STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT (this "AGREEMENT"), dated as of October 2,
1998, by and among D and W Holdings, Inc., a Delaware corporation (the
"COMPANY"), and each of the individuals and entities signatory hereto (each a
"STOCKHOLDER" and together the "STOCKHOLDERS").
RECITALS:
WHEREAS, the Company is authorized to issue a total of 125,000,000
shares of Common Stock, par value $0.01 per share ("COMMON STOCK"); and
WHEREAS, upon the consummation of the Transactions (as defined
herein), there will be shares of Common Stock issued and outstanding as set
forth on SCHEDULE I hereto and the Stockholders will own the number of shares of
Common Stock as set forth opposite their respective names on SCHEDULE II hereto;
and
WHEREAS, upon the consummation of the Transactions, there will be
options to purchase shares of Common Stock as set forth on SCHEDULE I hereto and
the Stockholders will own options to purchase shares of Common Stock as set
forth opposite their respective names on SCHEDULE II hereto;
WHEREAS, (i) Atrium (as defined herein) has requested, and GEIPPPII
and Ardatrium (each as defined herein) have agreed, to provide loans to Atrium
pursuant to that certain Indenture, dated as of the date hereof, and (ii) in
connection therewith, Atrium has agreed to issue the Discount Debentures (as
defined herein) to GEIPPPII and Ardatrium (together, the "Lenders");
WHEREAS, the parties desire to enter into an agreement with respect to
the management of the Company, the transfer or other disposition of the Common
Stock presently owned or hereafter acquired by any of the Stockholders and
certain other matters.
NOW THEREFORE, in consideration of the mutual premises, agreements and
covenants set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending legally to be bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
1.01 DEFINED TERMS. The following terms when used in this Agreement,
including its preamble and recitals, shall have the following meanings, such
meanings to be equally applicable to the singular and plural forms thereof:
"ACQUISITION TRANSACTIONS" shall mean (i) the purchase of Common Stock
pursuant to that certain Subscription Agreement, entered into as of August 3,
1998, by and among the Company, GEIPPPII and Ardatrium (as assignee of Arddoor)
and (ii) the transactions contemplated by the Merger Agreement.
"AFFILIATE" shall mean, with respect to any Person, any Person that,
directly or indirectly, controls, is controlled by, or is under common control
with, such Person. For the purposes of this definition, "control" (including,
with correlative meanings, the terms "controlled by" and "under common control
with"), as used with respect to any Person, shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of such Person, whether through the ownership of voting securities,
by contract or otherwise.
"ARDATRIUM" shall mean Ardatrium L.L.C., a Delaware limited liability
company.
"ARDDOOR" shall mean Arddoor L.L.C., a Delaware limited liability
company.
"ARDSHIEL" shall mean Ardshiel, Inc., a Delaware corporation.
"ARDSHIEL AFFILIATES" shall mean Ardatrium, Arddoor, Ardshiel and
Ardwing.
"ARDSHIEL STOCKHOLDERS" shall mean Ardatrium, Arddoor, Ardshiel,
Ardwing, Hambro and Wing L.P.
"ARDWING" shall mean Ardwing LLC, a Delaware limited liability
company.
"ATRIUM" shall mean Atrium Corporation, a Delaware corporation and a
wholly owned subsidiary of the Company.
"COMMON STOCK" shall have the meaning set forth in the recitals of
this Agreement and shall include fractional shares of Common Stock and shares of
Common Stock received by way of dividend or upon an increase, a reduction,
substitution or
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reclassification of securities of the Company or upon any merger,
consolidation or other reorganization of the Company.
"COMMON STOCK EQUIVALENTS" shall mean the number of shares of Common
Stock issuable upon the exercise, exchange or conversion of any security.
"CONTRIBUTION TRANSACTIONS" shall mean the contribution by all of the
stockholders of Atrium (other than those whose equity interests in Atrium
converted into the right to receive cash in the merger pursuant to the Merger
Agreement), WIH and Door of their entire equity interests in Atrium, WIH and
Door, respectively, in exchange for shares of Common Stock.
"DEMAND REGISTRATION RIGHT" shall have the meaning set forth in
Section 4.02.
"DISCOUNT DEBENTURES" shall mean the 12% Senior Discount Debentures
due 2010 issued pursuant to that certain Indenture, dated as of the date hereof,
by and among GEIPPPII, Ardatrium and Atrium.
"DOOR" shall mean Door Holdings, Inc., a Delaware corporation.
"EQUITY SECURITIES" shall mean any Common Stock, any securities
exercisable or exchangeable for, or convertible into, Common Stock and any
rights, options or warrants to acquire any of the foregoing and shall include
fractional shares of Equity Securities and Equity Securities received by way of
dividend or upon an increase, a reduction, substitution or reclassification of
securities in the Company or upon any merger, consolidation or other
reorganization of the Company.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"EXPIRATION DATE" shall mean the first to occur of (i) the
effective date of a public offering, which when aggregated with all prior
public offerings, constitutes an offering registered under the Securities Act
of more than 30% of the outstanding shares of Common Stock or (ii) the
effective date of any other transaction, which when aggregated with all other
transactions, results in a sale, exchange or other transfer of more than 30%
of the outstanding shares of Common Stock for shares or other interests in a
publicly-traded entity.
"FINANCING DOCUMENTS" shall mean (i) the Indenture, dated as of the
date hereof, by and among GEIPPPII, Ardatrium and Atrium, relating to Atrium's
Discount Debentures and (ii) the Credit Agreement, dated as of the date hereof,
by and among
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Atrium Companies, Inc., a wholly owned, indirect subsidiary of the Company,
the lenders named therein and BankBoston, N.A., as Agent, and any
refinancing, refunding, extension, amendment, replacement or renewal of
either of them and all documents executed and/or delivered in connection
therewith.
"FINANCING TRANSACTIONS" shall mean the transactions contemplated by
the Financing Documents.
"FOJTASEK" shall mean Randall S. Fojtasek.
"GEIPPPII" shall mean GE Investment Private Placement Partners II, a
Limited Partnership, a Delaware limited partnership.
"HAMBRO" shall mean North Atlantic Smaller Companies Investment Trust,
a United Kingdom corporation, together with J O Hambro Capital Management
Limited - Isle of Man Account 2, an Isle of Man corporation.
"INDEBTEDNESS EVENT" shall mean (a) the failure of the Company or any
of its subsidiaries to pay (i) within 90 days after the same becomes due, any
amount of principal with respect to any indebtedness having an outstanding
aggregate principal amount of $15,000,000 or greater or (ii) within 45 days
after the same becomes due, any interest with respect to any indebtedness having
an outstanding aggregate principal amount of $15,000,000 or greater; provided
that the failure by the Company or any subsidiary to make any such payments on
such indebtedness due solely to a payment blockage instituted by holders of
other indebtedness pursuant to the terms of a subordination, intercreditor or
other arrangement (a "Blockage Notice") shall not be deemed an Indebtedness
Event, unless after the expiration or withdrawal of such Blockage Notice such
failure to pay continues for more than two business days or (b) the acceleration
of the final maturity of any indebtedness referred to in clause (a) above by the
holders thereof.
"INVESTMENT AGREEMENT" shall mean the Investment Agreement, dated as
of June 24, 1997, by and between GE Investment Management Incorporated and
Ardshiel, as amended, amended and restated or otherwise modified in accordance
with its terms.
"MANAGEMENT AGREEMENT" shall mean the Management Agreement, dated the
date hereof, by and between Ardshiel and the Company, as amended, amended and
restated or otherwise modified in accordance with its terms.
"MANAGING STOCKHOLDERS" shall mean the Ardshiel Stockholders and
Fojtasek.
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"MERGER AGREEMENT" shall mean the Agreement and Plan of Merger, dated
as of August 3, 1998, by and among the Company, D and W Acquisition Corp.,
Atrium and the securityholders named therein.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"NASDAQ" shall mean the Nasdaq National Market System.
"OPTION PLAN" shall mean D and W Holding's Inc. 1998 Stock Option
Plan.
"OTHER TRANSACTIONS" shall mean the transactions contemplated by the
agreements set forth in Schedule III hereto.
"PERMITTED REGISTRATION RIGHTS" shall mean all demand and piggyback
registration rights granted (i) under this Agreement and (ii) to holders of
Permitted Common Stock Rights.
"PERMITTED COMMON STOCK RIGHTS" shall mean each of
(i) the issuance, exercise, redemption and/or conversion of the
Equity Securities outstanding on the date hereof; and
(ii) any issuance and/or exercise of Equity Securities to or by the
Company's or any of its subsidiaries' officers, directors or
employees under the Option Plan, but only to the extent that the
aggregate number of shares of Common Stock covered under this
clause (ii) that are issued after the date of this Agreement does
not exceed 2% of the aggregate amount of Common Stock outstanding
on the date hereof (on a fully diluted basis).
"PERMITTED TRANSACTIONS" shall mean (i) Permitted Registration Rights
(ii) the Transactions and (iii) Permitted Common Stock Rights.
"PERMITTED TRANSFEREE" shall have the meaning set forth in Section
3.05 herein.
"PERSON" shall mean and include an individual, a corporation, a
limited liability company, an association, a partnership, a joint venture, a
trust or estate, a government or any department or agency thereof, or any other
entity or governmental
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body.
"PIGGYBACK REGISTRATION" shall have the meaning set forth in
Section 4.01.
"REGISTRATION EXPENSES" shall mean the following expenses incident to
the Company's performance of or compliance with its obligations under Sections
4.01 and 4.02 hereof, including without limitation, all SEC, NASD and securities
exchange or NASDAQ registration, listing and filing fees and expenses, fees and
expenses of compliance with applicable state securities or "blue sky" laws
(including, without limitation, reasonable fees and disbursements of counsel for
the underwriters in connection with "blue sky" qualifications of securities to
be registered), printing expenses, messenger and delivery expenses, fees and
disbursements of counsel for the Company and all independent certified public
accountants retained by the Company (including the expenses of any annual audit
and "cold comfort" letters required by or incident to such performance and
compliance), fees and disbursements of underwriters customarily paid by issuers
or sellers of securities (including the fees and expenses of any "qualified
independent underwriter" required by the NASD), reasonable fees and expenses of
any special experts retained by the Company in connection with such
registration, fees and expenses of other Persons retained by the Company, all
transfer taxes with respect to the shares of Common Stock sold by a Stockholder
and all other expenses incurred by Stockholders customary for and incidental to
the sale and delivery of the shares of Common Stock to be sold by such
Stockholders (but not including any underwriting discounts or commission, if
any, attributable to the sale of Common Stock by holders of such Common Stock
other than the Company); PROVIDED, that the term "Registration Expenses" shall
not include fees and expenses of counsel for the Stockholders other than
reasonable fees and expenses of one counsel for all Stockholders in the case of
(i) any Piggyback Registration in connection with a Company initiated
registration or (ii) any Demand Registration and/or any Piggyback Registration
in connection with a Demand Registration.
"SEC" shall mean the Securities and Exchange Commission and any
successor agency performing the same or a similar function.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"TRANSACTIONS" shall mean the Acquisition Transactions, the
Contribution Transactions, the Financing Transactions and the Other
Transactions.
"WIH" shall mean Wing Industries Holdings, Inc., a Delaware
corporation.
"WING L.P." shall mean Wing Partners, L.P., a Delaware limited
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partnership.
ARTICLE II
VOTING AGREEMENT
2.01 BOARD OF DIRECTORS OF THE COMPANY. The Company and each
Stockholder agree that the Company shall have, and each Stockholder agrees to
vote its shares of Common Stock to cause the Company to have, a Board of
Directors consisting of up to nine directors. Prior to the Expiration Date, (i)
GEIPPPII, so long as it is a Stockholder, shall nominate one person for election
as a director of the Company; provided, that, in the event the Board of
Directors consists of seven or more members, GEIPPPII, so long as it is a
Stockholder, shall be entitled to nominate two persons for election as directors
of the Company; and provided further, that during the continuation of an
Indebtedness Event, GEIPPPII, so long as it is a Stockholder, shall be entitled
to nominate the balance of the Board of Directors not otherwise required to be
nominated pursuant to this Section 2.01; and (ii) Fojtasek, so long as he holds
Equity Securities and an employee of the Company or any of its subsidiaries,
shall be nominated for election as a director of the Company. The Ardshiel
Affiliates, so long as any of them is a Stockholder, shall (a) prior to the
Expiration Date except during the continuance of an Indebtedness Event, nominate
up to six persons (subject to the number of persons nominated by GEIPPPII
pursuant to the terms of this Section 2.01) for election as directors of the
Company and (b) on and after the Expiration Date or during the continuance of an
Indebtedness Event, nominate two persons for election as directors of the
Company.
2.02 COVENANT TO VOTE. (a) Each of the Stockholders shall appear in
person or by proxy at any annual or special meeting of stockholders for the
purpose of obtaining a quorum and shall vote or cause the vote of the shares of
Common Stock owned by such Stockholder or by any Affiliate of such Stockholder,
either in person or by proxy, at any annual or special meeting of stockholders
of the Company called for the purpose of voting on the election, if such
director has been nominated for election, or removal, if such director has been
designated for removal, of directors, or take any consensual action of
stockholders with respect to such election or removal of directors, in favor of
such election of the directors nominated, or removal and/or replacement of the
directors designated, in accordance with Section 2.01 or 2.03, respectively. In
addition, each of the Stockholders shall appear in person or by proxy at any
annual or special meeting of stockholders for the purpose of obtaining a quorum
and shall vote or cause the vote of the shares of Common Stock owned by such
Stockholder or any Affiliate of such Stockholder upon any matter submitted to a
vote of the stockholders of the Company in a
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manner so as to be consistent and not in conflict with, and to implement, the
terms of this Agreement. If a Stockholder does not designate a director
pursuant to Section 2.01, each of the Stockholders shall appear in person or
by proxy at any annual or special meeting of stockholders for the purpose of
obtaining a quorum and shall vote or cause the vote of the shares of Common
Stock owned by such Stockholder or by any Affiliate of such Stockholder,
either in person or by proxy, for the re-election of the prior director
designated by the Stockholder failing to exercise his rights to designate a
director pursuant to Section 2.01.
(b) Notwithstanding anything herein to the contrary, each of the
Stockholders shall cause any director nominated by such Stockholder to abstain
from voting with respect to any exercise by the Company of the right of first
offer provided in Section 3.07 in the event such Stockholder is a Selling
Stockholder in connection therewith.
2.03 VACANCIES/REMOVALS. Each director of the Company shall be
subject to removal by the Stockholder(s) who nominated him or her at any time,
with or without cause. Each Stockholder shall have the right to call a special
meeting of Stockholders at any time, and from time to time, for the sole purpose
of removing from the Board of Directors of the Company, with or without cause,
any person or persons nominated by such stockholder for election as a director,
and in such event, the Stockholders shall vote all of their Common Stock in
support of such removal and for the election of such replacements as may be
nominated by the Stockholder who nominated the director(s) who were removed.
The Stockholders shall then cause the Company to remove from the Board of
Directors of the Company the person removed from the Board of Directors of the
Company and elect as a director of the Company the person who was elected as a
replacement to the Board of Directors of the Company.
2.04 NO VOTING OR CONFLICTING AGREEMENTS. Except as set forth in
Section 6.12, each of the Stockholders agrees that it will not and will not
permit any Affiliate to grant any proxy or enter into or agree to be bound by
any voting trust with respect to its shares of Common Stock or to enter into any
stockholder agreements or arrangements of any kind with any Person with respect
to its shares of Common Stock in any such case in a manner that is inconsistent
with the provisions of this Agreement.
2.05 ACTIONS CONSISTENT WITH AGREEMENT. The Company shall not take
any action inconsistent with the provisions of this Agreement.
2.06 AMENDMENTS TO ORGANIZATIONAL DOCUMENTS. Each Stockholder agrees
to vote all its shares of Common Stock in favor of amending or changing the
Certificate of Incorporation of the Company to authorize a sufficient number of
shares of Common Stock, in the opinion of the Board of Directors, to consummate
an initial public
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offering.
2.07 EXPIRATION OF RIGHTS. The rights granted pursuant to this
Article II shall expire and be of no further force and effect on and after the
Expiration Date; provided, however, that the provisions of Section 2.01(b) and
the other provisions of this Article II insofar as they may relate to the
matters described in Section 2.01(b) shall not expire. Notwithstanding anything
herein to the contrary, the rights granted pursuant to this Article II,
including, without limitation, the provisions of Section 2.01(b) and the other
provisions of this Article II relating to the matters described in Section
2.01(b), shall expire on the date the Investment Agreement is terminated
pursuant to Section 6.14(b) thereof.
ARTICLE III
RESTRICTIONS ON TRANSFERS BY THE STOCKHOLDERS
3.01 RESTRICTIONS ON TRANSFERS GENERALLY. (a) Each Stockholder hereby
agrees that such Stockholder shall not, and shall not permit any of its
Affiliates to, directly or indirectly, sell, transfer or otherwise dispose of
any of its Equity Securities or Discount Debentures other than, subject to the
terms and conditions of this Agreement, (i) pursuant to an effective
registration statement under the Securities Act or (ii) pursuant to an exemption
from registration under the Securities Act and any state securities or "blue
sky" laws.
(b) The Managing Stockholders agree not to sell, transfer, pledge,
mortgage, hypothecate, encumber or otherwise dispose of any Equity Securities or
Discount Debentures so long as GEIPPPII shall own any Equity Securities or
Discount Debentures, respectively. Notwithstanding the provisions of this
Section 3.01(b), (i) the Managing Stockholders may (A) sell, transfer or
otherwise dispose of Equity Securities or Discount Debentures in connection with
any sale, transfer or other disposition by GEIPPPII in accordance with Section
3.02 and (B) sell, transfer or otherwise dispose of Equity Securities or
Discount Debentures pursuant to Sections 3.03, 3.05, 4.01 or 4.02, (ii) the
Ardshiel Stockholders may (A) sell, transfer or otherwise dispose of Equity
Securities or Discount Debentures pursuant to Section 3.04 and (B) if the
Investment Agreement is terminated for cause pursuant to Section 6.14(b)
thereof, subject to Section 3.07 hereof, sell, transfer or otherwise dispose of
any or all of their Equity Securities or Discount Debentures and (iii) Fojtasek
may pledge his Equity Securities in order to finance the purchase of such Equity
Securities; provided that if such pledge is made in favor of any Person other
than the Company, no foreclosure or other transfer in respect of such pledge may
be made unless such transfer is permitted under clause 3.01(b)(i).
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3.02 TAG-ALONG RIGHT. If GEIPPPII or any of its Affiliates or,
subject to Section 3.01(b), any of the Managing Stockholders propose to sell,
transfer or otherwise dispose of any Equity Securities or Discount Debentures to
any Person or Persons (other than to an Affiliate) (the "SELLING STOCKHOLDER"),
the Selling Stockholder shall notify each other Stockholder (each a "TAG ALONG
STOCKHOLDER") in writing (the "TAG ALONG NOTICE") of such proposed transfer and
its terms and conditions. Within 15 days of receipt of a Tag Along Notice, each
Tag Along Stockholder shall notify the Selling Stockholder if it elects to
participate in such transfer ("TAG ALONG RIGHT") and shall state the number of
shares of Equity Securities (in the case of a sale of Equity Securities by the
Selling Stockholder) or the amount of Discount Debentures (in the case of a sale
of Discount Debentures by the Selling Stockholder) that the Tag Along
Stockholder desires to sell. Upon electing to transfer, each Tag Along
Stockholder shall be obligated to sell, at the same price and on the same terms
as the Selling Stockholder, the number of shares or the amount of Discount
Debentures stated in its notice to the Selling Stockholder. Each Tag Along
Stockholder may elect to sell such number of Equity Securities or amount of
Discount Debentures as is equal to the number of Equity Securities or Discount
Debentures, as the case may be, to be purchased by the Buyer multiplied by a
fraction, the numerator of which shall be the number of Equity Securities or
Discount Debentures, as the case may be, held by such Tag Along Stockholder and
the denominator of which shall be the aggregate number of Equity Securities or
Discount Debentures, as the case may be, held by all transferors; PROVIDED,
HOWEVER, that the sale of the Equity Securities or Discount Debentures contained
in the Tag Along Notice is consummated within 180 days of delivery of the notice
by the Tag Along Stockholder evidencing such Stockholder's election to exercise
its Tag Along Right. Each such Tag Along Stockholder shall agree to enter into
a purchase agreement in form and substance approved by the Selling Stockholder
to the extent such agreement shall contain customary representations as to
ownership of the Equity Securities to be purchased and the absence of liens
thereon. If the sale is not consummated within such 180-day period, then each
Tag Along Stockholder shall no longer be obligated but shall continue to have
the right to sell such Stockholder's Equity Securities or Discount Debentures,
as the case may be, pursuant to such Tag Along Right and shall have the rights
under, and remain subject to, the provisions of this Section 3.02 with respect
to any subsequent proposed transfer described in this Section 3.02. In the
event that the proposed transferee does not purchase the number of Equity
Securities or Discount Debentures, as the case may be, that the Tag Along
Stockholder elects to sell pursuant to the foregoing on the same terms and
conditions as the securities purchased from the Selling Stockholder, then the
Selling Stockholder shall not be permitted to sell any securities to the
proposed transferee. If no Tag Along Notice is received by the end of the 15
days referred to above, the Selling Stockholder shall have the right for a
180-day period thereafter to transfer the securities to the proposed transferee
on terms and conditions no more favorable to the Selling Stockholder than those
stated in the Tag Along Notice and in accordance with the
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provisions of this Section 3.02.
3.03 DRAG ALONG RIGHT. (a) If at any time following the fourth
anniversary of the date of this Agreement, GEIPPPII proposes to transfer in a
bona fide arm's length sale all of the Equity Securities and/or all of the
Discount Debentures owned by GEIPPPII to any Person or Persons who are not
Affiliates of GEIPPPII (the "PROPOSED TRANSFEREE"), GEIPPPII shall have the
right (the "DRAG ALONG RIGHT"), subject to applicable law and compliance with
any other restrictions applicable to such transfer, to require all Stockholders
to sell, pursuant to Section 3.03(b), to the Proposed Transferee, on the same
terms and conditions as applicable to GEIPPPII except as limited in Section
3.03(b), all (but not less than all) of the Equity Securities and/or all (but
not less than all of the) Discount Debentures then held by such Stockholders.
(b) To exercise a Drag Along Right, GEIPPPII shall give each
Stockholder (each, a "DRAG-ALONG STOCKHOLDER"), at least 15 days prior to the
proposed transfer to the Proposed Transferee, a written notice (the "DRAG ALONG
NOTICE") containing (i) the name and address of the Proposed Transferee and
(ii) the proposed purchase price, the terms of payment and other material terms
and conditions of the Proposed Transferee's offer. Each Drag Along Stockholder
shall thereafter be obligated to sell all of its Equity Securities and/or
Discount Debentures to the Proposed Transferee. Each such Drag Along
Stockholder shall agree to enter into a purchase agreement in form and substance
approved by GEIPPPII to the extent such agreement shall contain customary
representations as to ownership of the shares to be purchased and the absence of
liens thereon and customary indemnification provisions, including
indemnification from the Drag Along Stockholder. If the sale is not consummated
within a period of 180 days following the date of the Drag Along Notice, then
each Drag Along Stockholder shall no longer be obligated to sell such
Stockholder's Equity Securities and/or Discount Debentures pursuant to such Drag
Along Right but shall have the rights under, and remain subject to, the
provisions of this Section 3.03 with respect to any subsequent proposed transfer
described in this Section 3.03. No Drag Along Stockholder shall be required to
participate in a proposed transfer pursuant to the exercise of a Drag Along
Right unless its liability for breaches of representations and warranties made
in connection with the sale thereunder is limited to no more than the total sale
price received by such Drag Along Stockholder in such sale.
3.04 PUT OPTION. (a) Notwithstanding Section 3.01 or any other
provision herein to the contrary, any of the Ardshiel Affiliates may from time
to time propose or request that GEIPPPII sell or dispose of all of GEIPPPII's
Equity Securities and Discount Debentures, in a bona fide arm's length sale, to
any Person or Persons who are not Affiliates of any of the Ardshiel Affiliates
(an "ARDSHIEL PROPOSAL") but GEIPPPII shall be under no obligation to do so;
provided, however, that if GEIPPPII has held such
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Equity Securities and Discount Debentures for at least two years and the
terms on which any of the Ardshiel Affiliates so proposes or requests
GEIPPPII to sell or dispose of such Equity Securities and Discount Debentures
would result in GEIPPPII realizing an annual internal rate of return on its
investment in the Company, WIH and Door of at least 15% (compounded
semi-annually) over the period that such Equity Securities and Discount
Debentures have been held pursuant to the calculations set forth in the
letter agreement (the "Letter Agreement") among the Ardshiel Affiliates and
GEIPPPII, dated as of the date hereof, and GEIPPPII is permitted by
applicable law and regulation to sell but refuses to sell or dispose of such
Equity Securities and Discount Debentures on such terms as set forth in the
Ardshiel Proposal, each of the Ardshiel Affiliates shall have the right (the
"PUT RIGHT") to cause GEIPPPII to purchase the Ardshiel Stockholders'
interests in any Equity Securities and Discount Debentures (the "PUT
SECURITIES") for a purchase price equal to the lesser of the price set forth
in the Ardshiel Proposal and the price determined in accordance with the
formula set forth in the Letter Agreement. GEIPPPII shall have the right to
assign such purchase obligation to any Person and GEIPPPII shall have no
obligation under this Section 3.04 subsequent to September 19, 2005.
(b) Each Ardshiel Proposal shall contain (a) the name and address of
the proposed transferee and (b) the proposed purchase price, the terms of
payment and other material terms and conditions of the proposed transaction.
Within 15 days following the receipt of an Ardshiel Proposal, GEIPPPII shall
notify the Ardshiel Affiliates if it will sell on the terms and conditions
contained in the Ardshiel Proposal, subject to review and approval of final
documentation of such Ardshiel Proposal.
(c) To exercise a Put Right, any of the Ardshiel Affiliates shall
give GEIPPPII a written notice ("PUT NOTICE") evidencing its election to
exercise its Put Right within 10 days following notice by GEIPPPII of its
refusal to sell its Equity Securities pursuant to the terms of the Ardshiel
Proposal. Within two business days following delivery of such Put Notice,
GEIPPPII shall notify the Ardshiel Affiliates if it will sell on the terms and
conditions contained in the Ardshiel Proposal. If GEIPPPII notifies the
Ardshiel Affiliates that GEIPPPII will not sell on the terms and conditions
contained in the Ardshiel Proposal, GEIPPPII or its assignee shall purchase, on
or before the date 60 days following the date of the Put Notice, the Put
Securities by wire transfer of immediately available funds, in an amount equal
to the purchase price equal to the lesser of the price stated in the Ardshiel
Proposal and the price as calculated using the procedures set forth in the side
letter among the Ardshiel Affiliates and GEIPPPII, dated as of the date hereof,
to an account or accounts designated by the Ardshiel Affiliates in the Put
Notice and the Ardshiel Stockholders shall deliver to GEIPPPII or its assignee
all of the Put Securities free of all liens and encumbrances. In connection
with the Put Right, (i) GEIPPPII and the Ardshiel Stockholders shall take such
steps as may be appropriate to ensure compliance with any applicable law, rule
or regulation or any applicable agreement, in each case, relating to the Put
Securities or the Ardshiel Stockholders' transfer thereof, including the making
by GEIPPPII of any appropriate
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representations and warranties and (ii) GEIPPPII or its assignee shall have,
as of the date of such exercise, represented and warranted to the Ardshiel
Stockholders that GEIPPPII or its assignee is purchasing the Put Securities
based solely on its own analysis regarding the Put Securities and the
Company, obtained from sources other than the Ardshiel Stockholders and that
GEIPPPII or its assignee is not relying on any representations or warranties
express or implied (other than as to the Ardshiel Stockholders' ownership of
the Put Securities and the absence of liens or encumbrances thereon) from the
Ardshiel Stockholders relating to the Put Securities or the Company.
(d) Notwithstanding anything contained in this Agreement to the
contrary, this Section 3.04 shall not apply to Randall S. Fojtasek.
3.05 TRANSFERS TO AFFILIATES. Notwithstanding anything to the
contrary contained in this Article III, (i) each of the Ardshiel Stockholders
and GEIPPPII may transfer any or all of its Equity Securities and/or Discount
Debentures to an Affiliate of such Stockholder (an "INSTITUTIONAL PERMITTED
TRANSFEREE") and (ii) Fojtasek may transfer his Equity Securities to an
Affiliate of Fojtasek approved by the Ardshiel Affiliates in writing (together
with Institutional Permitted Transferees, "Permitted Transferees"), provided
that in each case such transfer shall be subject to the transferor and
transferee agreeing in writing, for the benefit of the Company and the other
Stockholders (who shall be third party beneficiaries of such agreement) that the
transferor will repurchase such Equity Securities and Discount Debentures in the
event such transferee ceases to be an Affiliate; and provided further, that the
Permitted Transferee of a Stockholder may only transfer its Equity Securities
and Discount Debentures to the transferor Stockholder from whom such Permitted
Transferee received such Equity Securities and Discount Debentures or any of
such transferor's Permitted Transferees or otherwise in accordance with the
terms hereof.
3.06 TRANSFEREES SUBJECT TO AGREEMENT. Any transferor of Equity
Securities or Discount Debentures, other than a transferor of Equity Securities
or Discount Debentures transferring such Equity Securities or Discount
Debentures pursuant to an effective registration statement under the Securities
Act, shall, as a condition of the consummation of such transfer, sale or other
disposition, require the transferee to agree in writing to be subject to and
bound by the terms of this Agreement and to be deemed to be a Stockholder under
this Agreement (it being understood that the transferee shall be subject to the
obligations of the transferor but shall not be entitled to the rights of the
transferor unless the transferor expressly assigns such rights and, with respect
to which, if assigned, the transferor shall cease to be entitled, to the extent
of such assignment). Any transfer made in violation of this Section 3.06 shall
be null and void.
3.07 RIGHT OF FIRST OFFER. (a) Until the Expiration Date, prior to
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offering or soliciting any offers, or accepting any unsolicited offers, with
respect to the disposition of any Equity Securities (other than (i) any sale,
transfer or other disposition of such Equity Securities in connection with any
sale, transfer or other disposition by GEIPPPII in accordance with Section 3.02,
(ii) and sale, transfer or other disposition of such Equity Securities pursuant
to Sections 3.03, 3.04, 3.05, 4.01 or 4.02 or (iii) a distribution of Equity
Securities to the partners or members of a Selling Stockholder (defined below)
that is a partnership or a limited liability company), a Stockholder (the
"SELLING STOCKHOLDER") shall give written notice to the Company or, in the case
of a transfer permitted by Section 3.01(b)(ii)(B), to GEIPPPII of such proposed
transfer, together with such additional information as is necessary, or
reasonably requested by the Company or GEIPPPII, as applicable, to evaluate such
proposed transfer (the "FIRST OFFER NOTICE"). The First Offer Notice shall
constitute an invitation to the Company or GEIPPPII, as applicable, to offer to
purchase or otherwise acquire all, but not less than all, of the Equity
Securities that are the subject of such First Offer Notice.
(b) Upon receipt of a First Offer Notice pursuant to Section 3.07(a)
above, the Company or GEIPPPII, as applicable, shall have a period of 20
business days (the "OFFER PERIOD") within which to submit a proposal (each, a
"PROPOSAL") to the Selling Stockholder to purchase all, but not less than all,
of the Equity Securities that are the subject of such First Offer Notice. The
Selling Stockholder shall then have a period of 30 days from the end of the
Offer Period within which to accept or reject such Proposal.
(c) If the Selling Stockholder accepts the Proposal, the Selling
Stockholder and the Company or GEIPPPII, as applicable, shall each use
commercially reasonable efforts to consummate the transaction in accordance with
such Proposal as promptly as practicable. If, despite the use of good faith
efforts by the Selling Stockholder, any such transaction is not consummated
within 90 days of the acceptance of the Proposal, the Selling Stockholder shall,
for a period of 180 days thereafter, be free to sell, transfer or otherwise
dispose of all, but not less than all, of the Equity Securities that are the
subject of such accepted Proposal in any manner and to any Person. After such
180-day period, the Selling Stockholder shall not sell, transfer or otherwise
dispose of such shares without again complying with the provisions of this
Section 3.07.
(d) If the Selling Stockholder in its sole discretion rejects one or
more Proposals, the Selling Stockholder may, within 180 days after the
expiration of the Offer Period, sell, transfer or otherwise dispose of all, but
not less than all, of the Equity Securities that are the subject of such
rejected Proposal or Proposals on terms (including price and other terms and
conditions) that (considered as a whole) are in the Selling Stockholder's good
faith reasonable judgment more favorable to the Selling Stockholder than the
terms contained in such rejected Proposal or Proposals. After such 180-day
period, the Selling Stockholder shall not sell, transfer or otherwise dispose of
such shares
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without again complying with the provisions of this Section 3.07.
(e) If the Company or GEIPPPII, as applicable, fails to submit a
Proposal during the Offer Period, the Selling Stockholder shall be free to
sell, transfer or otherwise dispose of all, but not less than all, of the
Equity Securities that are the subject of the First Offer Notice in any
manner and to any Person for a period of 90 days following the expiration of
the Offer Period. After such 90-day period, the Selling Stockholder shall not
sell, transfer or otherwise dispose of such shares or securities without
again complying with the provisions of this Section 3.07.
3.08 EXPIRATION OF RESTRICTIONS. The restrictions set forth in
Article III hereof shall expire and be of no further force and effect on and
after the Expiration Date.
ARTICLE IV
REGISTRATION RIGHTS
4.01 PIGGYBACK REGISTRATION. (a) If the Company proposes (including in
connection with any Demand Registration Right exercised or to be exercised by a
Stockholder) to file a registration statement under the Securities Act with
respect to any Equity Security (other than pursuant to a registration statement
on Form S-4 or S-8 or any successor or similar forms in connection with an
exchange offer or any offering of securities solely to the Company's then
existing stockholders or employees of the Company and its subsidiaries), the
Company shall give written notice of such proposed filing to each Stockholder at
least 20 days prior to such proposed filing. Such notice shall offer to each
Stockholder the opportunity to include in such registration statement for resale
by the Stockholders, such number of shares of Common Stock each may request in a
written notice to the Company (which notice shall specify the number of shares
to be disposed of by such holder and the intended method of disposition thereto
within 20 days after the receipt of such notice from the Company (a "PIGGYBACK
REGISTRATION"). The Company shall permit, or shall cause the managing
underwriter of any such proposed offering to permit, the shares of Common Stock
requested to be included in the registration to be included on the same terms,
and conditions as are applicable to the other Equity Securities included in such
registration statement. If any shares of Common Stock are to be distributed
pursuant to this Section 4.01 through a firm of underwriters to the public, and
(i) GEIPPPII shall be participating in such offering or (ii) General Electric
Company has a direct or indirect interest of 5% or greater in an underwriter
selected by the Board of Directors of the Company, GEIPPPII shall have the
right, in its sole discretion, to disapprove of any such underwriter. The
Company shall not be required to maintain the effectiveness of the registration
statement beyond the earlier to occur of (i) 120 days after the effective date
of the registration statement; and (ii) consummation of the distribution by the
Stockholders whose shares of Common Stock are included in such
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registration statement.
(b) If (i) the managing underwriter or underwriters, if any, advise
the Stockholders seeking to register shares of Common Stock under this Section
4.01 in writing that in its or their opinion; or (ii) in the case of a Piggyback
Registration not being underwritten, the Company shall reasonably determine and
notify such Stockholders of such determination, after consultation with an
investment banker of nationally recognized standing that, the number of
securities proposed to be sold in such registration (including securities to be
included pursuant to Section 4.01(a) above) will materially adversely affect the
success of such offering, the Company will include in such registration the
number of securities, if any, which in the opinion of such underwriter or
underwriters, or the Company can be sold as follows: (i) first, the shares the
Company proposes to sell; (ii) second, the shares of Common Stock requested to
be included in such registration by the Stockholders and (iii) third, the
securities requested to be included by each other Person exercising any
Piggyback Registration rights; provided, that (a) if all shares requested to be
included in such Piggyback Registration by members of any group set forth above
are not to be included, selection of shares to be included from within such
groups shall be made PRO RATA based on the number of shares that each member of
such group holds and (b) no Stockholder shall have the right to register shares
pursuant to this Section 4.01 if the Company is at such time, and has been
continuously during the immediately preceding three years, subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act and such
Stockholder is then entitled to sell all of its shares of Common Stock in less
than three months pursuant to Rule 144 (other than under Rule 144(k)).
(c) The provisions of this Section 4.01 shall also apply in the event
any subsidiary of the Company proposes to file a registration statement under
the Securities Act with respect to any of its equity securities (other than
pursuant to a registration statement on Form S-4 or S-8 or any successor or
similar forms in connection with an exchange offer or any offering of securities
solely to the Company's or its subsidiaries' then existing stockholders or
employees of such subsidiary) as if the Company had proposed such filing
pursuant to clause (a) above.
4.02 DEMAND REGISTRATION RIGHTS. Upon the written request (the
"Request") of a Stockholder that has the right to require the Company to
register under the Securities Act any or all shares of the Common Stock then
held by such Stockholder (a "DEMAND REGISTRATION RIGHT"), the Company shall
include such shares in a registration statement on Form S-1, Form S-2 or Form
S-3 (or any equivalent form), and use its best efforts to register such shares,
under the Securities Act. GEIPPPII shall have five Demand Registration Rights
provided, that, if, at any time, GEIPPPII owns less than 10% of the issued and
outstanding Common Stock and has more than one Demand
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Registration Right remaining, GEIPPPII shall not be entitled to use one of
its then remaining Demand Registration Rights. The Ardshiel Stockholders
shall have two Demand Registration Rights and Fojtasek shall have one Demand
Registration Right. A Demand Registration Right may not be exercised unless
(i) if the exercising Stockholder is GEIPPPII or an Ardshiel Stockholder, the
exercising Stockholder(s) elects to sell under the registration statement the
lesser of (x) at least 50 % of the aggregate number of shares of Common Stock
then held by such Stockholder(s) or (y) at least 5 % of the then issued and
outstanding shares of Common Stock and (ii) if the exercising Stockholder is
Fojtasek, at least 270 days have elapsed since the Company consummated an
initial public offering and Fojtasek elects to sell under the registration
statement the lesser of (x) at least 4% of the then issued and outstanding
shares of Common Stock and (iii) shares of Common Stock having an aggregate
offering price of at least $5,000,000. The Company will promptly give
written notice of such requested registration to all other Stockholders and
thereupon will use its best efforts to effect the registration under the
Securities Act of (i) the Common Stock which the Company has been so
requested to register, for disposition in accordance with the intended method
of disposition stated in such request; and (ii) all other Common Stock, the
holders of which shall have, within 20 days after the receipt of such written
notice from the Company, made written request (which notice shall specify the
intended method of disposition thereof) to the Company for registration
thereof, all to the extent required to permit the disposition (in accordance
with the intended method thereof as aforesaid) by all such holders of
securities so to be registered; provided, however, that the Company shall not
be obligated to effect any such registration pursuant to this Section 4.02
(i) at any time prior to the earlier to occur of (a) the third anniversary of
the date of this Agreement; or (b) the effective date of the first
registration statement filed by the Company with the SEC; and (ii) at any
time prior to the date six months following the consummation by the Company
of any public offering. GEIPPPII shall have the right, in its sole
discretion, to disapprove of any underwriter selected by the Board of
Directors of the Company. If the managing underwriter or underwriters, if
any, advise the Stockholders seeking to register shares of Common Stock under
this Section 4.02 in writing that in its or their opinion the number of
securities proposed to be sold in such registration will materially adversely
affect the success of such offering, the Company shall include in such
registration the number of securities, if any, which in the opinion of such
underwriter or underwriters can be sold on a PRO RATA basis based on the
number of shares that each such Stockholder holds. Notwithstanding anything
contained herein to the contrary, (i) if the Stockholder exercising a Demand
Registration Right does not sell at least 50% of the shares of Common Stock
it requested be registered in the registration, such Stockholder shall be
entitled to an additional Demand Registration Right; and (ii) any Stockholder
that sells at least 50% of the shares of Common Stock owned by it in the
registration shall lose one of its Demand Registration Rights.
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4.03 HOLDBACK AGREEMENT. Notwithstanding any other provision in this
Article IV, the Company and each Stockholder agrees it will not, and the Company
shall use its best efforts to not permit any Affiliate to (and it shall be a
condition to the rights of each Stockholder under this Article IV that such
Stockholder does not), offer for public sale any shares of Common Stock, or
effect any sale of securities pursuant to Rule 144, during the 10 days prior to
and the 90 days after the closing date of any underwritten offering thereunder
unless such shares of Common Stock are covered by such registration statement or
such shorter period is agreed to by any managing underwriter or underwriters of
such offering.
4.04 EXPENSES. All Registration Expenses in connection with any
registration under this Article IV shall be borne by the Company.
4.05 REGISTRATION PROCEDURES. In connection with the registration of
shares of Common Stock under the Securities Act pursuant to this Agreement, the
Company will furnish each Stockholder whose shares of Common Stock are
registered thereunder and each underwriter, if any, with a copy of the
registration statement (including all exhibits thereto) and all amendments
thereto and will supply each such Stockholder and each underwriter, if any, with
copies of any prospectus included therein (including any preliminary prospectus)
and all amendments and supplements thereto in such quantities as may be
reasonably necessary for the purposes of the proposed sale or distribution
covered by such registration.
In connection with the Company's registration obligations pursuant to
this Article IV, the Company will use its best efforts to effect such
registration to permit the sale of the shares of Common Stock being registered
in accordance with the intended method or methods of disposition thereof, and
pursuant thereto the Company will:
(a) prepare and file with the SEC, as soon as practicable after
receiving a written notice pursuant to Section 4.02, a registration statement on
any appropriate form under the Securities Act, which form shall be selected by
the Company, shall be reasonably acceptable to any managing underwriter chosen
in accordance with Section 4.02 and shall be available for the sale of the
shares of Common Stock in accordance with the intended method or methods of
distribution thereof, and shall use its reasonable efforts to cause such
registration statement to become effective; provided that before filing a
registration statement or any prospectus related thereto or any amendments or
supplements thereto, including documents incorporated by reference, after the
initial filing of any registration statement, the Company will furnish copies of
all such documents proposed to be filed to the holders of the shares of Common
Stock covered by such registration statement and underwriters, if any, and make
the Company's representatives available for discussion of such documents and
other relevant matters and
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shall reasonably consider such changes in such documents prior to the filing
thereof as such holders or underwriters may timely and reasonably request.
If any Stockholder whose shares of Common Stock are covered by such
registration statement shall reasonably object to any disclosure in or
omission from any registration statement or any amendment thereto or any
prospectus or any supplement thereto, including documents incorporated by
reference, which the Company in good faith on the advice of counsel believes
is necessary or appropriate to be included therein or omitted therefrom, and
prior to the effectiveness of such registration advises the Company that it
chooses not to participate in such offering, such Stockholder may choose not
to participate in such offering;
(b) prepare and file with the SEC such amendments and post-effective
amendments to the registration statement as may be necessary to keep such
registration statement effective for the required duration thereof; cause the
related prospectus to be supplemented by any required prospectus supplement, and
as so supplemented to be filed pursuant to Rule 424 under the Securities Act;
and comply with the relevant provisions of the Securities Act during the
applicable period in accordance with the intended methods of disposition by the
sellers thereof set forth in such registration statement or supplement to such
prospectus;
(c) notify the selling Stockholders and the managing underwriters if
any, promptly, and (if requested by any such holder) confirm such notification
in writing, (i) when a prospectus or any prospectus supplement or post-effective
amendment has been filed, and, with respect to a registration statement or any
post-effective amendment, when the same has become effective, (ii) of any
request by the SEC for amendments or supplements to a registration statement or
related prospectus or for additional information, (iii) of the issuance by the
SEC of any stop order suspending the effectiveness of a registration statement
or the initiation of any proceedings for that purpose, (iv) of the receipt by
the Company of any written notification with respect to the suspension of the
qualification of any of the shares of Common Stock for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose, and (v) of
the existence of any fact known to the Company which results in a registration
statement, a prospectus or any document incorporated therein by reference
containing an untrue statement of a material fact or omitting to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(d) use reasonable efforts to obtain the withdrawal of any order
suspending the effectiveness of a registration statement at the earliest
practicable moment;
(e) if reasonably requested by the managing underwriters or a selling
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Stockholder, promptly incorporate in a prospectus supplement or post-effective
amendment such information as the managing underwriters or a selling Stockholder
agree should be included therein, subject to the last sentence of Section
4.05(a); and promptly make all required filings of such prospectus supplement or
post-effective amendment as soon as notified of the matters to be incorporated
in such prospectus supplement or post-effective amendment;
(f) prior to any public offering of shares of Common Stock, register
or qualify or cooperate with the selling Stockholders, the managing
underwriters, if any, and their respective counsel in connection with the
registration or qualification of such shares for offer and sale under the
securities or "blue sky" laws of such jurisdictions within the United States as
any seller or underwriter reasonably requests in writing and do any and all
other acts or things reasonably necessary or advisable to enable the disposition
in such jurisdictions of the shares of Common Stock covered by the applicable
registration statement; provided, that the Company will not be required to
qualify generally to do business in any jurisdiction where it would not
otherwise be required to be so qualified or to take any action which would
subject itself to taxation (other than a nominal amount) in any such
jurisdiction or to general service of process in any jurisdiction where it is
not then so subject;
(g) cooperate with the selling Stockholders and the managing
underwriters, if any, to facilitate the timely preparation and delivery of
certificates representing shares of Common Stock to be sold and not bearing any
restrictive legends; and enable such shares to be in such denominations and
registered in such names as the managing underwriters may request at least two
business days prior to any sale of shares to the underwriters;
(h) use its best efforts to cause the shares of Common Stock covered
by the applicable registration statement to be listed or registered with or
approved by any securities exchange or quotation system on which the shares of
Common Stock are then listed and by such governmental agencies or authorities
within the United States as may be reasonably necessary to enable the seller or
sellers thereof or the underwriters, if any, to consummate the disposition of
such shares;
(i) if any fact contemplated by Section 4.05 (c)(v) shall exist,
prepare a supplement of post-effective amendment to the applicable registration
statement or the related prospectus or any document incorporated therein by
reference or file any other required document so that, as thereafter delivered
to the purchasers of the shares of Common Stock being sold thereunder, such
prospectus will not contain any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not
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misleading;
(j) provide a CUSIP number for all shares of Common Stock, no later
than the effective date of the applicable registration statement;
(k) enter into such agreements (including an underwriting agreement)
and take all such other actions in connection therewith in order to expedite or
facilitate the disposition of such shares of Common Stock and, whether or not an
underwriting agreement is entered into and whether or not the registration is an
underwritten registration: (i) make such representations and warranties to the
holders of such shares and the underwriters, if any, in form, substance and
scope as are customarily made by issuers to underwriters in primary underwritten
offerings; (ii) obtain opinions of counsel to the Company (including counsel
which may be an employee of the Company) and updates thereof which counsel and
opinions (in form, scope and substance) shall be reasonably satisfactory to the
managing underwriters, if any, covering the matters customarily covered in
opinions requested by such holders and underwriters; (iii) obtain "cold comfort"
letters and updates thereof from the Company's independent certified public
accountants, addressed to the selling Stockholders and the underwriters, if any,
such letters to be in customary form and covering matters of the type
customarily covered in "cold comforts" letters to underwriters in connection
with primary underwritten offerings; (iv) if any underwriting agreement is
entered into, the same shall set forth in full the indemnification provisions
and procedures of Section 4.06 with respect to all parties to be indemnified
pursuant to such Section 4.06; and (v) deliver such documents and certificates
as may be reasonably requested by the holders of the shares of Common Stock
being sold and the managing underwriters, if any, to evidence compliance with
clause (i) hereof and with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Company. The
above shall be done at each closing under such underwriting or similar agreement
or as and to the extent otherwise reasonably required thereunder;
(l) make available for inspection during normal business hours by a
representative of each Stockholder, any underwriter participating in any
disposition pursuant to a registration statement and any attorney or accountants
retained by such selling Stockholders or underwriter, all financial and other
records, pertinent corporate documents and properties of the Company, and cause
the Company's officers, directors and employees to supply all information
reasonably requested by such representative, underwriter, attorney or accountant
in connection with such registration statement; provided, that such
Stockholders, underwriters, attorneys or accountants execute prior thereto an
agreement with the Company that all such records, information or documents shall
be kept confidential by such persons unless (i) disclosure of such records,
information or documents is required by court or administrative order, or (ii)
such records, information or documents are or become (but only when they become)
generally
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available to the public other than as a result of disclosure in violation of
this clause (l); and
(m) otherwise use its best efforts to comply with all applicable
rules and regulations of the SEC, and make generally available to the
Stockholders earnings statements satisfying the provisions of Section 11(a) of
the Securities Act no later than 45 days after the end of any 12-month period
(or 90 days, if such period is a fiscal year) (i) commencing at the end of any
fiscal quarter in which shares of Common Stock are sold to underwriters in an
underwritten offering, or (ii) if not sold to underwriters in such an offering
beginning with the first month of the Company's first fiscal quarter commencing
after the effective date of the registration statement.
The Company may require each Stockholder who is a party hereto as to
which any registration is being effected to furnish to the Company such
information and undertakings as it may reasonably request regarding such
Stockholder and the distribution of the shares of Common Stock as the Company
may from time to time reasonably request in writing.
Each Stockholder who is a party hereto agrees (i) that upon receipt of
any notice from the Company of the happening of any event of the kind described
in Section 4.05 (c)(v) such Stockholder will forthwith discontinue such
Stockholder's disposition of shares of the Common Stock pursuant to the
registration statement relating to such shares until such Stockholder's receipt
of the copies of the supplemented or amended prospectus contemplated by Section
4.05(i) and, if so directed by the Company, will deliver to the Company (at the
Company's expense) all copies then in such Stockholder's possession of the
prospectus relating to such shares current at the time of receipt of such notice
and (ii) that such Stockholder will immediately notify the Company, at any time
when a prospectus relating to the registration of such shares is required to be
delivered under the Securities Act, of the happening of any event as a result of
which information previously furnished by such holder to the Company in writing
for inclusion in such prospectus contains an untrue statement of a material fact
or omits to state any material fact required to be stated therein, or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading.
4.06 INDEMNIFICATION AND CONTRIBUTION. (a) INDEMNIFICATION. (i) In
the event of any registration (other than a registration in which shares of
Common Stock are to be distributed through a firm of underwriters to the public)
under the Securities Act of any shares of Common Stock pursuant to this
Article IV, the Company hereby agrees to indemnify and hold harmless each
Stockholder offering or selling such shares, and their respective officers,
directors, stockholders and affiliates, in connection with such offer or sale
against such losses, claims, damages, liabilities, costs or expenses (including
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reimbursement for reasonable legal and other expenses) to which any such person
may become subject under the Securities Act or otherwise insofar as such losses,
claims, damages, liabilities, costs or expenses arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact contained
in any registration statement under which such shares were registered under the
Securities Act, any preliminary prospectus, final prospectus or summary
prospectus contained therein, or any amendment or supplement thereto, or any
application or other filing under any "blue sky" or state securities law, or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, provided that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage, liability (or action or proceeding in respect thereof), cost or
expense arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement,
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement, or application or other filing, in reliance upon and in conformity
with written information furnished to the Company through an instrument duly
executed by such selling Stockholder.
(ii) In the event of any registration under the Securities Act of any
shares of Common Stock pursuant to this Article IV (other than a registration in
which shares of Common Stock are to be distributed through a firm of
underwriters to the public), each Stockholder whose shares are included in such
registration hereby agrees to indemnify and hold harmless, but only for an
amount, with respect to such Stockholder, not in excess of the net proceeds
realized by such Stockholder from the sale of its shares of Common Stock
registered pursuant to such registration statement, both the Company and its
officers, directors, stockholders and affiliates, and any other Stockholder
participating in such registration, and their respective officers, directors,
stockholders and affiliates, in connection with such offer or sale against such
losses, claims, damages, liabilities, costs or expenses (including reimbursement
for reasonable legal and other expenses) to which any such person may become
subject under the Securities Act or otherwise insofar as such losses, claims,
damages, liabilities, costs or expenses arise out of or are based solely upon
any untrue statement or alleged untrue statement of any material fact contained
in any registration statement under which such shares were registered under the
Securities Act, any preliminary prospectus, final prospectus or summary
prospectus contained therein, or any amendment or supplement thereto, or any
application or other filing under any "blue sky" or state securities law, or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, to the extent that
such untrue statement or omission or alleged omission made in such registration
statement, any such preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement, or application or other filing, is
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contained in any written information furnished to the Company through an
instrument duly executed by such holder.
(b) CONTRIBUTION. (i) If the indemnification provided for in Section
4.06(a) is unavailable to persons to be indemnified pursuant thereto in respect
of any losses, claims, damages, liabilities, costs or expenses referred to
therein, then the Company, in lieu of indemnifying such person shall contribute
to the amount paid or payable by such person as a result of such losses, claims,
damages, liabilities, costs or expenses, in such proportion as is appropriate to
reflect the relative fault of the Company and such persons in connection with
the actions which resulted in such losses, claims, damages, liabilities, costs
or expenses, as well as any other relevant equitable considerations. The
relative fault of the Company and such persons shall be determined by reference
to, among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact, has been made by, or relates to information supplied by,
the Company or such persons, and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such action. The amount
paid or payable by a party as a result of the losses, claims, damages,
liabilities, costs and expenses referred to above shall be deemed to include any
legal or other fees or expenses reasonably incurred by such party in connection
with any investigation or proceeding.
(ii) The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 4.06(b) were determined by
PRO RATA allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately
preceding paragraph. Notwithstanding the provisions of this Section 4.06(b),
an indemnified person shall not be required to contribute any amounts in
excess of the amount by which the total price at which the shares of Common
Stock were sold by such indemnified person and distributed to the public
exceeds the amount of any damages which such indemnified person has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission and provided, however, that a Stockholder's
aggregate liability shall be limited to the net proceeds received by such
Stockholder in such offering. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(iii) If indemnification is available under this Section 4.06, the
Company shall indemnify each indemnified party to the full extent provided
herein without regard to the relative fault of the Company or the indemnified
party or any other equitable consideration provided for in this Section 4.06(b).
(c) UNDERWRITTEN OFFERINGS. In the event of a registration in which
-24-
shares of Common Stock are to be distributed through a firm of underwriters
to the public, the Company will use its reasonable efforts to include in any
underwriting agreement executed in connection therewith the provisions
contained in clauses (a) and (b) of this Section 4.06 and will agree to
provide customary indemnification and contribution provisions in favor of the
underwriters of such registered offering. In the event that any provisions
of an indemnification clause in an underwriting agreement executed by or on
behalf of a holder differs from a provision in this Article IV, such
provision in the underwriting agreement shall determine such holder's rights
in respect thereof. Each Stockholder participating in a registered offering
shall negotiate in good faith with the underwriters for such registered
offering to provide customary indemnification and contribution provisions
relating to such Stockholder in favor of such underwriters in connection
therewith. The Company shall not, and shall not be deemed, to have breached
its obligations under this Article IV if a Stockholder does not participate
in a registered offering due to the failure of such Stockholder to reach an
agreement with respect to such indemnification and contribution provisions
with the underwriters for such registered offering.
4.07 OTHER REGISTRATION RIGHTS. The Company will not grant any person
or entity any demand or piggyback registration rights with respect to any Equity
Securities other than (a) Permitted Registration Rights that would not be
inconsistent with the terms of this Article 4; (b) piggyback registration rights
("NEW PIGGYBACK RIGHTS") and (c) demand registration rights providing for
priority inclusion of shares of Common Stock owned by the holders of such rights
("NEW DEMAND RIGHTS"), provided, however, that such New Piggyback Rights and New
Demand Rights shall be subordinated to the Piggyback Registration rights herein
or the Demand Registration Rights, as the case may be unless (i) each
Stockholder whose Piggyback Registration rights herein or Demand Registration
Rights, as the case may be, would be subordinated to or PARI PASSU with such New
Piggyback Rights or New Demand Rights, as the case may be, shall consent
thereto, or (ii) such New Piggyback Rights or New Demand Rights, as the case may
be, are given in connection with financing provided to the Company and the Board
of Directors of the Company shall decide that the senior or PARI PASSU priority
of the New Piggyback Rights or New Demand Rights, as the case may be, is in the
best interests of the Company. To the extent that the Company grants to any
person or entity registration rights with respect to any securities of the
Company having provisions more favorable to the holders thereof than the
provisions contained in this Agreement, the Company will confer comparable
rights upon the Stockholders under this Agreement, but only while any
Stockholder has the benefit of Section 4.01 or 4.02.
ARTICLE V
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CERTAIN REPRESENTATIONS AND COVENANTS
5.01 STOCKHOLDER REPRESENTATION. (a) Each Stockholder represents and
warrants as to itself that as of the Closing Date (after giving effect to all
transactions occurring on or as of the Closing Date) such Stockholder is not a
party to any other agreement with respect to the holding, voting, acquisition or
disposition of shares of Equity Securities, other than agreements among GEIPPPII
and the Ardshiel Affiliates entered into from time to time.
(b) Each Stockholder represents and warrants as to itself that as of the
date hereof such Stockholder has no plan or intention to sell, transfer or
otherwise dispose of any of its Equity Securities.
5.02 COMPANY REPRESENTATION. The Company represents and warrants that
as of the Closing Date (after giving effect to all transactions occurring on or
as of the Closing Date) (a) it is not a party to any other agreement with
respect to the holding, voting, acquisition or disposition of Equity Securities
except as previously disclosed to the Stockholders, and (b) it has not granted
to any other Person any other registration rights with respect to capital stock
of the Company, and no holder of any capital stock of the Company shall have as
of the date hereof any right to require registration of any capital stock of the
Company under the Securities Act or to include any security in any registration
statement filed by the Company under the Securities Act except pursuant hereto.
5.03 LEGEND ON CERTIFICATES. The following statement shall be
inscribed on all certificates representing Equity Securities or any certificates
received with respect thereto so long as this Agreement is in effect with
respect to the Equity Securities represented by such certificates:
"The securities evidenced by this certificate are
transferable only upon compliance with the applicable
provisions of that certain Stockholders Agreement dated as
of October 2, 1998, and any amendments thereto, by and among
D and W Holdings, Inc. (the "Company") and the persons named
therein, a copy of which is on file at the principal office
of the Company, and any sale, transfer or other disposition
of this certificate in violation of said agreement shall be
invalid.
The securities evidenced by this certificate have not been
registered under the Securities Act of 1933, as amended
-26-
(the "ACT"), or applicable state securities laws. These
securities have been acquired for investment and not with a
view to distribution or resale. No sale, transfer or other
disposition of the securities may be made except in
compliance with the requirements of the Act and such state
securities laws and until the Company is furnished with an
opinion of counsel reasonably satisfactory in form and
substance to the Company to that effect."
5.04 ACTIONS REQUIRING CONSENT OF GEIPPPII. (a) As long as GEIPPPII,
or any Permitted Transferee of GEIPPPII, shall hold any shares of Common Stock
(provided, that clause (xxiv) below shall apply only if GEIPPPII and its
Permitted Transferees hold, in the aggregate, at least 20% of the outstanding
shares of Common Stock on a fully diluted basis), the Company shall not and
shall not permit any direct or indirect subsidiary thereof or joint venture to
which the Company or any subsidiary is a party to undertake the following
actions without the prior written consent of GEIPPPII (or in the event GEIPPPII
ceases to hold any shares of Common Stock, without the prior written consent of
any Permitted Transferee holding not less than 50% of the number of shares of
Common Stock set forth opposite GEIPPPII's name on Schedule II hereto):
(i) create any committee of its Board of Directors, or change the
size or agreed composition of its Board of Directors;
(ii) declare or pay dividends or make other distributions;
(iii) form any direct or indirect subsidiaries or a joint venture
in which the Company or one of its subsidiaries is a party;
(iv) open any additional locations to conduct business other than
locations that consist solely of sales offices;
(v) engage in any new line of business;
(vi) modify its certificate of incorporation, by-laws or other
organizational documents in any respect;
(vii) enter into, or waive or modify (A) any provision of, any
stockholders agreement, registration rights agreement, management agreement or
investment banking agreement or (B) any executive employment agreement, in each
case, in any material respect;
(viii) redeem or repurchase any shares of any class of capital
stock or
-27-
security of the Company, or repurchase or repay any indebtedness prior to its
stated maturity;
(ix) hypothecate, mortgage, pledge, charge or encumber any assets
having a value in the aggregate in excess of $2,000,000 per annum;
(x) borrow or lend aggregate amounts in excess of $2,000,000 or
lesser amounts if outside the ordinary course of business;
(xi) modify or restructure in any material respect the terms of any
indebtedness for borrowed money subject to item (x) above;
(xii) declare bankruptcy, dissolve, voluntarily liquidate or
voluntarily wind-up;
(xiii) enter into any contract or agreement outside the ordinary
course of business which involves aggregate consideration in excess of
$2,000,000 per annum;
(xiv) acquire or dispose of any assets in a single transaction or
series of related transactions for aggregate consideration in excess of
$2,000,000 per annum;
(xv) terminate or retain accountants, or amend or modify its
accounting practices in any material respect;
(xvi) effect any merger, amalgamation, corporate reorganization or
business combination;
(xvii) authorize, create, allot, reserve or issue additional shares
of any class of securities other than in respect of Permitted Common Stock
Rights and securities issued upon the exercise of rights previously approved in
accordance with this clause (xvii);
(xviii) register or offer securities for public sale;
(xix) select an exchange on which any securities shall be listed
or list securities on any exchange;
(xx) assume, guaranty, endorse or otherwise become liable upon the
obligation of any Stockholder or any of their respective Affiliates (other than
a subsidiary of the Company);
-28-
(xxi) purchase or acquire, except in the ordinary course of
business, any property or assets or obligations or stock of or interest in, make
any capital contribution to, or otherwise invest directly or indirectly in, or,
except for expenses of directors of the Company incurred in connection with any
meeting of the Board of Directors of the Company, make loans or advances to, any
Stockholders or any of their respective Affiliates (other than a subsidiary of
the Company);
(xxii) pay or incur any obligation for the payment of salaries,
fees or other remuneration, or change the rate of compensation or other
remuneration, or pay any debts claimed to be owing, directly or indirectly, to
any Stockholder or director of the Company or any of its subsidiaries or to any
firm or corporation in which they have an interest other than (A) the payment to
Ardshiel or its Affiliates of closing fees in connection with the Permitted
Transactions, (B) the payment to Ardshiel or its Affiliates of fees and expenses
under the Investment Agreement and under the Management Agreement; (C) any
employment, management or consulting arrangements made with management of the
Company or directors of the Company; (D) Permitted Common Stock Rights; and
(E) customary fees and expenses of the directors of the Company or any
subsidiary paid in connection with any meeting of the Board of Directors of the
Company or such subsidiary;
(xxiii) enter into any transaction with any Stockholder or any of
their respective Affiliates unless such transaction is on terms no less
favorable to the Company than can be obtained from an unaffiliated third party
other than the payment to Ardshiel of its investment banking fee and management
fees under the Investment Agreement and the Management Agreement; or
(xxiv) adopt any shareholder rights plan (i.e., a so-called "poison
pill") in respect of the capital stock of the Company or any of its
subsidiaries.
(b) Notwithstanding any other provision of this Agreement, the prior
written consent of GEIPPPII shall not be required prior to the taking of the
actions specified in Section 5.03(a)(ix),(x),(xi) or (xiii) if such actions are
required in order to comply with an obligation of the Company or any direct or
indirect subsidiary thereof or joint venture to which the Company or any
subsidiary is a party which (i) pertains to the environment, health or safety
and (ii) is imposed by a foreign, federal, state, local or municipal law,
statute, rule or regulation or pursuant to a judgment, directive, decree, order
or permit of, or binding agreement with, any foreign, federal, state, local or
municipal governmental authority.
(c) The rights granted pursuant to this Section 5.04 shall expire and
be of no further force and effect on and after the Expiration Date.
-29-
5.05 COVENANTS BY THE COMPANY. (a) So long as GEIPPPII or Ardatrium
holds Discount Debentures, the Company shall cause (i) Atrium Companies, Inc.
("ACI"), a wholly owned indirect subsidiary of the Company, to make dividend
payments to Atrium to enable Atrium to make interest and principal payments on,
and to redeem, prepay or repurchase all or a portion of, the Discount Debentures
to the extent ACI has funds legally available for the payment of such dividends
and ACI is not prohibited from making such dividend payments by the terms of any
contract to which it is a party and (ii) Atrium, to the extent Atrium is not
prohibited from doing so by the terms of any contract to which it or ACI is a
party, to pay interest and principal on and to redeem, prepay or repurchase (at
par plus accreted value and unpaid interest) all or a portion of the Discount
Debentures from the proceeds of any such dividend payment.
(b) So long as GEIPPPII or Ardatrium holds any Discount Debentures,
each of GEIPPPII and Ardatrium shall have the right to require the Company to
cause Atrium to register under the Securities Act any or all such Discount
Debentures then held by such noteholder (a "Note Registration Right"). Each of
GEIPPPII and Ardatrium shall have two Note Registration Rights, which rights
shall be on terms similar to, and consistent with those set forth in Article IV
hereof for Common Stock, with such changes as shall be required, in good faith,
to give meaningful effect to this Section 5.05(b).
5.06 COVENANTS BY GEIPPPII AND ARDATRIUM. GEIPPPII agrees that it
will not, in its capacity as a stockholder of the Company, vote in favor of any
amendment to the Certificate of Incorporation or the By-laws of the Company or
any of its subsidiaries if such amendment would conflict with, or be
inconsistent with, the terms of this Agreement (including, without limitation,
any amendment which would increase the number of, or otherwise modify the terms
of, actions requiring the consent of GEIPPPII).
5.07 FOJTASEK INVESTMENT RIGHT. In the event GEIPPPII any Ardshiel
Stockholder or any of such parties' respective affiliates purchases from the
Company, after the date hereof, Equity Securities issued after the date hereof,
Fojtasek and affiliates of his controlled by him shall be entitled to
participate in such investment on a PRO RATA basis (and on the same terms and
conditions as shall apply to GEIPPPII and such Ardshiel Stockholder) based on
the then relative fully diluted ownership interests in Equity Securities of
Fojtasek and any such purchasing holder of Equity Securities. GEIPPPII and/or
any such Ardshiel Stockholder, as the case may be, shall provide Fojtasek with
14 days advanced written notice of the proposed purchase and shall grant to
Fojtasek and affiliates of his controlled by him the right (the "Right") to
subscribe for and purchase such securities to be sold on such terms. The Right
may be exercised by Fojtasek and affiliates of his controlled by him at any time
by written notice to GEIPPPII and/or any such Ardshiel Stockholder, as the case
may be, received by GEIPPPII and/or
-30-
any such Ardshiel Stockholder, as the case may be, within four days after
receipt of notice from GEIPPPII and/or any such Ardshiel Stockholder, as the
case may be, of the proposed purchase, and the closing of the purchase and
sale pursuant to the exercise of the Right shall occur concurrently with the
closing of such proposed purchase. Notwithstanding anything herein to the
contrary, the rights under this Section 5.07 shall not be assigned to any
Person, other than by will or by the laws of descent and distribution,
without the prior written consent of the parties hereto.
ARTICLE VI
MISCELLANEOUS
6.01 INJUNCTIVE RELIEF. The parties acknowledge that it will be
impossible to measure in money the damages that would be suffered if the parties
fail to comply with certain of the obligations imposed on them by this
Agreement, including without limitation those obligations set forth in Article
II, III, IV and V and that in the event of any such failure, an aggrieved Person
will be irreparably damaged and will not have an adequate remedy at law. Any
such Person shall, therefore, be entitled to injunctive relief and/or specific
performance to enforce such obligations, and if any action is brought in equity
to enforce any of such provisions of this Agreement, none of the parties hereto
shall raise the defense that there is an adequate remedy at law.
6.02 FURTHER ASSURANCES. Each party hereto shall do and perform or
cause to be done and performed all such further acts and things and shall
execute and deliver all such other agreements, certificates, instruments and
documents as any other party hereto reasonably may request in order to carry out
the intent and accomplish the purposes of this Agreement.
6.03 GOVERNING LAW; SUBMISSION TO JURISDICTION. This Agreement shall
be construed and enforced in accordance with, and the rights of the parties
shall be governed by, the laws of the State of New York without regard to
principles of conflict of laws. The parties agree to submit to the personal and
exclusive jurisdiction of the state and federal courts serving New York, New
York with respect to the enforcement or interpretation of this Agreement or the
parties' obligations hereunder. Each party hereto irrevocably waives, to the
full extent permitted by law, any objection which it may now or hereafter have
to the laying of the venue of any such proceeding brought in such a court and
any claim that any such proceeding brought in such a court has been brought in
an inconvenient forum. Nothing in this Section shall affect the right of any
party hereto to serve legal process in any manner permitted by law.
6.04 ENTIRE AGREEMENT; AMENDMENT; WAIVER. This Agreement together
with the Investment Agreement and the Letter Agreement constitutes the entire
-31-
agreement among the parties hereto with respect to the subject matter hereof,
supersedes all prior and contemporaneous agreements and understandings, if any,
of the parties with respect thereto, may not be amended or supplemented except
by an instrument or counterparts thereof in writing signed by a duly authorized
representative of (a) the Company, (b) the holders of at least 50% of the
shares of Common Stock then outstanding and (c) so long as the Investment
Agreement has not been terminated pursuant to Section 6.14(b) thereof (other
than as a result of the occurrence of a Key Man Event (as defined in such
Section 6.14(b) thereof)), Ardshiel and Ardwing and, in any such case, may not
be discharged except by such written instrument or by performance. In the event
of any conflict between the provisions of this Agreement and the Investment
Agreement, the provisions of this Agreement shall control. No waiver of any
term or provision of this Agreement shall be effective unless in writing signed
by the party to be charged and such waiver shall not be effective as to any
other provision of this Agreement.
6.05 BINDING EFFECT This Agreement shall be binding on and inure to
the benefit of the parties hereto and, subject to the terms and provisions
hereof, their respective, heirs, administrators, executors, legal
representatives, successors and permitted assigns.
6.06 INVALIDITY OF PROVISION. The invalidity or unenforceability of
any provision of this Agreement in any jurisdiction shall not affect the
validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of this Agreement, including that
provision, in any other jurisdiction.
6.07 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, all of which taken together shall be deemed one and the same
instrument.
6.08 NOTICES. All notices and other communications given or made
hereunder shall be in writing and, unless otherwise provided herein, shall be
deemed to have been given when received by the party to whom such notice is to
be given at its address set forth on the signature pages hereto, or such other
address for the party as shall be specified by notice given pursuant hereto.
6.09 HEADINGS. The descriptive headings of the several sections of
this Agreement are inserted for convenience only and do not constitute part of
this Agreement.
6.10 FAILURE TO DELIVER STOCK. In the event that a Stockholder having
become obligated to sell Equity Securities or Discount Debentures hereunder
shall fail to deliver such securities in accordance with the terms of this
Agreement, the purchaser of
-32-
such securities may, at its option, in addition to all other remedies such
purchaser may have, send to the selling Stockholder by registered mail,
return receipt requested, the purchase price for such securities as is herein
above specified and notify the Company of such action. Following receipt of
such notice, the Company, upon written notice to the selling Stockholder, (i)
shall cancel on its books the certificate or certificates representing the
shares of stock to be sold, (ii) shall issue, in lieu thereof, a new
certificate in the name of the purchaser representing such securities and
(iii) shall deliver such new certificate or certificates to the purchaser,
and thereupon all of the selling Stockholder's rights in and to said
securities shall terminate.
6.11 PROXY. Hambro hereby appoints Ardshiel as its attorney-in-fact
and proxy to attend any and all meetings of the Stockholders, to vote all shares
of Common Stock owned by Hambro, to give or withhold a written consent in
connection with any consent solicitation, to take any action or exercise any
rights under this Agreement and to represent and otherwise to act for Hambro in
the same manner and with the same effect as if done by Hambro in connection with
the submission to the Stockholders of any matter, in each case, including,
without limitation, in connection with any decision to sell, transfer or
otherwise dispose of any Equity Securities and in effectuating any such sale,
transfer or disposition. This proxy shall be deemed to be coupled with an
interest and is irrevocable and shall remain in effect until the termination of
this Agreement in accordance with its terms. Hambro authorizes Ardshiel to
substitute any other person to act hereunder, to revoke any substitution and to
file this proxy and any substitution or revocation with the Secretary of the
Company. Hambro shall execute such instruments as Ardshiel may request in order
to evidence the granting of this proxy.
6.12 PAYMENT OF FEES. The Stockholders acknowledge and agree that the
fees and expenses of certain initial Stockholders, including without limitation,
legal fees and expenses incurred in connection with the Permitted Transactions,
may be paid by the Company.
6.13 TERMINATION OF PRIOR STOCKHOLDER AGREEMENTS. Each Stockholder (a)
acknowledges that each of (i) the Equityholders' Agreement dated as of October
25, 1996 of Wing Industries Holdings, Inc. and (ii) the Investors Agreement
dated January 9, 1998 of Door Holdings, Inc., to which it is a party is
terminated and of no further force and effect and (b) agrees that it has no
prior or future rights thereunder.
6.14 CONSENTS TO PERMITTED TRANSACTIONS. Each Stockholder hereby
consents to the Permitted Transactions.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first above written.
D AND W HOLDINGS, INC.
By:
----------------------------
Name:
Title:
Notice Information:
STOCKHOLDERS:
ARDATRIUM L.L.C.
By:
----------------------------
Name:
Title:
Notice Information:
Ardatrium L.L.C.
c/o Ardshiel, Inc.
230 Park Avenue
Suite 2527
New York, New York 10169
ARDDOOR L.L.C.
By:
----------------------------
Name:
Title:
Notice Information:
Arddoor L.L.C.
c/o Ardshiel, Inc.
230 Park Avenue
Suite 2527
New York, New York 10169
ARDSHIEL, INC.
By:
----------------------------
Name:
Title:
Notice Information:
Ardshiel, Inc.
230 Park Avenue
Suite 2527
New York, New York 10169
ARDWING LLC
By:
----------------------------
Name:
Title:
Notice Information:
Ardwing L.L.C.
c/o Ardshiel, Inc.
230 Park Avenue
Suite 2527
New York, New York 10169
GE INVESTMENT PRIVATE PLACEMENT
PARTNERS II, A LIMITED PARTNERSHIP
By: GE INVESTMENT MANAGEMENT INCORPORATED,
its general partner
By:
----------------------------
Name:
Title:
Notice Information:
GE Investment Private Placement Partners II
c/o GE Investment Management Incorporated
3003 Summer Street
Stamford, Connecticut 06904
J O HAMBRO CAPITAL MANAGEMENT
LIMITED - ISLE OF MAN ACCOUNT 2
By: J O HAMBRO CAPITAL MANAGEMENT LIMITED
By:
----------------------------
Name:
Title:
Notice Information:
J O Hambro Capital Management Limited - Isle of Man Account 2
c/o J O Hambro Capital Management Limited
10 Park Place
London SWIA 11P
NORTH ATLANTIC SMALLER COMPANIES
INVESTMENT TRUST
By:
----------------------------
Name:
Title:
Notice Information:
North Atlantic Smaller Companies Investment Trust
J O Hambro Capital Management Limited
10 Park Place
London SWIA 11P
RANDALL S. FOJTASEK
- -------------------------------
Notice Information:
WING PARTNERS, L.P.
By: ARDWING LLC, its general partner
By:
----------------------------
Name:
Title:
Notice Information:
Wing Partners, L.P.
c/o Ardshiel, Inc.
230 Park Avenue
Suite 2527
New York, New York 10169
SCHEDULE I
ISSUED AND OUTSTANDING SECURITIES
SCHEDULE II
OWNERSHIP OF SECURITIES
Aggregate
Principal Amount
Number of Shares of at Maturity of 12%
Common Stock Discount
of the Company Debentures of
Name of Stockholder Atrium
- ------------------- ------------------- ------------------
Ardatrium L.L.C. 500,000 shares $200,000
Arddoor L.L.C. 146,962 shares
Ardshiel, Inc. 182 shares
Ardwing LLC 51,364 shares
GE Investment Private
Placement Partners II,
a Limited Partnership 92,970,561 shares $19,800,000
Bank of Scotland - Isle
of Man Account 2 118,755 shares
North Atlantic Smaller
Companies
Investment Trust 673,189 shares
Wing Partners, L.P. 1,120,525 shares
Randall S. Fojtasek 0 shares
SCHEDULE III
CERTAIN AGREEMENTS
Investment Agreement, dated as of June 24, 1997, by and between GE Investment
Management Incorporated and Ardshiel, as amended, amended and restated or
otherwise modified in accordance with its terms
Management Agreement, dated the date hereof, by and between Ardshiel and the
Company, as amended, amended and restated or otherwise modified in accordance
with its terms
Amendment Number Two to Indenture, dated the date hereof, among the Company,
WIH, Wing, Door, Darby, Total Trim and Trustee
Indemnification Escrow Agreement, dated as of October 2, 1998, by and among
Hicks, Muse Fund III, Incorporated, D and W Holdings, Inc. and Norwest Bank
Texas, NA
Amendment to Certificate of Incorporation of Door to increase capital stock
Employment Agreement and Warrant by and among D and W Holdings, Inc., Randall
Fojtasek and Atrium Companies, Inc.
Employment Agreement by and among D and W Holdings, Inc., Jeff L. Hull and
Atrium Companies, Inc.
Employment Agreement by and among D and W Holdings, Inc., Ken Gilmer and Wing
Industries, Inc.
Employment Agreement by and between Wing Industries, Inc. and Michael Quadhamer
Amendment to Employment Agreement by and between Wing Industries, Inc. and Sam
A. Wing
Amendment to Employment Agreement by and between Wing Industries, Inc. and
Robert Pischke
- ------------
(1) This agreement will not be signed as of closing; it will, however, be
permitted for post-closing purposes.
Employment Agreement for Michael Flores(1)
Extension of Employment Agreement for Douglas McMillan (Super Millwork,
Inc.)(2)
Extension of Employment Agreement for Sanford Lavitt (Super Millwork, Inc.)(3)
Buy-Sell Agreements with Cliff Darby, Jimmy Darby, James McDonald, John F.
Darby, Jr., Robert Tyree, Stuart Sockwell, Ken Gilmer, Mike Quadhamer, Bob
Pischke, Greg Yates, Jim Wright, Ed Beachley, Jamey Renfrow, Mike Driscoll, Bob
Wolf, Hershal Hicks, Fred Bengston, Mike Easterly, Bob Deakin, Martin Cook,
Scott McGill, Tom Bowen, Pete Ziegler, Al Ashe, Jim McGlinn, Tom LaManna, Rich
Kettle, John Craine
D and W Holdings, Inc. Warrant for 4,735,369 shares for Randall Fojtasek
D and W Holdings, Inc. Exchange Warrant for 1,000,000 shares for Randall
Fojtasek
D and W Holdings, Inc. 1998 Stock Option Plan
D and W Holdings, Inc. Option Agreements in exchange for existing WIH or Door
options with Ken Gilmer, Mike Quadhamer, Bob Pischke, Sandy Lavitt, Doug
MacMillan, Mike Flores, Tim Tarabe, Bryan Geary, Terry Tharnish, Jay Landem,
Darren Braddy, Tom Kahn, Randy Tschiggine, Gary Reiber, Rich Rock, Lou Petix,
Jeff Wharton, Jeff Pischke, Dan Luckett, Steve Mobley, Kathi Perry, Jeanette
Dazo, Charis Avery, Jeannie Fogarty, Rosie Apodaca, Sam Wing, III, Paul Archer,
Dan Cook, Chuck Stephens, Kim Henderson, Duane Powell, Frank Blanchard, Cliff
Darby, Robert Tyree, Stuart Sockwell, Jimmy McDonald, John Darby, Jimmy Darby
D and W Holdings, Inc. Options with Ken Gilmer, Mike Quadhamer, Bob Pischke,
Sandy Lavitt, Doug MacMillan, Mike Flores, Tim Tarabe, Bryan Geary, Terry
Tharnish, Jay Landem, Darren Braddy, Tom Kahn, Randy Tschiggine, Gary Reiber,
Rich Rock, Lou Petix, Jeff Wharton, Cliff Darby, Greg Yates, Don Daly, Vickie
Dunn, Goodloe
- ------------
(1) This agreement will not be signed as of closing; it will, however, be
permitted for post-closing purposes.
(2) This agreement will not be signed as of closing; it will, however, be
permitted for post-closing purposes.
(3) This agreement will not be signed as of closing; it will, however, be
permitted for post-closing purposes.
Pride, Chuck Westmorland, Dan Douthit, Patricia Murphy, Calvin Stanford, Jeff
Hull, Eric Long, Jill Anderson, Lou Simi, Russell Fojtasek, Jim Wright James
Gresham, George Frost, Ed Beachley, Jamey Renfrom, Mike Driscoll, Billy
Robinson, Horace Hicks, Bob Wolf, Hershal Hicks, Fred Bengston, Mike Easterly,
Bob Deakin, Martin Cook Scott McGill, Tom Bowen, Pete Ziegler, Al Ashe, Jim
McGlinn, Tom LaManna, Mike Hillmeyer, Rich Kettle, Dow Pointer, John Craine
D and W Holdings, Inc. Replacement Stock Option Plan
D and W Holdings, Inc. Replacement Options with Jeff Hull, Eric Long, Jill
Anderson, Lou Simi, Russell Fojtasek, Jim Wright James Gresham, George Frost, Ed
Beachley, Mike Driscoll, Billy Robinson, Horace Hicks, Fred Bengston, Mike
Easterly, Bob Deakin, Martin Cook Scott McGill, Tom Bowen, Pete Ziegler, Al
Ashe, Jim McGlinn, Tom LaManna, Mike Hillmeyer, Rich Kettle, Dow Pointer, John
Craine
Intercompany Note, dated as of the date hereof, made by Atrium Corporation in
favor of Atrium Companies, Inc.
Amended and Restated Stock Pledge and Security Agreements with respect to each
of the Amended and Restated Purchase Notes for each of Ken Gilmer, Michael
Quadhamer and Robert Pischke
Amended and Restated Purchase Note with respect to Ken Gilmer
Amended and Restated Purchase Note with respect to Michael Quadhamer
Amended and Restated Purchase Note with respect to Robert Pischke
Contribution and Subscription Agreement, dated as of October 2, 1998, by and
among Door Holdings, Inc., GEIPPPII and Arddoor
Contribution and Subscription Agreement, dated as of October 2, 1998, by and
among Wing Industries Holdings, Inc., D and W Holdings, Inc., GEIPPPII, Ardsheil
and Ardwing
Agreement of contribution of $50 million by D and W Holdings, Inc. to D and W
Acquisition Corp., dated as of October 2, 1998
Agreement of contribution of Wing and Door Common Stock by Wing and Door
stockholders to D and W Holdings, Inc., dated as of October 2, 1998
Agreement of contribution of Wing and Door Common Stock by D and W Holdings,
Inc. to Atrium, dated as of October 2, 1998
Agreement of contribution of Wing and Door Common Stock by Atrium Corp. to
Atrium Companies, Inc., dated as of October 2, 1998
Option Agreement, dated as of October 2, 1998, by and among Ardshiel, Ardwing,
Arddoor and Ardatrium
Amended and Restated Restricted Stock Agreement
Change of Control Offer to Purchase