Exhibit 2.7
FIRST AMENDMENT TO
STOCK PURCHASE AGREEMENT
This FIRST AMENDMENT TO STOCK PURCHASE AGREEMENT (this
"Amendment") is made as of May 17, 1999, among Atrium Companies, Inc., a
Delaware corporation ("BUYER"), and David Rascoe, Todd Rascoe, Brian Warren,
Gary Petitclerc and Evan Kaffenes (collectively, the "ROLLING OPTIONHOLDERS").
RECITALS
WHEREAS, Heat, Inc. ("HEAT"), its Shareholders and Optionholders
(including the Rolling Optionholders), H.I.G. Vinyl, Inc., a Cayman Island
corporation, H.I.G. Investment Fund, L.P., a Cayman Island limited partnership,
H.I.G. Capital Management, Inc., a Delaware corporation and Buyer, have entered
into that certain Stock Purchase Agreement, dated April 20, 1999 (the "STOCK
PURCHASE AGREEMENT"), pursuant to which Buyer will acquire all of the issued and
outstanding capital stock and options of Heat and H.I.G. Vinyl, Inc., a Delaware
corporation, which includes the options (the "Heat Options") to acquire shares
of Heat's Class A Common Stock, par value $.01 per share (the "HEAT COMMON
STOCK"), held by the Rolling Optionholders.
WHEREAS, Section 11.05 and Section 13.10 of the Stock Purchase
Agreement contemplate that the Stock Purchase Agreement may be amended solely by
the parties hereto to provide that some or all of the Heat Options held by the
Rolling Optionholders may be exchanged for options (the "D&W OPTIONS") to
purchase common stock, par value $0.01 per share, of D and W Holdings, Inc., a
Delaware corporation and the ultimate parent company of Buyer ("D&W"), rather
than cash.
WHEREAS, the parties hereto have determined that it is in their
best interests to amend the Stock Purchase Agreement.
NOW, THEREFORE, in consideration of the mutual promises,
agreements and covenants set forth herein and in the Stock Purchase Agreement
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto, intending legally to be bound,
agree as follows:
1. DEFINED TERMS. Capitalized terms used and not defined herein
shall have the respective meanings ascribed to them in the Stock Purchase
Agreement.
2. AMENDMENT AND ACKNOWLEDGMENT TO STOCK PURCHASE AGREEMENT.
(a) The first sentence of Section 1.01 of the Stock Purchase
Agreement shall be deleted in its entirety and replaced with the following:
THE AGGREGATE CONSIDERATION TO BE DELIVERED BY BUYER SHALL BE (I) AN
AMOUNT IN CASH EQUAL TO (A) THE AGGREGATE EQUITY PRICE MINUS (B) THE
AGGREGATE ROLLED AMOUNT, AND (II) SECURITIES TO BE DELIVERED TO ROLLING
OPTIONHOLDERS, REPRESENTING THE AGGREGATE ROLLED AMOUNT.
(b) Section 1.04(a) shall be deleted in its entirety and replaced
with the following:
THE PURCHASE PRICE FOR EACH OF THE ISSUED AND OUTSTANDING OPTIONS FROM
THE OPTIONHOLDERS SHALL BE AN AMOUNT, IN CASH OR, IN THE CASE OF
ROLLING OPTIONHOLDERS, SECURITIES, EQUAL TO THE PER SHARE PURCHASE
PRICE MINUS THE EXERCISE PRICE FOR SUCH OPTION (THE "PER OPTION
PURCHASE PRICE").
(c) Section 1.07(b)(i) shall be deleted in its entirety and
replaced with the following:
BUYER SHALL (A) DELIVER TO THE SHAREHOLDER REPRESENTATIVE (ON BEHALF OF
THE SHAREHOLDERS (OTHER THAN VINYL), THE OPTIONHOLDERS (OTHER THAN THE
ROLLING OPTIONHOLDERS IN RESPECT OF ANY ROLLED AMOUNTS) AND H.I.G.
CAYMAN) AN AMOUNT IN CASH EQUAL TO THE ESTIMATED AGGREGATE EQUITY PRICE
DETERMINED PURSUANT TO SECTION 1.06(A), MINUS THE DEPOSIT AND THE
DEPOSIT INTEREST, BY WIRE TRANSFER OF IMMEDIATELY AVAILABLE FUNDS TO
THE ACCOUNT DESIGNATED BY THE SHAREHOLDER REPRESENTATIVE TO BUYER PRIOR
TO THE CLOSING, AND (B) DELIVER TO THE ROLLING OPTIONHOLDERS SECURITIES
REPRESENTING THEIR RELEVANT ROLLED AMOUNTS, AS DESCRIBED IN SECTION
2(E) OF AMENDMENT NO. 1.
(d) Section 5.08 shall be deleted in its entirety and replaced
with the following:
TO THE EXTENT BUYER HAS OBTAINED THE DEBT FINANCING DESCRIBED IN THE
FINANCING LETTER, BUYER HAS, AND SHALL HAVE AT THE CLOSING, SUFFICIENT
CASH AND AVAILABLE CREDIT FACILITIES (AND HAS PROVIDED EVIDENCE THEREOF
SATISFACTORY TO THE SHAREHOLDER REPRESENTATIVE), TO PAY THE FULL
CONSIDERATION PAYABLE TO THE SHAREHOLDERS (OTHER THAN VINYL), THE
OPTIONHOLDERS AND H.I.G. CAYMAN HEREUNDER, TO MAKE ALL OTHER NECESSARY
PAYMENTS BY IT IN CONNECTION WITH THE PURCHASE OF THE SHARES, THE VINYL
SHARES AND THE OPTIONS AND TO PAY ALL OF ITS
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RELATED FEES AND EXPENSES; PROVIDED HOWEVER, THAT, IN DETERMINING SUCH
SUFFICIENCY, THE AGGREGATE ROLLED AMOUNT SHALL BE EXCLUDED FROM THE
CALCULATION OF CONSIDERATION PAYABLE, SO LONG AS SUCH AGGREGATE ROLLED
AMOUNT IS PAID FOR WITH THE ISSUANCE OF SECURITIES.
(e) Each Rolling Optionholder acknowledges and agrees that,
notwithstanding the provisions of Section 1.04 of the Stock Purchase Agreement:
(i) such Rolling Optionholder will not be eligible to
receive a portion of the Aggregate Equity Price in cash from Buyer in
the manner set forth in Section 1.04 of the Stock Purchase Agreement in
exchange for the Options set forth beside such Rolling Optionholder's
name on EXHIBIT A hereto (the "Rolled Options"); and
(ii) to the extent that such Rolling Optionholder is not
eligible to receive a portion of the Aggregate Equity Price in cash
from Buyer as contemplated by Section 1(b)(i) of this Amendment, such
Rolling Optionholder shall receive D&W Options, as set forth in, and
subject to the terms and conditions of, the D and W Holdings, Inc.
Replacement Stock Option Plan and the Replacement Stock Option
Agreement to be entered into by and between D&W and such Rolling
Optionholder.
3. DEFINITIONS. Section 12.01 of the Stock Purchase Agreement
shall be amended by inserting the following new defined terms in the appropriate
alphabetical order:
"AGGREGATE EQUITY PRICE" shall be an amount equal to (a)
$85,000,000 PLUS (b) the aggregate amount of cash and cash equivalents
held by the Company as of the Closing Date (the "CLOSING CASH") MINUS
(c) the outstanding amount of the Indebtedness as of the Closing to be
paid by Buyer pursuant to Section 1.07(b)(v) (the "CLOSING DEBT") MINUS
(d) the Escrow Amount MINUS (e) $32,500, which represents the cash
amount of the Special Bonus Awards granted pursuant to the letters
dated February 12, 1999 to Thomas Warren, Michael Lane and Gerald Fiano
(collectively, the "Bonuses") MINUS (f) the outstanding amount of
capitalized lease obligations as of the Closing Date (the "CAPITALIZED
LEASE OBLIGATIONS") MINUS (g) any outstanding amounts owed in
connection with any agreements with Computer Associates International,
Inc., to the extent such obligations are not paid in full, as of the
Closing Date (the "OUTSTANDING COMPUTER ASSOCIATES DEBT").
"AGGREGATE ROLLED AMOUNT" means the aggregate Rolled Amounts
of all Rolling Optionholders.
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"AMENDMENT NO.1" means the First Amendment to Stock Purchase
Agreement, dated as of May 17, 1999, by and among Buyer and the
individuals set forth therein.
"ROLLED AMOUNT" means, with respect to each Rolling Optionholder,
the amount equal to the product obtained when the number of shares of
Heat Class A Stock issuable upon the exercise of Rolled Options
immediately prior to the Closing Date, whether at or upon the passage
of time or the occurrence of future events, is multiplied by an amount
equal to the Per Option Purchase Price of such Rolled Option.
"ROLLING OPTIONHOLDER" has the meaning set forth in the
preamble of Amendment No. 1.
4. FURTHER ASSURANCES. From time to time, as and when requested
by any party hereto and at such party's expense, either before or after the
Closing, any other party shall execute and deliver, or cause to be executed and
delivered, all such documents and instruments and shall take, or cause to be
taken, all such further or other actions as such other party may reasonably deem
necessary or desirable to evidence and effectuate the transactions contemplated
by this Amendment.
5. AMENDMENT AND WAIVER. Any provision of this Amendment or the
Exhibits hereto may be amended or waived only in writing signed by Buyer and the
other parties hereto; provided, that if any amendment or waiver adversely
affects any party hereto in any material respect that does not affect all other
parties hereto, such amendment or waiver shall require the consent of the first
party. No waiver of any provision hereunder or any breach or default thereof
shall extend to or affect in any way any other provision or prior or subsequent
breach or default. The Stock Purchase Agreement, as amended hereby, is hereby
ratified and confirmed in all respects and shall continue in full force and
effect.
6. SEVERABILITY. Whenever possible, each provision of this
Amendment shall be interpreted in such manner as to be effective and valid under
present or future applicable law, but if any provision of this Amendment is held
to be prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Amendment.
7. COUNTERPARTS. This Amendment may be executed in multiple
counterparts, any one of which need not contain the signatures of more than one
party, but all such counterparts taken together shall constitute one and the
same instrument.
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8. COMPLETE AGREEMENT. This Amendment, the Stock Purchase
Agreement, and the documents referred to therein (including the Confidentiality
Agreement) contain the complete agreement between the parties hereto and merge
and supersede any prior understandings, agreements or representations by or
between the parties, written or oral, which may have related to the subject
matter hereof in any way, including, without limitation, the Letter of Intent,
dated March 1, 1999.
9. GOVERNING LAW. This Amendment and all matters relating to the
interpretation, construction, validity and enforcement of this Amendment shall
be governed by and construed in accordance with the domestic laws of the State
of New York without giving effect to any choice or conflict of law provision or
rule (whether of the State of New York or any other jurisdiction) that would
cause the application of laws of any jurisdiction other than the State of New
York. The parties hereto agree to submit to the personal and exclusive
jurisdiction of the state and federal courts serving Pittsburgh, Pennsylvania
with respect to the enforcement or interpretation of this Amendment or the
parties' obligations hereunder. Each party hereto irrevocably consents to the
service of any and all process in any action or proceeding by the mailing of
copies of such process by registered or certified mail to such party hereto to
serve legal process in any other manner permitted by law. 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.
10. ASSIGNMENT. This Amendment and all of the provisions hereof
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, except that neither this Amendment
nor any of the rights, interests or obligations hereunder may be assigned or
delegated by either party without the prior written consent of all other
parties. Notwithstanding the foregoing, (a) Buyer may assign or delegate any or
all of its rights or obligations under this Amendment to any Affiliate of Buyer,
and (b) nothing in this Agreement shall limit Buyer's ability to make a
collateral assignment of its rights under this Amendment to any institutional
lender that provides funds to Buyer, without the consent of the other parties
hereto; provided, however, that unless written notice is given to the other
parties hereto, that any such collateral assignment has been foreclosed upon,
such other parties shall be entitled to deal exclusively with Buyer as to any
matters arising under this Amendment or the transactions contemplated by this
Amendment. In the event of such an assignment, the provisions of this Amendment
shall insure to the benefit of, and be binding upon, the assigns of Buyer.
11. NO STRICT CONSTRUCTION. The language used in this Amendment
shall be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction shall be applied against any
Person. The section headings
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herein have been inserted for convenience of reference only and shall in no way
modify or restrict the terms and provisions hereof.
12. EXHIBITS. All Exhibits referred to in this Amendment are
intended to be and are hereby specifically made a part of this Amendment.
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IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Amendment as of the date and year first above written.
ATRIUM COMPANIES, INC.
By: /s/ JEFF L. HULL
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Name: Jeff L. Hull
Title: Executive Vice President
Chief Financial Officer
Treasurer and Secretary
ROLLING OPTIONHOLDERS:
/s/ DAVID RASCOE
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David Rascoe
/s/ TODD RASCOE
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Todd Rascoe
/s/ BRIAN WARREN
---------------------------------------
Brian Warren
/s/ GARY PETITCLERC
---------------------------------------
Gary Petitclerc
/S/ EVAN KAFFENES
---------------------------------------
Evan Kaffenes
EXHIBIT A
Rolled Replacement
Name Heat Options D&W Options
---- ------------ -----------
DAVID RASCOE 8,062 319,149
TODD RASCOE 4,031 159,574
BRIAN WARREN 2,567 63,830
GARY PETITCLERC 1,612 79,787
EVAN KAFFENES 4,459*/ 53,191
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*/ With an exercise price of $30.00