Exhibit 10.16
EXECUTIVE
SUBSCRIPTION AGREEMENT
AND
POWER OF ATTORNEY
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CPG International Holdings LP
c/o AEA Investors LLC
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Attention: General Counsel
Re: Form of Subscription for [Class B-1/Class B-2] Limited
Partnership Interests in CPG International Holdings LP
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Ladies and Gentlemen:
1) Subscription.
(a) Contribution. The undersigned (the "Subscriber") irrevocably and
unconditionally subscribes for and agrees to purchase [Class B-1/Class
B-2] Units of limited partnership interests (the "Interests") in CPG
International Holdings LP (the "Partnership"). The sale by the
Partnership of the Interests is in consideration of the Subscriber's
agreement to contribute capital to the Partnership in the amount and
type set forth on Schedule 1 hereto on the terms and conditions
described herein and in the Agreement of Limited Partnership, dated as
of May 10, 2005, as amended in January 2007 and February 2008 (the
"Partnership Agreement") supplied herewith. Capitalized terms used
herein have the meanings given to them in the Partnership Agreement
unless otherwise defined herein. The Subscriber's obligation to pay
for the Interests shall be complete and binding upon the execution of
this Subscription Agreement and the Subscriber's Capital Contribution
shall be payable as directed by CPH Holding I LLC, the General Partner
of the Partnership.
(b) Delivery of Subscription Agreement. The Subscriber hereby delivers
one executed copy of this Subscription Agreement to the Partnership,
c/o AEA Investors LLC, ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: _____________.
(c) Acceptance. This Subscription Agreement is subject to the
acceptance of the General Partner. The General Partner reserves the
right to accept or reject any subscription or any portion thereof.
Upon such acceptance, this Subscription Agreement shall become a
binding agreement between the Partnership and the Subscriber.
(d) Closing. The closing of the issuance of the Interests shall occur
on or about _____________, or on such other date as the General
Partner of the Partnership, in its sole discretion may determine (the
"Closing Date").
(e) Purpose. The terms of this Subscription Agreement and any similar
agreements are intended to increase the Partnership's ability to
attract and retain individuals of exceptional managerial talent upon
whom, in large measure, the sustained progress, growth and
profitability of the Partnership's business depends.
(f) Adoption of Partnership Agreement. From and after the Closing
Date, the Subscriber hereby adopts, accepts, and agrees to be bound by
all terms and conditions of the Partnership Agreement and to perform
all obligations therein imposed upon the Subscriber in his capacity as
a Limited Partner of the Partnership, including, but not limited to,
the optional redemption rights in Article 8 thereof, except as
specifically modified herein.
2) Subscriber Representations, Warranties and Agreements.
(a) In connection with the purchase and sale of the Interests
hereunder, the Subscriber represents and warrants to, and agrees with,
the Partnership that:
(i) the Interests to be acquired by Subscriber pursuant to this
Subscription Agreement will be acquired for Subscriber's own account
and not with a view to, or intention of, distribution thereof in
violation of the Securities Act of 1933, as amended (the "Securities
Act"), or any applicable state securities laws, and the Interests will
not be disposed of in contravention of the Securities Act or any
applicable state securities laws;
(ii) the Subscriber is an "accredited investor" as defined in
Rule 501 of the Securities Act;
(iii) the Subscriber is able to bear the economic risk of his
investment in the Interests for an indefinite period of time because
the Interests have not been registered under the Securities Act and,
therefore, cannot be sold unless subsequently registered under the
Securities Act or an exemption from such registration is available;
(iv) the Subscriber has had an opportunity to ask questions and
receive answers concerning the terms and conditions of the offering of
Interests and has had full access to such other information concerning
the Partnership and any of its subsidiaries as he has requested;
(v) this Subscription Agreement constitutes the legal, valid and
binding obligation of the Subscriber, enforceable in accordance with
its terms, and the execution, delivery and performance of this
Subscription Agreement by the Subscriber does not and will not
conflict with, violate or cause a breach of any agreement, contract or
instrument to which the Subscriber is a party or any judgment, order
or decree to which the Subscriber is subject; and
(vi) the Subscriber is a resident of the State set forth beneath
the Subscriber's name on the signature page hereto.
(b) As an inducement to the Partnership to issue the Interests to the
Subscriber, and as a condition thereto, the Subscriber acknowledges
and agrees that neither the issuance of the Interests to the
Subscriber nor any provision contained herein shall entitle the
Subscriber to remain in the employment of the Partnership or any of
its subsidiaries or affect the right of the Partnership or any of its
subsidiaries to terminate the Subscriber's employment at any time for
any reason.
(c) The Subscriber acknowledges that he may not sell, transfer,
assign, pledge, dispose of, grant a security interest in, mortgage,
hypothecate, encumber or permit or suffer any encumbrance on all or
any portion of the Subscriber's Interests including any interest in
the profits or capital of the Partnership (the commission of any such
act, or any such similar act in relation to a person's beneficial
interest in the Partnership being referred to as a "Transfer"), unless
the General Partner consents to the Transfer in writing and the
Transfer is registered under the Securities Act or an exemption from
such registration is available. The Subscriber also understands that
the Transfer of such Subscriber's Interests is restricted by the
provisions of the Partnership Agreement and state securities laws.
3) Additional Contributions. If the Subscriber makes any additional Capital
Contributions in respect of [Class B-1/Class B-2] Units at any time, this
Subscription Agreement will be deemed to be amended to include such
additional contributions and all representations and warranties made by the
Subscriber herein will be deemed repeated with respect to such additional
contribution as of the date such contribution is made. The foregoing
representations, warranties and agreements shall survive the date hereof.
4) Right of Optional Redemption. The Partnership shall have the right to
redeem the Interests held by the Subscriber, in whole or in part, within
120 days of the date that the Subscriber's employment is terminated , as
follows:
(a) If the Subscriber's employment is terminated on or before
__________, _____, then the Partnership shall be entitled to redeem up
to 100% of the Subscriber's Interests at a redemption price equal to
the lesser of (i) the aggregate Capital Contributions made in respect
of such Interests and (ii) the Fair Market Value of the Subscriber's
Interests.
(b) If the Subscriber's employment is terminated on or before
__________, _____, then the Partnership shall be entitled to redeem up
to 75% of the Subscriber's Interests at a redemption price equal to
the lesser of (i) the aggregate Capital Contributions made in respect
of such Interests and (ii) the Fair Market Value of the Subscriber's
Interests, and up to 25% of the Subscriber's Interests at a redemption
price equal to the Fair Market Value of such Interests.
(c) If the Subscriber's employment is terminated on or before
__________, _____, then the Partnership shall be entitled to redeem up
to 50% of the Subscriber's Interests at a redemption price equal to
the lesser of (i) the aggregate Capital Contributions made in respect
of such Interests and (ii) the Fair Market Value of the Subscriber's
Interests, and up to 50% of the Subscriber's Interests at a redemption
price equal to the Fair Market Value of such Interests.
(d) If the Subscriber's employment is terminated on or before
__________, _____, then the Partnership shall be entitled to redeem up
to 25% of the Subscriber's Interests at a redemption price equal to
the lesser of (i) the aggregate Capital Contributions made in respect
of such Interests and (ii) the Fair Market Value of the Subscriber's
Interests, and up to 75% of the Subscriber's Interests at a redemption
price equal to the Fair Market Value of such Interests.
(e) If the Subscriber's employment is terminated after __________,
_____, then the Partnership shall be entitled to redeem up to 100% of
the Subscriber's Interests at a redemption price equal to the Fair
Market Value of such Interests.
(f) Notwithstanding the foregoing clauses (a) through (e) hereof, if
the Subscriber's employment is terminated for Cause at any time, then
the Partnership shall be entitled to redeem up to 100% of the
Subscriber's Interests at a redemption price equal to the lesser of
(i) the aggregate Capital Contributions made in respect of such
Interests and (ii) the Fair Market Value of such Interests.
(g) For purposes of Section 6.7 of the Partnership Agreement, if the
Subscriber reasonably disagrees with the General Partner's
determination of Fair Market Value, the Subscriber shall deliver to
the General Partner a written notice of objection within thirty days
after delivery of the General Partner's determination. Upon receipt of
the Subscriber's written notice of objection, the General Partner and
the Subscriber will negotiate in good faith to agree on such Fair
Market Value. If such agreement is not reached within 45 days after
the delivery of the General Partner's determination, Fair Market Value
shall be determined by an appraiser jointly selected by the General
Partner and the Subscriber, which appraiser shall submit to the
General Partner and the Subscriber a report within 30 days of its
engagement setting forth such determination. If the Subscriber and the
General Partner are unable to agree on an appraiser within 45 days
after delivery of the General Partner's determination, within seven
days, the Subscriber and the General Partner shall submit the names of
four nationally recognized firms that are engaged in the business of
valuing non-public securities, and the Subscriber and the General
Partner shall be entitled to strike two names from the other party's
list of firms, and the appraiser shall be selected by lot from the
remaining four firms. The expenses of such appraiser shall be borne by
the Subscriber unless the appraiser's valuation is more than 10%
greater than the amount determined by the General Partner, in which
case, the expenses of the appraiser shall be borne by the Companies.
The determination of such appraiser as to Fair Market Value shall be
final and binding upon all parties.
5) Power of Attorney. The Subscriber, as principal, hereby appoints the
General Partner as its true and lawful representative and attorney-in-fact,
in its name, place and stead to make, execute, sign, deliver, acknowledge,
swear to and file:
(a) the Partnership Agreement and thereby to cause the Subscriber to
become a limited partner of the Partnership;
(b) any amendment to the Partnership Agreement duly approved as
provided therein; and
(c) any partnership certificate, business certificate, fictitious name
certificate, amendment thereto, or other instrument or document of any
kind necessary or desirable to accomplish the business, purpose and
objectives of the Partnership, or required by any applicable Federal,
state or local or foreign law.
(d) This power of attorney is coupled with an interest, is
irrevocable, and shall survive and shall not be affected by, the
subsequent death, disability, incompetency, termination, bankruptcy,
insolvency or dissolution of the undersigned; provided, however, that
this power of attorney will terminate upon the substitution of another
Limited Partner for all of the undersigned's interest in the
Partnership and upon the complete withdrawal of the undersigned from
participation in the Partnership.
6) Miscellaneous.
(a) Modification. Neither this Subscription Agreement nor any
provisions hereof shall be waived, modified, changed, discharged, or
terminated except by an instrument in writing signed by the party
against whom any waiver, modification, change, discharge or
termination is sought.
(b) Revocability. This Subscription Agreement may not be withdrawn or
revoked by the Subscriber in whole or in part without the consent of
the General Partner.
(c) Counterparts. This Subscription Agreement may be executed in
multiple counterpart copies, each of which shall be considered an
original and all of which constitute one and the same instrument
binding on all the parties, notwithstanding that all parties are not
signatories to the same counterpart.
(d) Successors and Assigns. Except as otherwise provided herein, this
Subscription Agreement and all of the terms and provisions hereof
shall be binding upon and inure to the benefit of the parties and
their respective heirs, executors, administrators, successors,
trustees, legal representatives and, in the case of the Partnership,
its assigns. The obligations of the Subscriber, and the agreements,
representations, warranties, and acknowledgments herein, shall be
binding upon the Subscriber's heirs, executors, administrators,
successors, trustees, legal representatives and permitted assigns.
(e) Assignability. This Subscription Agreement is not transferable or
assignable by the Subscriber.
(f) Entire Agreement. Except as stated or referred to herein, this
instrument contains the entire agreement of the parties, and there are
no representations, covenants or other agreements.
(g) Applicable Law. This Subscription Agreement shall be governed by
and construed in accordance with the laws of the State of the New York
applicable to agreements made and to be performed in that state.
[signature page follows]
IN WITNESS WHEREOF, the Subscriber has executed this Subscription
Agreement as of the ____ day of _____________, ____.
SUBSCRIBER
Signature
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Print Name:
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State of Residence
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Subscriber's Taxpayer I.D. No.:
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Subscriber's address for notices:
SUBSCRIPTION ACCEPTED AS OF ____________, _______.
CPG INTERNATIONAL HOLDINGS LP
By:
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CPH Holding I LLC
Its General Partner
By:
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SCHEDULE 1
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Capital Contribution
Subscriber Amount of Capital Number of [Class Type of Capital
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Contribution B-1/Class B-2] Contribution
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Units
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$
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