section 11(b)(3) of the Securities Act.
Section 3.5 Rights of Requesting Holders. Each holder of Registrable
Securities to be included in a Registration which makes a written request
therefor in Section 3.1 or 3.2, as the case may be, shall have the right to
receive within thirty (30) days of receipt by the Company of such request copies
of the information, notices and other documents described in Section 3.3(l) and
Section 3.3(o).
Section 3.6 Registration Expenses. The Company will pay all
Registration Expenses in connection with each registration of Registrable
Securities, including, without limitation, any such registration not effected by
the Company.
Section 3.7 Indemnification; Contribution.
(a) The Company shall indemnify, to the fullest extent permitted by
law, each holder of Registrable Securities, its officers, directors, partners,
employees and agents, if any, and each Person, if any, who controls such holder
within the meaning of section 15 of the Securities Act, against all losses,
claims, damages, liabilities (or proceedings in respect thereof) and expenses
(under the Securities Act or common law or otherwise), joint or several,
resulting from any violation by the Company of the provisions of the Securities
Act or any untrue statement or alleged untrue statement of a material fact
contained in any registration statement or prospectus (and as amended or
supplemented if amended or supplemented) or any preliminary
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prospectus or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein (in the case of any prospectus, in light of the circumstances under
which they were made) not misleading, except to the extent that such losses,
claims, damages, liabilities (or proceedings in respect thereof) or expenses are
caused by any untrue statement or alleged untrue statement contained in or by
any omission or alleged omission from information concerning any holder
furnished in writing to the Company by such holder expressly for use therein. If
the Public Offering pursuant to any registration statement provided for under
this Article III is made through underwriters, no action or failure to act on
the part of such underwriters (whether or not such underwriter is an Affiliate
of any holder of Registrable Securities) shall affect the obligations of the
Company to indemnify any holder of Registrable Securities or any other Person
pursuant to the preceding sentence. If the Public Offering pursuant to any
registration statement provided for under this Article III is made through
underwriters, the Company agrees to enter into an underwriting agreement in
customary form with such underwriters and the Company agrees to indemnify such
underwriters, their officers, directors, employees and agents, if any, and each
Person, if any, who controls such underwriters within the meaning of section 15
of the Securities Act to the same extent as herein before provided with respect
to the indemnification of the holders of Registrable Securities; provided that
the Company shall not be required to indemnify any such underwriter, or any
officer, director or employee of such underwriter or any Person who controls
such underwriter within the meaning of section 15 of the Securities Act, to the
extent that the loss, claim, damage, liability (or proceedings in respect
thereof) or expense for which indemnification is claimed results from such
underwriter's failure to send or give a copy of an amended or supplemented final
prospectus to the Person asserting an untrue statement or alleged untrue
statement or omission or alleged omission at or prior to the written
confirmation of the sale of Registrable Securities to such Person if such
statement or omission was corrected in such amended or supplemented final
prospectus prior to such written confirmation and the underwriter was provided
with such amended or supplemented final prospectus.
(b) In connection with any registration statement in which a holder of
Registrable Securities is participating, each such holder, severally and not
jointly, shall indemnify, to the fullest extent permitted by law, the Company,
each underwriter and their respective officers, directors, employees and agents,
if any, and each Person, if any, who controls the Company or such underwriter
within the meaning of section 15 of the Securities Act, against any losses,
claims, damages, liabilities (or proceedings in respect thereof) and expenses
resulting from any untrue statement or alleged untrue statement of a material
fact, or any omission or alleged omission of a material fact required to be
stated in the registration statement or prospectus or preliminary prospectus or
any amendment thereof or supplement thereto or necessary to make the statements
therein (in the case of any prospectus, in light of the circumstances under
which they were made) not misleading, but only to the extent that such untrue
statement is contained in or such omission is from information so concerning a
holder furnished in writing by such holder expressly for use therein; provided
that such holder's obligations hereunder shall be limited to an amount equal to
the net proceeds to such holder of the Registrable Securities sold pursuant to
such registration statement.
(c) Any Person entitled to indemnification under the provisions of
this Section 3.7 shall (i) give prompt notice to the indemnifying party of any
claim with respect to which it seeks indemnification and (ii) unless in such
indemnified party's reasonable judgment a conflict
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of interest between such indemnified and indemnifying parties may exist in
respect of such claim, permit such indemnifying party to assume the defense of
such claim, with counsel reasonably satisfactory to the indemnified party; and
if such defense is so assumed, such indemnifying party shall not enter into any
settlement without the consent of the indemnified party if such settlement
attributes liability to the indemnified party and such indemnifying party shall
not be subject to any liability for any settlement made without its consent
(which shall not be unreasonably withheld); and any underwriting agreement
entered into with respect to any registration statement provided for under this
Article III shall so provide. In the event an indemnifying party shall not be
entitled, or elects not, to assume the defense of a claim, such indemnifying
party shall not be obligated to pay the fees and expenses of more than one
counsel or firm of counsel for all parties indemnified by such indemnifying
party in respect of such claim, unless in the reasonable judgment of any such
indemnified party a conflict of interest may exist between such indemnified
party and any other of such indemnified parties in respect to such claim.
(d) If for any reason the foregoing indemnity is unavailable, then the
indemnifying party shall contribute to the amount paid or payable by the
indemnified party as a result of such losses, claims, damages, liabilities or
expenses (i) in such proportion as is appropriate to reflect the relative
benefits received by the indemnifying party on the one hand and the indemnified
party on the other or (ii) if the allocation provided by clause (i) above is not
permitted by Applicable Law or provides a lesser sum to the indemnified party
than the amount hereinafter calculated, in such proportion as is appropriate to
reflect not only the relative benefits received by the indemnifying party on the
one hand and the indemnified party on the other but also the relative fault of
the indemnifying party and the indemnified party as well as any other relevant
equitable considerations. Notwithstanding the foregoing, no holder of
Registrable Securities shall be required to contribute any amount in excess of
the amount such holder would have been required to pay to an indemnified party
if the indemnity under Section 3.7(b) was available. No Person guilty of
fraudulent misrepresentation (within the meaning of section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation. The obligation of any Person to
contribute pursuant to this Section 3.7 shall be several and not joint.
(e) An indemnifying party shall make payments of all amounts required
to be made pursuant to the foregoing provisions of this Section 3.7 to or for
the account of the indemnified party from time to time promptly upon receipt of
bills or invoices relating thereto or when otherwise due or payable.
(f) The indemnity and contribution agreements contained in this
Section 3.7 shall remain in full force and effect regardless of any
investigation made by or on behalf of a participating holder of Registrable
Securities, its officers, directors, agents or any Person, if any, who controls
such holder as aforesaid, and shall survive the Transfer of Equity Securities by
such holder and the termination of this Agreement for any reason.
Section 3.8 Holdback Agreements; Registration Rights to Others. In the
event and to the extent requested by the managing underwriter or, if the
Registrable Securities are not being disposed of in an underwritten Public
Offering, if requested by the Company, each Stockholder agrees not to sell, make
any short sale of, grant any option for the purchase of, or otherwise dispose of
any securities of the Company, other than those Registrable Securities included
in
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such Registration pursuant to Section 3.1(a), 3.1(b) or 3.2(a) for the thirty
(30) days prior to and the ninety days (90) days (one hundred and eighty (180)
days in the case of the initial Public Offering of the Company) after the
effectiveness of the registration statement pursuant to which such Public
Offering shall be made (or such shorter period of time as is sufficient and
appropriate, in the opinion of the managing underwriter or, as the case may be,
the Company in order to complete the sale and distribution of the securities
included in such Public Offering; provided, that in no event shall such shorter
period of time with respect to any Stockholder be shorter than any such period
for any other Stockholder); provided, that the limitations contained in this
Section 3.8 shall not apply to the extent a Stockholder is prohibited by
Applicable Law from so withholding such Registrable Securities from sale during
such period.
Section 3.9 Availability of Information. Following the Company's
initial Public Offering, the Company shall comply with the reporting
requirements of Sections 13 and 15(d) of the Exchange Act and will comply with
all other public information reporting requirements of the SEC as from time to
time in effect, and cooperate with Stockholders who are holders of Registrable
Securities, so as to permit disposition of the Registrable Securities pursuant
to an exemption from the Securities Act for the sale of any Registrable
Securities (including, without limitation, the current public information
requirements of Rule 144(c) and Rule 144A under the Securities Act). The Company
shall also cooperate with each Stockholder who is a holder of any Registrable
Securities in supplying such information as may be necessary for such holder to
complete and file any information reporting forms presently or hereafter
required by the SEC as a condition to the availability of an exemption from the
Securities Act for the sale of any Registrable Securities.
Section 3.10 Additional Registration Rights. Nothing contained in this
Agreement shall prevent the Company from granting additional registration rights
to any Person; provided, however, that any grant of additional registration
rights to any Harvest Fund must be approved by the Requisite Disinterested
Holders.
ARTICLE IV
BOARD OF DIRECTORS OF THE COMPANY
Section 4.1 Board of Directors.
(a) Each Stockholder agrees to vote, at any time and from time to
time, all of the shares of Common Stock held by such Stockholder and all other
shares of Common Stock over which he or it has voting control and shall take all
other necessary or desirable action within his or its control (whether in his or
its capacity as a stockholder, director or officer of the Company or otherwise),
and the Company shall take all necessary or desirable action within its control,
in order to elect and maintain a seven (7) member Board, which shall include:
(i) four (4) directors designated by the Harvest Funds, who shall initially by
▇▇. ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇
Vollmershavsen, (ii) the chief executive officer of Associated from time to
time, (iii) a director designated by PPM America Private Equity Fund LP, who
shall initially be ▇▇. ▇▇▇▇▇ ▇▇▇▇▇ and (iv) a director designated by Weston
Presidio Service Company, LLC ("Weston Presidio"), who shall initially be Mr.
▇▇▇▇▇ ▇▇▇▇▇.
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(b) In the event that any director designated by the Harvest Funds for
any reason ceases to serve as a director during his or her term of office, the
resulting vacancy on the Board shall be filled by a director designated by the
Harvest Funds. In the event that any director designated by any Person other
than the Harvest Funds for any reason ceases to serve as a director during his
or her term of office, the resulting vacancy on the Board shall be filled by the
Person with the right to designate the director ceasing to serve, subject to the
reasonable approval of the Harvest Funds.
(c) The removal of any director may be only at the written request of
the Harvest Funds or, in the case of a director not designated by the Harvest
Funds, the Person who designated such director.
(d) (i) In order to effectuate the provisions of this Agreement and in
addition to and not in lieu of Section 4.1 (a) through (c) hereof, each
Stockholder and each of his Permitted Transferees (other than Weston Presidio
and TGF) hereby grants to the Harvest Funds, an irrevocable proxy (which proxy
is coupled with an interest) and to vote at any annual or special meeting of
stockholders, or to take action by written consent in lieu of such meeting, with
respect to all of the shares of Common Stock owned or held of record by the
Stockholders, as determined by the Harvest Funds, with respect to (w) the
election of directors designated in accordance with this Section 4.1, (x) the
removal of directors in accordance with this Section 4.1, (y) the election of a
director to fill any vacancy on the Board in accordance with this Section 4.1
and (z) amending the certificate of incorporation of the Company but, excluding
changes that would disproportionately and adversely affect the rights of any
Stockholder (other than a Harvest Fund). The Harvest Funds shall use their
commercially reasonable efforts to provide each other Stockholder with written
prior notice of any exercise of the proxy granted pursuant to this Section
4.1(d); provided, however, that failure to provide such written prior notice
shall not affect the exercise of such proxy by the Harvest Funds.
(ii) In order to effectuate the provisions of this Agreement and in
addition to and not in lieu of Section 4.1 (a) through (c) hereof, each of
Weston Presidio and TGF agree to vote at any annual or special meeting of
stockholders, or to take action by written consent in lieu of such meeting, with
respect to all of the shares of Common Stock owned or held of record by such
Stockholder, as determined by the Harvest Funds, with respect to (i) the
election of directors designated in accordance with this Section 4.1, (ii) the
removal of directors in accordance with this Section 4.1, (iii) the election of
a director to fill any vacancy on the Board in accordance with this Section 4.1
and (iv) amending the certificate of incorporation of the Company but, in each
case, excluding changes that would disproportionately and adversely affect the
rights of any Stockholder (other than a Harvest Fund).
(e) So long as a Financial Investor continues to hold in the aggregate
at least ten percent (10%) of the Equity Securities acquired by such Financial
Investor upon consummation of the Restructuring, the Company shall deliver to
such Financial Investor (i) on or prior to the thirtieth (30th) day after the
end of each monthly fiscal period of the Company, an unaudited income statement,
balance sheet and cash flow statement for and as of the end of such monthly
period, (ii) within forty-five (45) days after the end of each fiscal quarter of
the Company, an unaudited income statement, balance sheet and cash flow
statement for and as of the end of such fiscal quarter and for the year to date,
including management's discussion and
-24-
analysis with respect thereto and (iii) within ninety (90) days after the end of
each fiscal year of the Company, (x) an audited income statement, balance sheet
and cash flow statement for and as of the end of such fiscal year and (y) the
annual budget of the Company.
(f) Upon execution by the Company of a letter of intent with respect
to an acquisition by the Company pursuant to which the Company will issue New
Securities, the Company shall use its commercially reasonable efforts to notify
the Financial Investors of the terms of such proposed acquisition; provided,
however, that failure to provide such notice shall not effect the obligations of
any Stockholder pursuant to Section 2.5 hereof.
(g) To the extent a Financial Investor shall not be entitled to
designate a director pursuant to Section 4.1 or a Board observer pursuant to
Section 4.2, such Financial Investor may review the books and records and
inspect any of the properties or assets of the Company and its Subsidiaries from
time to time at reasonable intervals during normal business hours upon
reasonable notice to the Company or a Subsidiary, as the case may be.
Section 4.2 Observation Rights. For so long as TGF continues to hold
at least fifty percent (50%) of the Equity Securities acquired by TGF upon
consummation of the Restructuring, TGF shall have the right to have one
representative present (whether in person or by telephone) at all meetings of
the Board (and committees thereof); provided that such representative shall not
be entitled to vote at such meetings; and provided further, that such
representative is reasonably acceptable to the Harvest Funds. The Company shall
send to such representative all of the notices, information and other materials
that are distributed to directors, and shall provide TGF with a notice and
agenda of each meeting of the Board (and committees thereof) of the Company, at
the same time as delivered to the directors. TGF shall provide notice to the
Company of the identity and address of, or any change with respect to the
identity or address of, their representative. Notwithstanding the foregoing, the
Company shall be entitled to (x) excuse such representative of TGF from any
portion of a meeting of the Board (or committee thereof) which discusses any
matters directly relating to TGF and (y) withhold information from the TGF
representative delivered to the Board (or committee thereof) prior to a meeting
of the Board or (committee thereof), in each case if the Company believes there
is a reasonable likelihood that the receipt of such information by the TGF
representative would create a conflict of interest for the TGF representative or
affect the attorney/client privilege of the Company and its legal advisors.
Notwithstanding anything contained in this Agreement to the contrary, this
Section 4.2 shall not be amended without the written consent of TGF.
ARTICLE V
CERTAIN REGULATORY MATTERS
Section 5.1 Regulatory Problem. Notwithstanding any other provision of
this Agreement to the contrary, in the event that, at any time, the continued
holding by any Regulated Stockholder or any of its Affiliates of some or all of
the Equity Securities or any other securities of the Company held by it, at such
time, will result in a Regulatory Problem, such Regulated Stockholder or such
Affiliate shall promptly notify the Company and explain in reasonable detail the
facts which have given rise to the Regulatory Problem and such Regulated
Stockholder or such Affiliate shall use all reasonable best efforts to cure such
Regulatory Problem (including,
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but not limited to, transferring such Equity Securities or other securities to
an Affiliate of such Regulated Stockholder, holding non-voting securities, or
relinquishing the right to enforce certain or all protective covenants, if any,
in favor of such Regulated Shareholder or such Affiliate) and thereafter may,
subject to compliance with Article II, promptly sell, exchange or otherwise
dispose of such securities. In connection with the foregoing sentence, if
requested by such Regulated Stockholder or such Affiliate, the Company shall
cooperate with such Regulated Stockholder or such Affiliate (x) in disposing of
such securities to a third party or (y) exchanging all or any portion of such
securities on a share-for-share basis for shares of a non-voting security of the
Company (such non-voting security to be identical in all respects to such voting
securities or other securities, except that they shall be non-voting and shall
be convertible or exercisable into voting securities on such conditions as are
requested by such Regulated Stockholder in light of the regulatory
considerations prevailing). Without limiting the foregoing, at the request of
such Regulated Stockholder or such Affiliate, the Company shall provide (and
authorize such Regulated Stockholder or such Affiliate to provide) financial and
other information concerning the Company to any prospective purchaser of such
securities owned by such Regulated Stockholder or such Affiliate, and shall
amend this Agreement, the certificate of incorporation of the Company, the
by-laws of the Company, and any related agreements and instruments and take any
additional actions in order to effectuate and reflect the foregoing. The Company
shall not be required to provide any such information unless the recipient
thereof signs a confidentiality agreement reasonably satisfactory to the
Company.
ARTICLE VI
MISCELLANEOUS
Section 6.1 Entire Agreement. This Agreement contains the entire
agreement between the parties hereto with respect to the subject matter hereof
and supersedes all prior arrangements or understandings (whether written or
oral) with respect thereto.
Section 6.2 Captions. The Article and Section captions used herein are
for reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
Section 6.3 Counterparts. For the convenience of the parties, any
number of counterparts of this Agreement may be executed by the parties hereto
and each such executed counterpart shall be deemed to be an original instrument.
Section 6.4 Notices. All notices, consents, requests, instructions,
approvals and other communications provided for herein and all legal process in
regard hereto shall be validly given, made or served, if in writing and
delivered by personal delivery, overnight courier or registered or certified
mail, return-receipt requested and postage prepaid addressed as follows:
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If to the Company, to:
Harvest/AMI Holdings Inc.
c/o Harvest Partners, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (which shall not constitute notice) to its counsel:
White & Case LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to any Harvest Fund, to:
c/o Harvest Partners, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (which shall not constitute notice) to its counsel:
White & Case LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and if to any of the Financial Investors or the Management Stockholders, to the
addresses set forth opposite each of their names on Schedule I or, as the case
may be, Schedule II attached hereto (or included in any joinder to this
Agreement), or to such other address as any such party hereto may, from time to
time, designate in writing to all other parties hereto, and any such
communication shall be deemed to be given, made or served as of the date so
delivered or, in the case of any communication delivered by mail, as of the date
so received.
Section 6.5 Successors and Assigns; Additional Stockholders. (a) This
Agreement shall be binding upon and inure to the benefit of the Company, the
Stockholders and their respective successors, assigns and Permitted Transferees.
The rights of a Stockholder, a Financial Investor, a Management Stockholder or a
Harvest Fund under this Agreement may not be assigned or otherwise conveyed by
any Stockholder except in connection with a Transfer of
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Equity Securities which, until termination of Article II pursuant to Section
6.10, is in compliance with this Agreement.
(b) At the election of the Board, any holder of Equity Securities may
become a party to this Agreement as a Stockholder upon execution of a joinder to
this Agreement by such holder.
Section 6.6 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO SUCH STATE'S CHOICE OF LAW PROVISIONS.
Section 6.7 Submission to Jurisdiction.
(a) Each of the parties hereto, other than TGF, hereby irrevocably
acknowledges and consents that any legal action or proceeding brought with
respect to any of the obligations arising under or relating to this Agreement
may be brought in the courts of the State of New York or in the United States
District Court for the Southern District of New York and each of the parties
hereto, other than TGF, hereby irrevocably submits to and accepts with regard to
any such action or proceeding, for itself and in respect of its property,
generally and unconditionally, the non-exclusive jurisdiction of the aforesaid
courts. Each party, other than TGF, hereby further irrevocably waives any claim
that any such courts lack jurisdiction over such party, and agrees not to plead
or claim, in any legal action or proceeding with respect to this Agreement or
the transactions contemplated hereby brought in any of the aforesaid courts,
that any such court lacks jurisdiction over such party. Each party, other than
TGF, irrevocably consents to the service of process in any such action or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to such party, at its address for notices set forth in Section
6.4, such service to become effective 10 days after such mailing. Each party,
other than TGF, hereby irrevocably waives any objection to such service of
process and further irrevocably waives and agrees not to plead or claim in any
action or proceeding commenced hereunder or under any other documents
contemplated hereby that service of process was in any way invalid or
ineffective. Subject to Section 6.7(b), the foregoing shall not limit the rights
of any party to serve process in any other manner permitted by Applicable Law.
The foregoing consents to jurisdiction shall not constitute general consents to
service of process in the State of New York for any purpose except as provided
above and shall not be deemed to confer rights on any Person other than the
respective parties to this Agreement.
(b) Each of the parties, other than TGF, hereto hereby waives any
right it may have under the laws of any jurisdiction to commence by publication
any legal action or proceeding with respect to this Agreement. To the fullest
extent permitted by Applicable Law, each of the parties hereto hereby
irrevocably waives the objection which it may now or hereafter have to the
laying of the venue of any suit, action or proceeding arising out of or relating
to this Agreement in any of the courts referred to in Section 6.7(a) and hereby
further irrevocably waives and agrees not to plead or claim that any such court
is not a convenient forum for any such suit, action or proceeding.
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(c) The parties hereto agree that any judgment obtained by any party
hereto or its successors or assigns or Permitted Transferees in any action, suit
or proceeding referred to above may, in the discretion of such party (or its
successors or assigns or Permitted Transferees), be enforced in any
jurisdiction, to the extent permitted by Applicable Law.
(d) The parties hereto agree that the remedy at law for any breach of
this Agreement may be inadequate and that should any dispute arise concerning
the sale or disposition of any Securities or the voting thereof or any other
similar matter hereunder, this Agreement shall be enforceable in a court of
equity by an injunction or a decree of specific performance. Such remedies
shall, however, be cumulative and nonexclusive, and shall be in addition to any
other remedies which the parties hereto may have.
Section 6.8 Remedies; Jury Trial.
(a) The parties hereto agree that the remedy at law for any breach of
this Agreement may be inadequate and that should any dispute arise concerning
the sale or disposition of any securities or the voting thereof or any other
similar matter hereunder, this Agreement shall be enforceable in a court of
equity by an injunction or a decree of specific performance. Such remedies
shall, however, be cumulative and nonexclusive, and shall be in addition to any
other remedies which the parties hereto may have.
(b) The parties hereto waive all right to trial by jury in any action
or proceeding to enforce or defend any rights under this Agreement.
Section 6.9 Benefits Only to Parties. Nothing expressed by or
mentioned in this Agreement is intended or shall be construed to give any
Person, other than Persons indemnified pursuant to Section 3.7, the parties
hereto and their respective successors or assigns and Permitted Transferees, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision herein contained, this Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of the parties hereto and their respective successors and assigns and
Permitted Transferees, and for the benefit of no other Person.
Section 6.10 Termination; Survival of Benefits. This Agreement shall
terminate on the closing of a Public Offering; provided, however, that (a)
Article VI and (b) the rights and obligations of the Stockholders and the
Company under Article III shall survive any termination of this Agreement.
Section 6.11 Publicity. None of the parties hereto shall issue or
cause to be issued any press release or make or cause to be made any other
public statement or disclosure in each case relating to or connected with or
arising out of this Agreement or the matters contained herein, without obtaining
the prior written consent of parties mentioned in such press release or public
disclosure or statement and the Company in advance to the contents and the
manner of presentation and publication thereof. Notwithstanding the foregoing,
each of the parties hereto may, in documents required to be filed by it with the
SEC or other regulatory bodies, make such statements with respect to the
transactions contemplated hereby as each may be advised by
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counsel is legally necessary or advisable, and may make such disclosure as it is
advised by its counsel is required by Applicable Law.
Section 6.12 Confidentiality. Each of the parties hereto hereby agrees
that throughout the term of this Agreement it shall keep (and shall cause its
directors, officers, employees, representatives and outside advisors and its
Affiliates to keep) all non-public information received as a Stockholder
relating to the Company (including any such information received prior to the
date hereof) confidential except information which (i) becomes known to such
Stockholder from a source, other than the Company, its directors, officers,
employees, representatives or outside advisors, which source is not obligated to
the Company to keep such information confidential or (ii) becomes generally
available to the public through no breach of this Agreement by any party hereto.
Each of the parties hereto agrees that such non-public information (a) shall be
communicated only to those of its directors, officers, employees,
representatives, outside advisors and Affiliates who need to know such
non-public information and for the Financial Investors to their investors,
partners and members in a manner consistent with past practice, and, if
requested, to rating agencies and, if required by law, applicable regulatory
authorities and (b) will not be used by such party or its directors, officers,
employees, representatives, outside advisors, Affiliates, investors, partners or
members either to, directly or indirectly, compete with the Company or to
conduct itself in a manner inconsistent with the antitrust laws of the United
States or any State. Notwithstanding the foregoing, a party hereto may disclose
non-public information if required to do so by a court of competent jurisdiction
or by any governmental agency; provided, however, that prompt notice of such
required disclosure be given to the Company and the Harvest Funds prior to the
making of such disclosure so that the Company and/or the Harvest Funds may seek
a protective order or other appropriate remedy. In the event that such
protective order or other remedy is not obtained, the party hereto required to
disclose the non-public information will disclose only that portion which such
party is advised by opinion of counsel is legally required to be disclosed and
will request that confidential treatment be accorded such portion of the
non-public information.
Section 6.13 Expenses. The Company shall reimburse each of the
respective members of its Board and Board observers pursuant hereto who are not
employees of the Company for their travel and out-of-pocket expenses incurred in
connection with their serving on the Board. Employees of the Company who incur
expenses in connection with their attendance of meetings of the Board in the
performance of their duties shall also be reimbursed in accordance with the
Company's usual expense reimbursement policies.
Section 6.14 Stockholder Rights. Intentionally Omitted.
Section 6.15 Amendments; Waivers. No provision of this Agreement may
be amended, modified or waived without the prior written consent of the holders
of more than fifty percent (50%) of Equity Securities then outstanding;
provided, however, that no amendment, modification or waiver shall adversely and
disproportionately affect the rights of any Stockholder without such
Stockholder's prior written consent.
Section 6.16 Transaction with Affiliates.
-30-
(a) Any Stockholder and any of its Affiliates may engage in or possess
an interest in any other business venture of any kind, nature or description,
independently or with others, whether or not such ventures are competitive with
the Company or its Subsidiaries, notwithstanding that representatives of such
Stockholder or any of their Affiliates may be serving as a Director of the
Company or its Subsidiaries. Nothing in this Agreement shall be deemed to
prohibit any Stockholder or any of their Affiliates from dealing, or otherwise
engaging in business, with Persons transacting business with the Company or its
Subsidiaries. Neither the Company nor any Stockholder shall have any rights or
obligations by virtue of this Agreement, in or to any independent venture of any
other Stockholder or any of their Affiliates, or the income or profits or losses
or distributions derived therefrom, and such ventures shall not be deemed
wrongful or improper even if competitive with the business of the Company or its
Subsidiaries.
(b) After the date hereof, the Company will not, and will not permit
any of its Subsidiaries to, enter into any transaction (other than for legal
services) with any Harvest Fund or any employee, officer, director or Affiliate
of any Harvest Fund, other than transactions which are on terms not
substantially less favorable to the Company or its Subsidiaries, as the case may
be, as it could obtain in a transaction with a party without a conflict of
interest, it being understood that a transaction approved by the Requisite
Disinterested Holders shall be deemed to be on terms not substantially less
favorable; provided, however, that this paragraph (b) shall not prohibit the
transactions contemplated by the amended and restated management agreement to be
executed by and between Harvest Partners, Inc. and Associated as of the date
hereof.
ARTICLE VII
TERMINATION OF HOLDINGS STOCKHOLDERS AGREEMENT
Section 7.1 Termination of Holdings Stockholders Agreement. Holdings
and the Stockholders hereby agree that the Holdings Stockholders Agreement is
hereby terminated in its entirety effective as of the date first above written,
notwithstanding the provisions of Section 6.9 of the Holdings Stockholders
Agreement. As a result of such termination, the Holdings Stockholders Agreement
shall forthwith be of no further force or effect.
* * *
-31-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first set forth above.
AMH HOLDINGS, INC.
By: /s/ D. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------------------
Name: D. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President-Finance
ASSOCIATED MATERIALS HOLDINGS INC., for purposes of
Section 7.1 only
By: /s/ D. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------------------
Name: D. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President-Finance
HARVEST PARTNERS III, L.P.
By: Harvest Associates III, LLC,
its general partner
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Member
HARVEST PARTNERS III, GbR
By: Harvest Associates III, LLC,
its general partner
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Member
HARVEST PARTNERS IV, L.P.
By: Harvest Associates IV, LLC,
its general partner
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Member
HARVEST PARTNERS IV GmbH & Co. KG
By: Harvest Associates IV, LLC,
its general partner
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Member
BANCBOSTON CAPITAL INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
PRIVATE EQUITY PORTFOLIO FUND II, LLC
by Fleet National Bank, its manager
By: /s/ ▇▇▇▇ DeSislo
-------------------------------------------------
Name: ▇▇▇▇ DeSislo
Title: Director
GE CAPITAL EQUITY CAPITAL GROUP,
INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
OLD HICKORY FUND I, LLC
By: PPM America, Inc.,
its manager
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Partner
PPM AMERICA PRIVATE EQUITY FUND L.P.
By: PPM America Capital Partners, LLC,
its general partner
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Senior Partner
▇▇▇▇▇▇ CAPITAL PRIVATE EQUITY FUND III, L.P.
By: ▇▇▇▇▇▇ Capital Private Equity Partners III,
L.P., its general partner
By: ▇▇▇▇▇▇ Capital Management, L.L.C.
its general partner
BNY PARTNERS FUND L.L.C.
By: BNY Private Investment Management, Inc., Member
Manager
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
NEW YORK LIFE CAPITAL PARTNERS II L.P.
By: NYLCAP Manager LLC, its Investment Manager
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Executive Vice President
THE BOARD OF TRUSTEES OF THE TEXAS GROWTH FUND II, AS
TRUSTEE FOR THE TEXAS GROWTH FUND II - 1998 TRUST
By: TGF II Management, L.P., as
Executive Director
By: TGF Management Corp., as
General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
WESTON PRESIDIO CAPITAL III, L.P.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: General Partner
WESTON PRESIDIO CAPITAL IV, L.P.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: General Partner
WPC ENTREPRENEUR FUND, L.P.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: General Partner
WPC ENTREPRENEUR FUND II, L.P.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: General Partner
LIBERTY MUTUAL INSURANCE COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
NATIONAL CITY EQUITY PARTNERS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
-------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Managing Director
GREAT LAKES CAPITAL INVESTMENTS IV, LLC
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
-------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Member
3755428 CANADA INC.
By: /s/ ▇▇▇▇▇▇ Vollmershausen
-------------------------------------------------
Name: ▇▇▇▇▇▇ Vollmershausen
Title: President
EXECUTIVE SIGNATURE PAGE
------------------------
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇.
------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ D. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------
D. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
SCHEDULE I
FINANCIAL INVESTORS
Name Notice Address
BancBoston Capital Inc. ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Private Equity Portfolio Fund, II, LLC ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
GE Capital Equity Capital Group, Inc. ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
National City Equity Partners, Inc. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Principal
▇▇▇▇ ▇. ▇▇▇ ▇▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Great Lake Capital Investments, IV, L.L.C. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Principal
▇▇▇▇ ▇. ▇▇▇ ▇▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Liberty Mutual Insurance Company ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇
PPM America Private Equity Fund LP c/o PPM America
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Old Hickory Fund I, LLC c/o PPM America
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
SCHEDULE I
Page 2
▇▇▇▇▇▇ Capital Private Equity Fund III, ▇.▇. ▇▇▇▇▇▇ Capital Management, LLC
1211 Avenue of the Americas -
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
BNY Partners Fund L.L.C. ▇/▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
New York Life Capital Partners II L.P. ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
The Texas Growth Fund II - 1998 Trust ▇▇▇▇▇ ▇▇▇▇▇▇
TGF Management Corp.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇ ▇▇▇-▇▇▇▇
Weston Presidio Capital III, L.P. ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ Presidio Capital IV, L.P. ▇▇▇▇▇ ▇▇▇▇▇▇▇
WPC Entrepreneur Fund, L.P. 200 Clarendon
WPC Entrepreneur Fund II, L.P. ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (Fax)
3755428 Canada Inc. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (Fax)
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
SCHEDULE II
EQUITY SECURITIES TO BE HELD BY THE HARVEST FUNDS
AND THE FINANCIAL INVESTORS
Investor Preferred Stock Common Shares*
-------- --------------- -------------
Harvest III LP 118,780 131,978
Harvest III GbR 16,220 18,022
Harvest IV LP 245,700 273,000
Harvest IV Kg 69,300 77,000
BancBoston Capital Inc. 82,340 91,488
Private Equity Portfolio Fund II, LLC 16,468 18,298
GE Capital Equity Capital Group Inc. 65,871 73,190
National City Equity Partners, Inc. 55,991 62,212
Great Lakes Capital Investments IV, LLC 9,881 10,979
Liberty Mutual Insurance Company 123,510 137,232
Old Hickory Fund I LLC 1,235 1,372
PPM America Private Equity Fund LP 163,443 181,603
▇▇▇▇▇▇ Capital Private Equity Fund III 50,400 56,000
BNY Partners Fund L.L.C. 3,600 4,000
New York Life Capital Partners II LP 90,000 100,000
Texas Growth Fund 164,678 182,976
Weston Presidio Capital III 59,393 65,992
Weston Presidio Capital IV 141,288 156,986
WPC Entrepreneur Fund, L.P. 2,930 3,256
WPC Entrepreneur Fund II, L.P. 2,236 2,485
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇. 51,469 35,844
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 5,136 3,344
D. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 5,130 3,213
3755428 Canada Inc. 900 1,000
----------------
* All shares of Class A Common Stock except 19,118 shares of Class B Common
Stock issued to BancBoston Capital Inc.
(i)