Exhibit 3.6
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EXECUTION COPY
NORCRAFT GP, L.L.C.
Amended and Restated
Limited Liability Company Agreement
Dated as of October 21, 2003
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ARTICLE I DEFINITIONS..........................................................1
1.1 Cross Reference Table...............................................1
1.2 Certain Definitions.................................................2
ARTICLE II FORMATION, ETC......................................................3
2.1 Formation...........................................................3
2.2 Name................................................................3
2.3 Term................................................................4
2.4 Purpose.............................................................4
2.5 Limited Liability...................................................4
2.6 Agreement...........................................................4
ARTICLE III MEMBERSHIP.........................................................4
3.1 Admission...........................................................4
3.2 Capital Contributions...............................................4
3.3 Additional Members and Interests....................................4
3.4 Transfer of Interests...............................................5
3.5 Specific Limitations................................................5
ARTICLE IV MANAGEMENT OF THE COMPANY...........................................5
4.1 Board of Managers...................................................5
4.1.1 Initial Designation..........................................5
4.1.2 Increase in Board............................................6
4.1.3 Chairman and Vice Chairman of the Board......................6
4.2 Term................................................................6
4.3 Action by Board.....................................................6
4.4 Committees; Subsidiaries............................................6
4.5 Meetings............................................................7
4.5.1 Notice.......................................................7
4.5.2 Special Notice...............................................7
4.5.3 Proxy Attendance.............................................8
4.5.4 Quorum.......................................................8
4.6 Fees and Expenses...................................................8
4.7 Other Rules.........................................................8
4.8 Authority of Board of Managers......................................8
4.9 Officers; Agents....................................................9
4.10 Certain Transactions................................................9
4.10.1 TCP Members' Consent.........................................9
4.10.2 TCP Members' Rights.........................................10
4.10.3 ▇▇▇▇▇▇ Members' Consent.....................................10
4.11 Control of Original Members........................................10
4.11.1 SKM Member..................................................10
4.11.2 TCP Member..................................................10
4.11.3 ▇▇▇▇▇▇ Member...............................................11
ARTICLE V DISTRIBUTIONS.......................................................11
5.1 Capital Account....................................................11
5.2 Allocations........................................................11
5.3 Distributions......................................................11
5.4 Withholding........................................................11
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ARTICLE VI INDEMNIFICATION....................................................11
6.1 General............................................................11
6.2 Exculpation........................................................12
6.3 Persons Entitled to Indemnity......................................12
6.4 Indemnification Agreements.........................................12
6.5 Amendment..........................................................12
6.6 Survival...........................................................12
ARTICLE VII AMENDMENTS TO AGREEMENT...........................................13
7.1 Amendment..........................................................13
ARTICLE VIII DISSOLUTION OF COMPANY...........................................13
8.1 Termination of Membership..........................................13
8.2 Events of Dissolution or Liquidation...............................13
8.3 Liquidation........................................................13
8.4 No Further Claim...................................................13
ARTICLE IX GOVERNING LAW......................................................14
9.1 Governing Law......................................................14
9.2 Consent to Jurisdiction............................................14
9.3 WAIVER OF JURY TRIAL...............................................14
9.4 Exercise of Rights and Remedies....................................15
ARTICLE X MISCELLANEOUS.......................................................15
10.1 Further Assurances.................................................15
10.2 General............................................................15
10.3 Notices, etc.......................................................15
10.4 Gender and Number..................................................16
10.5 Severability.......................................................16
10.6 Headings...........................................................16
10.7 No Third Party Rights..............................................16
10.8 Counterparts.......................................................16
10.9 Registered Office/Agent............................................17
10.10 Authorized Person..................................................17
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NORCRAFT GP, L.L.C.
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
THIS AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (the
"Agreement") of Norcraft GP, L.L.C., (the "Company") dated as of October 21,
2003 is among each of the Persons (as hereinafter defined) from time to time
party hereto, as Members (as hereinafter defined).
WHEREAS, the Company was formed as a limited liability company pursuant to
the Delaware Limited Liability Company Act by the filing of the Certificate (as
hereinafter defined) with the Secretary of State of the State of Delaware on
October 10, 2003.
WHEREAS, the Company is the General Partner of Norcraft Holdings, L.P., a
Delaware limited partnership company ("Holdings").
WHEREAS, certain of the Members (as hereinafter defined) entered into a
limited liability company agreement (the "Existing Agreement") dated as of
October 10, 2003.
WHEREAS, the Members (as hereinafter defined) now desire to execute this
Agreement to amend the respective rights and obligations of the Members.
NOW, THEREFORE, in consideration of the mutual covenants expressed herein,
the Members hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Cross Reference Table. The following terms defined elsewhere in this
Agreement in the Sections set forth below will have the respective meanings
therein defined.
Terms Definition
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Agreement Preamble
Board of Managers Section 4.1.
▇▇▇▇▇▇ Managers Section 4.1.
Capital Account Section 5.1.
Company Preamble
Existing Agreement Recitals
Indemnified Persons Section 6.1.
Holdings Recitals
Manager Section 4.1.
SKM Managers Section 4.1.
TCP Managers Section 4.1.
1.2 Certain Definitions. The following terms, as used herein, have the
following meanings. Capitalized terms not otherwise defined herein shall have
the meanings assigned thereto in the Holdings LP Agreement.
"Act" shall mean the Delaware Limited Liability Company Act (6 Del.
C.(S)18-101, et seq.) as amended and in effect from time to time.
"Affiliate" shall mean, with respect to any specified Person, (i) any
Person that directly or through one or more intermediaries controls or is
controlled by or is under common control with the specified Person (as used in
this definition, the term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through ownership of voting securities, by
contract or otherwise), provided, however that the Company shall be deemed not
to be an Affiliate of any Member, (ii) any Person who is a general partner,
member, managing director, manager, or principal of such Person and (iii) any
Member of the Immediate Family of such Person or any Person referred to in
clauses (i) and (ii) above.
"▇▇▇▇▇▇ Members" shall mean the HMB Norcraft Corp. and each Member to whom
the Interests originally held by such Persons are validly transferred in
accordance with this Agreement.
"Certificate" shall mean the Certificate of Formation of the Company and
any and all amendments thereto and restatements thereof filed pursuant to the
Act.
"Change of Control" shall mean any sale or other disposition of all or
substantially all of the assets of Holdings (including without limitation by way
of a merger or consolidation or through the sale of all or substantially all of
the equity interests of Holdings or its Subsidiaries (including shares of
Blocker Stock, as defined in the Holdings LP Agreement) or sale of all or
substantially all of the assets of Holdings and its Subsidiaries, taken as a
whole) to another Person (the "Change of Control Transferee") if, immediately
after giving effect thereto, any Person (or group of Persons acting in concert)
other than the SKM Members, TCP Members or their respective Affiliates will have
the power to elect a majority of the members of the board of directors (or other
similar governing body with direct or indirect control over management) of the
Change of Control Transferee.
"Closing" shall mean the consummation of the transactions contemplated by
the Unit Purchase Agreement dated as of August 29, 2003 by and between Holdings
(formerly known as Norcraft Holdings, L.L.C.), Norcraft Companies, L.P.
(formerly known as Norcraft Holdings, L.L.C.), Goense, Bounds & Partners B,
L.P., the Sellers (as defined therein) and the Sellers' Representatives (as
defined therein).
"Distribution" shall mean cash or property (net of liabilities assumed or
to which the property is subject) distributed to a Member in respect of the
Member's Interest in the Company.
"Holdings LP Agreement" shall mean the Amended and Restated Agreement of
Limited Partnership of Norcraft Holdings, L.P. dated as of the date hereof, as
amended from time to time.
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"Interest" shall mean with respect to any Member as of any time, such
Member's limited liability company interest in the Company, which includes such
Member's Capital Account balance.
"Initial Public Offering" shall mean an underwritten public offering and
sale of equity securities of any successor to Holdings or successor to Holding's
Subsidiaries for cash pursuant to an effective registration statement under the
Securities Act of 1933, as amended.
"LTM EBITDA" shall mean, with respect to the twelve month period ending on
the last day of the month preceding the determination date, Holding's
consolidated earnings before interest, taxes, depreciation and amortization,
calculated in accordance with GAAP and consistent with Holdings' and Opco's past
practices.
"Members" shall mean those Persons admitted as members of the Company
pursuant to Section 3.1, 3.3 or 3.4, in each such Person's capacity as a member
of the Company.
"Opco" shall mean Norcraft Companies, L.P., a Delaware limited partnership
(formerly known as Norcraft Companies, L.L.C.).
"SKM Members" shall mean SKM Norcraft Corp., a Delaware corporation, and
each Member to whom the Interests originally held by such Persons are validly
transferred in accordance with this Agreement.
"Subsidiary" shall mean any Person which is controlled, either directly or
indirectly, by the General Partner or Holdings (or other specified Person).
"TCP Members" shall mean Trimaran Cabinet Corp., a Delaware corporation,
and each Member to whom the Interests originally held by such Persons are
validly transferred in accordance with this Agreement.
ARTICLE II
FORMATION, ETC.
2.1 Formation. The Company was formed by the filing of the Certificate with
the Secretary of State of the State of Delaware. The rights and liabilities of
the Members shall be determined pursuant to the Act and this Agreement. To the
extent that the rights or obligations of any Member are different by reason of
any provision of this Agreement than they would be in the absence of such
provision, this Agreement shall, to the extent permitted by the Act, control.
2.2 Name. The name of the Company is Norcraft GP, L.L.C. The business of
the Company may be conducted under that name or any other name that the Board of
Managers deems appropriate or advisable. The Board of Managers shall file, or
shall cause to be filed, any fictitious name certificates and similar filings,
and any amendments thereto, that the Board of Managers considers appropriate or
advisable.
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2.3 Term. The term of the Company shall continue until the Company is
dissolved as hereinafter provided. The existence of the Company as a separate
legal entity shall continue until cancellation of the Certificate as provided in
the Act.
2.4 Purpose. Subject to the limitations contained elsewhere in this
Agreement, the Company is formed for the object and purpose of, and the nature
of the business to be conducted and promoted by the Company is, engaging in any
lawful act or activity for which limited liability companies may be formed under
the Act and engaging in any and all activities necessary, advisable, convenient
or incidental thereto. Without limiting the generality of the foregoing, the
Company's primary purpose shall be to serve as the General Partner of each of
Holdings and Opco.
2.5 Limited Liability. Except as otherwise required by the Act, the debts,
obligations and liabilities of the Company, whether arising in contract, tort or
otherwise, shall be solely the debts, obligations and liabilities of the
Company, and no Member or Manager shall be obligated personally for any such
debt, obligation or liability of the Company solely by reason of being Member or
Manager. All Persons dealing with the Company shall look solely to the assets of
the Company for the payment of the debts, obligations or liabilities of the
Company.
2.6 Agreement. This Agreement shall become effective upon the execution of
this Agreement or a counterpart to this Agreement by the SKM Members, TCP
Members and ▇▇▇▇▇▇ Members, and upon such effectiveness the Existing Agreement
shall be superseded in its entirety hereby.
ARTICLE III
MEMBERSHIP
3.1 Admission. Upon the execution of this Agreement or a counterpart of
this Agreement, each Person whose name appears on Schedule 3.1 shall be admitted
as a Member of the Company and shall hold an Interest in the Company. In
addition, additional Members may be admitted in accordance with Section 3.3 or
Section 3.4 of this Agreement upon execution of this Agreement or a counterpart
of this Agreement containing an amended Schedule 3.1 reflecting such admission,
together with any other documents or instruments required by the Board of
Managers in connection therewith.
3.2 Capital Contributions. The Members shall not be obligated to make any
contributions to the capital of the Company.
3.3 Additional Members and Interests. With the unanimous written consent of
all Members, the Board of Managers may issue additional Interests and admit
Persons as Members on such terms and conditions as the Board of Managers deems
appropriate without the necessity of a capital contribution. As a condition to
the issuance of such additional Interests and the Person's admission as a
Member, such Person shall execute and deliver to the Company and the other
Members a counterpart signature page to this Agreement. Promptly following the
issuance of additional Interests, the Board of Managers shall amend the books
and records of the Company and this Agreement to reflect the Interests.
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3.4 Transfer of Interests. Units may not be transferred by any Member
except in accordance with this Section 3.4. In connection with a Transfer of
Units (directly or indirectly including by way of a sale of Blocker Stock) owned
by a Member or its Affiliates in accordance with the Holdings LP Agreement, a
Member shall transfer the same relative portion of its Interest to such Person,
and such Person shall be deemed a SKM Member, a TCP Member or a ▇▇▇▇▇▇ Member,
based on the designation of the Member transferring the Interests, with the same
rights as similarly designated Members (shared proportionately with other SKM
Members, TCP Members or ▇▇▇▇▇▇ Members, respectively, based on the portion of
Units of Holdings Transferred); provided, however, that as a condition to the
transfer of such Interest and the Person's admission as a Member, such Person
shall execute and deliver to the Company and the other Members a counterpart
signature page to this Agreement. Immediately following such transfer, the Board
of Managers shall amend the books and records of the Company and this Agreement
to reflect the transfer and, if the transferor Member shall have transferred all
of its Interests, it shall cease to be a Member and shall not be entitled to any
Distributions (including any Distributions under Section 18-604 of the Act) from
and after the date of such transfer and; and provided, further, that (a) the
original SKM Member shall not transfer its Interests in connection with a Sale
of Units (directly or indirectly including by way of a sale of Blocker Stock) to
a Permitted Transferee unless such Sale constitutes a Change of Control, (b) the
original TCP Member shall not transfer its Interests in connection with a Sale
of Units (directly or indirectly including by way of a sale of Blocker Stock) to
a Permitted Transferee, and (c) the original ▇▇▇▇▇▇ Member shall not transfer
its Interests in connection with a Sale of Units (directly or indirectly
including by way of a sale of Blocker Stock) to a Permitted Transferee.
3.5 Specific Limitations. No Member shall have the right or power to: (a)
withdraw or reduce its capital contribution except as a result of the
dissolution of the Company or as otherwise provided by the Act in this
Agreement, (b) make voluntary capital contributions or contribute any property
to the Company other than cash, (c) bring an action for partition against the
Company or any Company assets, (d) cause the dissolution of the Company, except
as set forth in this Agreement or as required by the Act, or (e) require that
property other than cash be distributed upon any Distribution, including any
liquidating Distribution.
ARTICLE IV
MANAGEMENT OF THE COMPANY
4.1 Board of Managers.
4.1.1 Initial Designation. The business of the Company shall be
managed by a board of managers (the "Board of Managers"), and the Persons
constituting the Board of Managers shall be the "managers" of the Company
for all purposes of the Act (each, a "Manager", and collectively, the
"Managers") and decisions of the Board of Managers shall be decisions of
the "manager" for all purposes of the Act. The Board of Managers shall
initially consist of six Managers. The SKM Members holding a majority of
Interests held by the SKM Members shall have the right to appoint two
Managers and any successors thereto (the "SKM Managers"), each of whom
shall be entitled to two and one half votes. The TCP Members holding a
majority of Interests held by the TCP Members shall have the right to
appoint two Managers and any successors thereto (the
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"TCP Managers"), each of whom shall be entitled to one vote. The ▇▇▇▇▇▇
Members holding the majority of Interests held by the Buller Members shall
have the right to appoint two Managers and any successors thereto (the
"▇▇▇▇▇▇ Managers"), each of whom shall be entitled to one vote. Upon the
effectiveness of this Agreement, the Board of Managers shall consist of:
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ SKM Manager
▇▇▇▇▇ ▇▇▇ SKM Manager
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ TCP Manager
▇▇▇ ▇▇▇▇▇ TCP Manager
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Manager
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Manager
4.1.2 Increase in Board. The Board of Managers may, by vote or
resolution of the Board of Managers increase the size of the Board of
Managers, and additional Managers shall be appointed by the action of the
Board of Managers; provided, however that the number of votes held by each
SKM Manager shall be automatically increased (in half vote increments) to
that number of votes necessary for the SKM Managers to retain the majority
of the votes capable of being cast by all Managers after giving effect to
any such increase.
4.1.3 Chairman and Vice Chairman of the Board. ▇▇▇▇ ▇▇▇▇▇▇ shall be
the Chairman of the Board of Managers and ▇▇▇▇ ▇▇▇▇▇▇ shall be the Vice
Chairman of the Board of Managers until such time such person ceases to be
a Manager or unless otherwise agreed by the parties.
4.2 Term. Each Manager shall, unless otherwise provided by law, hold office
until such individual is removed by the Person(s) appointing him or her, resigns
or dies. Any Manager may be removed by the Person(s) appointing him or her, at
any time without giving any reason for such removal. A Manager designated
pursuant to Section 4.1.2 may be removed at any time with or without cause by
action of the Board of Managers. A Manager may resign by written notice to the
Company, which resignation shall not require acceptance and, unless otherwise
specified in the resignation notice, shall be effective upon receipt by the
Company. Vacancies in the Board of Managers shall be filled as provided in
Section 4.1 above.
4.3 Action by Board. All decisions of the Board of Managers shall be made
by a vote of the Managers holding a majority of the votes capable of being cast
by all Managers present in person or by proxy at a meeting at which a quorum is
present pursuant to Section 4.5.4 hereof, or if by written consent, Managers
holding a majority of the votes capable of being cast by all Managers. Any
action required or permitted to be taken at any meeting of the Board of Managers
may be taken without a meeting, and shall be treated for all purposes as the act
of the Board of Managers if the Managers holding a majority of the votes capable
of being cast by all Managers consent thereto in writing.
4.4 Committees; Subsidiaries. The Board of Managers may, by vote or
resolution of the Board of Managers, establish executive, audit and/or
compensation committees and delegate to such committees any or all of its
powers, which delegated powers may be revoked by action of
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the Board of Managers at any time. Each such committee shall consist of three
members, two designated by the SKM Managers and one designated by the TCP
Managers. The Board of Managers may, by vote or resolution of the Board of
Managers increase the size of any committee; provided, however that the number
of votes held by each SKM Manager on such committee shall be automatically
increased (in half vote increments) to that number of votes necessary for the
SKM Managers to retain the majority of the votes capable of being cast by all
members of such committee after giving effect to any such increase. The Board of
Managers may, by vote or resolution of the Board of Managers, establish any
other committee and delegate to it any or all of its powers, which delegated
powers may be revoked by action of the Board of Managers at any time. The TCP
Members shall have the right to appoint one member to such committees. The board
of directors or similar governing body, if one exists, of each Subsidiary of the
Company shall have substantially the same composition of the Board of Managers
unless the holders of a majority of the Interests held by each of the SKM
Members, the TCP Members and the ▇▇▇▇▇▇ Members consent to a different
composition.
4.5 Meetings.
4.5.1 Notice. Meetings of the Board of Managers may be held at any
time and at any place within or without the State of Delaware designated in
the notice of the meeting, when called by any two Managers, reasonable
notice thereof being given to each other Manager. Reasonable notice shall
be by overnight delivery at least two complete business days, by facsimile
or electronic mail at least one complete business day, or in person or by
telephone at least one complete business day, before the meeting. Notice of
a meeting need not be given to any Manager if a written waiver of notice,
executed by such Manager before or after the meeting, is filed with the
records of the meeting, or to any Manager who attends the meeting without
protesting the lack of notice prior to or at the commencement of the
meeting. Neither notice of a meeting nor a waiver of a notice need specify
the purposes of the meeting.
4.5.2 Special Notice. Notwithstanding Section 4.5.1, the Board of
Managers shall not be permitted to vote on the following actions at a
meeting (and shall not be permitted to act by written consent) unless
notice of such meeting specified that a vote on such action was to occur
(or a draft of such written consent was circulated to each of the Managers
in advance of such consent being given): (i) approval of the annual budget
of Holdings or its Subsidiaries, (ii) any sale, merger or consolidation, or
transfer of all or substantially all of the assets of Holdings or its
Subsidiaries, (iii) any issuance of any class of equity securities, debt
securities or securities convertible or exchangeable into equity securities
of Holdings or its Subsidiaries, (iv) any incurrence of indebtedness for
borrowed money by Holdings or its Subsidiaries other than on or about the
date of this Agreement and borrowings pursuant to Credit Agreement, (v) any
payment of dividends or other distributions to the holders of Holding's
equity securities, (vi) the dismissal or hiring of the chief executive
officer, chief financial officer or chief operating officer of the Holdings
or its Subsidiaries, (vii) any material change in the employment terms or
compensation of any of the officers set froth in clause (vi), (viii) any
material change in the type of business conducted by Holdings or its
Subsidiaries and (ix) any acquisition or disposition of a material portion
of Holding's or its Subsidiaries' assets.
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4.5.3 Proxy Attendance. In the event that any Manager is unable to
attend any meeting, such Manager may give to any other Manager such
nonattending Manager's proxy to exercise such nonattending Manager's voting
rights at such meeting. Managers may participate in a meeting of the Board
of Managers by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can
hear each other or by any other means permitted by law and such
participation shall constitute presence in person at such meeting.
4.5.4 Quorum. Except as may be otherwise provided by law, at any
meeting of the Board of Managers, the presence in person or by proxy of (a)
Managers who hold at least a majority of the aggregate votes capable of
being cast by all Managers, (b) at least one TCP Manager and (c) at least
one ▇▇▇▇▇▇ Manager shall constitute a quorum; provided, however, that the
presence in person or by proxy of a TCP Manager or ▇▇▇▇▇▇ Manager shall not
be required to constitute a quorum to the extent the Managers holding a
majority of the remaining votes capable of being cast by all Managers
determine that such Manager deliberately or recklessly failed to attend
such meeting in order to prevent a quorum from being present; provided,
further, that the Managers holding a majority of the remaining votes
capable of being cast shall, in the event the determination is to be made
with respect to a TCP Manager, include at least one ▇▇▇▇▇▇ Manager, and in
the event the determination is to be made with respect to a ▇▇▇▇▇▇ Manager,
include at least one TCP Manager. Any meeting may be adjourned from time to
time by a majority of the votes cast upon the question, whether or not a
quorum is present, and the meeting may be held as adjourned without further
notice.
4.6 Fees and Expenses. Each Manager shall be reimbursed for such Manager's
reasonable out-of-pocket expenses incurred in the performance of such Manager's
duties as Manager. In the discretion of the Board of Managers, each Manager
(other than an employee of the Company or its Subsidiaries) may be paid such
fees for such Manager's services as Manager as the Board of Managers from time
to time may determine. Nothing contained in this Section shall be construed to
preclude any Manager from serving the Company or its Subsidiaries in any other
capacity and receiving reasonable compensation therefor.
4.7 Other Rules. The Board of Managers may adopt such other rules for the
conduct of its business that are not inconsistent with this Agreement as it may
from time to time deem necessary or appropriate.
4.8 Authority of Board of Managers. Subject to any provisions of this
Agreement which require the consent or approval of one or more Members and any
other limitations contained in this Agreement, the Board of Managers shall have
the exclusive power and authority to manage the business and affairs of the
Company and to make all decisions with respect thereto. Except as may be
otherwise expressly provided in this Agreement or any other agreement between
such Member and the Company, notwithstanding the last sentence of Section 18-402
of the Act, in no event shall any Member, in its capacity as such, have any
right or authority to act for or bind the Company, and no Member in its capacity
as such shall take part in or interfere in any manner with the management of the
business and affairs of the Company. To the fullest extent permitted by Delaware
law, but subject to any specific provisions hereof granting rights to Members
and any other limitations contained in this Agreement, the Board of
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Managers shall have the power to do any and all acts, statutory or otherwise,
with respect to the Company or this Agreement, which would otherwise be
possessed by the Members under the laws of the State of Delaware. Subject to any
provisions of this Agreement which require the consent or approval of one or
more Members and any other limitations contained in this Agreement, the power
and authority granted to the Board of Managers hereunder shall include all those
necessary or convenient for the furtherance of the purposes of the Company and
shall include the power to make all decisions with regard to the management,
operations, assets, financing and capitalization of the Company.
4.9 Officers; Agents. The Board of Managers shall have the power to appoint
agents (who may be referred to as officers) to act for the Company with such
titles, if any, as the Board of Managers deems appropriate and to delegate to
such officers or agents, including any Manager, such of the powers of the Board
of Managers, including the power to execute documents on behalf of the Company,
as the Board of Managers may in its sole discretion determine. Each officer
shall hold office until such officer's respective successor is chosen, unless a
shorter period shall have been specified by the terms of such officer's election
or appointment, or in each case until such officer sooner dies, resigns, is
removed or becomes disqualified. Each agent shall retain its authority at the
pleasure of the Board of Managers. Any officer or agent may resign by delivering
a written letter of resignation to the Board of Managers, which resignation
shall, unless otherwise specified in the letter of resignation, be effective
upon receipt. The Board of Managers may remove any officer or agent at any time
without giving any reason for such removal and no officer or agent shall be
entitled to any damages by virtue of such removal from office or position as
agent. Effective immediately upon the Closing, the officers of the Company shall
be:
Chief Executive Officer and President: ▇▇▇▇ ▇▇▇▇▇▇
4.10 Certain Transactions.
4.10.1 TCP Members' Consent. Without the consent of the TCP Members
holding the majority of Interests held by the TCP Members, the Company
shall not effect and the Board of Managers shall not approve or permit: (a)
any agreement or transaction between the Company and any of its
Subsidiaries, on the one hand, and any SKM Member or any Affiliate of any
SKM Member on the other; provided, however, that this clause (a) shall not
apply to (i) the Management and Monitoring Agreement dated as of the
Closing between Norcraft Holdings, L.P., Norcraft Companies, L.P. and
▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇, LLC as in effect as of the Closing, (ii) any
exercise by any SKM Member or its Affiliates of rights as a Limited Partner
or a Member, respectively, pursuant to the Holdings LP Agreement or this
Agreement including, without limitation, the right to reimbursement for
reasonable out-of-pocket fees in accordance with Section 4.6 hereof, and
(iii) the payment of fees and expenses in connection with the Closing; (b)
any acquisition or series of acquisitions of assets by Holdings or its
Subsidiaries that has a purchase price in excess of $85,000,000 in the
aggregate; (c) the appointment of a successor chief executive officer of
Holdings following the termination or resignation of ▇▇▇▇ ▇▇▇▇▇▇; (d) the
Company's consenting to the Transfer of Units not otherwise permitted by
the Holdings LP Agreement; or (e) the Transfer of the Company's general
partner interest in Holdings except without consideration, in connection
with a Transfer
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of Units pursuant to Article IX of the Holdings LP Agreement, which such
consent, with respect to clauses (c), (d) and (e), shall not be
unreasonably withheld.
4.10.2 TCP Members' Rights. In connection with the exercise by the TCP
Limited Partner of its rights under Section 13.1 of the Holdings LP
Agreement, the Company shall cause and the Board of Managers shall approve
and permit the conversion of Holdings into a corporation or other successor
entity in accordance with Article XIV of the Holdings LP Agreement if such
conversion is necessary to satisfy Holding's obligations under Section 13.1
of the Holdings LP Agreement, and the shares or other equity interests of
such corporation or other successor entity shall be divided so that the
price per share or equity interest is reasonably acceptable to the managing
underwriter of the Public Offering (consistent with the requirements of
Article XIV of the Holdings LP Agreement). No conversion pursuant to
Article XIV of the Holdings LP Agreement shall occur without the consent of
the holders of a majority of the Interests held by the TCP Members, except
in connection with the consummation of an initial Public Offering or a
Change of Control. Any such conversion shall not result in materially
adverse tax consequences to the original TCP Limited Partner unless the SKM
Limited Partner suffers substantially similar adverse tax consequences.
4.10.3 ▇▇▇▇▇▇ Members' Consent. Prior to the second anniversary of the
Closing, the Company shall not effect and the Board of Managers shall not
approve or permit, without the consent of the ▇▇▇▇▇▇ Members holding a
majority of Interests held by the ▇▇▇▇▇▇ Members, an Initial Public
Offering or any transaction or series of transactions that would result in
a Change of Control unless the LTM EBITDA as of the most recently ended
fiscal quarter prior to the date of the Initial Public Offering or the
execution of a definitive agreement with respect to a transaction or series
of transactions the consummation of which would result in a Change of
Control is less than the amount set forth on Exhibit 4.10.3 opposite the
applicable quarter.
4.11 Control of Original Members.
4.11.1 SKM Member. The original SKM Member shall be controlled by SKM
Equity Fund III, L.P. or another entity controlled by ▇▇▇▇▇▇▇▇ ▇▇▇▇ &
▇▇▇▇▇▇ LLC unless Interests of the original SKM Member are transferred as a
result of a Transfer of Units (directly or indirectly including by way of a
sale of Blocker Stock) to a Person that is not a Permitted Transferee
(unless such Transfer to a Permitted Transferee constitutes a Change of
Control, in which case such Interest may be transferred). For purposes of
this Section 4.11.1, "control" shall have the meaning contained within the
definition of Affiliate.
4.11.2 TCP Member. The original TCP Member shall be controlled by
Trimaran Fund II, LLC or another entity controlled by Trimaran Fund
Management, L.L.C. unless Interests of the original TCP Member are
transferred as a result of a Transfer of Units (directly or indirectly
including by way of a sale of Blocker Stock) to a Person that is not a
Permitted Transferee. For purposes of this Section 4.11.2, "control" shall
have the meaning contained within the definition of Affiliate.
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4.11.3 ▇▇▇▇▇▇ Member. The original ▇▇▇▇▇▇ Member shall be controlled
by ▇▇▇▇ ▇▇▇▇▇▇ and/or ▇▇▇▇ ▇▇▇▇▇▇ unless Interests of the original ▇▇▇▇▇▇
Member are transferred as a result of a Transfer of Units (directly or
indirectly including by way of a sale of Blocker Stock) to a Person that is
not a Permitted Transferee.
ARTICLE V
DISTRIBUTIONS
5.1 Capital Account. The Company shall maintain capital accounts for each
Member in accordance with Section 704 of the Code and the regulations thereunder
(each, a "Capital Account"). The Capital Account of each Member shall be
increased by all capital contributions made by such Member and all profits
allocated to such Member and be decreased by all distributions to such Member
and by all losses allocated to such Member.
5.2 Allocations. All of the Company's profits and losses shall be allocated
to the Members pro rata in accordance with the capital contributions made by
each Member or, if no such capital contributions were made, pro rata in
accordance with the number of Capital Units (as defined in the Holdings LP
Agreement) held by each Member and its Affiliates.
5.3 Distributions. Subject to the requirements of the Act, the amount and
timing of all distributions shall be determined by the Board of Managers.
Distributions may be made in cash, securities or other property and shall be
made to the Members pro rata in accordance with the balances in their respective
capital accounts.
5.4 Withholding. The Members hereby authorize the Company to withhold and
pay over any withholding or other taxes payable by the Company as a result of
the Members' status as a Member hereunder.
ARTICLE VI
INDEMNIFICATION
6.1 General. The Company shall cause Holdings and Opco, on a joint and
several basis, to the fullest extent permitted by law, to indemnify, defend, and
hold harmless the Board of Managers and each Member and each of the foregoing
Person's officers, directors, partners, members, shareholders, employees,
employers and agents (all such indemnified persons being referred to as
"Indemnified Persons"), from any liability, loss, or damage incurred by the
Indemnified Person by reason of any act performed or omitted to be performed by
the Indemnified Person in connection with the business of the Company and from
liabilities or obligations of the Company imposed on such Indemnified Person by
virtue of any such Person's position with the Company, including reasonable
attorneys fees and costs and any amounts expended in the settlement of any such
claims of liability, loss, or damage; provided, however, that, if the liability,
loss, damage, or claim arises out of any action or inaction of an Indemnified
Person, indemnification under this Section 6.1 shall be available only if (a)
either (i) the Indemnified Person, at the time of such action or inaction,
believed, in good faith, that its, his or
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her course of conduct was in, or not opposed to, the best interests of the
Company or (ii) in the case of inaction by the Indemnified Person, the
Indemnified Person did not intend its, his or her inaction to be harmful or
opposed to the best interests of the Company, and (b) the action or inaction did
not constitute fraud, gross negligence, or willful misconduct by the Indemnified
Person. The Company shall cause Holdings and Opco, on a joint and several basis,
to pay or reimburse attorneys fees of an Indemnified Person as incurred, if such
Indemnified Person executes an undertaking to repay the amount so paid or
reimbursed if there is a final determination by a court of competent
jurisdiction that such Indemnified Person is not entitled to indemnification
under this Article VI. The Company may cause Holdings and Opco, on a joint and
several basis, to pay for insurance covering liability of the Indemnified
Persons for negligence in operation of the Company's affairs.
6.2 Exculpation. No Indemnified Person shall be liable, in damages or
otherwise, to the Company, any of its Subsidiaries, or to any Member for any
loss that arises out of any act performed or omitted to be performed by it or
him pursuant to the authority granted by this Agreement if (a) either (i) the
Indemnified Person, at the time of such action or inaction, believed, in good
faith, that such Indemnified Person's course of conduct was in, or not opposed
to, the best interests of the Company and its Subsidiaries or (ii) in the case
of inaction by the Indemnified Person, the Indemnified Person did not intend
such Indemnified Person's inaction to be harmful or opposed to the best
interests of the Company or its Subsidiaries and (b) the conduct of the
Indemnified Person did not constitute fraud, gross negligence or willful
misconduct by such Indemnified Person; provided, however, that nothing in this
Section 6.2 shall be deemed to affect the fiduciary duties of a member of the
Board of Managers. No Indemnified Person shall be liable, in damages or
otherwise, to the Company, any Member, Holdings, any of its Subsidiaries, the
General Partner or to any Limited Partner for any loss that arises out the
exercise of rights contained in this Agreement or the Holdings LP Agreement by
such Indemnified Person acting in its respective capacity as a Member or Limited
Partner of the Company or Holdings.
6.3 Persons Entitled to Indemnity. Any Person who is within the definition
of "Indemnified Person" at the time of any action or inaction in connection with
the business of the Company shall be entitled to the benefits of this Article VI
as an "Indemnified Person" with respect thereto, regardless whether such Person
continues to be within the definition of "Indemnified Person" at the time of
such Indemnified Person's claim for indemnification or exculpation hereunder.
6.4 Indemnification Agreements. The Company may enter into or cause its
Subsidiaries to enter into agreements with any of its Members or Managers
extending to any such Person the benefits of, or setting forth procedures
consistent with applicable law for implementing, the indemnities provided in
this Article VI.
6.5 Amendment. Notwithstanding Article VII, no amendment or repeal of this
Article VI that adversely affects the rights of any Indemnified Person under
this Article VI with respect to its acts or omissions at any time prior to such
amendment or repeal shall apply to any Indemnified Person without its prior
written consent.
6.6 Survival. This Article VI shall survive any termination of this
Agreement.
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ARTICLE VII
AMENDMENTS TO AGREEMENT
7.1 Amendment. This Agreement may be modified or amended with the written
consent of the holders of the majority of Interests held by each of the SKM
Members, the TCP Members and the ▇▇▇▇▇▇ Members. The Managers shall cause to be
prepared and filed any amendment to the Certificate that may be required to be
filed under the Act as a consequence of any such amendment or modification.
ARTICLE VIII
DISSOLUTION OF COMPANY
8.1 Termination of Membership. No Member shall resign or withdraw from the
Company except as provided in Section 3.4. The death, retirement, resignation,
expulsion, bankruptcy or dissolution of any Member or the occurrence of any
other event that terminates the continued membership of any Member shall not in
and of itself cause the Company to be dissolved or its affairs to be wound up,
and upon the occurrence of any such event, the Company shall be continued
without dissolution.
8.2 Events of Dissolution or Liquidation. The Company shall be dissolved
upon the happening of any of the following events: (a) the unanimous consent of
the Members, (b) the termination of the legal existence of the last remaining
Member of the Company or the occurrence of any other event which terminates the
continued membership of the last remaining Member of the Company in the Company
unless the business of the Company is continued in a manner permitted by this
Agreement or the Act, or (c) the entry of a decree of judicial dissolution under
Section 18-802 of the Act.
8.3 Liquidation. Upon dissolution of the Company for any reason, the
Company shall immediately commence to wind up its affairs. A reasonable period
of time shall be allowed for the orderly termination of the Company's business,
discharge of its liabilities, and distribution or liquidation of the remaining
assets so as to enable the Company to minimize the normal losses attendant to
the liquidation process. The Company's property and assets or the proceeds from
the liquidation thereof shall be distributed (i) in accordance with the Act and
(ii) following satisfaction (whether by payment or the making of reasonable
provision for payment) of the Company's liabilities, in accordance with and in
proportion to the Members' positive Capital Accounts, as determined after taking
into account all Distributions previously made and all allocations pursuant to
Section 5.2. Upon such final accounting, a Manager shall cancel the Certificate
in accordance with the Act and the Company's existence as a separate legal
entity shall terminate.
8.4 No Further Claim. Without limitation of the provisions of Section 8.1
and 8.2, upon dissolution, each Member shall look solely to the assets of the
Company for the return of its capital, and if the Company's property remaining
after payment or discharge of the debts and liabilities of the Company,
including debts and liabilities owed to one or more of the Members, is
insufficient to return the aggregate capital contributions of each Member, such
Members shall
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have no recourse against the Company, any member of the Board of Managers or any
other Member.
ARTICLE IX
GOVERNING LAW
9.1 Governing Law. This Agreement shall be governed by and construed in
accordance with the domestic substantive laws of the State of Delaware without
giving effect to any choice or conflict of laws provision or rule that would
cause the application of the domestic substantive laws of any other
jurisdiction.
9.2 Consent to Jurisdiction. Each party to this Agreement, by its execution
hereof, (a) hereby irrevocably submits to the exclusive jurisdiction of the
state and federal courts sitting in the State of Delaware for the purpose of any
action, claim, cause of action or suit (in contract, tort or otherwise),
inquiry, proceeding or investigation arising out of or based upon this Agreement
or relating to the subject matter hereof, (b) hereby waives to the extent not
prohibited by applicable law, and agrees not to assert, and agrees not to allow
any of its subsidiaries to assert, by way of motion, as a defense or otherwise,
in any such action, any claim that it is not subject personally to the
jurisdiction of the above-named courts, that its property is exempt or immune
from attachment or execution, that any such proceeding brought in one of the
above-named courts is improper, or that this Agreement or the subject matter
hereof or thereof may not be enforced in or by such court and (c) hereby agrees
not to commence or maintain any action, claim, cause of action or suit (in
contract, tort or otherwise), inquiry, proceeding or investigation arising out
of or based upon this Agreement or relating to the subject matter hereof or
thereof other than before one of the above-named courts nor to make any motion
or take any other action seeking or intending to cause the transfer or removal
of any such action, claim, cause of action or suit (in contract, tort or
otherwise), inquiry, proceeding or investigation to any court other than one of
the above-named courts, whether on the grounds of inconvenient forum or
otherwise. Notwithstanding the foregoing, to the extent that any party hereto is
or becomes a party in any litigation in connection with which it may assert
indemnification rights set forth in this Agreement, the court in which such
litigation is being heard shall be deemed to be included in clause (a) above.
Each party hereto hereby consents to service of process in any such proceeding
in any manner permitted by Delaware law, and agrees that service of process by
registered or certified mail, return receipt requested, at its address specified
pursuant to Section 10.3 hereof is reasonably calculated to give actual notice.
9.3 WAIVER OF JURY TRIAL. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW
WHICH CANNOT BE WAIVED, EACH PARTY HERETO HEREBY WAIVES AND COVENANTS THAT IT
WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE) ANY RIGHT TO
TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE OR ACTION, CLAIM, CAUSE OF
ACTION OR SUIT (IN CONTRACT, TORT OR OTHERWISE), INQUIRY, PROCEEDING OR
INVESTIGATION ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE SUBJECT MATTER
HEREOF OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE TRANSACTIONS
CONTEMPLATED HEREBY, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING.
EACH PARTY HERETO ACKNOWLEDGES
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THAT IT HAS BEEN INFORMED BY THE OTHER PARTIES HERETO THAT THIS SECTION 9.3
CONSTITUTES A MATERIAL INDUCEMENT UPON WHICH THEY ARE RELYING AND WILL RELY IN
ENTERING INTO THIS AGREEMENT. ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART
OR A COPY OF THIS SECTION 9.3 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT
OF EACH SUCH PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.
9.4 Exercise of Rights and Remedies. No delay of or omission in the
exercise of any right, power or remedy accruing to any party as a result of any
breach or default by any other party under this Agreement shall impair any such
right, power or remedy, nor shall it be construed as a waiver of or acquiescence
in any such breach or default, or of any similar breach or default occurring
later; nor shall any such delay, omission or waiver of any single breach or
default be deemed a waiver of any other breach or default occurring before or
after that waiver.
ARTICLE X
MISCELLANEOUS
10.1 Further Assurances. At any time and from time to time after the date
of this Agreement, upon the request of the Board of Managers and at the expense
of the Company, each Member shall do and perform, or cause to be done and
performed, all such additional acts and deeds, and shall execute, acknowledge,
and deliver, or cause to be executed, acknowledged, and delivered, all such
additional instruments and documents, as may reasonably be required to
effectuate the provisions of this Agreement.
10.2 General. This Agreement shall be binding upon the executors,
administrators, estates, heirs, and legal successors of the Members and contains
the entire contract among the Members as to the subject matter hereof.
10.3 Notices, etc. All notices and other communications required or
permitted hereunder shall be effective if in writing and (i) delivered
personally, (ii) sent by facsimile, (iii) sent by nationally-recognized
overnight courier, or (iv) sent by registered or certified mail, postage
prepaid, in each case, addressed as follows:
If to any Member, at the address of such Member set forth on Schedule 3.1
attached hereto or at such other address as such Member shall have furnished to
the Company and each other Member in writing as the address to which notices are
to be sent hereunder.
If to the Company or the Board of Managers, to it care of:
Norcraft Holdings G.P., L.L.C.
▇/▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇, LLC
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy (which shall not constitute notice) to:
Ropes & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Unless otherwise specified herein, such notices or other communications shall be
deemed effective, (a) on the date received, if personally delivered or sent by
facsimile during normal business hours, (b) one business day after being sent by
nationally-recognized overnight courier or by facsimile after normal business
hours and (c) five business days after being sent by registered or certified
mail. Each of the parties hereto shall be entitled to specify a different
address by giving notice as aforesaid to each of the other parties hereto.
10.4 Gender and Number. Whenever required by the context, as used in this
Agreement the singular number shall include the plural, the plural shall include
the singular, and all words herein in any gender shall be deemed to include the
masculine, feminine and neuter genders.
10.5 Severability. If any provision of this Agreement is determined by a
court to be invalid or unenforceable, that determination shall not affect the
other provisions hereof, each of which shall be construed and enforced as if the
invalid or unenforceable portion were not contained herein. That invalidity or
unenforceability shall not affect any valid and enforceable application thereof,
and each said provision shall be deemed to be effective, operative, made,
entered into or taken in the manner and to the full extent permitted by law.
Notwithstanding the foregoing, if any such invalidity or unenforceability shall
deprive any party hereto of a material portion of the benefits intended to be
provided to such party hereby, the parties shall in good faith seek to negotiate
a substitute benefit for such Person, it being understood that it is possible
that no such substitute benefit will be able to be so negotiated, in which event
the other provisions of this Section 10.5 shall govern.
10.6 Headings. The headings used in this Agreement are used for
administrative convenience only and do not constitute substantive matter to be
considered in construing the terms of this Agreement.
10.7 No Third Party Rights. The provisions of this Agreement are for the
benefit of the Company, the Board of Managers and the Members, and no other
Person, including creditors of the Company, shall have any right or claim
against the Company, any member of the Board of Managers or any Member by reason
of this Agreement or any provision hereof or be entitled to enforce any
provision of this Agreement.
10.8 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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10.9 Registered Office/Agent. The registered office required to be
maintained by the Company in the State of Delaware pursuant to the Act is c/o
the Corporation Service Company, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇. The name and address of the registered agent of the Company
pursuant to the Act is the Corporation Service Company, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇. The Company may, upon compliance with the
applicable provisions of the Act, change its registered office or registered
agent from time to time in the discretion of the Board of Managers.
10.10 Authorized Person. ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ was designated as an
"authorized person" within the meaning of the Act, and has executed, delivered
and filed the Certificate with the Secretary of State of the State of Delaware.
From and after the date hereof, each member of the Board of Managers and such
other Persons as may be designated from time to time by the Board of Managers
are authorized persons, within the meaning of the Act, to execute, deliver and
file any amendments or restatements of the Certificate and any other
certificates and any amendments or restatements thereof which are allowed or
required to be filed pursuant to the Act and any other certificates and any
amendments or restatements thereof necessary for the Company to qualify to do
business in a jurisdiction in which the Company may wish to conduct business.
-17-
IN WITNESS WHEREOF, the parties have executed this Limited Liability Company
Agreement as of the day and year first set forth above.
SKM NORCRAFT CORP.
/s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
By: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
TRIMARAN CABINET CORP.
/s/ ▇▇▇▇▇▇ ▇. Flyer
----------------------------------------
By: ▇▇▇▇▇▇ ▇. Flyer
Title: President
HMB NORCRAFT CORP.
/s/ ▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
By: ▇▇▇▇ ▇▇▇▇▇▇
Title: President
-18-
Schedule 3.1
SKM Norcraft Corp.
Trimaran Cabinet Corp.
HMB Norcraft Corp.
-19-
Exhibit 4.10.3
Most Recently-Ended Fiscal Quarter LTM EBITDA
---------------------------------- ----------
4Q03 $45.2 mm
1Q04 $45.5 mm
2Q04 $45.8 mm
3Q04 $46.2 mm
4Q04 $46.5 mm
1Q05 $47.6 mm
2Q05 $48.8 mm
3Q05 $49.9 mm