EXHIBIT 10.7
EXECUTION COPY
HCI SECURITIES PURCHASE AGREEMENT
THIS HCI SECURITIES PURCHASE AGREEMENT (the "Agreement") is made as of
March 31, 2004 by and among Code Hennessy & Simmons IV LP, a Delaware limited
partnership ("CHS"), HCI Acquisition Corp., a Delaware corporation ("HCI"),
Ontario Teachers' Pension Plan Board, an Ontario corporation ("OTPPB", or
"Teachers"), HarbourVest Partners VI - Direct Fund, L.P., a Delaware limited
liability partnership ("HarbourVest"), and each of the other Persons listed on
Schedule A attached hereto (CHS, Teachers, HarbourVest and the other Persons
listed on Schedule A are referred to sometimes herein individually as
"Purchaser" and collectively as the "Purchasers"). Except as otherwise indicated
herein, capitalized terms used herein are defined in Section 5 hereof.
This Agreement contemplates a transaction in which HCI will sell, and
the Purchasers will purchase, 5,805.27 shares of Class A Common Stock of HCI at
a price of $1,000.00 per share for an aggregate purchase price of $5,805,270.06,
2,787.097 shares of Class C Common Stock of HCI at a price of $1,000.00 per
share for an aggregate purchase price of $2,787,096.77, and 82,104.84 shares of
Preferred Stock of HCI for a price of $1,000.00 per share for an aggregate
purchase price of $82,104,838.64.
HCI is a party to a certain Agreement and Plan of Merger dated as of
February 14, 2004 (the "Merger Agreement") by and among HCI, The Hillman
Companies, Inc. ("Hillman") and the Persons set forth on the Stockholder
Signature Page attached thereto in their capacities as stockholders and
optionholders of Hillman, pursuant to which HCI is merging with and into
Hillman.
Effective upon the consummation of the Merger (as defined in the Merger
Agreement) and without any action by HCI, Hillman or the Purchasers, Hillman, as
the surviving corporation in the Merger, will assume all of HCI's obligations,
and become entitled to all of HCI's rights, under this Agreement. The surviving
corporation post-Merger shall be referred to herein as the "Company". In
addition, by virtue of the Merger, each share of Common Stock of HCI and each
share of Preferred Stock of HCI shall be converted into an equivalent number of
shares of Common Stock of the Company and of Preferred Stock of the Company,
respectively.
In consideration of the mutual covenants contained herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
1. Authorization and Closing.
(a) Authorization of the Securities. HCI shall authorize the
issuance of and sale to the Purchasers of 5,805.27 shares of Class A Common
Stock at a price of $1,000.00 per share, 2,787.097 shares of Class C Common
Stock at a price of $1,000.00 per share, and 82,104.84 shares of Preferred Stock
at a price of $1,000.00 per share, in each case as allocated among the
Purchasers in the manner set forth on Schedule B attached hereto.
(b) Purchase and Sale of the Securities. At the Closing, HCI shall
sell to the Purchasers and, on the terms and subject to the conditions set forth
herein, the Purchasers shall purchase from HCI, 5,805.27 shares of the Class A
Common Stock, 2,787.097 shares of the Class C Common Stock and 82,104.84 shares
of the Preferred Stock, in each case in the amounts and at the purchase prices
set forth on Schedule B attached hereto.
(c) The Closing. The closing of the purchases and sales of the
Securities (the "Closing") shall take place at the offices of Kirkland & Ellis
LLP, 200 East Randolph Drive, Chicago, Illinois immediately prior to the
Effective Time on the date hereof, or at such other place as may be mutually
agreeable to HCI and CHS. At the Closing, HCI shall deliver to each Purchaser
certificates evidencing the Class A Common Stock to be purchased by such
Purchaser, certificates evidencing the Class C Common Stock to be purchased by
such Purchaser and certificates evidencing the Preferred Stock to be purchased
by such Purchaser, and each Purchaser shall deliver to HCI the purchase price by
wire transfer of immediately available funds to a bank account designated by HCI
in writing in the amount set forth next to such Purchaser's name on Schedule B
attached hereto.
2. Conditions to the Purchasers' Obligations at Closing. The
obligation of each Purchaser to purchase and pay for the Securities is subject
to the satisfaction as of the Closing of the following conditions:
(a) Representations and Warranties; Covenants. The representations
and warranties contained in Section 3 hereof shall be true and correct at and as
of the date of Closing, except to the extent of changes caused by the
transactions expressly contemplated therein, and HCI shall have performed in all
material respects all of the covenants required to be performed by it hereunder
prior to the Closing.
(b) Merger Agreement. All of the conditions to closing in the
Merger Agreement shall have been satisfied or shall be satisfied on the date
hereof to the satisfaction of the Purchasers or waived pursuant to the Waiver
Letter dated March 31, 2004 from HCI to Hillman, including, without limitation,
the consummation of the debt financings contemplated by Section 6.1(j) thereof.
(c) Amendment of HCI Certificate of Incorporation. Prior to the
Closing, HCI shall have duly adopted, executed and filed with the Secretary of
State of Delaware a Certificate of Amendment to its Certificate of Incorporation
in form and substance attached hereto as Exhibit A (the Certificate of
Incorporation, as so amended, the "HCI Amended Charter"), authorizing the
issuance of the Securities being purchased pursuant to this Agreement, and the
HCI Amended Charter shall continue to be in full force and effect as of the
Closing and shall not have been further amended or modified.
(d) HCI Bylaws. HCI shall have duly adopted Amended and Restated
Bylaws in form and substance attached hereto as Exhibit B (the "HCI Bylaws"),
and the HCI Bylaws shall continue to be in full force and effect as of the
Closing and shall not have been further amended or modified.
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(e) HCI Stockholders Agreement. HCI shall have entered into the
Stockholders Agreement (the "HCI Stockholders Agreement") in the form attached
hereto as Exhibit C, and the HCI Stockholders Agreement shall not have been
amended or modified and shall be in full force and effect as of the Closing.
(f) Registration Agreement. HCI shall have entered into a
Registration Agreement (the "Registration Agreement") in the form attached
hereto as Exhibit D, and the Registration Agreement shall not have been amended
or modified and shall be in full force and effect as of the Closing.
(g) Management Agreement. CHS Management IV LP, a Delaware limited
partnership ("CHS Management"), shall have entered into a Management Agreement
with The Hillman Group, Inc. ("Hillman Group") in the form attached hereto as
Exhibit E (the "Management Agreement"), and the Management Agreement shall not
have been amended or modified and shall be in full force and effect as of the
Closing.
(h) Employment Agreements. As of the date hereof, Hillman Group
and Max W. Hillman, Jr., James P. Waters and Richard P. Hillman shall have
entered into Employment Agreements in substantially the form attached hereto as
Exhibit F (the "Employment Agreements"), and the Employment Agreements shall not
have been amended or modified and shall be in full force and effect as of the
Closing.
(i) Executive Securities Agreements. HCI and certain managers of
the Company and its Subsidiaries shall have entered into Executive Securities
Agreements in substantially the form attached hereto as Exhibit G (the
"Executive Securities Agreements"), and the Executive Securities Agreements
shall not have been amended or modified and shall be in full force and effect as
of the Closing, and each manager shall have purchased the equity securities
proposed to be purchased by him thereunder.
(j) Investment Company Securities Purchase Agreement. As of the
date hereof, Hillman Investment Company shall have entered into a Securities
Purchase Agreement with the Purchasers in the form attached hereto as Exhibit H,
by which preferred stock of Hillman Investment Company shall have been issued to
the Purchasers and certain managers of the Company and its Subsidiaries (the
"Invesco Securities Purchase Agreement"), and the Invesco Securities Purchase
Agreement shall not have been amended or modified and shall be in full force and
effect as of the Closing.
(k) Investment Company Stockholders Agreement. As of the date
hereof, Hillman Investment Company shall have entered into the Stockholders
Agreement with the Purchasers in the form attached hereto as Exhibit I (the
"Invesco Stockholders Agreement"), and the Invesco Stockholders Agreement shall
not have been amended or modified and shall be in full force and effect as of
the Closing.
(l) Amendment of Invesco Certificate of Incorporation. Prior to
the Closing, Hillman Investment Company shall have duly adopted, executed and
filed with the Secretary of State of Delaware a Certificate of Amendment to its
Certificate of Incorporation in form and substance attached hereto as Exhibit J
(the Certificate of Incorporation, as so amended, the
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"Invesco Amended Charter"), authorizing the issuance of the securities being
purchased pursuant to the Invesco Securities Purchase Agreement, and the Invesco
Amended Charter shall continue to be in full force and effect as of the Closing
and shall not have been further amended or modified.
(m) Side Letter Regarding 30% Voting Restrictions. As of the date
hereof, the Company, Teachers and CHS shall have entered into a Side Letter
Regarding 30% Voting Restrictions in the form attached hereto as Exhibit K (the
"Side Letter Regarding 30% Voting Restrictions"), and the Side Letter Regarding
30% Voting Restrictions shall not have been amended or modified and shall be in
full force and effect as of the Closing.
(n) Side Letter Regarding Fees. As of the date hereof, the
Company, Hillman Group, Teabar Capital Corporation ("Teabar") and CHS shall have
entered into a Side Letter Regarding Fees in the form attached hereto as Exhibit
L (the "Side Letter Regarding Fees"), and the Side Letter Regarding Fees shall
not have been amended or modified and shall be in full force and effect as of
the Closing. (The Side Letter Regarding 30% Voting Restrictions and the Side
Letter Regarding Fees shall be collectively referred to herein as the "Side
Letters".)
(o) Closing Documents. HCI shall have delivered to the Purchasers
all of the following documents:
(i) an Officer's Certificate, dated as of the date
hereof, stating that the conditions specified in Section 2 have been
fully satisfied;
(ii) certified copies of the resolutions duly adopted by
the Board of Directors of HCI authorizing the execution, delivery and
performance of this Agreement, the HCI Stockholders Agreement, the
Registration Agreement, the Executive Securities Agreements and each of
the other agreements contemplated hereby to which it is a party (the
"Transaction Documents"), the issuance and sale of the Securities and
the consummation of all other transactions contemplated by this
Agreement to which it is a party;
(iii) certified copies of the resolutions duly adopted by
the stockholders of HCI adopting the HCI Amended Charter;
(iv) certified copies of the HCI Amended Charter and the
HCI Bylaws, each as in effect at the Closing;
(v) a certified copy of the Certificate of Merger filed
with the Delaware Secretary of State certifying the merger of HCI with
and into Hillman;
(vi) a copy of the Invesco Amended Charter, as in effect
at the Closing; and
(vii) a copy of the Invesco By-laws, as in effect at the
Closing.
(p) Waiver of Closing Conditions. Any condition specified in this
Section 2 may be waived only if such waiver is set forth in a writing executed
by the Purchasers.
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3. Representations and Warranties of HCI. As a material
inducement to the Purchasers to enter into this Agreement and purchase the
Securities, HCI hereby represents and warrants that:
(a) Organization and Corporate Power. HCI is a corporation duly
organized, validly existing and in good standing under the laws of Delaware and
is qualified to do business in every jurisdiction in which its ownership of
property or conduct of business requires it to qualify. HCI has all requisite
corporate power and authority and all material licenses, permits and
authorizations necessary to own and operate its properties, to carry on its
businesses as now conducted and presently proposed to be conducted and to carry
out the transactions contemplated by this Agreement.
(b) Common Stock and Preferred Stock Outstanding.
(i) As of the Closing and immediately thereafter, the
authorized capital stock of the Company shall consist of 23,141 shares
of Class A Common Stock (of which 6,212.902 shares shall be issued and
outstanding), 2,500 shares of Class B Common Stock (of which 1,000.001
shares shall be issued and outstanding and 256.410 shares shall be
reserved for issuance upon the exercise of the options granted under
the Company's 2004 Stock Option Plan), 23,141 shares of Class C Common
Stock (of which 2,787.097 shares shall be issued and outstanding) and
238,889 shares of Preferred Stock (of which 86,000.00 shares shall be
issued and outstanding and of which 9,555.556 shares shall be reserved
for issuance upon the exercise of the options granted pursuant to the
Executive Securities Agreements).
(ii) As of the Closing, neither the Company nor any
Subsidiary shall have outstanding any other stock or securities
convertible or exchangeable for any shares of its capital stock, nor
shall it have outstanding any rights or options to subscribe for or to
purchase its capital stock or any stock or securities convertible into
or exchangeable for its capital stock, except as set forth herein, in
the Invesco Securities Purchase Agreement, the Executive Securities
Agreements, the HCI Stockholders Agreement, the Investment Company
Stockholders Agreement, the Registration Agreement and the Company's
2004 Stock Option Plan.
(iii) There are no statutory or, other than as set forth in
this Agreement and the HCI Stockholders Agreement, contractual
preemptive rights or rights of refusal with respect to HCI's or the
Company's securities or options, warrants or other rights to acquire or
cause the issuance of such securities. Assuming the accuracy of the
representations in Section 6(d) and in the Executive Securities
Agreements, HCI has not violated any applicable federal or state
securities laws in connection with the offer, sale or issuance of any
of its securities. To HCI's knowledge, there are no agreements with
respect to the voting or transfer of HCI's securities except for the
HCI Stockholders Agreement and the Executive Securities Agreements.
(c) Authorization; No Breach. The execution, delivery and
performance of this Agreement and all other agreements contemplated hereby to
which HCI is a party (including, without limitation, the Merger Agreement) (the
"HCI Agreements") have been duly authorized
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by HCI and, to the extent required, its stockholders. Each of the HCI Agreements
constitutes a valid and binding obligation of HCI, enforceable in accordance
with its terms. The execution and delivery by HCI of the HCI Agreements, the
offering, sale and issuance of the Securities hereunder, and the fulfillment of
and compliance with the respective terms hereof and thereof by HCI, do not and
shall not (i) conflict with or result in a breach of the terms, conditions or
provisions of, (ii) constitute a default under, (iii) result in the creation of
any lien, security interest charge or encumbrance upon HCI's securities or
assets pursuant to, (iv) give any third party the right to modify, terminate or
accelerate any obligation under, (v) result in a violation of, or (vi) require
any authorization, consent, approval, exemption or other action by or notice to
any court, administrative or governmental body or other Person pursuant to the
HCI Agreements, the HCI Amended Charter, the HCI Bylaws or any law, statute,
rule or regulation to which HCI is subject, or any agreement, instrument, order,
judgment or decree to which HCI is subject.
(d) Conduct of Business; Liabilities. Other than in connection
with the negotiation, execution and delivery of this Agreement, the Transaction
Documents, the Senior Credit Agreement, the Merger Agreement (including the
financing contemplated thereunder) and the other agreements contemplated hereby
and thereby, prior to the Closing, HCI has not (i) conducted any business, (ii)
incurred any expenses, obligations or liabilities (whether accrued, absolute,
contingent, unliquidated or otherwise, whether or not known to HCI and whether
due or to become due and regardless of when asserted), (iii) owned any assets or
(iv) entered into any contracts or agreements. HCI has not violated any laws or
governmental rules or regulations.
(e) Brokerage. There are no claims for brokerage commissions,
finders' fees or similar compensation in connection with the transactions
contemplated by this Agreement based on any arrangement or agreement binding
upon HCI. HCI shall pay, and hold the Purchasers harmless against, any
liability, loss or expense (including, without limitation, attorneys' fees and
out-of-pocket expenses) arising in connection with any such claim.
(f) Governmental Consent, etc. No permit, consent, approval or
authorization of, or declaration to or filing with, any governmental authority
is required in connection with the execution, delivery and performance by HCI of
this Agreement or the other agreements contemplated hereby, or the consummation
by HCI of any other transactions contemplated hereby or thereby.
(g) Fees. Other than the fees payable by the Company to CHS under
the Management Agreement and to Teabar under the Side Letter Regarding Fees and
salary, bonus or other compensation payable to employees of the Company or any
of its Subsidiaries, or any payment to any employee pursuant to the Executive
Securities Agreements, the Employment Agreements or the Company's 2004 Stock
Option Plan, there are no other agreements between the Company or its
Subsidiaries and any Person requiring the Company or its Subsidiaries to pay
fees or other compensation to any holder of capital stock or other equity
interests in the Company or its Subsidiaries.
4. Covenants.
(a) Financial Statements and Other Information. Until the
consummation of a Public Offering (as defined in the HCI Stockholders
Agreement), the Company shall deliver to each
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Purchaser (so long as such Purchaser (together with its Affiliates) holds
Stockholder Shares (as defined in the HCI Stockholders Agreement) and shares of
Investment Company Preferred Stock with an aggregate Original Cost (as defined
in the HCI Stockholders Agreement) of at least $10,000,000):
(i) as soon as available but in any event within 30 days
after the end of each monthly accounting period in each fiscal year,
unaudited consolidating and consolidated statements of income and cash
flows of the Company and its Subsidiaries for such monthly period and
for the period from the beginning of the fiscal year to the end of such
month, and consolidating and consolidated balance sheets of the Company
and its Subsidiaries as of the end of such monthly period, all prepared
in accordance with United States generally accepted accounting
principles, consistently applied, subject to the absence of footnote
disclosures and to normal year-end adjustments;
(ii) as soon as available but in any event within 30 days
after the end of each of the first three quarterly accounting periods
in each fiscal year, unaudited consolidating and consolidated
statements of income and cash flows of the Company and its Subsidiaries
for such quarterly period and for the period from the beginning of the
fiscal year to the end of such quarter, and consolidating and
consolidated balance sheets of the Company and its Subsidiaries as of
the end of such quarterly period, all prepared in accordance with
United States generally accepted accounting principles, consistently
applied, subject to the absence of footnote disclosures and to normal
year-end adjustments;
(iii) accompanying the financial statements referred to in
Sections 4(a)(i) and 4(a)(ii) above, an Officer's Certificate stating
that neither the Company nor any of its Subsidiaries is in default
under any of its material agreements or, if any such default exists,
specifying the nature and period of existence thereof and what actions
the Company and its Subsidiaries have taken and propose to take with
respect thereto;
(iv) within 90 days after the end of each fiscal year,
consolidated statements of income and cash flows of the Company and its
Subsidiaries for such fiscal year, and consolidated balance sheets of
the Company and its Subsidiaries as of the end of such fiscal year,
setting forth in each case comparisons to the annual budget and to the
preceding fiscal year, all prepared in accordance with United States
generally accepted accounting principles, consistently applied, and
accompanied by (a) with respect to the consolidated portions of such
statements (except with respect to budget data), an opinion of an
independent accounting firm of recognized national standing acceptable
to CHS, (b) a copy of such accounting firm's annual management letter
to the Board of Directors, and (c) an Officer's Certificate from either
the chief executive officer or chief financial officer of the Company
stating the following: "To the knowledge of the undersigned, the
information contained in the financial statements attached to this
certificate fairly presents, in all material respects, the financial
condition and results of operations of the Company and its
Subsidiaries";
(v) promptly upon receipt thereof, any additional
reports, management letters or other detailed information concerning
significant aspects of the Company's operations
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or financial affairs given to the Company by its independent
accountants (and not otherwise contained in other materials provided
hereunder);
(vi) at least 30 days prior to the beginning of each
fiscal year, an annual budget prepared on a monthly basis for the
Company and its Subsidiaries for such fiscal year (displaying
anticipated statements of income and cash flows), and promptly upon
preparation thereof any other significant budgets prepared by the
Company and any revisions of such annual or other budgets; and
(vii) with reasonable promptness, such other information
and financial data concerning the Company and its Subsidiaries as any
Person entitled to receive information under this Section 4(a) may
reasonably request.
Each of the financial statements referred to in Sections
4(a)(i), 4(a)(ii) and 4(a)(iv) shall be true and correct in
all material respects as of the dates and for the periods
stated therein, subject in the case of the unaudited financial
statements to changes resulting from normal year-end audit
adjustments (none of which would, alone or in the aggregate,
be materially adverse to the financial condition, operating
results, assets, operations or business prospects of the
Company and its Subsidiaries taken as a whole).
(b) Restrictions. The Company shall not, without (x) the prior
written consent of CHS, provided that CHS and its Affiliates (other than
portfolio companies of CHS and of its affiliated funds) hold Stockholder Shares
and shares of Investment Company Preferred Stock with an aggregate Original Cost
of at least $25,000,000, (y) in the case of Sections 4(b)(i), 4(b)(ii),
4(b)(iii) (other than with respect to issuances and sales by the Company),
4(b)(iv), 4(b)(v), 4(b)(vi), 4(b)(vii), 4(b)(viii), 4(b)(x), 4(b)(xi),
4(b)(xii), 4(b)(xiii) and 4(b)(xv) the prior written consent of Teachers,
provided that Teachers and its Affiliates hold Stockholder Shares and shares of
Investment Company Preferred Stock with an aggregate Original Cost of at least
$25,000,000, and (z) in the case of Section 4(b)(xiv) below, the prior written
consent of Teachers, provided that Teachers and its Affiliates hold Stockholder
Shares and shares of Investment Company Preferred Stock with an aggregate
Original Cost of at least $35,000,000:
(i) directly or indirectly declare or pay any dividends
or make any distributions upon any of its equity securities, or cause
any Subsidiary to directly or indirectly declare or pay any dividends
or make any distributions upon any of its equity securities, provided
that, notwithstanding clause (y) above, the prior written consent of
Teachers shall not be required if (A) such dividend or distribution is
paid on a pro rata basis to all holders of such equity securities or
(B) such dividend or distribution by a Subsidiary is paid solely to the
Company or one of its Subsidiaries;
(ii) directly or indirectly redeem, purchase or otherwise
acquire, or permit any Subsidiary to redeem, purchase or otherwise
acquire, any of the Company's or any Subsidiary's equity securities
(including, without limitation, warrants, options and other rights to
acquire equity securities), other than redemptions or repurchases of
stock owned by employees of the Company or its Subsidiaries, provided
that, notwithstanding clause (y) above, the prior written consent of
Teachers shall not be required if such such
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redemption, purchase or acquisition is on a pro rata basis to all
holders of such equity securities;
(iii) except as expressly contemplated by this Agreement,
the Executive Securities Agreements, the Invesco Securities Purchase
Agreement or the Merger Agreement, authorize, issue, sell or enter into
any agreement providing for the issuance (contingent or otherwise), or
permit any Subsidiary to authorize, issue, sell or enter into any
agreement providing for the issuance (contingent or otherwise) of, (A)
any notes or debt securities containing equity features (including,
without limitation, any notes or debt securities convertible into or
exchangeable for equity securities, issued in connection with the
issuance of equity securities or containing profit participation
features) or (B) any equity securities (or any securities convertible
into or exchangeable for any equity securities) or rights to acquire
any equity securities, other than the issuance of equity securities by
a Subsidiary to the Company or another Subsidiary or by the Company
pursuant to a Board-approved incentive equity plan for the benefit of
the employees of the Company and its Subsidiaries;
(iv) make, or permit any Subsidiary to make, any loans or
advances to, guarantees for the benefit of, or Investments in, any
Person, except for (A) reasonable advances to employees in the ordinary
course of business as well as travel advances not prohibited by
applicable law, (B) relocation loans to employees not prohibited by
applicable law, (C) trade credit extended to customers in the ordinary
course of business and (D) Investments having a stated maturity no
greater than one year from the date the Company or any Subsidiary makes
such Investment in (1) obligations of the United States government or
any agency thereof or obligations guaranteed by the United States
government, (2) certificates of deposit of commercial banks having
combined capital and surplus of at least $50 million, (3) commercial
paper with a rating of at least "Prime-1" by Moody's Investors Service,
Inc. or (4) money market accounts investing in any of the foregoing or
in substantially similar investments, provided that, notwithstanding
clause (y) above, the prior written consent of Teachers shall not be
required for loans, advances, guarantees or Investments that are not
permitted under clauses (A) through (D) of this subsection if the
aggregate amount of all such loans, advances, guarantees or Investments
is less than $50,000,000;
(v) merge or consolidate with any Person or permit any
Subsidiary to merge or consolidate with any Person (other than a wholly
owned Subsidiary), or liquidate, dissolve or effect, or permit any of
its Subsidiaries to liquidate, dissolve or effect, a recapitalization
or reorganization or similar transaction or any other Sale of the
Company (as defined in the HCI Stockholders Agreement) in any form of
transaction (including, without limitation, any reorganization into a
corporation or a partnership); provided that, notwithstanding clause
(y) above, the prior written consent of Teachers shall not be required
if the Teachers' Targets are satisfied in full;
(vi) sell, lease or otherwise dispose of, or permit any
Subsidiary to sell, lease or otherwise dispose of, more than 5% of the
consolidated assets of the Company and its Subsidiaries (computed on
the basis of book value, determined in accordance with United States
generally accepted accounting principles consistently applied, or fair
market value,
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determined by the Board of Directors in its reasonable good faith
judgment) in any transaction or series of related transactions (other
than sales of inventory in the ordinary course of business or sales of
obsolete assets), provided that, notwithstanding clause (y) above, the
prior written consent of Teachers shall not be required if (A) such
asset sale, lease or disposition involves, together with all other
asset sales, leases or dispositions, consideration of less than
$50,000,000 in the aggregate or (B) Teachers' Targets are satisfied in
full;
(vii) file an initial registration statement with the
Securities Exchange Commission with respect to an initial Public
Offering ("IPO") if the Teachers' IRR would be less than 10% measured
from the date hereof through the estimated date of the effectiveness of
the IPO registration statement, based on the stated low end of the
price range set forth in such filing or first amendment to such
registration statement;
(viii) acquire, or permit any Subsidiary to acquire, any
interest in any business or Person (whether by a purchase of assets,
purchase of securities, merger or otherwise), provided that,
notwithstanding clause (y) above, the prior written consent of Teachers
shall not be required if all such acquisitions involve consideration of
less than $50,000,000 in the aggregate;
(ix) enter into, or permit any Subsidiary to enter into,
any joint venture with any other Person or Persons;
(x) enter into, or permit any Subsidiary to enter into,
any agreement, contractual commitment or other transaction (including,
without limitation, relating to any of the properties, assets or
businesses of the Company or any Subsidiary or the acquisition or
disposition of property, rights or assets (including, without
limitation, any leasehold estate) of the Company or any Subsidiary)
with any of its or any Subsidiary's officers, directors, nominees for
election as a director, employees, equityholders or 10% Affiliates or
any individual related by blood, marriage or adoption to any such
Person or any entity in which any such Person or individual owns a
beneficial interest, except for normal employment arrangements and
benefit programs with its employees on reasonable terms, the Company's
2004 Stock Option Plan, the Transaction Documents, the Management
Agreement, the Side Letters, the Employment Agreements, the Investment
Company Securities Purchase Agreement, the Investment Company
Stockholders Agreement, the Executive Securities Agreements, the Merger
Agreement, the Senior Credit Agreement and the Loan Agreement;
(xi) make any amendment to the certificate of
incorporation or bylaws of the Company; provided that the prior written
consent of Teachers shall not be required in connection with an action
that would not otherwise be subject to the prior written consent of
Teachers pursuant to any clause (v) of this Section 4(b).
(xii) create a non-wholly owned Subsidiary; provided that
the prior written consent of Teachers shall not be required in
connection with an action that would not otherwise be subject to the
prior written consent of Teachers pursuant to clause (v) this Section
4(b).
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(xiii) create, incur, assume or suffer to exist, or permit
any Subsidiary to create, incur, assume or suffer to exist, any
Indebtedness other than pursuant to the Senior Credit Agreement and the
Loan Agreement, provided that, notwithstanding clause (y) above, the
prior written consent of Teachers shall not be required if the
outstanding amount of all such Indebtedness incurred after the date
hereof is less than $50,000,000 in the aggregate;
(xiv) appoint a chief executive officer of the Company; or
(xv) approve an annual operating budget (or modifications
thereof) that provides for or could reasonably be expected to result in
(A) capital expenditures in excess of $17,000,000 in the aggregate, (B)
an EBITDA Margin of less than 6%, (C) material changes in strategy or
(D) introduction of new product lines that could reasonably be expected
to result in an adverse change in EBITDA (as defined in the Senior
Credit Agreement) of 5% or more. For purposes of this Agreement, an
"EBITDA Margin" shall mean EBITDA divided by net sales of the Company
on a consolidated basis.
(c) Affirmative Covenants. Unless the Company obtains the prior
written consent of CHS (for so long as the CHS Group (as defined in the HCI
Stockholders Agreement) and its Affiliates (other than portfolio companies of
CHS) hold Stockholder Shares and shares of Investment Company Preferred Stock
with an aggregate Original Cost of at least $25,000,000), and, with respect to
Section 4(c)(i) only, Teachers (for so long as Teachers and its Affiliates hold
Stockholder Shares and shares of Investment Company Preferred Stock with an
aggregate Original Cost of at least $25,000,000) the Company shall, and shall
cause each Subsidiary to:
(i) comply with all applicable laws, rules and
regulations of all governmental authorities, the violation of which
would reasonably be expected to have a material adverse effect upon the
financial condition, operating results, assets, operations or business
prospects of the Company and its Subsidiaries taken as a whole, and pay
and discharge when payable all Taxes, assessments and governmental
charges (except to the extent the same are being contested in good
faith and adequate reserves therefor have been established);
(ii) cause any agreement entered into by the Company or
any Subsidiary after the date hereof which provides for the sale of
Securities (or the capital stock of any Subsidiary of the Company) to
or employment of an employee, to be in form and substance substantially
similar to the draft of such agreement reviewed and approved by CHS;
and
(iii) enforce the provisions of the Executive Securities
Agreements and exercise all of its rights and remedies thereunder
(including, without limitation, any repurchase options and first
refusal rights).
(d) Public Statements. The Company shall not, nor shall it permit
any of its Subsidiaries or other Affiliates to, disclose any Purchaser's (or its
Affiliates') name or identity as an investor in the Company in any press release
or other public announcement or in any document or material filed with any
governmental entity, without the prior written consent of
- 11 -
such Purchaser, unless such disclosure is required by applicable law or
governmental regulations or by order of a court of competent jurisdiction, in
which case prior to making such disclosure the Company shall give prior written
notice to the Purchaser describing in reasonable detail the proposed content of
such disclosure and shall permit the Purchaser to review and comment upon the
form and substance of such disclosure.
(e) Board Meeting Materials. Until the consummation of a Public
Offering, the Company shall deliver to each Purchaser (so long as such Purchaser
holds Stockholder Shares equal to at least 5% of the voting power (other than
with respect to the election of directors) of the Company) the reports and other
materials that are distributed to the members of the Board in connection with a
meeting of the Board as and when such reports and other materials are
distributed to the Board. However, if the reports or other materials contain
information which, in the Board's reasonable judgment, cannot be disclosed to a
Purchaser, including, but not limited to, in order to avoid a conflict of
interest on the part of a Purchaser or to preserve an attorney-client privilege
or (if legally available) an accountant-client privilege, then such information
may be deleted from any materials being distributed pursuant to this section in
connection with any meeting.
(f) Expenses. The annual management fees payable by the Company to
CHS under Section 3(a) of the Management Agreement and the annual fees payable
by the Company to Teachers under Section 1(a) of the Side Letter Regarding Fees
shall in no event exceed $2,000,000 per year in the aggregate.
5. Definitions. For the purposes of this Agreement, the following
terms have the meanings set forth below:
"10% Affiliate" means with respect to any Person, any other
Person controlling at least 10% of such Person, at least 10% of whom is
controlled by, or at least 10% of whom is under common control with such first
Person and in the case of a Person which is a partnership or limited liability
company, any partner or member with at least a 10% partnership or membership
interest in that Person.
"Affiliate" (and collectively "Affiliates") means with respect
to any Person, any other Person controlling, controlled by, or under common
control with such first Person and in the case of a Person which is a
partnership, any partner of that Person.
"Class A Common Stock" means the Class A Common Stock, par
value $0.01 per share of, immediately prior to the Merger, HCI, and upon and
following the Effective Time, the Company.
"Class C Common Stock" means the Class C Common Stock, par
value $0.01 per share of, immediately prior to the Merger, HCI, and upon and
following the Effective Time, the Company.
"Common Stock" means the Class A Common Stock and the Class C
Common Stock.
"Dollars" and the sign "$" means lawful money of the United
States of America.
- 12 -
"Effective Time" has the meaning set forth in the Merger
Agreement.
"Indebtedness" means all indebtedness for borrowed money
(including purchase money obligations), all indebtedness under revolving credit
arrangements, all capitalized lease obligations, obligations evidenced by notes,
bonds, debentures or similar instruments, obligations to pay the deferred
purchase price of property or services, all obligations under swap transactions,
derivative transactions or similar transactions, all indemnification obligations
and all guarantees of any of the foregoing.
"Investment" as applied to any Person means (i) any direct or
indirect purchase or other acquisition by such Person of any notes, obligations,
instruments, stock, securities or ownership interest (including partnership
interests and joint venture interests) of any other Person and (ii) any capital
contribution by such Person to any other Person.
"Investment Company Preferred Stock" means the Preferred
Stock, par value $0.01 per share of Hillman Investment Company.
"Loan Agreement" shall mean (i) the Loan Agreement dated as of
the date hereof by and among the Company, Hillman Investment Company, Hillman
Group and Allied Capital Corporation and (ii) the Senior Subordinated Debenture
dated as of the date hereof issued by the Hillman Group to Allied Capital
Corporation.
"Officer's Certificate" means a certificate signed by the
chief executive officer or chief financial officer of HCI or the Company, as
applicable, stating that (i) the officer signing such certificate has made or
has caused to be made such investigations as are necessary in order to permit
such officer to verify the accuracy of the information set forth in such
certificate and (ii) to the best of such officer's knowledge, such certificate
does not misstate any material fact and does not omit to state any fact
necessary to make the certificate not misleading.
"Person" means an individual, a partnership, a corporation, a
limited liability company, association, a joint stock company, a trust, a joint
venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"Preferred Stock" means the Preferred Stock, par value $0.01
per share of, immediately prior to the Merger, HCI, and upon and following the
Effective Time, the Company.
"Public Offering" means an underwritten public offering and
sale, registered under the Securities Act, of shares of the Common Stock.
"Securities" means the Common Stock and the Preferred Stock.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities and Exchange Commission" includes any governmental
body or agency succeeding to the functions thereof.
- 13 -
"Senior Credit Agreement" shall mean the Credit Agreement
dated as of the date hereof by and among HCI, Hillman, Hillman Investment
Company, Hillman Group and the Lenders from time to time party thereto.
"Subsidiary" means, with respect to any Person, a corporation,
limited liability company, partnership, association, or business entity of which
(i) if a corporation, a majority of the total voting power of shares of stock
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers, or trustees thereof is at the 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 limited
liability company, partnership, association, or other business entity (other
than a corporation), a majority of partnership or other similar ownership
interest thereof is at the time owned or controlled, directly or indirectly, by
any Person or one or more Subsidiaries of the Person or a combination thereof.
For purposes hereof, a Person or Persons shall be deemed to have a majority
ownership interest in a limited liability company, partnership, association, or
other business entity (other than a corporation) if such Person or Persons shall
be allocated a majority of limited liability company, partnership, association
or other business entity gains or losses or shall be or control any managing
director or member or general partner of such limited liability company,
partnership, association, or other business entity.
"Teachers' Targets" means, with respect to a transaction, (i)
either (A) all or substantially all (but in no event less than 90%) of (1) CHS
Shares (as defined in the HCI Stockholders Agreement) and the (2) other
Stockholder Shares (based on the value of such Stockholder Shares) are being
sold (whether by merger, consolidation, recapitalization, reorganization,
combination, sale or transfer of the Company's capital stock or otherwise), or
(B) all or substantially all of the Company's assets on a consolidated basis are
being sold and, except for the Management Option (as defined in the HCI
Stockholders Agreement), the proceeds of such sale, which are actually received
by the Company and not otherwise required for the payment of fees, expenses,
Indebtedness or other liabilities or obligations in connection with such
transaction, are distributed to Teachers and its Affiliates upon the closing
thereof; and (ii) 75% or more of the consideration to be paid to Teachers and
its Affiliates in such transaction consists of cash or Marketable Securities (as
defined in the HCI Stockholders Agreement) or a combination thereof; and (iii)
the Teachers' IRR (as defined in the HCI Stockholders Agreement) is greater than
10% after giving effect to such transaction; and (iv) with respect to each class
of Stockholder Shares, Teachers and its Affiliates shall receive the same form
and amount of consideration per share as all other holders of such Stockholder
Shares, or if holders of such class of Stockholder Shares are given an option as
to the form and amount of consideration to be received, all such holders shall
be given the same option (provided that if any option is given to employees of
the Company or any of its Subsidiaries as to the consideration to be received by
such employees in such transaction, including sale bonuses approved by the Board
of Directors or an option to exchange shares of capital stock in the Company for
ownership interests in the Person acquiring the Company, such option need not be
given to other holders of Stockholder Shares); and (v) except for any Management
Options, Teachers and its Affiliates will receive the same rights and benefits
(including, without limitation, consideration and any fees) on a pro rata basis
and have no more obligations in respect of its Stockholder Shares being sold
than any member of the CHS Group or any other Stockholder (as defined in the HCI
Stockholders Agreement).
- 14 -
6. Miscellaneous.
(a) Pre-Emptive Rights. If after the date hereof the Company
authorizes the issuance or sale (each an "Issuance") of any equity securities of
the Company or any securities convertible, exchangeable or exercisable for
equity securities of the Company and any other Stockholder Shares (as defined in
the HCI Stockholders Agreement), the Company shall, at least 15 days and not
more than 60 days prior to such issuance, notify the CHS Group and Teachers in
writing of the Issuance (including the price, the purchaser thereof and the
other terms thereof) and grant to the CHS Group and to Teachers the right (the
"Right") to subscribe for and concurrently purchase such securities
(collectively, the "Preemptive Stock"), in the same proportion at the same price
and on the same terms as issued in the Issuance such that, after giving effect
to the Issuance and exercise of the Right, the percentage of the Preemptive
Stock immediately following such issuance owned by each such holder shall equal
the percentage of the outstanding Stockholder Shares as was owned by each such
holder prior to the Issuance on a fully diluted basis (but excluding any
Stockholder Shares or any class of capital stock of the Company's Subsidiaries
which are not then fully vested and, in the case of options, warrants or other
rights to acquire capital stock, immediately exercisable, convertible or
exchangeable for Stockholder Shares or any class of capital stock of the
Company's Subsidiaries issued in such Issuance), or such lesser amount
designated by such holder. Notwithstanding the foregoing, the rights set forth
in this Section 6(a) shall not apply to Issuances: (i) pro rata to all holders
of equity securities of the Company, as a subdivision of or other distribution
in respect of, equity securities of the Company, (ii) to executives, directors,
employees and consultants of the Company or its Subsidiaries, (iii) in
connection with acquisitions by the Company or its Subsidiaries, (iv) in a
Public Offering, or (v) to the Purchasers on the Closing Date pursuant to this
Agreement. In addition, the rights set forth in this Section 6(a) shall not
apply with respect to the CHS Group or to Teachers in connection with an
Issuance to the extent the CHS Group or Teachers have available to them and
exercises the pre-emptive rights set forth in Section 7 of the HCI Stockholders
Agreement in connection with such Issuance. The rights set forth in this Section
6(a) shall continue until the earlier of the consummation of a Sale of the
Company and the consummation of a Public Offering (each as defined in the HCI
Stockholders Agreement).
(b) Confidentiality. Except as otherwise required by law or
judicial order or decree or by any governmental agency or authority, each Person
entitled to receive information regarding the Company and its Subsidiaries under
this Agreement or otherwise shall use its reasonable efforts to maintain the
confidentiality of all nonpublic information obtained by it hereunder; provided
that each such Person may disclose such information (i) to such Person's
representatives and professional advisers, (ii) in connection with the sale or
transfer of any capital stock if such Person's transferee agrees in writing to
be bound by the provisions hereof, and (iii) in summary form, in connection with
communications with its limited partners, financing sources, employees, agents,
advisors, partners and potential partners or to the extent reasonably required
in the ordinary course of their businesses.
(c) Remedies. The Purchasers shall have all rights and remedies
set forth in this Agreement and all rights and remedies which the Purchasers
have been granted at any time under any other agreement or contract and all of
the rights which the Purchasers have under any law. Any Person having any rights
under any provision of this Agreement shall be entitled to enforce
- 15 -
such rights specifically (without posting a bond or other security), to recover
damages by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law.
(d) Purchasers' Investment Representations. Each Purchaser is an
"Accredited Investor" as such term is defined in Regulation D promulgated by the
Securities and Exchange Commission under the Securities Act. Each Purchaser
hereby represents that he, she or it is acquiring the Securities purchased
hereunder or acquired pursuant hereto for his, her or its own account with the
present intention of holding such securities for purposes of investment, and
that he, she or it has no intention of selling such securities in a public
distribution in violation of the federal securities laws or any applicable state
securities laws; provided that nothing contained herein shall prevent the
Purchasers and subsequent holders of Securities from transferring such
securities in compliance with the provisions of Section 4 of the HCI
Stockholders Agreement hereof.
(e) Place of Payments with Respect to the Securities. All payments
to be made to a Purchaser with respect to the Securities, including, without
limitation, dividends and redemption payments, shall be delivered to the
respective address indicated on Schedule B or to such other Person or account as
a Purchaser may from time to time specify to HCI by prior written notice.
(f) Consent to Amendments. Except as otherwise expressly provided
herein, the provisions of this Agreement may be amended and the Company may take
any action herein prohibited, or omit to perform any act herein required to be
performed by it, only if the Company has obtained the written consent of CHS and
Teachers; provided that in the event that such amendment or waiver would treat a
Purchaser or group of Purchasers materially and adversely differently from any
other Purchaser or group of Purchasers, then such amendment or waiver will also
require the consent of such Purchaser or group of Purchasers (based on the
relative ownership of Common Stock) so materially and adversely treated;
provided, further, that no amendment or modification that by its terms expressly
amends in an adverse manner any right specifically granted to a particular
Purchaser hereunder shall be effective without the prior written consent of such
Purchaser; provided, further, that no amendment to Section 4(a) hereof, Section
4(e) hereof, Section 4(f) hereof or this Section 6(f) hereof (to the extent it
amends this proviso) shall be effective without the prior approval of
HarbourVest. No other course of dealing between the Company and any Purchaser or
any delay in exercising any rights hereunder shall operate as a waiver of any
rights of any such Person. For purposes of this Agreement, any Securities held
by the Company shall not be deemed to be outstanding.
(g) Survival of Representations and Warranties. All
representations and warranties contained herein or made in writing by any party
in connection herewith shall survive the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby,
regardless of any investigation made by any Purchaser or on such Purchaser's
behalf.
(h) Successors and Assigns. Except as otherwise expressly provided
herein, all covenants and agreements contained in this Agreement by or on behalf
of any of the parties hereto shall bind and inure to the benefit of the
respective successors and assigns of the parties hereto whether so expressed or
not. In addition, and whether or not any express assignment has been made, the
provisions of this Agreement which are for each Purchaser's benefit as a
- 16 -
purchaser of the Securities are also for the benefit of, and enforceable by, any
subsequent holder of the Securities.
(i) Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
(j) Counterparts; Facsimile Signature. This Agreement, the
agreements referred to herein, and each other agreement or instrument entered
into in connection herewith or therewith or contemplated hereby or thereby, and
any amendments hereto or thereto, to the extent signed and delivered by means of
a facsimile machine, shall be treated in all manner and respects as an original
agreement or instrument and shall be considered to have the same binding legal
effect as if it were the original signed version thereof delivered in person. At
the request of any party hereto or to any such agreement or instrument, each
other party hereto or thereto shall reexecute original forms thereof and deliver
them to all other parties. No party hereto or to any such agreement or
instrument shall raise the use of a facsimile machine to deliver a signature or
the fact that any signature or agreement or instrument was transmitted or
communicated through the use of a facsimile machine as a defense to the
formation or enforceability of a contract and each such party forever waives any
such defense.
(k) Descriptive Headings; Interpretation. The descriptive headings
of this Agreement are inserted for convenience only and do not constitute a part
of this Agreement. The use of the word "including" in this Agreement shall be by
way of example rather than by limitation.
(l) Governing Law. This Agreement will be governed in all respects
by the laws of the State of Delaware, without regard to the principles of
conflicts of law of such state.
(m) Notices. All notices, demands or other communications to be
given or delivered under or by reason of the provisions of this Agreement shall
be in writing and shall be deemed to have been given when delivered personally
to the recipient, sent to the recipient by reputable express courier service
(charges prepaid) or mailed to the recipient by certified or registered mail,
return receipt requested and postage prepaid.
The Company's address is:
The Hillman Companies, Inc.
10590 Hamilton Avenue
Cincinnati, Ohio 45231
Attention: Chief Executive Officer
with a copy (which shall not constitute notice to the Company)
to:
Code Hennessy & Simmons IV LP
10 South Wacker Drive, Suite 3175
Chicago, Illinois 60606
- 17 -
Attention: Peter M. Gotsch
and
Kirkland & Ellis LLP
200 East Randolph Drive
Chicago, IL 60601
Attention: Stephen L. Ritchie, P.C.
Teachers' address is:
Ontario Teachers' Pension Plan Board
5650 Yonge Street
Toronto, Ontario M2M 4H5
Canada
Attention: J. Mark MacDonald
with copies (which shall not constitute notice to Teachers)
to:
Ontario Teachers' Pension Plan Board
Law Department
5650 Yonge Street
Toronto, Ontario M2M 4H5
Attention: Legal Counsel, Investments
and
Torys LLP
237 Park Avenue
New York, NY 10017
Attention: Joseph J. Romagnoli, Esq.
HarbourVest's address is:
HarbourVest Partners VI - Direct Fund, L.P.
c/o HarbourVest Partners LLC
One Financial Center, 44th floor
Boston, MA 02111
with a copy (which shall not constitute notice to HarbourVest)
to:
Debevoise & Plimpton LLP
919 Third Avenue
New York, NY 10022
Attention: David J. Schwartz
- 18 -
(n) MUTUAL WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN
CONNECTION WITH COMPLEX TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED
BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND
FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT
THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE,
TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF
ARBITRATION, EACH PARTY TO THIS AGREEMENT HEREBY WAIVES ALL RIGHTS TO TRIAL BY
JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE BETWEEN
OR AMONG ANY OF THE PARTIES HERETO, WHETHER ARISING IN CONTRACT, TORT, OR
OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED OR INCIDENTAL TO THIS
AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREBY AND/OR THE RELATIONSHIP
ESTABLISHED AMONG THE PARTIES HEREUNDER.
(o) Entire Agreement. This Agreement, those documents expressly
referred to herein and other documents of even date herewith embody the complete
agreement and understanding among the parties and supersede and preempt any
prior understandings, agreements or representations by or among the parties,
written or oral, that may have related to the subject matter hereof in any way.
(p) Understanding Among the Purchasers. The determination of each
Purchaser to purchase the Securities pursuant to this Agreement has been made by
such Purchaser independent of any other Purchaser and independent of any
statements or opinions as to the advisability of such purchase or as to the
properties, business, prospects or condition (financial or otherwise) of the
Company which may have been made or given by any other Purchaser or by any agent
or employee of any other Purchaser. In addition, it is acknowledged by each of
the Purchasers that no Purchaser has acted as an agent of any other Purchaser in
connection with making its investment hereunder and that no Purchaser shall be
acting as an agent of any other Purchaser in connection with monitoring its
investment hereunder. It is further acknowledged by each of the other Purchasers
that CHS has retained Kirkland & Ellis LLP to act as their counsel in connection
with the transactions contemplated hereby and that Kirkland & Ellis LLP has not
acted as counsel for any of the other Purchasers in connection herewith and that
none of the other Purchasers has the status of a client of Kirkland & Ellis LLP
for conflict of interest or other purposes as a result thereof.
* * * * *
- 19 -
IN WITNESS WHEREOF, the parties hereto have executed this HCI
Securities Purchase Agreement on the date first written above.
HCI ACQUISITION CORP.
By: /s/ PETER M. GOTSCH
---------------------------------------
Name:
-------------------------------------
Its:
--------------------------------------
CODE HENNESSY & SIMMONS IV LP
By: CHS Management IV LP
Its: General Partner
By: Code Hennessy & Simmons LLC
Its: General Partner
By: /s/ PETER M. GOTSCH
---------------------------------------
Peter M. Gotsch
Partner
ONTARIO TEACHERS' PENSION PLAN BOARD
By: /s/ J. MARK MACDONALD
---------------------------------------
Name:
-------------------------------------
Its:
--------------------------------------
HARBOURVEST PARTNERS VI - DIRECT FUND, L.P.
By: HarbourVest VI - Direct Associates LLC
Its: General Partner
By: HarbourVest Partners, LLC
Its: Managing Member
By: /s/ WILLIAM A. JOHNSTON
---------------------------------------
Name:
-------------------------------------
Its:
--------------------------------------
- 20 -
RANDOLPH STREET PARTNERS VI
/s/ STEPHEN L. RITCHIE
-------------------------------------------
By:
---------------------------------------
Its: Managing Partner
/s/ PAIGE WALSH
-------------------------------------------
Paige Walsh
- 21 -