Exhibit 4.7
EXECUTION COUNTERPART
SECURITYHOLDERS AGREEMENT
THL - NORTEK INVESTORS, LLC
Dated as of August 27, 2004
TABLE OF CONTENTS
ARTICLE I.
RESTRICTIONS ON TRANSFER OF SECURITIES..................................... 1
1.1 General Restriction on Transfer by Securityholders................ 1
1.2 Permitted Transferees............................................. 2
ARTICLE II.
[Intentionally Omitted].................................................... 4
ARTICLE III.
[Intentionally Omitted].................................................... 4
ARTICLE IV.
PURCHASE PRICE............................................................. 4
4.1 Fair Market Value................................................. 4
4.2 Carrying Value.................................................... 4
ARTICLE V.
[Intentionally Omitted].................................................... 4
ARTICLE VI.
SALES TO THIRD PARTIES..................................................... 5
6.1 General........................................................... 5
6.2 Agreements to Be Bound............................................ 5
6.3 Involuntary Transfers............................................. 5
6.4 Tag and Drag Along Rights......................................... 6
ARTICLE VII.
REGISTRATION RIGHTS AGREEMENT.............................................. 12
7.1 Registration Rights................................................ 12
ARTICLE VIII.
CHARTER DOCUMENTS AND BOARD................................................ 13
8.1 Charter Document.................................................. 13
8.2 Board of the Company.............................................. 13
ARTICLE IX.
TERMINATION................................................................ 16
9.1 Cessation of Ownership of Company Stock........................... 16
9.2 Other Termination Events.......................................... 16
ARTICLE X.
PREEMPTIVE RIGHTS.......................................................... 16
10.1 Preemptive Rights................................................. 16
10.2 Excluded Transactions............................................. 19
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ARTICLE XI.
MISCELLANEOUS PROVISIONS................................................... 19
11.1 Definitions....................................................... 19
11.2 Securities Legend................................................. 24
11.3 New Management Securityholders.................................... 25
11.4 Fee............................................................... 25
11.5 Certain Transactions.............................................. 25
11.6 No Other Arrangements or Agreements............................... 25
11.7 Amendment and Modification........................................ 26
11.8 Assignment........................................................ 26
11.9 Recapitalizations, Exchanges, etc. Affecting the Company Stock.... 26
11.10 Transfer of Securities............................................ 26
11.11 Further Assurances................................................ 27
11.12 Governing Law..................................................... 27
11.13 Jurisdiction...................................................... 27
11.14 Invalidity of Provision........................................... 27
11.15 Notices........................................................... 27
11.16 Headings; Execution in Counterparts............................... 28
11.17 Entire Agreement: Effect on Certain Other Agreements.............. 29
11.18 Injunctive Relief................................................. 29
11.19 Attorneys' Fees................................................... 29
11.20 Third Party Beneficiaries......................................... 29
11.21 Sales to Competitors.............................................. 30
11.22 Third Party Investors............................................. 30
11.23 Improper Transfer................................................. 30
11.24 Persons........................................................... 30
11.25 Other Agreements.................................................. 30
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SECURITYHOLDERS AGREEMENT
SECURITYHOLDERS AGREEMENT, dated as of August 27, 2004, among THL - Nortek
Investors, LLC, a Delaware limited liability company (the "Company"), THL
Buildco Holdings, Inc., a Delaware corporation ("Holdings"), Xxxxxx X. Xxx
Equity Fund V, L.P. ("THL V"), Xxxxxx X. Xxx Parallel Fund V, L.P. ("THL
Parallel Fund"), Xxxxxx X. Xxx Cayman Fund V, L.P. ("THL Cayman Fund"), 1997
Xxxxxx X. Xxx Nominee Trust ("THL 1997 Trust"), Xxxxxx X. Xxx Investors Limited
Partnership ("THL Investors"), Xxxxxx Investments Employees' Securities Company
I LLC ("Xxxxxx I"), Xxxxxx Investments Employees' Securities Company II LLC
("Xxxxxx II"), Xxxxxx Investments Holdings, LLC ("Xxxxxx Holdings"), Third Party
Investors (as defined in Section 11.22 herein) and the securityholders of the
Company listed in the Schedule of Management Securityholders attached hereto
(such management securityholders, together with any persons who become parties
to this Agreement pursuant to Section 11.3 of this Agreement and each of their
respective permitted transferees who agree to be bound by the terms of this
Agreement in accordance with Sections 1.2(b) and 6.2 hereof, are referred to
herein, collectively, as the "Management Securityholders"). Such Schedule shall
be updated from time to time to include each Management Securityholder who
becomes a party to this Agreement after the date hereof. THL V, THL Parallel
Fund, THL Cayman Fund, THL 1997 Trust, THL Investors, Xxxxxx I, Xxxxxx II and
Xxxxxx Holdings, together with their affiliates and transferees, in each case,
to the extent they own Securities, are hereinafter referred to collectively as
the "THL Group" and the THL Group, the Third Party Investors and the Management
Securityholders are hereinafter referred to collectively as the
"Securityholders".
WHEREAS, Holdings, a direct wholly-owned subsidiary of the Company, THL
Buildco, Inc., a Delaware corporation and a direct wholly owned subsidiary of
Holdings, Xxxxx Investment Associates VI, L.P. and certain other selling parties
entered into a Stock Purchase Agreement dated as of July 15, 2004 (as amended
from time to time, the "Purchase Agreement"), pursuant to which the parties
agreed, upon the terms and subject to the conditions set forth therein, to
consummate the transactions contemplated thereby (the "Transactions"), after
which the parties intend that the name of Holdings be changed to "Nortek
Holdings, Inc."; and
WHEREAS, the Securityholders believe it to be in their respective best
interests and in the best interests of the Company that they enter into this
Agreement providing for certain rights and restrictions with respect to the
Securities owned by them or their permitted transferees.
NOW, THEREFORE, in consideration of the mutual covenants and obligations
set forth in this Agreement, the parties hereto agree as follows:
ARTICLE I.
RESTRICTIONS ON TRANSFER OF SECURITIES
1.1 General Restriction on Transfer by Securityholders. (a) Prior to the
closing of a bona fide public offering pursuant to an effective registration
statement, other than a registration statement on Form S-4 or S-8 or any
successor forms and other than a registration statement
registering the sale of securities only to employees of Holdings or its
subsidiaries (a "Registration"), under the Securities Act of 1933 (the "Act"),
filed after the Closing Date that covers shares of Common Stock of any
corporation into which the Company converts or with which the Company merges, of
Holdings or of any of their subsidiaries (an "IPO"), no Securities now or
hereafter owned by any Securityholder or any interest therein may, directly or
indirectly, be sold, assigned, mortgaged, transferred, pledged, hypothecated or
otherwise disposed of or transferred (collectively "Transferred" and each such
action being a "Transfer"), except for (i) Transfers pursuant to Section 1.2 to
the applicable transferees specified therein (a "Permitted Transferee"), (ii)
Transfers by any member of the THL Group to any Person of Common Stock, provided
that such Transfers shall comply with Article VI to the extent expressly
provided therein or (iii) Transfers by any other Securityholder of Common Stock
contemplated by and in accordance with Article VI hereof.
(b) The period of time from the date of this Agreement until the
consummation of an IPO shall hereinafter be referred to as the "Restricted
Period".
(c) Nothing in this Section 1.1 limits the ability of the Company to
Transfer any shares of common stock of Holdings held by it.
1.2 Permitted Transferees. (a) Subject to paragraph (b) of this Section
1.2:
(i) Subject to Section 6.4(a) with respect to Covered Sales (as
defined in Section 6.4), the members of the THL Group may Transfer any
Securities or any interest therein or their rights to subscribe for the
same to any of their affiliates (as defined in Section 1.2(c));
(ii) any Management Securityholder may Transfer any Securities or any
interest therein or his rights to subscribe for the same, if any, (A) to a
trust, partnership, limited liability company or corporation the
beneficiaries, partners, members or securityholders of which are such
Management Securityholder, his spouse, parents, members of his immediate
family or his lineal descendants, provided that the foregoing shall be
subject to the limitation that the Company's Management Committee or, in
the event that Company converts into or is merged with a corporation, the
board of directors of such corporation (as applicable, the "Board") acting
in good faith does not conclude that such Transfer together with all other
Transfers made after the Closing could result in or create a "significant
risk" that the Company may become subject to, or after any Registration
will continue by reason thereof to be subject to, the informational
requirements of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") or the registration requirements of the Investment Company
Act of 1940 (the "40 Act") and provided, further that a Management
Securityholder shall give advance notice to the Company in the event of any
Transfer to any permitted transferee set forth in this clause (A), (B) in
case of his death, by will, by transfer in trust or by the laws of
intestate succession to executors, trustees, administrators, testamentary
trustees, legatees or beneficiaries or (C) with the prior written consent
of the Board and the THL Group, to any transferee.
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(iii) any Third Party Investor may Transfer any Securities or any
interest therein or its rights to subscribe for the same to any of its
affiliates (as defined in Section 1.2(c)).
In addition to the foregoing, any transferee of a Securityholder described above
may Transfer Securities back to such Securityholder or to another Permitted
Transferee of such Securityholder. For the purposes of this Section 1.2, a
"significant risk", as referred to above, shall be deemed to arise when the
number of "holders of record" (as determined in accordance with the Exchange Act
and the rules and regulations thereunder or the registration requirements of the
40 Act) is greater than 80% of the number of "holders of record" that would
cause the application or continued application of the informational requirements
of the Exchange Act under the then existing circumstances.
(b) Any Transfer of Securities made pursuant to paragraph (a) of this
Section 1.2 to a Permitted Transferee shall be permitted and shall be effective
only if such Permitted Transferee shall agree in writing to be bound by the
terms and conditions of this Agreement in the same manner and capacity as its
transferor, unless such Permitted Transferee is already a Securityholder,
pursuant to an instrument of assumption reasonably satisfactory in form and
substance to the Company and the THL Group.
(c) An "affiliate" of, or a person "affiliated" with, a specified
person, is a person that directly or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
the person specified. In addition, in the case of any member of the THL Group,
the term "affiliate" shall be deemed to include, without limitation, (1) any
partner of such member of the THL Group or (2) any limited partner of any blind
investment fund organized by or at the direction of the THL Group (collectively,
the "THL Funds") or (3) any director, officer, partner or employee of THL or any
of its affiliates (excluding any limited partner of the THL Funds), any
individual retirement account of any such partner, director, officer or
employee, any family member of any such partner, director, officer or employee,
or any trust or family partnership for the benefit of any such partner,
director, officer or employee or family member thereof. In the case of the Third
Party Investors, affiliate shall be deemed to include any partner or member of
such Person or any director, officer or employee of such Person, any individual
retirement account of any such partner, director, officer or employee, any
family member of any such partner, director officer or employee or any trust or
family partnership for the benefit of any such partner, director, officer or
employee or family member thereof. An "Excluded Permitted Transferee" as used in
Section 6.4 shall mean (i) any Person specified in clause (2) above (other than
any such person who is also described in clause (3) above), except with respect
to a Transfer for value involving a liquidation of a THL Fund or a redemption,
in whole or in part, of a limited partner's interest in a THL Fund, (ii) any THL
Fund, other than THL V, THL Parallel Fund, THL Cayman Fund, THL 1997 Trust, THL
Investors, Xxxxxx I, Xxxxxx II and Xxxxxx Holdings and (iii) the Company or any
of its subsidiaries.
(d) Any action to be taken under this Agreement by members of the THL
Group may be taken on their behalf by the members of the THL Group holding a
majority of the Securities held by the THL Group in the aggregate or by such
other person as is designated by such majority holders to act on behalf of the
THL Group.
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ARTICLE II.
[Intentionally Omitted]
ARTICLE III.
[Intentionally Omitted]
ARTICLE IV.
PURCHASE PRICE
4.1 Fair Market Value.
(a) Fair Market Value. For the purposes of this Agreement, the "Fair
Market Value" of a given Security being purchased by or sold to the Company, the
THL Group or their respective designees, pursuant to this Agreement shall be
determined by the Board in good faith. In making such determination, the Board
shall adhere to the following principles: (i) in the case of a Unit of the
Company, the Fair Market Value of such Units shall be the amount that would be
distributed with respect to such Unit assuming, as of such calculation date, the
sale of all of the assets of the Company at fair value and the distribution of
the proceeds resulting therefrom in accordance with the distribution provisions
set forth in the LLC Agreement and (ii) in the case of a share of Common Stock,
the Fair Market Value of such share shall be the entire equity interest of the
issuer of such Common Stock taken as a whole, divided by the number of
outstanding shares of such Common Stock, all calculated on a fully diluted basis
(and assuming all outstanding stock options were exercised in full for cash),
without additional premiums for control or discounts for minority interests or
restrictions on transfer, and shall be determined as of the date of transfer to
an Involuntary Transferee (as defined in Section 6.3) (each of such dates, a
"Determination Date"); provided, that until the one year anniversary of the date
hereof, the Fair Market Value of the Class B Units shall be equal to the price
paid for such Units.
(b) Notice to Securityholders. After notice has been given pursuant to
Section 6.3, the Company shall promptly deliver a notice (the "FMV Notice") to
the THL Group and to each Securityholder whose Securities are to be purchased
pursuant to Section 6.3 setting forth the determination of the Fair Market Value
of the given Securities to be sold.
4.2 Carrying Value. "Carrying Value" of any Security being purchased by the
Company shall be equal to the price paid by the selling Management
Securityholder for any such Security ("Cost"), less the amount of distributions
or dividends paid to such Management Securityholder in respect of any such
Security.
ARTICLE V.
[Intentionally Omitted]
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ARTICLE VI.
SALES TO THIRD PARTIES
6.1 General. An "Excluded Transaction" shall mean any Transfer pursuant to
an IPO.
6.2 Agreements to Be Bound. Notwithstanding anything contained in this
Section 6, any Transfer (other than in connection with a transaction which
constitutes a Change in Control (as defined herein)) to a third party or any
Involuntary Transfer (as defined in Section 6.3) to an Involuntary Transferee
(as defined in Section 6.3) shall be permitted under the terms of this Agreement
only if such third party or Involuntary Transferee, as the case may be, shall
agree in writing to be bound by the terms and conditions of this Agreement in
the same manner and capacity as its transferor pursuant to an instrument of
assumption reasonably satisfactory in form and substance to the Company; it
being understood that any transferee of a member of the THL Group shall
constitute a member of the THL Group for all purposes of this Agreement,
including Section 1.2(d) hereof.
6.3 Involuntary Transfers. In the case of any Transfer of title or
beneficial ownership of Securities beneficially owned by a Securityholder upon
default, foreclosure, forfeit, divorce, court order, or otherwise than by a
voluntary decision on the part of a Securityholder (an "Involuntary Transfer"),
the Company shall have the right to purchase such Securities pursuant to this
Section 6.3 or, if the Company fails to exercise such right, the THL Group (or
its designees, which designees shall become parties hereto in accordance with
the terms hereof) shall have such right. Upon the Involuntary Transfer of any
Securities beneficially owned by a Securityholder, such Securityholder shall
promptly (but in no event later than two days after such Involuntary Transfer)
furnish written notice (the "Notice") to the Company and the THL Group
indicating that the Involuntary Transfer has occurred, specifying the name of
the person to whom such Securities have been transferred (the "Involuntary
Transferee") and giving a detailed description of the circumstances giving rise
to, and stating the legal basis for, the Involuntary Transfer. Upon the receipt
of the Notice, and for 30 days thereafter, the Company (or its designee(s))
shall have the right (and in the event the Company fails to exercise such right
within such 30 day period then, until the later of (i) five days from the end of
such 30 day period and (ii) 10 days from the day the THL Group receives
notification from the Company that it is declining to exercise such right, the
THL Group (and its designee(s)) shall have the right) to purchase, and the
Involuntary Transferee shall have the obligation to sell, all, but not less than
all, of the Securities acquired by the Involuntary Transferee for a purchase
price equal to (subject to the following paragraph) the lesser of (i) the Fair
Market Value of such Securities on the date of transfer to the Involuntary
Transferee and (ii) the amount of the indebtedness or other liability that gave
rise to the Involuntary Transfer plus the excess, if any, of the Carrying Value
of such Securities over the amount of such indebtedness or other liability that
gave rise to the Involuntary Transfer.
Notwithstanding the foregoing, the Board may, for good cause shown by the
Securityholder who made the Involuntary Transfer, determine that payment of a
purchase price equal to the Fair Market Value of such Securities on the date of
transfer to the Involuntary Transferee would be appropriate under the
circumstances, and direct that payment be made in such amount.
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MANAGEMENT SECURITYHOLDERS
By: /s/ Xxxxxx X. Xxxxxxxxx
-----------------------------
Name (Print): Xxxxxx X. Xxxxxxxxx
[Securityholders Agreement]
6.4 Tag and Drag Along Rights. In the case that (i) the Company converts
into or is merged with a corporation and the Securityholders receive shares of
Common Stock as a result thereof, (ii) the Company distributes shares of
Holdings Stock to the Securityholders, or (iii) a Covered Sale is intended, the
following provisions of Section 6.4(a) shall apply to the Common Stock or
Subject Units (as defined below), as the case may be, held by the
Securityholders. In the case that events set forth in clauses (i) or (ii) above
occur, the following provisions of Section 6.4(b) shall apply to the Common
Stock held by the Securityholders. A "Covered Sale" shall mean a Transfer for
value by a member of the THL Group to an Excluded Permitted Transferee of Class
B Units (or any other type of securities into which the Class B Units have been
converted) in an amount which when taken together with all previous (or
substantially simultaneous) Transfers of Class B Units or such other type of
securities by all of the members of the THL Group would exceed 5% of the Class B
Units or such other type of securities held by all such members of the THL Group
at the time of the transaction in question (which in the case of a series of
related transactions is the most current transaction in such series).
(a) Tag Along Rights. None of the members of the THL Group shall:
(i) effect a Covered Sale, or
(ii) in any one transaction or any series of related transactions,
Transfer for value any shares of Common Stock in an amount which when taken
together with all previous (or substantially simultaneous) Transfers by all
of the members of the THL Group would exceed 5% of the Common Stock held by
all such members of the THL Group at the time of the transaction in
question (which in the case of a series of related transactions is the most
current transaction in such series), except pursuant to an Excluded
Transaction, a Transfer to a Permitted Transferee (other than an Excluded
Permitted Transferee) or pursuant to Section 6.4(b), to the Company or any
of its subsidiaries or any other party or parties,
unless the Management Securityholders, the Third Party Investors, and their
respective Permitted Transferees (collectively, the "Offerees"), are offered the
right, at the option of each Offeree, to include in such Transfer to the Third
Party (as defined below) such number of shares of Common Stock or Subject Units,
as the case may be, owned by each such Offeree as determined in accordance with
this Section 6.4(a). For purposes of this Agreement, each Person to which
Securities are to be Transferred in accordance with subclauses (i) and (ii)
above are referred to herein as a "Third Party". If any member of the THL Group
(i) receives from a Third Party a bona fide offer or offers to consummate a
Covered Sale, or proposes to consummate a Covered Sale, or (ii) receives from a
Third Party a bona fide offer or offers to Transfer, or proposes to Transfer to
a Third Party, shares of its or their Common Stock, in excess of such 5%
threshold, such member (the "Transferor") shall give written notice (the
"Tag-Along Notice") to each of the Offerees, setting forth the consideration per
share or Subject Unit, as the case may be, to be paid by such Third Party and
the other material terms and conditions of such transaction. The Tag-Along
Notice shall offer the Offerees the opportunity to participate in the proposed
Transfer of shares or Subject Units, as the case may be, to the Third Party
according to the terms and conditions of this Section 6.4(a) and for the same
type of consideration and for an amount of consideration per share or Subject
Unit, as the case may be, not less than that offered to the Transferor by the
Third Party and on terms and conditions (other than, in the case of members of
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the THL Group, any management, advisory or transaction fees payable to them or
their affiliates) no less favorable to such Offerees than the terms and
conditions offered to the Transferor by the Third Party; provided, however, that
with respect to any Vested Class C Units requested to be included in the
Transfer, the amount of consideration per Unit shall be the then Fair Market
Value of such Vested Class C Units. At any time within 15 days after its receipt
of the Tag-Along Notice, each of the Offerees may irrevocably (but subject to
the terms and conditions of such offer) accept the offer included in the
Tag-Along Notice for up to such number of shares of Common Stock or Subject
Units, as the case may be, as is determined in accordance with the provisions of
this Section 6.4(a) by furnishing written notice of such acceptance to the
Transferor. Promptly following such acceptance by an Offeree, each such Offeree
shall deliver to the Transferor the certificate or certificates, if applicable,
representing the shares of Common Stock or Subject Units, as the case may be, to
be Transferred pursuant to such offer by such Offeree, together with a limited
power-of-attorney authorizing the Transferor to sell or otherwise dispose of
such shares of Common Stock or Subject Units, as the case may be, pursuant to
the proposed Transfer to the Third Party. In addition, each such Offeree shall
also execute all other documents required to be executed in connection with such
transaction; provided, that in the event that (x) the Offeree is required to
provide any representations or warranties in connection with such transaction,
each Offeree shall only be required to represent and warrant as to its or his
title to its or his Common Stock or Subject Units, as the case may be, to be
Transferred and such holder's authority, power, and right to enter into and
consummate such transaction without violating any other agreement or legal
requirement and other matters relating to such holder, or (y) the Offeree is
required to provide any indemnities in connection with such transaction (other
than in respect of representations and warranties referenced to in the preceding
clause (x)), then each Offeree shall only be required to provide the same
indemnities as the THL Group and shall not be liable for more than his or its
pro rata share (based upon the amount of consideration to be received by all
Offerees and the Transferor in such transaction) of any liability for indemnity
and such liability shall not exceed the total purchase price received by such
Offeree in such transaction; provided that, with respect to the foregoing
representations or warranties in the preceding clause (x) above given by the
Offerees, an Offeree may be liable for any and all losses resulting from a
breach of such representations or warranties and there shall be no cap by reason
of this Agreement on the liability of the relevant Offeree with respect to
breaches of such representations or warranties.
Each Offeree who shall have irrevocably accepted the offer in the Tag Along
Notice shall have the right to participate in the proposed Transfer to the Third
Party by Transferring Securities in connection therewith in accordance with the
following:
(1) in the case of shares of Common Stock, such Offeree shall
have the right to Transfer an amount equal to the product of (x) the
total number of shares to be acquired by the Third Party, times (y) a
fraction, the numerator of which shall be the total number of shares
of Common Stock owned by such Offeree, and the denominator of which
shall be the total number of shares of Common Stock owned by the THL
Group, plus the total number of shares of Common Stock owned by all
Offerees that have accepted the offer included in the Tag-Along
Notice.
(2) In the case of Subject Units, the amount of Subject Units
that an
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Offeree shall have the right to Transfer shall be determined as
follows:
(i) First, a dollar amount (the "Allocated Amount") shall
be allocated to each such Offeree equal to the product
of (1) the total purchase price of all Subject Units to
be purchased by the Third Party multiplied by (2) a
fraction, the numerator of which shall be the Fair
Market Value of the Subject Units owned by such Offeree
and the denominator of which shall be shall be the Fair
Market Value of the Subject Units owned by the THL
Group, plus the Fair Market Value of the Subject Units
owned by all Offerees that have accepted the offer
included in the Tag-Along Notice.
(ii) Second, each such Offeree shall be permitted to sell an
amount of such Offeree's Class B Units and Vested Class
C Units as is equal in value to such Allocated Amount;
provided, that such Offeree shall first sell all of his
Class B Units. For purposes of valuing the Class B
Units and Vested Class C Units under this clause (ii),
the Class B Units shall be valued at the per Unit price
initially offered by the Third Party to the member of
the THL Group selling Class B Units in such
transaction, and the Vested Class C Units shall be
valued at their Fair Market Value.
The maximum number of shares of Common Stock or Subject Units, as the case
may be, that may be Transferred by each Offeree to the Third Party in accordance
with this Section 6.4(a) shall be the total number of shares of Common Stock or
Subject Units, as the case may be, then owned by such Offeree.
If within 15 days after the receipt of the Tag-Along Notice, any Offeree
has not accepted the offer contained in the Tag-Along Notice, such Offeree will
be deemed to have waived any and all rights with respect to, or to participate
in, the Transfer of Common Stock or Subject Units, as the case may be, described
in the Tag-Along Notice. The Transferor shall have 45 days following such
delivery in which to Transfer Common Stock or Subject Units, as the case may be,
held by it plus any Common Stock or Subject Units, as the case may be, of any
Offerees who accept the offer described in the Tag-Along Notice in accordance
with the provisions of this Section 6.4(a), in the aggregate not more than the
amount of Common Stock or Subject Units, as the case may be, described in the
Tag-Along Notice, for an amount and type of sales price consideration per share
or Subject Unit, as the case may be, not more favorable to the Transferor than
was set forth in the Tag-Along Notice, provided, that the type of consideration
to be received by the Transferor may be different than the type set forth in the
Tag-Along Notice so long as (i) it is not materially more favorable to the
Transferor than to the Offerees and (ii) if the consideration to be received by
the Offerees is different than that set forth in the Tag Along Notice, each
Offeree may rescind its acceptance of the offer contained in the Tag Along
Notice within five days of receipt of notice of such change in the type of
consideration; provided further, that no rescission shall effect the number of
shares or Subject Units, as the case may be, which each accepting Offeree shall
have the right to Transfer pursuant to the preceding
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paragraph and the Transferor may increase the number of shares to be Transferred
by it by the number of shares or Subject Units, as the case may be, subject to
such rescission. If, at the end of 60 days following the delivery of the
Tag-Along Notice, the Transferor has not completed the Transfer of Common Stock
or Subject Units, as the case may be, of the Transferor and Common Stock or
Subject Units, as the case may be, of any Offeree, the Transferor shall return
to such Offeree all certificates, if applicable, representing shares of Common
Stock or Subject Units, as the case may be, which such Offeree delivered for
Transfer pursuant to this Section 6.4(a), and all the restrictions on sale or
other disposition contained in this Agreement with respect to Common Stock or
Subject Units, as the case may be, owned by the Transferor shall again be in
effect, including the requirement to give notice hereunder.
Except as may otherwise be agreed to by RLB with respect to Management
Securityholders, all Offerees whose shares of Common Stock or Subject Units, as
the case may be, are to be Transferred in accordance with this Section 6.4(a)
shall receive the consideration in respect of their shares or Subject Units, as
the case may be, substantially simultaneously with the receipt by the Transferor
of the consideration in respect of the shares of Common Stock or Subject Units,
as the case may be, of the Transferor.
For purposes of this Section 6.4(a) only, all stock options to purchase
Common Stock held by each Offeree which are exercisable at the time of delivery
of the Tag-Along Notice, or which would become exercisable by reason of the
Transfer after giving effect to this Section 6.4(a), shall be treated as Common
Stock hereunder (including, without limitation, for purposes of determining the
extent to which an Offeree may participate in a proposed Transfer pursuant to
the second paragraph of this Section 6.4(a)); provided, that each Offeree, in
order to participate in any proposed Transfer in this Section 6.4(a), shall
exercise any such stock options held by such Offeree the shares of Common Stock
in respect of which such Offeree desires to Transfer pursuant to this Section
6.4(a), in accordance with the terms and subject to the conditions of applicable
stock option plan, prior to the consummation of any such Transfer pursuant to
this Section 6.4(a); provided, further, that, to the extent practicable and to
the extent doing so would not adversely affect the Company, the Transferor or
the ability to consummate the Transfer, the Transferor and the Company shall use
their reasonable efforts to cause any such proposed Transfer to be structured so
as to facilitate the delivery to any Offeree holding stock options of the
difference between the per share consideration being paid in such Transfer and
the exercise price in respect of each such stock options being Transferred
pursuant to this Section 6.4(a) (in lieu of the delivery of the exercise price
in respect of such stock options to the Company).
(b) Drag-Along Rights. If any member or members of the THL Group
shall, individually or collectively, propose to Transfer at least 75% of all
shares of Common Stock collectively owned by the THL Group at the time of the
transaction in question to a Third Party, then (in addition to the rights of the
Management Securityholders, the Third Party Investors, and their respective
Permitted Transferees to participate in such Transfer pursuant to Section 6.4(a)
hereof) the members of the THL Group, may, at their option, require the
Management Securityholders, the Third Party Investors, and their respective
Permitted Transferees (collectively, the "Remaining Holders") to include in such
Transfer to the Third Party such number of shares of Common Stock owned by each
of them, as determined in accordance with this Section 6.4(b); provided that if
the members of the THL Group send the Drag-Along Notice referred to below,
Section 6.4(a) shall not apply to the Transfer.
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The members of the THL Group shall give written notice (the "Drag-Along
Notice") of the exercise of their rights pursuant to this Section 6.4(b) to each
of the Remaining Holders, setting forth the sales price consideration per share
to be paid by the Third Party and the other material terms and conditions of
such transaction, including the number of shares to be included therein. The
Drag-Along Notice shall state that the Remaining Holders shall be required to
participate in the proposed Transfer of shares to the Third Party according to
the terms and conditions of this Section 6.4(b) and for the same type of
consideration and for an amount of consideration per share not less than that
offered to any member of the THL Group by the Third Party and on terms and
conditions (other than, in the case of members of the THL Group, any management,
advisory or transaction fees payable to them or their affiliates) no less
favorable to such Remaining Holders than the terms and conditions offered to any
member of the THL Group by the Third Party. Within 15 days following the receipt
of the Drag-Along Notice, each of the Remaining Holders shall deliver to a
representative of the THL Group designated in the Drag-Along Notice certificates
representing all shares of Common Stock held by such Remaining Holder, duly
endorsed, together with all other documents required to be executed in
connection with such transaction. In the event that any Remaining Holder should
fail to deliver such certificates to the THL Group, the Company shall cause the
books and records of the Company to show that such shares are bound by the
provisions of this Section 6.4(b) and that such shares may be Transferred only
to the Third Party.
Each Remaining Holder shall be required to participate in the proposed
Transfer to the Third Party by Transferring in connection therewith shares of
Common Stock equal to the product of (x) the total number of shares to be
acquired by the Third Party, times (y) a fraction, the numerator of which shall
be the total number of shares of Common Stock owned by such Remaining Holder,
and the denominator of which shall be the total number of shares of Common Stock
owned by the THL Group plus the total number of shares of Common Stock owned by
all Remaining Holders in the aggregate. The maximum number of shares of Common
Stock that may be Transferred by each Remaining Holder to the Third Party in
accordance with this Section 6.4(b) shall be the total number of shares of
Common Stock then owned by such Remaining Holder.
If, within 90 days after the members of the THL Group gave the Drag-Along
Notice, they shall not have completed the Transfer of all the shares of Common
Stock of the THL Group and the Remaining Holders in accordance with this Section
6.4(b), the THL Group shall return to each of the Remaining Holders all
certificates representing shares of Common Stock that such Remaining Holder
delivered for Transfer pursuant hereto and that were not purchased pursuant to
this Section 6.4(b); provided that the THL Group shall be permitted, but not
obligated, to complete the sale by all non-defaulting Remaining Holders if one
or more of the Remaining Holders default; provided further that completion of
the sale by the THL Group and/or such Remaining Holders shall not relieve a
defaulting Remaining Holder of liability for its breach.
The obligations of the Remaining Holders pursuant to this Section 6.4(b)
are subject to the satisfaction of the following conditions:
(i) if any Securityholder is given an option as to the form and amount
of consideration to be received, all Securityholders will be given the same
option;
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(ii) no Remaining Holder shall be required to make any out-of-pocket
expenditure prior to the consummation of such transaction (excluding
expenditures for its own postage, copies, etc. and the fees and expenses of
its own counsel and other advisors retained by it, which amounts shall be
the sole responsibility of such Remaining Holder in any event (other than
pursuant to Section 6.4(c) herein)), and no Remaining Holder shall be
obligated to pay more than its or his pro rata share (based upon the
consideration to be received in such transaction) of expenses (in
comparison to the amount of expenses being borne by all other holders
participating in a Transfer pursuant to this Section 6.4(b)) incurred by
the Company or for the benefit of all Securityholders, provided that a
Remaining Holder's liability for its or his pro rata share of such
allocated expenses shall in no event exceed the total purchase price
received by such Remaining Holder in such transaction; and
(iii) in the event that (x) the Remaining Holders are required to
provide any representations or warranties in connection with such
transaction, each Remaining Holder shall only be required to represent and
warrant as to its or his title to its or his Common Stock to be Transferred
and such holder's authority, power, and right to enter into and consummate
such transaction without violating any other agreement or legal requirement
and other matters relating to such holder, or (y) the Remaining Holders are
required to provide any indemnities in connection with such transaction
(other than in respect of representations and warranties referenced to in
the preceding clause (x)), then each Remaining Holder shall only be
required to provide the same indemnities as the THL Group and shall not be
liable for more than his or its pro rata share (based upon the amount of
consideration to be received in such transaction by all Remaining Holders
and members of the THL Group) of any liability for indemnity and such
liability shall not exceed the total purchase price received by such
Remaining Holder in such transaction; provided that, with respect to the
foregoing representations or warranties in the preceding clause (x) given
by the Remaining Holders, a Remaining Holder may be liable for any and all
losses resulting from a breach of such representations or warranties and
there shall be no cap by reason of this Agreement on the liability of the
relevant Remaining Holder with respect to breaches of such representations
or warranties.
To the extent practicable, all Remaining Holders whose shares of Common
Stock are to be Transferred in accordance with this Section 6.4(b) shall receive
the consideration in respect of their shares substantially simultaneously with
the receipt by the THL Group of the consideration in respect of the shares of
Common Stock of the THL Group Transferred, except that all Management
Securityholders whose shares of Company Stock are to be Transferred in
accordance with this Section 6.4(b) shall receive the consideration in respect
of their shares (except as may be agreed to between the Company and RLB on
behalf of such Management Securityholders) simultaneously with the receipt by
the THL Group of the consideration in respect of the shares of Common Stock of
the THL Group.
For purposes of this Section 6.4(b) only, all stock options to purchase
Common Stock held by each Remaining Holder which are fully exercisable at the
time of the Drag-Along Notice, or which would become exercisable by reason of
the Transfer after giving effect to this Section 6.4(b), shall be treated as
Common Stock (including, without limitation, for purposes of determining the
extent to which a Remaining Holder is required to participate in a proposed
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Transfer pursuant to the third paragraph of this Section 6.4(b)); and each
Remaining Holder in connection with the exercise of drag-along rights by the THL
Group pursuant to this Section 6.4(b) shall immediately prior to such proposed
Transfer exercise any such stock options held by such Remaining Holders, the
shares of Common Stock in respect of which are required to be Transferred
pursuant to this Section 6.4(b), in accordance with the terms and subject to the
conditions of the applicable stock option plan, prior to the consummation of any
such Transfer pursuant to this Section 6.4(b); provided, further, that, to the
extent practicable and to the extent doing so would not adversely affect the
Company, any member of the THL Group or the ability to consummate the Transfer,
the THL Group and the Company shall use their reasonable efforts to cause any
such proposed Transfer to be structured so as to facilitate the delivery to any
Remaining Holder holding stock options of the difference between the per share
consideration being paid in such Transfer and the exercise price in respect of
each such stock option being Transferred pursuant to this Section 6.4(b) (in
lieu of the delivery of the exercise price in respect of such stock options to
the Company).
Notwithstanding anything herein to the contrary, this Section 6.4(b) shall
be of no force or effect and the THL Group may not exercise their rights under
this Section 6.4(b) until after the six month anniversary of the Closing.
(c) Attorney. The Company shall pay the reasonable fees and expenses
of one counsel selected by the Management Securityholders holding a majority of
the shares of Common Stock held in the aggregate by all Management
Securityholders (and reasonably acceptable to the THL Group) to represent the
Third Party Investors and Management Securityholders, unless such counsel has a
conflict of interest that would prevent such counsel from representing both the
Management Securityholders and the Third Party Investors in which case the
Company shall pay the reasonable fees and expenses of one counsel selected by
the Management Securityholders by a majority vote (and reasonably acceptable to
the Company) to represent the Management Securityholders and one counsel
selected by the Third Party Investors by a majority vote (and reasonably
acceptable to the Company) to represent the Third Party Investors, in each
transfer of shares of Common Stock held by them pursuant to Sections 6.4(a) or
6.4(b) hereof.
ARTICLE VII.
REGISTRATION RIGHTS AGREEMENT
7.1 Registration Rights. In the case that (i) the Company converts into or
is merged with a corporation and the Securityholders receive shares of Common
Stock as a result thereof or (ii) the Company distributes shares of Holdings
Stock to the Securityholders, the Company (or its successor), in the case of
clause (i) above, and Holdings, in the case of clause (ii) above, shall enter
into a Registration Rights Agreement with the Securityholders in substantially
the form attached as Exhibit A hereto (the "Registration Rights Agreement").
Following such event, the parties hereto agree that any additional members of
the THL Group, Third Party Investors and Management Securityholders who become
parties hereto shall also be added as parties to the Registration Rights
Agreement.
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ARTICLE VIII.
CHARTER DOCUMENTS AND BOARD
8.1 Charter Document. The Company has previously furnished to the
Securityholders copies of its LLC Agreement as in effect on the date hereof (the
"Charter Documents"). From and after the date hereof, each Securityholder shall
vote its voting securities of the Company, at any regular or special meeting of
members or stockholders of the Company or in any written consent executed in
lieu of such a meeting of members or stockholders, and shall take all actions
necessary, to ensure that the Charter Documents do not, at any time, conflict
with the provisions of this Agreement.
8.2 Board of the Company.
(a) The Securityholders agree and understand that immediately
following the consummation of the Transactions, the Board will consist of a
number of Representatives (as defined in the LLC Agreement) or directors between
five and eleven (as determined by the THL Group), two of whom shall be
designated by RLB, one of whom shall be designated by THL V and the remainder of
whom shall be persons designated by the THL Group (and who may be members of the
THL Group or affiliates thereof); provided that if RLB designates himself as a
Representative or director he shall have the right to serve as Chairman of the
Board so long as he is a Representative or director; provided further, that
RLB's rights pursuant to this Section 8.2, shall terminate at such time as he no
longer owns in excess of 5% of (i) the outstanding Class B Units and Class C
Units for so long as the Company remains a limited liability company or (ii) the
outstanding shares of Common Stock (including shares issuable under outstanding
options to purchase Common Stock as determined on a Cashless Exercise Basis) on
and following such time as the Company converts into or is merged with a
corporation and the Securityholders receive shares of Common Stock as a result
thereof. For purposes of this Agreement, "Cashless Exercise Basis" shall mean
determining the net number of shares of Common Stock underlying such option,
which shall be equal to (a) the total number of shares of Common Stock subject
to such option less (b) an amount of shares equal to the aggregate exercise
price of the option divided by the fair market value per share of Common Stock
as determined by the Board in good faith.
(b) The Securityholders shall vote their voting securities to
implement the foregoing at any regular or special meeting of the members or
stockholders of the Company called for the purpose of filling positions on the
Board, or in any written consent executed in lieu of such a meeting of
Securityholders, and shall take all lawful actions as may be reasonably
necessary to ensure the election to the Board of the Nominees. The nominees of
the THL Group, THL V and RLB are referred to herein as the "THL Nominees," the
"THL V Nominee," and the "Xxxxxx Nominees", respectively, and are collectively
referred to herein as the "Nominees" and individually as a "THL Nominee", "THLV
Nominee," "Xxxxxx Nominee" or "Nominee", as the case may be. Subject to any
applicable rules to the contrary of the Securities and Exchange Commission or
any national securities exchange or NASDAQ, RLB shall have the right to
participate in all committees of the Board, except the audit committee, so long
as he is a member of the Board.
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To effectuate the provisions of Section 8.2, the Secretary of the Company,
or if there be no Secretary such other officer of the Company as the Board may
appoint to fulfill the duties of Secretary (the "Secretary"), shall not record
any securityholders' vote or consent contrary to or inconsistent with the terms
of Section 8.2(a) and 8.2(b).
(c) If, prior to his or her election to the Board pursuant to Section
8.2(a) or 8.2(b), any THL Nominee, THL V Nominee or Xxxxxx Nominee shall be
unable or unwilling to serve as a Representative or director of the Company, the
members of the THL Group, THL V or RLB, as the case may be, shall be entitled to
nominate a replacement (the selection of which shall be consistent with Section
8.2(a) or 8.2(b), as applicable) who shall then be a Nominee for purposes of
this Section 8.2. If, following election to the Board pursuant to Section 8.2(a)
or 8.2(b), any Nominee shall resign or be removed or be unable to serve for any
reason prior to the expiration of his or her term as a Representative or
director of the Company, the members of the THL Group, if such Nominee was a THL
Nominee, THL V, if such Nominee was a THL V Nominee, or RLB, if such Nominee was
a Xxxxxx Nominee, shall within 30 days of such event, notify the Board in
writing of a replacement Nominee (the selection of which shall be consistent
with Section 8.2(a) or 8.2(b), as applicable), and each Securityholder shall
vote its voting securities, at any regular or special meeting called for the
purpose of filling positions on the Board, or in any written consent executed in
lieu of such meeting of securityholders, and shall take all actions necessary
(including, without limitation, using its best efforts to cause its Nominees) to
elect such replacement Nominee as herein provided), to ensure the election to
the Board of such replacement Nominee to fill the unexpired term of the Nominee
whom such new Nominee is replacing. If the members of the THL Group or THL V
shall fail to so notify the Board with respect to any THL Nominee or THL V
Nominee, the Board, in its sole discretion, may nominate any other person to
fill the vacancy. Any THL Nominee may be removed by the THL Group, the THL V
Nominee may be removed by THL V, and any Xxxxxx Nominee may be removed by RLB,
and each Securityholder hereby agrees to vote all of the shares of voting stock
owned or held of record by such Securityholder for, or to take all actions by
written consent in lieu of any such meeting, necessary to cause, any such
removal.
(d) If the THL Group so requests, each Securityholder hereby agrees to
vote all of the voting securities owned or held of record by such Securityholder
for, or to take all actions by written consent in lieu of any such meeting
necessary to cause, the removal (with or without cause) of any Representative or
director designated by RLB and elected pursuant to Section 8.2 if during such
designee's term as Representative or director, RLB ceases to own in excess of 5%
of (i) the outstanding Class B Units and Class C Units for so long as the
Company remains a limited liability company or (ii) the outstanding shares of
Common Stock (including shares issuable under outstanding options to purchase
Common Stock as determined on a Cashless Exercise Basis) on and following such
time as the Company converts into or is merged with a corporation and the
Securityholders receive shares of Common Stock as a result thereof.
(e) Each Securityholder hereby agrees that any Representative or
director shall be removed with Cause only if the holders of a majority of the
outstanding voting securities held by Securityholders consent in writing to such
removal (and no meeting of securityholders need to be held to effect any such
removal). Solely for the purposes of this Section 8.2(e), "Cause" shall mean the
commission by a Representative or director of an act of fraud or
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embezzlement against the Company or any of its subsidiaries or a conviction for
a felony (or a plea of nolo contendere or guilty plea thereto) of such
Representative or director.
(f) In order to effectuate the provisions of this Article VIII, each
Securityholder hereby agrees that when any action or vote is required to be
taken by such Securityholder pursuant to this Agreement, such Securityholder
shall use its reasonable best efforts, if a special or annual meeting of
securityholders of the Company is not called, to execute or cause to be executed
a consent in writing in lieu of any such meetings to effectuate such
securityholder action.
(g) In order to effectuate the provisions of this Section 8.2 and in
addition to and not in lieu of Sections 8.2(a) through (f) hereof, the
Management Securityholders and the Third Party Investors (and any of their
respective Permitted Transferees thereof which own Securities subject to this
Agreement) hereby grant to the THL Group a proxy to vote at any annual or
special meeting of securityholders all of the voting securities owned or held of
record by such Securityholder and subject to this Agreement solely for (i) the
election of all Representatives or directors designated in accordance with
Section 8.2(a) and (ii) the removal of Representatives or directors in
accordance with Sections 8.2(c), 8.2(d) and 8.2(e).
(h) With respect to any business combination, merger, consolidation,
stock swap or sale of all or substantially all of the assets of the Company or
similar transaction involving the Company, if the members of the THL Group so
direct and such transaction results in a Change in Control (as defined below),
then each of the Securityholders shall vote in favor of such proposed
transaction all of the voting securities owned or held of record by such
Securityholder, at each regular or special meeting of the securityholders of the
Company called for the purpose of voting on such matter, or in any written
consent executed in lieu of such a meeting of securityholders, and shall waive
any appraisal or other dissenter's rights with respect to such transaction and
take all actions reasonably necessary, to ensure that all necessary
securityholder approvals for such transaction are obtained; provided that,
subject to the distribution provisions of Section 4.4 of the LLC Agreement, (A)
the conditions set forth in subclauses (i), (ii) and (iii) of the fourth to last
paragraph of Section 6.4(b) hereof are satisfied with respect to such
transaction and (B) such Securityholder is to receive the same type and amount
of consideration (1) per Class B Unit and Vested Class C Unit received by the
members of the THL Group on their Class B Units or (2) in the event the Company
has merged with or converted into a corporation, per share of Common Stock
received by the members of the THL Group on their Common Stock, and on terms and
conditions (other than, in the case of members of the THL Group, any management,
advisory or transaction fees payable to them or their affiliates) no less
favorable to such Securityholders than the terms and conditions to be received
by the members of the THL Group in the transaction.
(i) The parties hereto (including, without limitation, the Company)
shall take such actions as are necessary so that the Board of Directors of each
of Holdings and Nortek, Inc. is comprised entirely of the same individuals as
the Board of the Company.
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ARTICLE IX.
TERMINATION
9.1 Cessation of Ownership of Company Stock. Any party to, or Person who is
subject to, this Agreement which ceases to own Securities or any interest
therein shall cease to be a party to, or Person who is subject to, this
Agreement and thereafter shall have no rights or obligations hereunder.
9.2 Other Termination Events. Notwithstanding anything to the contrary
contained herein, every provision of this Agreement, other than the provisions
contained in Article VII and Section 11.5, shall terminate upon the earlier of
(i) the closing of an IPO and (ii) a Change in Control; provided, however, that
in the event that following any such Change in Control any Securityholder (other
than a Third Party Investor) continues to own in excess of 25% of the equity in
the Company held by it immediately after the Closing, such Securityholder shall
continue to have any rights it had prior to such Change in Control pursuant to
Sections 6.4(a) and 6.4(b) hereof and such Sections shall survive such Change in
Control for so long as any such Securityholder continues to have such stated
percentage of equity in the Company held by it immediately after the Closing.
For purposes of this Agreement, a "Change in Control" shall mean the earlier to
occur of (i) such time as the THL Group, (A) no longer owns at least 25% of the
Securities held by it immediately after Closing and (B) in the aggregate owns a
lesser number of Units or shares of Common Stock, as applicable, than that of at
least one other Person and its affiliates or (ii) any business combination,
merger, consolidation, security swap, security sale or sale of all or
substantially all of the assets of the Company or similar transaction involving
the Company in which (A) the Securityholders cease to own either 50% of the
outstanding voting power or the shares of common stock or other units of
beneficial interest, as applicable, of the Company or the surviving entity and
(B) at least one other Person and its affiliates owns in excess of 50% of the
number of shares of common stock or other units of beneficial interest, as
applicable, held in the aggregate by the THL Group.
ARTICLE X.
PREEMPTIVE RIGHTS
10.1 Preemptive Rights. The Company shall not issue or sell any of its
equity securities or any securities convertible into or exchangeable for any of
its equity securities, issue or grant any options or warrants for the purchase
of, or enter into any agreements providing for the issuance (contingent or
otherwise) of, any of its equity securities or any securities convertible into
or exchangeable for any of its equity securities (each an "Issuance" of "Subject
Securities"), except in compliance with the provisions of this Article X.
(a) Offer. Not fewer than fifteen days prior to the consummation of an
Issuance, a notice (the "Participation Notice") shall be furnished by the
Company to (1) each member of the THL Group and (2) each Management
Securityholder that beneficially owns at least 5% of (i) the aggregate
outstanding Class B Units and Class C Units for so long as the Company remains a
limited liability company or (ii) the outstanding shares of Common Stock
(including shares issuable under outstanding options to purchase Common Stock)
on and
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following such time as the Company converts into or is merged with a corporation
and the Securityholders receive shares of Common Stock as a result thereof ((1)
and (2) collectively being the "Participation Offerees"). The Participation
Notice shall include:
(1) The principal terms of the proposed Issuance, including,
without limitation, (i) the amount and kind of Subject Securities to
be included in the Issuance, (ii) the Participation Offeree's
"Participation Portion," which shall equal (i) for so long as the
Company remains a limited liability company, the percentage of all
outstanding Class B Units and Class C Units that the Class B Units and
Class C Units held by such Participation Offeree constitutes and (ii)
on and following such time as the Company converts into or is merged
with a corporation, the percentage of all outstanding shares of Common
Stock that the shares of Common Stock held by such Participation
Offeree constitutes (including for the purposes of such calculation
shares issuable under outstanding options to purchase Common Stock),
(iii) the maximum and minimum price per unit of the Subject Securities
and (v) the name and address of the party to whom the securities will
be issued (the "Prospective Subscriber"); and
(2) An offer by the Company to issue, at the option of each
Participation Offeree, to such Participation Offeree such portion of
the Subject Securities to be included in the Issuance as may be
requested by such Participation Offeree (not to exceed the
Participation Portion of the total amount of Subject Securities to be
included in the Issuance), on the same economic terms and conditions
as each of the Prospective Subscribers shall be issued units of
Subject Securities.
(b) Exercise.
(i) General. Each Participation Offeree desiring to accept the offer
contained in the Participation Notice shall send a written commitment (the
"Acceptance Notice") to the Company within fifteen days after the
effectiveness of the Participation Notice specifying the amount of Subject
Securities (not in any event to exceed the Participation Portion of the
total amount of Subject Securities to be included in the Issuance) which
such Participation Offeree desires to be issued (each a "Participating
Buyer"). Each Participation Offeree who has not so accepted such offer
shall be deemed to have waived all of his rights with respect to the
Issuance, and the Company shall thereafter be free to issue Subject
Securities in the Issuance to the Prospective Subscriber and any
Participating Buyers, at a price no less than the minimum price set forth
in the Participation Notice and on other principal terms not substantially
more favorable to the Prospective Subscriber than those set forth in the
Participation Notice, without any further obligation to such non-accepting
Participation Offerees. If, prior to consummation, the terms of such
proposed Issuance shall change with the result that the price shall be less
than the minimum price set forth in the Participation Notice or the other
principal terms shall be substantially more favorable to the Prospective
Subscriber than those set forth in the Participation Notice, it shall be
necessary for a separate Participation Notice to be furnished, and the
terms and provisions of this Section 10.1
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separately complied with, in order to consummate such Issuance pursuant to
this Section 10.1.
(ii) Irrevocable Acceptance. The acceptance of each Participating
Buyer shall be irrevocable except as hereinafter provided, and each such
Participating Buyer shall be bound and obligated to acquire in the Issuance
on the same terms and conditions, with respect to each unit of Subject
Securities issued, as the Prospective Subscriber, such amount of Subject
Securities as such Participating Buyer shall have specified in such
Participating Buyer's written commitment.
(iii) Time Limitation. If at the end of the 180th day following the
date of the effectiveness of the Participation Notice the Company has not
completed the Issuance, each Participating Buyer shall be released from his
obligations under the written commitment, the Participation Notice shall be
null and void, and it shall be necessary for a separate Participation
Notice to be furnished, and the terms and provisions of this Section 10.1
separately complied with, in order to consummate such Issuance pursuant to
this Section 10.1.
(c) Further Assurances. Each Participating Buyer shall take or cause
to be taken all such reasonable actions as may be necessary or reasonably
desirable in order expeditiously to consummate each Issuance pursuant to this
Section 10.1 and any related transactions, including, without limitation,
executing, acknowledging and delivering consents, assignments, waivers and other
documents or instruments; filing applications, reports, returns, filings and
other documents or instruments with governmental authorities; and otherwise
cooperating with the Company and the Prospective Subscriber. Without limiting
the generality of the foregoing, each such Participating Buyer agrees to execute
and deliver such subscription and other agreements specified by the Company to
which the Prospective Subscriber will be party.
(d) Expenses. All reasonable costs and expenses incurred by the
Participating Buyers in connection with any proposed Issuance of Subject
Securities (whether or not consummated), including without limitation attorney's
fees for one counsel selected by the THL Group (if a Participating Buyer) and,
if requested, one counsel selected by a majority in interest of the other
Participating Buyers and all accounting fees and charges and all finders,
brokerage or investment banking fees, charges or commissions, shall be paid by
the Company.
(e) Closing. The Participating Buyers and the Company shall have
thirty days from the delivery of the last Acceptance Notice of such
Participating Buyers in which to consummate a binding agreement. Subject to the
foregoing, the closing of an Issuance pursuant to Section 10.1 shall take place
at such time and place as the Company shall specify by notice to each
Participating Buyer. At the Closing of any Issuance under this Section 10.1,
each Participating Buyer shall be delivered the notes, certificates or other
instruments evidencing the Subject Securities to be issued to such Participating
Buyer, registered in the name of such Participating Buyer or his designated
nominee, free and clear of any liens or encumbrances, with any transfer tax
stamps affixed, against delivery by such Participating Buyer of the applicable
consideration.
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10.2 Excluded Transactions. Notwithstanding the preceding provisions of
this Article X, this Article X shall not restrict:
(a) any issuances, sales or grants of equity securities of the Company
or securities convertible into equity securities of the Company (collectively,
"Equity Securities"), as equity compensation, to the officers, Representatives
or directors of the Company or any of its subsidiaries;
(b) the issuance, delivery or sale of Equity Securities, either
directly or indirectly, in connection with the acquisition, strategic business
combination or investment by Company in any party which is not prior to such
transaction an affiliate of either the Company or any of the Securityholders
(whether by merger, consolidation, stock swap, sale of assets or securities, or
otherwise);
(c) the issuance, delivery or sale of Equity Securities to any third
party which is at such time a creditor of Company, other than any member of the
THL Group and their affiliates, in connection with the refinancing or
restructuring of the indebtedness owed to such third party;
(d) an issuance, delivery or sale of securities by the Company in
connection with an IPO or registration pursuant to the Registration Rights
Agreement; or
(e) any issuance, sale or delivery of securities by the Company
pursuant to the Transactions.
ARTICLE XI.
MISCELLANEOUS PROVISIONS
11.1 Definitions. As used in this Agreement, the following terms shall have
the meanings set forth or as referenced below:
"40 Act" has the meaning given to such term in Section 1.2.
"Acceptance Notice" has the meaning given to such term in Section 10.1(b).
"Act" has the meaning given to such term in Section 1.1.
"Allocated Amount" has the meaning given to such term in Section 6.4(a).
"Board" has the meaning given to such term in Section 1.2.
"Xxxxxx Nominee" has the meaning given to such term in Section 8.2.
"Carrying Value" has the meaning given to such term in Section 4.2.
"Cashless Exercise Basis" has the meaning given to such term in Section
8.2.
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"Cause" has the meaning given to such term in Section 8.2.
"Change in Control" has the meaning given to such term in Section 9.2.
"Charter Documents" has the meaning given to such term in Section 8.1.
"Class A Units" means the Class A Units of the Company.
"Class B Units" means the Class B Units of the Company.
"Class C Units" means the Class C-1 Units and Class C-2 Units of the
Company.
"Closing" has the meaning given to such term in the Purchase Agreement.
"Closing Date" has the meaning given to such term in the Purchase
Agreement.
"Common Stock" means (i) following the conversion of the Company into a
corporation or the Company being merged into, or otherwise succeeded by, a
corporation, the common stock of the Company and (ii) Holdings Stock.
"Common Stock Equivalents" means (without duplication with any Units or
Common Stock) rights, warrants, options, convertible securities, or exchangeable
securities or indebtedness, or other rights, exercisable for or convertible or
exchangeable into, directly or indirectly, Units, Common Stock or securities
exercisable for or convertible or exchangeable into Units or Common Stock, as
the case may be, whether at the time of issuance or upon the passage of time or
the occurrence of some future event.
"Company" has the meaning given to such term in the Introduction.
"Cost" has the meaning given to such term in Section 4.2.
"Covered Sale" has the meaning given to such term in Section 6.4.
"Deferred Compensation Plan" means the deferred compensation plan of Nortek
Holdings, Inc. dated August 27, 2004.
"Determination Date" has the meaning given to such term in Section 4.1.
"Equity Securities" has the meaning given to such term Section 10.2.
"Exchange Act" has the meaning given to such term in Section 1.2.
"Excluded Permitted Transferee" has the meaning given to such term in
Section 1.2(c).
"Excluded Transaction" has the meaning given to such term in Section 6.1.
"Fair Market Value" has the meaning given to such term in Section 4.1(a).
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"FMV Notice" has the meaning given to such term in Section 4.1(b).
"Holdings" has the meaning given to such term in the Introduction.
"Holdings Stock" means shares of common stock of Holdings that are
distributed by the Company to the Securityholders.
"Involuntary Transfer" has the meaning given to such term in Section 6.3.
"Involuntary Transferee" has the meaning given to such term in Section 6.3.
"IPO" has the meaning given to such term in Section 1.1.
"Issuance" has the meaning given to such term in Section 10.1.
"LLC Agreement" means the Limited Liability Company Agreement of the
Company dated as of August 27, 2004.
"Management Majority" means Management Securityholders holding a majority
of (i) the outstanding Class B Units and Class C Units held by the Management
Securityholders for so long as the Company remains a limited liability company
or (ii) the outstanding shares of Common Stock (including shares issuable under
outstanding options to purchase Common Stock as determined on a Cashless
Exercise Basis) held by the Management Securityholders on and following such
time as the Company converts into or is merged with a corporation and the
Securityholders receive shares of Common Stock as a result thereof.
"Management Securities" means (a) Class B Units and Class C Units acquired
by the Management Securityholders on or after the date of this Agreement under
the Management Subscription Agreements, (b) any Units, Common Stock or Common
Stock Equivalents hereafter acquired by any holder of Management Securities and
(c) any securities of the Company, Holdings or their successors issued with
respect to the securities referred to in clauses (a) or (b) above by way of a
payment-in-kind, securities dividend or securities split or in connection with a
combination of securities, exchange, conversion, recapitalization, merger,
consolidation or other reorganization.
"Management Securityholders" has the meaning given to such term in the
Introduction.
"Management Subscription Agreements" mean the unit subscription agreements
between the Company and the respective Management Securityholders.
"Nominee" has the meaning given to such term in Section 8.2.
"Nominees" has the meaning given to such term in Section 8.2.
"Notice" has the meaning given to such term in Section 6.3.
"Offerees" has the meaning given to such term in Section 6.4.
"Option Cancellation Agreements" mean the option cancellation agreements,
dated as of
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August 27, 2004, by and among the Company, Holdings, THL Buildco, Inc. and
certain Securityholders.
"Option Plan" has the meaning given to such term in Section 11.3.
"Participating Buyer" has the meaning given to such term in Section 10.1.
"Participation Notice" has the meaning given to such term in Section 10.1.
"Participation Offerees" has the meaning given to such term in Section
10.1.
"Participation Portion" has the meaning given to such term in Section 10.1.
"Permitted Transferee" has the meaning given to such term in Section 1.1.
"Person" has the meaning given to such term in Section 11.24.
"Prospective Subscriber" has the meaning given to such term in Section
10.1.
"Purchase Agreement" has the meaning given to such term in the Preamble.
"Xxxxxx I" has the meaning given to such term in the Preamble.
"Xxxxxx II" has the meaning given to such term in the Preamble.
"Xxxxxx Holdings" has the meaning given to such term in the Preamble.
"Registration" has the meaning given to such term in Section 1.1.
"Registration Rights Agreement" has the meaning given to such term in
Section 7.1.
"Remaining Holders" has the meaning given to such term in Section 6.4.
"Restricted Period" has the meaning given to such term in Section 1.1.
"Retirement" has the meaning given to such term in Section 2.1.
"RLB" means Xxxxxxx X. Xxxxxx. For purposes of calculating RLB's ownership
of Securities under this Agreement, he shall be deemed to own all Securities
held by his Permitted Transferees over which RLB has control.
"Secretary" has the meaning given to such term in Section 8.2.
"Securities" means, collectively, the THL Securities, the Third Party
Investor Securities and the Management Securities.
"Securityholder Majority" means Securityholders holding a majority of (i)
the outstanding Class B Units and Class C Units for so long as the Company
remains a limited liability company or (ii) the outstanding shares of Common
Stock (including shares issuable
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under outstanding options to purchase Common Stock as determined on a Cashless
Exercise Basis) on and following such time as the Company converts into or is
merged with a corporation and the Securityholders receive shares of Common Stock
as a result thereof.
"Securityholders" has the meaning given to such term in the Preamble.
"Senior Management Unit Subscription Agreement" means each of the senior
management unit subscription agreements, dated as of August 27, 2004, by and
among the Company and each of the Executives (as defined in each agreement).
"Subject Securities" has the meaning given to such term in Section 10.1.
"Subject Units" means Class B Units and Vested Class C Units (including
Class C Units vested as a result of any given Covered Sale).
"Tag-Along Notice" has the meaning given to such term in Section 6.4.
"Third Party" has the meaning given to such term in Section 6.4.
"Third Party Investor" has the meaning given to it in Section 11.22.
"Third Party Investor Securities" means (a) Units acquired by the Third
Party Investors on or after the date of this Agreement, (b) any Units, Common
Stock or Common Stock Equivalents hereafter acquired by any holder of Third
Party Investor Securities and (c) any securities of the Company, Holdings or any
of their successors issued with respect to the securities referred to in clauses
(a) or (b) above by way of a payment-in-kind, securities dividend or securities
split or in connection with a combination of securities, exchange, conversion,
recapitalization, merger, consolidation or other reorganization.
"Third Party Majority" means Third Party Investors holding a majority of
(i) the outstanding Class B Units and Class C Units held by the Third Party
Securityholders for so long as the Company remains a limited liability company
or (ii) the outstanding shares of Common Stock (including shares issuable under
outstanding options to purchase Common Stock as determined on a Cashless
Exercise Basis) held by the Third Party Securityholders on and following such
time as the Company converts into or is merged with a corporation and the
Securityholders receive shares of Common Stock as a result thereof.
"THL" means THL Managers V, LLC.
"THL 1997 Trust" has the meaning given to such term in the Preamble.
"THL Cayman Fund" has the meaning given to such term in the Preamble.
"THL Funds" has the meaning given to such term in Section 1.2.
"THL Group" has the meaning given to such term in the Introduction.
"THL Investors" has the meaning given to such term in the Preamble.
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"THL Nominee" has the meaning given to such term in Section 8.2.
"THL Parallel Fund" has the meaning given to such term in the Preamble.
"THL Securities" means (a) THL Units, (b) Units, Common Stock or Common
Stock Equivalents hereafter acquired by any member of the THL Group and (c) any
securities of the Company, Holdings or any of their successors issued with
respect to the securities referred to in clauses (a) or (b) above by way of a
payment-in-kind, securities dividend or securities split or in connection with a
combination of securities, exchange, conversion, recapitalization, merger,
consolidation or other reorganization.
"THL Units" means the Class A Units and Class B Units issued to members of
the THL Group on the Closing Date.
"THL V" has the meaning given to such term in the Preamble.
"THL V Nominee" has the meaning given to such term in Section 8.2.
"Transactions" has the meaning given to such term in the Preamble.
"Transferor" has the meaning given to such term in Section 6.4.
"Transferred" has the meaning given to such term in Section 1.1
"Units" means the Class A Units, Class B Units or Class C Units.
"Vested Class C Units" means with respect to a given Securityholder the
number of Vested Class C-1 Units (as defined in the LLC Agreement) and Vested
Class C-2 Units (as defined in the LLC Agreement) owned as of a given time of
determination.
11.2 Securities Legend. A copy of this Agreement shall be filed with the
Secretary of the Company and kept with the records of the Company. Each
certificate, if any, representing Securities owned by the Securityholders shall
bear upon its face the following legend:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
(THE "ACT"), AND MAY NOT BE OFFERED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED
OR OTHERWISE DISPOSED OF UNLESS (A) IN COMPLIANCE WITH THE SECURITYHOLDERS
AGREEMENT, DATED AS OF AUGUST 27, 2004 AND (B) UNTIL REGISTERED UNDER THE
ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR UNLESS, IN THE OPINION OF
COUNSEL TO THE HOLDER, WHICH COUNSEL MUST BE, AND THE FORM AND SUBSTANCE OF
WHICH OPINION ARE, SATISFACTORY TO THE ISSUER, SUCH OFFER, SALE,
ASSIGNMENT, PLEDGE, HYPOTHECATION, TRANSFER OR OTHER DISPOSITION IS EXEMPT
FROM REGISTRATION OR IS OTHERWISE IN COMPLIANCE WITH THE ACT AND SUCH
LAWS."
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All Securityholders shall be bound by the requirements of such legend to
the extent that such legend is applicable. Upon a registration under the Act of
any Securities or sale of Securities pursuant to Rule 144 or any other exemption
from registration where the removal of the legend is appropriate, the
certificate representing such Securities shall be replaced, at the expense of
the Company, with certificates not bearing the legend required by this Section
11.2.
11.3 New Management Securityholders. Each of the Securityholders hereby
agrees that the Company may require that any employee or director of the Company
or any of its subsidiaries or any representative (other than any such director
or representative affiliated with THL) who after the date of this Agreement is
offered Company securities shall, as a condition precedent to the acquisition of
such securities, become a party to this Agreement by executing the same and
delivering it to the Company at its address specified in Section 11.15. Upon
such execution and delivery, such employee shall be a "Management
Securityholder" for all purposes of this Agreement.
11.4 Fee. The parties hereto acknowledge and agree that at the Closing THL
will be paid a fee of $25 million and that Holdings, Nortek, Inc. and THL will
enter into the Management Agreement (which agreement may be amended from time to
time in accordance with Section 11.6 hereof to the extent applicable) previously
provided to RLB and the Company and Holdings and Nortek, Inc. will pay THL an
annual fee in accordance with the terms of such Management Agreement.
11.5 Certain Transactions. The THL Group agrees that, except as
contemplated hereby or by the Purchase Agreement or by any of the other
agreements contemplated hereby or thereby (other than Section 2.8 of the LLC
Agreement), during such time as RLB owns in excess of 5% of (1) the outstanding
Class B Units and Class C Units for so long as the Company remains a limited
liability company or (2) the outstanding shares of Common Stock (including
shares issuable under outstanding options to purchase Common Stock as determined
on a Cashless Exercise Basis) on and following such time as the Company converts
into or is merged with a corporation, without the prior approval of either (i)
RLB or (ii) a majority of the members of the Board who are not officers,
directors (excluding outside directors of portfolio companies) or employees of
THL or any of its affiliates, the Company and each of its subsidiaries shall not
(x) effect any transactions with any member of the THL Group or any of their
affiliates, (y) issue or Transfer any equity securities of any subsidiary of the
Company to any member of the THL Group or any of their affiliates, or (z)
Transfer any assets to any member of the THL Group or any of their affiliates,
other than, in any case of clauses (x) and (z), purchases and sales of inventory
in the ordinary course of business and other customary commercial transactions
on an arms' length basis involving portfolio companies of THL and its affiliated
investment funds.
11.6 No Other Arrangements or Agreements. Each Management Securityholder
hereby represents and warrants to each other Securityholder that, except for the
LLC Agreement and the Management Subscription Agreements, he has not entered
into or agreed to be bound by any other arrangements or agreements of any kind
with any other party with respect to Company securities, including, but not
limited to, arrangements or agreements with respect to the acquisition,
disposition or voting of Company securities (whether or not such agreements and
arrangements are with the Company, other Securityholders or holders of Company
securities that are not parties to this Agreement). Each of the members of the
THL Group and each other
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Securityholder represents and warrants to each other Securityholder that it has
not entered into or agreed to be bound by any voting agreements with respect to
its Company securities.
11.7 Amendment and Modification. This Agreement may be amended, modified or
supplemented only with the written consent of (i) the THL Group and (ii) if such
amendment modifies (A) any provision of this Agreement (x) in a manner
substantially adverse to the Management Securityholders, the Securityholders
constituting a Management Majority and (y) in a manner substantially adverse to
the Third Party Investors, the Securityholders constituting a Third Party
Majority or (B) any other Section of this Agreement, the Company and
Securityholders constituting a Securityholder Majority. Notwithstanding anything
to the contrary herein, the THL Group may add any additional third party to this
Agreement or eliminate any such additional third party from this Agreement as
the THL Group sees fit, subject to the consent of such affected party; provided,
however, that each member of the THL Group that owns Securities of the Company
or any interest therein shall be at all times party to this Agreement. Upon
receipt of the consents required by this Section 11.8, the Company shall notify
all Securityholders promptly after such amendment, modification or supplement
shall take effect.
11.8 Assignment. The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs, legal
representatives, successors and assigns; provided, however, that none of the
Company, the Third Party Investors or any Management Securityholder shall assign
any of its rights or obligations pursuant to this Agreement without the prior
written consent of the THL Group and, for so long as the Management
Securityholders own in excess of 5% of (1) the outstanding Class B Units and
Class C Units so long as the Company remains a limited liability company or (2)
the outstanding shares of Common Stock (including shares issuable under
outstanding options to purchase Common Stock as determined on a Cashless
Exercise Basis) on and following such time as the Company converts into or is
merged with a corporation, the members of the THL Group shall not assign its
rights or obligations pursuant to this Agreement, other than to its Permitted
Transferees and to persons who agree to be bound by this Agreement, without the
prior written consent of the Management Securityholders constituting a
Management Majority at such time. In the case of Permitted Transferees, third
parties and Involuntary Transferees, such Permitted Transferees, third parties
or Involuntary Transferees, as the case may be, shall be deemed the
Securityholder hereunder for purposes of obtaining the benefits or enforcing the
rights of such Securityholder hereunder; provided, however, that no Permitted
Transferee, third party or Involuntary Transferee, as the case may be, shall
derive any rights under this Agreement unless and until such Permitted
Transferee, third party or Involuntary Transferee, as the case may be, has
delivered to the Company a valid undertaking to become, and becomes, bound by
the terms of this Agreement to which the transferring Securityholder is subject.
11.9 Recapitalizations, Exchanges, etc. Affecting the Company Stock. Except
as otherwise provided herein, the provisions of this Agreement shall apply to
the full extent set forth herein with respect to the Securities. Except as
otherwise provided herein, this Agreement is not intended to confer upon any
person, except for the parties hereto, any rights or remedies hereunder.
11.10 Transfer of Securities. If at any time the Company purchases any
Securities pursuant to this Agreement, the Company may pay the purchase price
determined under this
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Agreement for the Securities it purchases by wire transfer of funds or Company
check in the amount of the purchase price, and upon receipt of payment of such
purchase price or, any portion thereof, the selling Securityholder shall deliver
to the Company the certificates representing the number of Securities being
purchased in a form suitable for transfer, duly endorsed in blank, and free and
clear of any lien, claim or encumbrance. In the event that any Securityholder
refuses or otherwise fails to deliver, in accordance with the preceding
sentence, certificates representing the number of Securities being purchased,
the Securities purchased from such Securityholder shall (notwithstanding such
refusal or failure) be deemed, upon receipt by such Securityholder of the
purchase price therefor, to not be outstanding for any purposes. Notwithstanding
anything in this Agreement to the contrary, the Company shall not be required to
make any payment for Securities purchased hereunder until delivery to it of the
certificates representing such Securities. If the Company is purchasing less
than all the Securities represented by a single certificate, the Company, after
making such purchase, shall deliver to the selling Securityholder a certificate
for any unpurchased Securities.
11.11 Further Assurances. Each party hereto or Person subject 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 or Person subject hereto may
reasonably request in order to carry out the intent and accomplish the purposes
of this Agreement and the consummation of the transactions contemplated hereby.
11.12 Governing Law. This Agreement and the rights and obligations of the
parties hereunder and the persons subject hereto shall be governed by, and
construed and interpreted in accordance with, the law of the State of Delaware,
without giving effect to the choice of law principles thereof.
11.13 Jurisdiction. Any suit, action or proceeding under or with respect to
this Agreement, or any judgment entered by any court in respect of any thereof,
shall be brought in any court of competent jurisdiction in the State of Delaware
and each of the parties hereto hereby submits to the exclusive jurisdiction of
such courts for the purpose of any such suit, action, proceeding or judgment.
Each of the parties hereto hereby irrevocably waives any objections which it may
now or hereafter have to the laying of the venue of any suit, action or
proceeding arising out of or relating to this Agreement brought in any court of
competent jurisdiction in the State of Delaware, and hereby further irrevocably
waives any claim that any such suit, action or proceeding brought in any such
court has been brought in any inconvenient forum.
11.14 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.
11.15 Notices. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement to any
party hereunder shall be in writing and deemed given upon (i) receipt, when
delivered via personal delivery, (ii) transmitter's confirmation of a receipt of
a facsimile transmission, when delivered via such transmittal, (iii) confirmed
delivery by a standard overnight carrier or (iv) receipt, as evidenced by
certification or
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registration, when mailed in the United States by certified or registered mail
at the following addresses (or at such other address for a party as shall be
specified by notice given hereunder):
(a) If to the Company, to it at:
THL - Nortek Investors, LLC
00 Xxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx and Xxxxxxx X. Xxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
with a copy to:
Xxxxxx X. Xxx Partners, L.P.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx X. XxXxxx and Xxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(b) If to a Management Securityholder, as listed on the signature
page. hereto, or, if not so listed, to it at its address as
reflected in the stock records of the Company, or as such
Management Securityholder shall designate to the Company in
writing, with a copy
to THL at its address indicated below (provided that any such
designation shall be effective only upon receipt thereof).
(c) If to a member of the THL Group, to it at:
c/o Xxxxxx X. Xxx Partners, L.P.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx X. XxXxxx and Xxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(d) If to a Third Party Investor, as listed on the signature page
hereto,
Or, if not so listed, to it at its address as reflected in the
stock records of the Company, or as such Third Party Investor
shall designate to the Company in writing, with a copy to THL
Group at address indicated above (provided that any such
designation shall be effective only upon receipt thereof).
11.16 Headings; Execution in Counterparts. The headings and captions
contained herein are for convenience and shall not control or affect the meaning
or construction of any
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provision hereof. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original and which together shall
constitute one and the same instrument.
11.17 Entire Agreement: Effect on Certain Other Agreements. This Agreement,
the LLC Agreement, the Registration Rights Agreement, the Option Cancellation
Agreements, the Deferred Compensation Plan, each of the Senior Management Unit
Subscription Agreements, the amended and restated employment agreement by and
between the Company and RLB dated August 27, 2004, the amended and restated
employment agreement by and between Xxxxx Xxxxxxxx and the Company, dated August
27, 2004, the amended and restated employment agreement by and between Xxxxx
Xxxx and the Company, dated August 27, 2004 and the Management Subscription
Agreements embody the entire agreement and understanding of the parties hereto
in respect of the subject matter contained herein. There are no restrictions,
promises, representations, warranties, covenants or undertakings relating to the
Securities, other than those expressly set forth or referred to herein, in the
Registration Rights Agreement, the LLC Agreement, the Option Cancellation
Agreement, the Deferred Compensation Plan and each of the Senior Management Unit
Subscription Agreements. This Agreement and the other agreements referenced in
the first sentence of this Section 11.17 supersede all prior agreements and
understandings among the parties with respect to such subject matter.
11.18 Injunctive Relief. The Securities cannot readily be purchased or sold
in the open market, and for that reason, among others, the Company and the
Securityholders shall be irreparably damaged in the event this Agreement is not
specifically enforced. Each of the parties therefore agrees that in the event of
a breach of any provision of this Agreement, the aggrieved party may elect to
institute and prosecute proceedings in any court of competent jurisdiction to
enforce specific performance or to enjoin the continuing breach of this
Agreement. Such remedies shall, however, be cumulative and not exclusive, and
shall be in addition to any other remedy which the Company or the
Securityholders may have. Each Securityholder hereby irrevocably submits to the
non-exclusive jurisdiction of the state and federal courts in New York and
Delaware for the purposes of any suit, action or other proceeding arising out of
or based upon this Agreement or the subject matter hereof. Each Securityholder
hereby consents to service of process by mail made in accordance with Section
11.15.
11.19 Attorneys' Fees. If any legal action or any arbitration or other
proceeding is brought for the enforcement of this Agreement, or because of an
alleged dispute, breach, default or misrepresentation in connection with any of
the provisions of this Agreement, the successful or prevailing party or parties
shall be entitled to recover such reasonable attorneys' fees and other costs
incurred in that action or proceeding, in addition to any other relief to which
it or they may be entitled, as may be ordered in connection with such
proceeding.
11.20 Third Party Beneficiaries. The headings and captions contained herein
are for convenience of reference only and shall not control or affect the
meaning or construction of any provisions hereof. Except as otherwise expressly
provided herein, the covenants, agreements and other provisions contained in
this Agreement are for the sole benefit of the parties hereto and their
permitted successors and assigns, and they shall not be construed as conferring,
and are not intended to confer, any rights, remedies or other benefits hereunder
on any other persons. Neither this Agreement nor any purchase or sale of
Securities shall create, or be construed or deemed to
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create, any right of employment in favor of a Management Securityholder or any
other person by the Company or any subsidiary of the Company.
11.21 Sales to Competitors. Notwithstanding anything to the contrary in
this Agreement (other than pursuant to Section 6.4(a) and 6.4(b)), no
Securityholder may, without the prior written consent of the THL Group and the
Company, Transfer any Securities that such Securityholder beneficially owns to
any Person that competes with or is engaged in any lines of business of the
Company whether or not so competing or engaged in the same geographic area as
the Company.
11.22 Third Party Investors. Each of the Securityholders hereby agrees that
the Company may require that any party, other than an employee or director of
the Company or any of its subsidiaries or any representative (other than any
such director or representative affiliated with THL) (who is dealt with in
Section 11.3), who immediately prior to or substantially contemporaneously with
the Closing purchases Securities, shall become a party to this Agreement by
executing the same and delivering it to the Company at its address specified in
Section 11.15. For all purposes of this Agreement, upon such execution and
delivery, such party shall be deemed to be a "Third Party Investor" and
collectively, with other similar persons, the "Third Party Investors."
11.23 Improper Transfer. Any attempt to Transfer any Securities not in
material compliance with this Agreement shall be null and void and neither the
Company nor any transfer agent shall give any effect in the Company's stock
records to such attempted Transfer.
11.24 Persons. For all purposes of this Agreement, "Person" means an
individual, corporation, partnership, limited liability partnership, limited
liability company, association, trust or any unincorporated organization.
11.25 Other Agreements. Nothing in this Agreement shall limit the ability
of the Company to enter into any agreement with any Management Securityholder or
any other employee with respect to the purchase and/or sale of Securities on
terms different than as set forth in this Agreement.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
THL - NORTEK INVESTORS, LLC
By: /s/ Xxxx X. Xxxxxx
------------------------------------
Name: Xxxx X. Xxxxxx
Title: Representative
THL BUILDCO HOLDINGS, INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President and Treasurer
[SIGNATURE PAGE TO SECURITYHOLDERS AGREEMENT]
XXXXXX X. XXX EQUITY FUND V, L.P.
By: THL Equity Advisors V, LLC, its
general partners
By: Xxxxxx X. Xxx Partners, L.P., its
sole member
By: Xxxxxx X. Xxx Advisors LLC, its
general partner
By: /s/ Xxxxxxx X. XxXxxx
------------------------------------
Name: Xxxxxxx X. XxXxxx
Title: Managing Director
XXXXXX X. XXX PARALLEL FUND V, L.P.
By: THL Equity Advisors V, LLC, its
general partner
By: Xxxxxx X. Xxx Partners, L.P., its
sole member
By: Xxxxxx X. Xxx Advisors LLC, its
general partner
By: /s/ Xxxxxxx X. XxXxxx
------------------------------------
Name: Xxxxxxx X. XxXxxx
Title: Managing Director
[SIGNATURE PAGE TO SECURITYHOLDERS AGREEMENT]
XXXXXX X. XXX EQUITY (CAYMAN)
FUND V, L.P.
By: THL Equity Advisors V, LLC, its
general partner
By: Xxxxxx X. Xxx Partners, L.P., its
sole member
By: Xxxxxx X. Xxx Advisors LLC, its
general partner
By: /s/ Xxxxxxx X. XxXxxx
------------------------------------
Name: Xxxxxxx X. XxXxxx
Title: Managing Director
1997 XXXXXX X. XXX NOMINEE TRUST
By: US Bank, N.A., not personally, but
solely as Trustee under the 1997
Xxxxxx X. Xxx Nominee Trust
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
----------------------------------
Title: Vice President
---------------------------------
XXXXXX X. XXX INVESTORS LIMITED
PARTNERSHIP
By: THL Investment Management Corp., its
general partner
By: /s/ Xxxxxx X. Xxx
------------------------------------
Name: Xxxxxx X. Xxx
Title: Chief Executive Officer
[SIGNATURE PAGE TO SECURITYHOLDERS AGREEMENT]
XXXXXX INVESTMENTS EMPLOYEES'
SECURITIES COMPANY I LLC
By: Xxxxxx Investments Holdings, LLC,
its managing member
By: Xxxxxx Investments, LLC, its
managing member
By: /s/ Xxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxx X. Xxxxx
----------------------------------
Title: Senior Vice President
---------------------------------
XXXXXX INVESTMENTS EMPLOYEES'
SECURITIES COMPANY II LLC
By: Xxxxxx Investments Holdings, LLC,
its managing member
By: Xxxxxx Investments, LLC, its
managing member
By: /s/ Xxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxx X. Xxxxx
----------------------------------
Title: Senior Vice President
---------------------------------
XXXXXX INVESTMENTS HOLDINGS, LLC
By: Xxxxxx Investments, LLC, its
managing member
By: /s/ Xxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxx X. Xxxxx
----------------------------------
Title: Senior Vice President
---------------------------------
[SIGNATURE PAGE TO SECURITYHOLDERS AGREEMENT]
THIRD PARTY INVESTORS
RGIP, LLC
By: /s/ Xxxxxxxx X. Xxxxx, Xx.
------------------------------------
Name: Xxxxxxxx X. Xxxxx, Xx.
Title: Managing Member
[SIGNATURE PAGE TO SECURITYHOLDERS AGREEMENT]
MANAGEMENT SECURITYHOLDERS
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------
Name(Print): Xxxxxxx X. Xxxxxx
[Securityholders Agreement]
MANAGEMENT SECURITYHOLDERS
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------
Name(Print): Xxxxxxx X. Xxxxxxx
[Securityholders Agreement]
MANAGEMENT SECURITYHOLDERS
By: /s/ Xxxxxxx X. Xxxxxxxxx
--------------------------
Name(Print): Xxxxxxx X. Xxxxxxxxx
[Securityholders Agreement]
MANAGEMENT SECURITYHOLDERS
By: X. X. Xxxxxxxxx
--------------------------
Name (Print): Xxxxxx X. Xxxxxxxxx
[Securityholders Agreement]
MANAGEMENT SECURITYHOLDERS
By: /s/ Xxxxxx X. Xxxxxx
--------------------------
Name(Print): Xxxxxx X. Xxxxxx
[Securityholders Agreement]
MANAGEMENT SECURITYHOLDERS
By: /s/ Xxxxx X. Xxxxx
--------------------------
Name(Print): Xxxxx X. Xxxxx
[Securityholders Agreement]
MANAGEMENT SECURITYHOLDERS
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------
Name(Print): Xxxxx X. Xxxxxxxx
[Securityholders Agreement]
MANAGEMENT SECURITYHOLDERS
By: /s/ Xxxxx X. Xxxxxxx
--------------------------
Name(Print): Xxxxx X. Xxxxxxx
[Securityholders Agreement]
MANAGEMENT SECURITYHOLDERS
By: /s/ Xxxxx X. Xxxx
--------------------------
Name(Print): Xxxxx X. Xxxx
[Securityholders Agreement]
MANAGEMENT SECURITYHOLDERS
By: /s/ Xxxxxxxx X. Xxxxxx
--------------------------
Name(Print): Xxxxxxxx X. Xxxxxx
[Securityholders Agreement]
MANAGEMENT SECURITYHOLDERS
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------
Name(Print):Xxxxxxx X. Xxxxxxxx
[Securityholders Agreement]
MANAGEMENT SECURITYHOLDERS
By: /s/ Xxxxx X. XxXxxxx
--------------------------
Name(Print): Xxxxx X. XxXxxxx
[Securityholders Agreement]
MANAGEMENT SECURITYHOLDERS
By: /s/ X.X. XxXxxx
--------------------------
Name(Print): X.X. XxXxxx
[Securityholders Agreement]
MANAGEMENT SECURITYHOLDERS
By: /s/ Xxxxxxx X. Xxx
--------------------------
Name(Print):Xxxxxxx X. Xxx
[Securityholders Agreement]
MANAGEMENT SECURITYHOLDERS
By: /s/ Xxxxxxx X. Xxxx
--------------------------
Name(Print): Xxxxxxx X. Xxxx
[Securityholders Agreement]
MANAGEMENT SECURITYHOLDERS
By: /s/ Xxxxx X. Xxxxxxx
--------------------------
Name(Print): Xxxxx X. Xxxxxxx
[Securityholders Agreement]
MANAGEMENT SECURITYHOLDERS
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------
Name(Print):Xxxxxxx X. Xxxxxxxx
[Securityholders Agreement]
MANAGEMENT SECURITYHOLDERS
By: /s/ Xxxxxx X. Xxxxxx
--------------------------
Name(Print): Xxxxxx X. Xxxxxx
[Securityholders Agreement]
MANAGEMENT SECURITYHOLDERS
By: /s/ Xxxxxx Xxxxx
--------------------------
Name(Print): Xxxxxx Xxxxx
[Securityholders Agreement]
MANAGEMENT SECURITYHOLDERS
By: /s/ Xxxxx Xxxxxx
--------------------------
Name(Print): Xxxxx Xxxxxx
[Securityholders Agreement]
MANAGEMENT SECURITYHOLDERS
By: /s/ Xxxxx X. Xxxx
--------------------------
Name (Print): Xxxxx X. Xxxx
[Securityholders Agreement]
MANAGEMENT SECURITYHOLDERS
By: /s/ Xxxxxx X. Xxxxx
--------------------------
Name(Print): Xxxxxx X. Xxxxx
[Securityholders Agreement]
MANAGEMENT SECURITYHOLDERS
By: /s/ Xxxxx X. Xxxxxxx
--------------------------
Name(Print): Xxxxx X. Xxxxxxx
[Securityholders Agreement]
MANAGEMENT SECURITYHOLDERS
By: /s/ Xxxxx X. Xxxxx
--------------------------
Name(Print): Xxxxx X. Xxxxx
[Securityholders Agreement]
MANAGEMENT SECURITYHOLDERS
By: /s/ Xxxxxx X. Xxxxx
--------------------------
Name(Print): Xxxxxx X. Xxxxx
[Securityholders Agreement]
MANAGEMENT SECURITYHOLDERS
By: /s/ Xxxxxxx Xxxx
--------------------------
Name(Print): Xxxxxxx Xxxx
[Securityholders Agreement]
MANAGEMENT SECURITYHOLDERS
By: /s/ X.X. Xxxxxxxxx
--------------------------
Name(Print):X.X. Xxxxxxxxx
[Securityholders Agreement]
MANAGEMENT SECURITYHOLDERS
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------
Name(Print): Xxxxx X. Xxxxxxxx
[Securityholders Agreement]
MANAGEMENT SECURITYHOLDERS
By: /s/ Xxxx X. Xxxxxxxxxx
--------------------------
Name (Print): Xxxx X. Xxxxxxxxxx
[Securityholders Agreement]
MANAGEMENT SECURITYHOLDERS
By: /s/ Xxxxxx X. Xxxxxxxxx
--------------------------
Name (Print): Xxxxxx X. Xxxxxxxxx
[Securityholders Agreement]
MANAGEMENT SECURITYHOLDERS
By: /s/ Xxxxx X. Xxxxxxx
--------------------------
Name (Print): Xxxxx X. Xxxxxxx
[Securityholders Agreement]
MANAGEMENT SECURITYHOLDERS
By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------------
Name (Print): Xxxxxxx X. Xxxxxxxxx
[Securityholders Agreement]
MANAGEMENT SECURITYHOLDERS
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------
Name (Print): Xxxxx X. Xxxxxxxx
[Securityholders Agreement]
MANAGEMENT SECURITYHOLDERS
By: /s/ Xxxxxx Xxxxxxx
--------------------------
Name (Print): Xxxxxx Xxxxxxx
[Securityholders Agreement]
MANAGEMENT SECURITYHOLDERS
By: /s/ Franco Stabellini
--------------------------
Name (Print): Franco Stabellini
[Securityholders Agreement]
MANAGEMENT SECURITYHOLDERS
By: /s/ Xxxxx X. Xxxxxx
--------------------------
Name (Print): Xxxxx X. Xxxxxx
[Securityholders Agreement]
MANAGEMENT SECURITYHOLDERS
By: /s/ Xxxxx X. Xxxxxxx
--------------------------
Name (Print): Xxxxx X. Xxxxxxx
[Securityholders Agreement]
MANAGEMENT SECURITYHOLDERS
By: /s/ Xxx Xxxxxxxxxxx
--------------------------
Name (Print): Xxx Xxxxxxxxxxx
[Securityholders Agreement]
MANAGEMENT SECURITYHOLDERS
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------
Name (Print): Xxxxxx X. Xxxxxxx
[Securityholders Agreement]
MANAGEMENT SECURITYHOLDERS
By: /s/ Xxx Xxxx
--------------------------
Name (Print): Xxx Xxxx
[Securityholders Agreement]
MANAGEMENT SECURITYHOLDERS
By: /s/ Xxxxx Xxxxxx
--------------------------
Name (Print): Xxxxx Xxxxxx
[Securityholders Agreement]
MANAGEMENT SECURITYHOLDERS
By: /s/ Xxxxxx Xxxxxxxxx
--------------------------
Name (Print): Xxxxxx Xxxxxxxxx
[Securityholders Agreement]
MANAGEMENT SECURITYHOLDERS
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------
Name (Print): Xxxxxx X. Xxxxxxx
[Securityholders Agreement]
MANAGEMENT SECURITYHOLDERS
By: /s/ Xxxxx X. Xxxxx
--------------------------
Name (Print): Xxxxx X. Xxxxx
[Securityholders Agreement]
MANAGEMENT SECURITYHOLDERS
By: /s/ Xxxx X. Xxxxxxx
--------------------------
Name (Print): Xxxx X. Xxxxxxx
[Securityholders Agreement]
MANAGEMENT SECURITYHOLDERS
By: /s/ Xxxxxx Xxxxxxxxx
--------------------------
Name (Print): Xxxxxx Xxxxxxxxx
[Securityholders Agreement]
MANAGEMENT SECURITYHOLDERS
Schedule of Management Securityholders
Xxxxxxx Xxxxxx
Xxxxxxx Xxxxxxxxx
Xxxxxxx Xxxxxxx
Xxxxxx Xxxxxxxxx
Xxxxxx Xxxxxx
Xxxxx Xxxxxxxx
Xxxxx Xxxxxxx
Xxxxx Xxxx
Xxxxx Xxxxx
Xxxxxxxx Xxxxxx
Xxxxxxx Xxxxxxxx
Xxxxx XxXxxxx
Xxxxxx XxXxxx
Xxxxxxx Xxx
Xxxxxxx Xxxx
Xxxxx Xxxxxxx
Xxxxxxx Xxxxxxxx
Xxxxxx Xxxxxx
Xxxxxx Xxxxx
Xxxxx Xxxxxx
Xxxxx Xxxx
Sham Almed
Xxxxx Xxxxxxx
Xxxxx Xxxxx
Xxxxxx Xxxxx
Xxxxxxx Xxxx
Xxxxxx Xxxxxxxxx
Xxxxx Xxxxxxxx
Xxxx Xxxxxxxxxx
Xxxxxx Xxxxxxxxx
Xxxxx Xxxxxxx
Xxxxxxx Xxxxxxxxx
Xxxxx Xxxxxxxx
Xxxxxx Xxxxxxx
Franco Stabellini
Xxxxx Xxxxxx
Xxxxx Xxxxxxx
Xxx Xxxxxxxxxxx
Xxxxxx Xxxxxxx
Xxx Xxxx
Xxxxxx Xxxxxxxxx
Xxxx Xxxxxxx
Xxxxxx Xxxxxxxxx
Xxx Xxxxxx
Xxxxxx Xxxxxxx
Xxxxx Xxxxx
Xxxxx XxXxxx
Xxxxxx Xxxxx
Xxxxxxxxx Xxxxxx
Xxxxxxx Xxxxxx
Xxxx Xxxxx
Xxxxxx Xxxxxxx
Xxxxxx Xxxxxx
Xxxxx Xxxxxxx
Xxxx Xxxxxx
Xxxxx Xxxxxxxx
Xxxxxxx Xxxxxxxxxx
Xxxxx Xxxxxx
Jeffrey Francisco
Xxxxxx Xxxxxxxxxx
Xxxxxx Xxxxxxx Xxxxx
Xxxxx Xxxxxx
Xxxx Xxxxxx
Xxxxx Xxxxxxx
Xxxxxx Forest
Xxx Xxxxxx
Xxxx Xxxx
Xxxxx Xxxxxx
MANAGEMENT SECURITYHOLDERS
Schedule of Management Securityholders
Xxxxxxx Xxxxxx
Xxxxxxx Xxxxxxxxx
Xxxxxxx Xxxxxxx
Xxxxxx Xxxxxxxxx
Xxxxxx Xxxxxx
Xxxxx Xxxxxxxx
Xxxxx Xxxxxxx
Xxxxx Xxxx
Xxxxx Xxxxx
Xxxxxxxx Xxxxxx
Xxxxxxx Xxxxxxxx
Xxxxx XxXxxxx
Xxxxxx XxXxxx
Xxxxxxx Xxx
Xxxxxxx Xxxx
Xxxxx Xxxxxxx
Xxxxxxx Xxxxxxxx
Xxxxxx Xxxxxx
Xxxxxx Xxxxx
Xxxxx Xxxxxx
Xxxxx Xxxx
Sham Almed
Xxxxx Xxxxxxx
Xxxxx Xxxxx
Xxxxxx Xxxxx
Xxxxxxx Xxxx
Xxxxxx Xxxxxxxxx
Xxxxx Xxxxxxxx
Xxxx Xxxxxxxxxx
Xxxxxx Xxxxxxxxx
Xxxxx Xxxxxxx
Xxxxxxx Xxxxxxxxx
Xxxxx Xxxxxxxx
Xxxxxx Xxxxxxx
Xxxxxx Xxxxxxxxxx
Xxxxx Xxxxxx
Xxxxx Xxxxxxx
Xxx Xxxxxxxxxxx
Xxxxxx Xxxxxxx
Xxx Xxxx
Xxxxxx Xxxxxxxxx
Xxxx Xxxxxxx
Xxxxxx Xxxxxxxxx
Xxx Xxxxxx
Xxxxxx Xxxxxxx
Xxxxx Xxxxx
Xxxxx XxXxxx
Xxxxxx Xxxxx
Xxxxxxxxx Xxxxxx
Xxxxxxx Xxxxxx
Xxxx Xxxxx
Xxxxxx Xxxxxxx
Xxxxxx Xxxxxx
Xxxxx Xxxxxxx
Xxxx Xxxxxx
Xxxxx Xxxxxxxx
Xxxxxxx Xxxxxxxxxx
Xxxxx Xxxxxx
Xxxxxxx Xxxxxxxxx
Xxxxxx Xxxxxxxxxx
Xxxxxx Xxxxxxx Xxxxx
Xxxxx Xxxxxx
Xxxx Xxxxxx
Xxxxx Xxxxxxx
Xxxxxx Forest
Xxx Xxxxxx
Xxxx Xxxx
Xxxxx Xxxxxx
Additional Management Securityholders Signature Page
The undersigned, by its signature below hereby becomes a party to the
Securityholders Agreement, dated as of August 27, 2004, among THL - Nortek
Investors LLC and certain of its Securityholders (the "Securityholders
Agreement") pursuant to Section 11.3 thereof and agrees to be bound by the terms
of the Securityholders Agreement and, for all purposes thereof, to be a
"Management Securityholder".
IN WITNESS WHEREOF, the undersigned has executed this instrument as of the
_____ day of _________________ 2004.
Signature /s/ Xxxxxx X. Xxxxxxx
-------------------------------------------
Print Name /s/ Xxxxxx X. Xxxxxxx
------------------------------------------
Additional Management Securityholders Signature Page
The undersigned, by its signature below hereby becomes a party to the
Securityholders Agreement, dated as of August 27, 2004, among THL - Nortek
Investors LLC and certain of its Securityholders (the "Securityholders
Agreement") pursuant to Section 11.3 thereof and agrees to be bound by the terms
of the Securityholders Agreement and, for all purposes thereof, to be a
"Management Securityholder".
IN WITNESS WHEREOF, the undersigned has executed this instrument as of the
_____ day of _________________ 2004.
Additional Management Securityholder
By: /s/ Xxxxxxxxx Xxxxxx
-------------------------------------------
Name (Print): Xxxxxxxxx Xxxxxx
[Securityholders Agreement]
Additional Management Securityholders Signature Page
The undersigned, by its signature below hereby becomes a party to the
Securityholders Agreement, dated as of August 27, 2004, among THL - Nortek
Investors LLC and certain of its Securityholders (the "Securityholders
Agreement") pursuant to Section 11.3 thereof and agrees to be bound by the terms
of the Securityholders Agreement and, for all purposes thereof, to be a
"Management Securityholder".
IN WITNESS WHEREOF, the undersigned has executed this instrument as of the
_____ day of _________________ 2004.
Additional Management Securityholder
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------------
Name (Print): Xxxxxx X. Xxxxxx
[Securityholders Agreement]
Additional Management Securityholders Signature Page
The undersigned, by its signature below hereby becomes a party to the
Securityholders Agreement, dated as of August 27, 2004, among THL - Nortek
Investors LLC and certain of its Securityholders (the "Securityholders
Agreement") pursuant to Section 11.3 thereof and agrees to be bound by the terms
of the Securityholders Agreement and, for all purposes thereof, to be a
"Management Securityholder".
IN WITNESS WHEREOF, the undersigned has executed this instrument as of the
_____ day of _________________ 2004.
Additional Management Securityholder
By: /s/ Xxxxxx X. Xxxxxxxxxx
-------------------------------------------
Name (Print): Xxxxxx X. Xxxxxxxxxx
------------------------------------------
[Securityholders Agreement]
Additional Management Securityholders Signature Page
The undersigned, by its signature below hereby becomes a party to the
Securityholders Agreement, dated as of August 27, 2004, among THL - Nortek
Investors LLC and certain of its Securityholders (the "Securityholders
Agreement") pursuant to Section 11.3 thereof and agrees to be bound by the terms
of the Securityholders Agreement and, for all purposes thereof, to be a
"Management Securityholder".
IN WITNESS WHEREOF, the undersigned has executed this instrument as of the
_____ day of _________________ 2004.
Additional Management Securityholder
By: /s/ Xxxxx Xxxxxx
--------------------------------
Name (Print): Xxxxx Xxxxxx
[Securityholders Agreement]
Additional Management Securityholders Signature Page
The undersigned, by its signature below hereby becomes a party to the
Securityholders Agreement, dated as of August 27, 2004, among THL - Nortek
Investors LLC and certain of its Securityholders (the "Securityholders
Agreement") pursuant to Section 11.3 thereof and agrees to be bound by the terms
of the Securityholders Agreement and, for all purposes thereof, to be a
"Management Securityholder".
IN WITNESS WHEREOF, the undersigned has executed this instrument as of the
_____ day of _________________ 2004.
Additional Management Securityholder
By: /s/ Xxx X. Xxxxxx
--------------------------------
Name (Print): Xxx X. Xxxxxx
[Securityholders Agreement]
Additional Management Securityholders Signature Page
The undersigned, by its signature below hereby becomes a party to the
Securityholders Agreement, dated as of August 27, 2004, among THL - Nortek
Investors LLC and certain of its Securityholders (the "Securityholders
Agreement") pursuant to Section 11.3 thereof and agrees to be bound by the terms
of the Securityholders Agreement and, for all purposes thereof, to be a
"Management Securityholder".
IN WITNESS WHEREOF, the undersigned has executed this instrument as of the
_____ day of _________________ 2004.
Additional Management Securityholder
By: /s/ Xxxxxx Forest
--------------------------------
Name (Print): Xxxxxx Forest
[Securityholders Agreement]
Additional Management Securityholders Signature Page
The undersigned, by its signature below hereby becomes a party to the
Securityholders Agreement, dated as of August 27, 2004, among THL - Nortek
Investors LLC and certain of its Securityholders (the "Securityholders
Agreement") pursuant to Section 11.3 thereof and agrees to be bound by the terms
of the Securityholders Agreement and, for all purposes thereof, to be a
"Management Securityholder".
IN WITNESS WHEREOF, the undersigned has executed this instrument as of the
_____ day of _________________ 2004.
Additional Management Securityholder
By: /s/ Xxxxxxx X. Francisco
--------------------------------
Name (Print): Xxxxxxx X. Francisco
[Securityholders Agreement]
Additional Management Securityholders Signature Page
The undersigned, by its signature below hereby becomes a party to the
Securityholders Agreement, dated as of August 27, 2004, among THL - Nortek
Investors LLC and certain of its Securityholders (the "Securityholders
Agreement") pursuant to Section 11.3 thereof and agrees to be bound by the terms
of the Securityholders Agreement and, for all purposes thereof, to be a
"Management Securityholder".
IN WITNESS WHEREOF, the undersigned has executed this instrument as of the
_____ day of _________________ 2004.
Additional Management Securityholder
By: /s/ Xxxx X. Xxxxxx
-------------------------------
Name (Print): Xxxx X. Xxxxxx
[Securityholders Agreement]
Additional Management Securityholders Signature Page
The undersigned, by its signature below hereby becomes a party to the
Securityholders Agreement, dated as of August 27, 2004, among THL - Nortek
Investors LLC and certain of its Securityholders (the "Securityholders
Agreement") pursuant to Section 11.3 thereof and agrees to be bound by the terms
of the Securityholders Agreement and, for all purposes thereof, to be a
"Management Securityholder".
IN WITNESS WHEREOF, the undersigned has executed this instrument as of the
7th day of September 2004.
Additional Management Securityholder
By: /s/ Xx X Xxxxxxxxxx
-------------------------------------------
Name (Print): Xxxxxxx X. Xxxxxxxxxx
------------------------------------------
[Securityholders Agreement]
Additional Management Securityholders Signature Page
The undersigned, by its signature below hereby becomes a party to the
Securityholders Agreement, dated as of August 27, 2004, among THL - Nortek
Investors LLC and certain of its Securityholders (the "Securityholders
Agreement") pursuant to Section 11.3 thereof and agrees to be bound by the terms
of the Securityholders Agreement and, for all purposes thereof, to be a
"Management Securityholder".
IN WITNESS WHEREOF, the undersigned has executed this instrument as of the
_____ day of _________________ 2004.
Additional Management Securityholder
By: /s/ Xxxx X. Xxxx
-------------------------------------------
Name (Print): /s/ Xxxx X. Xxxx
------------------------------------------
[Securityholders Agreement]
Additional Management Securityholders Signature Page
The undersigned, by its signature below hereby becomes a party to the
Securityholders Agreement, dated as of August 27, 2004, among THL - Nortek
Investors LLC and certain of its Securityholders (the "Securityholders
Agreement") pursuant to Section 11.3 thereof and agrees to be bound by the terms
of the Securityholders Agreement and, for all purposes thereof, to be a
"Management Securityholder".
IN WITNESS WHEREOF, the undersigned has executed this instrument as of the
_____ day of _________________ 2004.
Additional Management Securityholder
By: /s/ Xxxxxx Xxxxxxx Xxxxx
-----------------------------------------------
Name (Print): Xxxxxx Xxxxxxx Xxxxx
---------------------------------------
[Securityholders Agreement]
Additional Management Securityholders Signature Page
The undersigned, by its signature below hereby becomes a party to the
Securityholders Agreement, dated as of August 27, 2004, among THL - Nortek
Investors LLC and certain of its Securityholders (the "Securityholders
Agreement") pursuant to Section 11.3 thereof and agrees to be bound by the terms
of the Securityholders Agreement and, for all purposes thereof, to be a
"Management Securityholder".
IN WITNESS WHEREOF, the undersigned has executed this instrument as of the
21st day of September 2004.
Additional Management Securityholder
By: /s/ Xxxxx Xxxxxxxx
-------------------------------------------------
Name (Print): Xxxxx Xxxxxxxx
---------------------------------------
[Securityholders Agreement]
Additional Management Securityholders Signature Page
The undersigned, by its signature below hereby becomes a party to the
Securityholders Agreement, dated as of August 27, 2004, among THL - Nortek
Investors LLC and certain of its Securityholders (the "Securityholders
Agreement") pursuant to Section 11.3 thereof and agrees to be bound by the terms
of the Securityholders Agreement and, for all purposes thereof, to be a
"Management Securityholder".
IN WITNESS WHEREOF, the undersigned has executed this instrument as of the
_____ day of _________________ 2004.
Additional Management Securityholder
By: /s/ Xxxxx X. XxXxxx
-----------------------------------------------
Name (Print): Xxxxx X. XxXxxx
---------------------------------------
[Securityholders Agreement]
Additional Management Securityholders Signature Page
The undersigned, by its signature below hereby becomes a party to the
Securityholders Agreement, dated as of August 27, 2004, among THL - Nortek
Investors LLC and certain of its Securityholders (the "Securityholders
Agreement") pursuant to Section 11.3 thereof and agrees to be bound by the terms
of the Securityholders Agreement and, for all purposes thereof, to be a
"Management Securityholder".
IN WITNESS WHEREOF, the undersigned has executed this instrument as of the
8th day of Sept. 2004.
Additional Management Securityholder
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------------
Name (Print): Xxxxxxx X. Xxxxxx
------------------------------------------
[Securityholders Agreement]
Additional Management Securityholders Signature Page
The undersigned, by its signature below hereby becomes a party to the
Securityholders Agreement, dated as of August 27, 2004, among THL - Nortek
Investors LLC and certain of its Securityholders (the "Securityholders
Agreement") pursuant to Section 11.3 thereof and agrees to be bound by the terms
of the Securityholders Agreement and, for all purposes thereof, to be a
"Management Securityholder".
IN WITNESS WHEREOF, the undersigned has executed this instrument as of the
_____ day of _________________ 2004.
Additional Management Securityholder
By: /s/ Xxxxxxxx Xxxxx Xxxxxx
-------------------------------------------
Name (Print): Xxxxxxxx Xxxxx Xxxxxx
------------------------------------------
[Securityholders Agreement]
Additional Management Securityholders Signature Page
The undersigned, by its signature below hereby becomes a party to the
Securityholders Agreement, dated as of August 27, 2004, among THL - Nortek
Investors LLC and certain of its Securityholders (the "Securityholders
Agreement") pursuant to Section 11.3 thereof and agrees to be bound by the terms
of the Securityholders Agreement and, for all purposes thereof, to be a
"Management Securityholder".
IN WITNESS WHEREOF, the undersigned has executed this instrument as of the
8th day of September 2004.
Additional Management Securityholder
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------------
Name (Print): Xxxxxx X. Xxxxx
------------------------------------------
[Securityholders Agreement]
Additional Management Securityholders Signature Page
The undersigned, by its signature below hereby becomes a party to the
Securityholders Agreement, dated as of August 27, 2004, among THL - Nortek
Investors LLC and certain of its Securityholders (the "Securityholders
Agreement") pursuant to Section 11.3 thereof and agrees to be bound by the terms
of the Securityholders Agreement and, for all purposes thereof, to be a
"Management Securityholder".
IN WITNESS WHEREOF, the undersigned has executed this instrument as of the
_____ day of _________________ 2004.
Additional Management Securityholder
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------------
Name (Print): /s/ Xxxxx X. Xxxxxx
------------------------------------------
[Securityholders Agreement]
Additional Management Securityholders Signature Page
The undersigned, by its signature below hereby becomes a party to the
Securityholders Agreement, dated as of August 27, 2004, among THL - Nortek
Investors LLC and certain of its Securityholders (the "Securityholders
Agreement") pursuant to Section 11.3 thereof and agrees to be bound by the terms
of the Securityholders Agreement and, for all purposes thereof, to be a
"Management Securityholder".
IN WITNESS WHEREOF, the undersigned has executed this instrument as of the
15th day of September 2004.
Additional Management Securityholder
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------------
Name (Print): /s/ Xxxxxxx X. Xxxxxxx
------------------------------------------
[Securityholders Agreement]
Additional Management Securityholders Signature Page
The undersigned, by its signature below hereby becomes a party to the
Securityholders Agreement, dated as of August 27, 2004, among THL - Nortek
Investors LLC and certain of its Securityholders (the "Securityholders
Agreement") pursuant to Section 11.3 thereof and agrees to be bound by the terms
of the Securityholders Agreement and, for all purposes thereof, to be a
"Management Securityholder".
IN WITNESS WHEREOF, the undersigned has executed this instrument as of the
_____ day of _________________ 2004.
Additional Management Securityholder
By: /s/ Xxxxx Xxxxxx
-------------------------------------------
Name (Print): Xxxxx Xxxxxx
------------------------------------------
[Securityholders Agreement]
Additional Management Securityholders Signature Page
The undersigned, by its signature below hereby becomes a party to the
Securityholders Agreement, dated as of August 27, 2004, among THL - Nortek
Investors LLC and certain of its Securityholders (the "Securityholders
Agreement") pursuant to Section 11.3 thereof and agrees to be bound by the terms
of the Securityholders Agreement and, for all purposes thereof, to be a
"Management Securityholder".
IN WITNESS WHEREOF, the undersigned has executed this instrument as of the
_____ day of _________________ 2004.
Additional Management Securityholder
By: /s/ Xxxx X. Xxxxx
-------------------------------------------
Name (Print): Xxxx X. Xxxxx
------------------------------------------
[Securityholders Agreement]
Exhibit A - Form of Registration Rights Agreement
EXHIBIT A
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of [_____ __, 200_] among [THL -
Nortek Investors, Inc./Nortek Holdings, Inc.], a Delaware corporation (the
"COMPANY"), Nortek Inc., a Delaware corporation ("NORTEK"), Xxxxxx X. Xxx Equity
Fund V, L.P., Xxxxxx X. Xxx Parallel Fund V, L.P., Xxxxxx X. Xxx Cayman Fund V,
L.P., Xxxxxx X. Xxx Investors Limited Partnership, 1997 Xxxxxx X. Xxx Nominee
Trust, Xxxxxx Investments Holdings, LLC, Xxxxxx Investments Employees'
Securities Company I, LLC, Xxxxxx Investments Employees' Securities Company II,
LLC (collectively, the "THL PARTIES"), the Third Party Investors (as defined in
the Securityholders Agreement (as defined below)) and those employees of the
Company or its subsidiaries listed on Schedule 1 hereto (collectively, the
"MANAGEMENT STOCKHOLDERS"). The THL Parties, the Third Party Investors and the
Management Stockholders are hereinafter referred to collectively as the
"STOCKHOLDERS." Capitalized terms used herein without definition are defined in
Section 10.
WHEREAS, the Stockholders hold shares of common stock, par value [$0.01]
(the "Common Stock") of the Company;
WHEREAS, the Stockholders and the Company are parties to a Securityholders
Agreement dated as of August 27, 2004 (the "Securityholders Agreement") which
provides that, under certain circumstances set forth in Section 7.1 of the
Securityholders Agreement, the parties will enter into this Agreement; and
WHEREAS, the circumstances contemplated by Section 7.1 of the
Securityholders Agreement have occurred.
NOW, THEREFORE, in consideration of the mutual covenants and obligations
set forth in this Agreement, the parties hereto agree as follows:
1. Registrations Upon Request.
1.1. Requests by the THL Parties.
(a) At any time, the THL Parties, on behalf of the THL Group (as
defined in the Stockholders Agreement), shall have the right to make up to
six (6) separate requests that the Company effect the registration (which
may at the option of the THL Parties be effected as a "shelf registration")
under the Securities Act of the offer and sale of all or a portion of the
Registrable Securities owned by members of the THL Group, each such request
to specify the intended method or methods of disposition thereof; provided,
however, that the Company shall not be required to effect a registration
relating to an underwritten offering pursuant to this Section 1.1 until a
period of 120 days shall have elapsed from the effective date of the most
recent registration relating to an underwritten offering. A request made by
the THL Parties shall not be counted for purposes of the request
limitations set forth above: (a) if the THL Parties, on behalf of the THL
Group, determine in their good faith judgment to withdraw the proposed
registration of the offer and sale of any Registrable Securities requested
to be registered pursuant to this Section 1.1 due to marketing or
regulatory reasons; (b) the registration statement relating to any such
request is not declared effective within 90 days of the date
such registration statement is first filed with the Commission; (c) if,
within 180 days after the registration relating to any such request has
become effective, such registration is interfered with by any stop order,
injunction or other order or requirement of the Commission or other
governmental agency or court for any reason and the Company fails to have
such stop order, injunction or other order or requirement removed,
withdrawn or resolved to the reasonable satisfaction of the THL Parties
within 30 days after the occurrence of any such interference; (d) if more
than 10% of the Registrable Securities requested by the THL Parties to be
included in the registration are not so included pursuant to Section 1.5;
or (e) the conditions to closing specified in the underwriting agreement or
purchase agreement entered into in connection with the registration
relating to any such request are not satisfied (other than as a result of a
default or breach thereunder by the THL Group). Upon any such request, the
Company will promptly, but in any event within 15 days of such request,
give written notice of such request to all holders of Registrable
Securities and thereupon the Company will, subject to Section 1.5, use its
best efforts to effect the prompt registration under the Securities Act of:
(i) the offer and sale of the Registrable Securities which
the Company has been so requested to register by the THL Parties on
behalf of the THL Group; and
(ii) the offer and sale of all other Registrable Securities
which the Company has been requested to register by the holders
thereof by written request given to the Company by such holders within
15 days after the giving of such written notice by the Company to such
holders,
all to the extent required to permit the disposition of the Registrable
Securities so to be registered in accordance with the intended method or
methods of disposition of the THL Group.
(b) Notwithstanding the foregoing, if the Company shall at any
time furnish to each proposed seller of Registrable Securities a
certificate signed by the President of the Company stating that the Company
has pending or in process a material transaction (including a financing
transaction), the disclosure of which would, in the good faith judgment of
the Board, materially and adversely affect the Company, the Company may
defer the filing (but not the preparation) of a registration statement to
be filed pursuant to this Section 1.1 for up to 60 days (but the Company
shall use its best efforts to complete the transaction and file the
registration statement as soon as possible).
1.2. Request by Xxxxxxx X. Xxxxxx.
(a) Following the later of (i) such time as Xxxxxxx X. Xxxxxx
("RLB") ceases to be CEO (as defined in the Stockholders Agreement) and
(ii) the one year anniversary of an IPO (as defined in the Stockholders
Agreement), RLB shall have the right to make two requests that the Company
effect the registration under the Securities Act of the offer and sale of
all or a portion of the Registrable Securities owned by him, such request
to specify the intended method or methods of disposition thereof; provided,
however, that the Company shall not be required to effect a registration
relating to an
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underwritten offering pursuant to this Section 1.2 until a period of 120
days shall have elapsed from the effective date of the most recent
registration relating to an underwritten offering; provided, further, that
the RLB shall not be entitled to have such registration effected by means
of a "shelf" registration unless the effectiveness of such "shelf"
registration is limited in duration to 180 days; provided further, that, at
any time when the fair market value of the Common Stock and all options
held by RLB in the aggregate falls below $20 million (such fair market
value to be based on the average of the closing prices of the Common Stock
on any exchange on which the Common Stock is listed or on NASDAQ for the 10
trading days preceding any date of determination and to take into account
the exercise price of options), RLB shall not have the right to request the
registration of the offer and sale of such Registrable Securities if such
registration is not required under the Securities Act to permit the
immediate disposition of all such shares on any exchange on which the
Common Stock is listed or on NASDAQ. A request made by RLB shall not be
counted for purposes of the request limitation set forth above: (a) if RLB
determines in his good faith judgment to withdraw the proposed registration
of the offer and sale of any Registrable Securities requested to be
registered pursuant to this Section 1.2 due to marketing or regulatory
reasons; (b) the registration statement relating to any such request is not
declared effective within 90 days of the date such registration statement
is first filed with the Commission; (c) if, within 180 days after the
registration relating to any such request has become effective, such
registration is interfered with by any stop order, injunction or other
order or requirement of the Commission or other governmental agency or
court for any reason and the Company fails to have such stop order,
injunction or other order or requirement removed, withdrawn or resolved to
RLB's reasonable satisfaction within 30 days after the occurrence of any
such interference; (d) the conditions to closing specified in the
underwriting agreement or purchase agreement entered into in connection
with the registration relating to any such request are not satisfied (other
than as a result of a default or breach thereunder by RLB); or (e) if more
than 10% of the Registrable Securities requested by RLB to be included in
the registration are not so included pursuant to Section 1.5. Upon any such
request, the Company will promptly, but in any event within 15 days of such
request, give written notice of such request to all holders of Registrable
Securities and thereupon the Company will, subject to Section 1.5, use its
best efforts to effect the prompt registration under the Securities Act of:
(i) the offer and sale of the Registrable Securities which
the Company has been so requested to register by RLB, and
(ii) the offer and sale of all other Registrable Securities
which the Company has been requested to register by the holders
thereof by written request given to the Company by such holders within
15 days after the giving of such written notice by the Company to such
holders,
all to the extent required to permit the disposition of the Registrable
Securities so to be registered in accordance with the intended method or
methods of disposition of RLB; provided, however, that RLB shall not be
entitled to have such registration effected by means of a "shelf"
registration unless the effectiveness of such "shelf' registration is
limited in duration to 180 days.
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(b) Notwithstanding the foregoing, if the Company shall at any
time furnish to each proposed seller of Registrable Securities a
certificate signed by the President of the Company stating that the Company
has pending or in process a material transaction (including a financing
transaction), the disclosure of which would, in the good faith judgment of
the Board, materially and adversely affect the Company, the Company may
defer the filing (but not the preparation) of a registration statement to
be filed pursuant to this Section 1.2 for up to 60 days (but the Company
shall use its best efforts to complete the transaction and file the
registration statement as soon as possible).
(c) Any rights exercisable by the Management Stockholders under
this Agreement shall be exercisable solely by a majority in interest of the
Management Stockholders; provided, however, that so long as RLB is CEO, any
rights exercisable by Management Stockholders shall be exercisable solely
by RLB on their behalf, unless the Company consents otherwise. The Company
shall be entitled to deal exclusively with the party or parties having the
right to act on behalf of the Management Stockholders at any given time and
to rely on such party's or parties' consent, waiver or other action as the
consent, waiver or other action of all of the Management Stockholders.
1.3. Registration Statement Form. A registration requested pursuant to
Sections 1.1 or 1.2 shall be effected by the filing of a registration statement
on a form determined by the Company; provided that S-1 type information may be
included therein if the managing underwriter states in writing that it believes
that it would be beneficial for the marketing of the offering.
1.4. Expenses. The Company will pay all Registration Expenses in
connection with any registration requested under Section 1.1 or 1.2, including
the reasonable fees and expenses of one counsel selected by the Management
Stockholders by a majority vote (and reasonably acceptable to the Company) to
represent the Management Stockholders and the Third Party Investors; provided,
however, that if such counsel has a conflict of interest that would prevent such
counsel from representing both the Management Stockholders and the Third Party
Investors, then the Company shall pay all Registration Expenses in connection
with any registration requested under Section 1.1 or 1.2, including the
reasonable fees and expenses of one counsel selected by the Management
Stockholders by a majority vote (and reasonably acceptable to the Company) to
represent the Management Stockholders and one counsel selected by the Third
Party Investors by a majority vote (and reasonably acceptable to the Company) to
represent the Third Party Investors; provided, further, that each seller of
Registrable Securities shall pay all Registration Expenses to the extent
required to be paid by such seller under applicable law and all underwriting
discounts and commissions and transfer taxes, if any.
1.5. Priority in Demand Registrations. If a registration pursuant to
Section 1.1 or 1.2 involves an underwritten offering, and the managing
underwriter (or, in the case of an offering which is not underwritten, a
nationally recognized investment banking firm) shall advise the Company in
writing (with a copy to each Person requesting registration of the offer and
sale of Registrable Securities) that, in its opinion, the number of securities
requested and otherwise proposed to be included in such registration exceeds the
number which can be sold in such offering without materially and adversely
affecting the offering price, the Company will include in such registration to
the extent of the number which the Company is so advised can be sold in
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such offering without such material adverse effect, first, the Registrable
Securities of the THL Group, the Third Party Investors and the Management
Stockholders on a pro rata basis (based on the number of shares of Registrable
Securities owned by each such Stockholder), and second, the securities, if any,
being sold by the Company. Notwithstanding the foregoing, the Management
Stockholders (and any successor managers of the Company and its subsidiaries)
will not be entitled to participate in any such registration requested by the
THL Parties to the extent that the managing underwriter (or, in the case of an
offering that is not underwritten, a nationally recognized investment banking
firm) shall determine in good faith and in writing (with a copy to each affected
Person requesting registration of Registrable Securities), that the
participation of management would adversely affect the marketability or offering
price of the securities being sold in such registration, it being understood
that the Company will include in such registration that number of shares of the
Management Stockholders, if any, which can be sold in such offering without
adversely affecting the marketability or offering price of the other securities
to be sold in such registration. In the event of any such determination under
this Section 1.5, the Company shall give the affected holders of Registrable
Securities notice of such determination and in lieu of the notice otherwise
required under Sections 1.1 or 1.2, as the case may be. The THL Parties shall
use their commercially reasonable best efforts to persuade the managing
underwriter not to make or to minimize the determination set forth in the second
preceding sentence of this Section 1.5.
1.6. No Company Initiated Registration. After receipt of notice of a
requested registration pursuant to Section 1.1 or 1.2, the Company shall not
initiate, without the consent of the THL Parties, in the case of Section 1.1 or
RLB in the case of Section 1.2, a registration of the offer and sale of any of
its equity securities for its own account until 90 days after such registration
has been terminated or declared effective (unless advised by the managing
underwriter that a longer period, not to exceed 180 days, is required, or such
shorter period as the managing underwriter for any underwritten offering may
agree), except for transactions of a type described in clauses (iii) and (iv) of
Section 5(b).
2. Incidental Registrations. If the Company at any time proposes to
register the offer and sale of any of its equity securities under the Securities
Act (other than pursuant to (x) an employee equity compensation plan, including
an option plan, or (y) an acquisition, strategic or business combination
transaction), then the Company will give prompt written notice to all holders of
Registrable Securities regarding such proposed registration. Upon the written
request of any such holder made within 15 days after the receipt of any such
notice (which request shall specify the number of Registrable Securities
intended to be disposed of by such holder and the intended method or methods of
disposition thereof), the Company will use its best efforts to effect, in
connection with such proposed registration by the Company, the registration
under the Securities Act of the offer and sale of such Registrable Securities on
a pro rata basis (based on the number of Registrable Securities owned by each
holder of Registrable Securities) in accordance with such intended method or
methods of disposition, provided that:
(a) (i) if such registration shall be in connection with an IPO,
the Company shall not include any Registrable Securities in such proposed
registration if the Board shall have determined, after consultation with
the managing underwriter for such offering, that it is not in the best
interests of the Company to include any Registrable Securities in such
registration and (ii) the Company shall not include any Registrable
-5-
Securities of any Management Stockholder in any proposed registration
pursuant to this Section 2 to the extent that the managing underwriter (or,
in the case of an offering that is not underwritten, a nationally
recognized investment banker) shall determine in good faith that the
participation of such Management Stockholder would adversely affect the
offering and provided, further, that in the event of any such determination
under subsection (i) or (ii), the Company shall give the affected holders
of Registrable Securities notice of such determination and in lieu of the
notice otherwise required by the first paragraph of this Section 2. The
Company shall use its commercially reasonable best efforts to persuade the
managing underwriter not to make or to minimize the determination set forth
in the preceding sentence of this 2(a);
(b) if, at any time after giving written notice (pursuant to this
Section 2) of its intention to register the offer and sale of equity
securities and prior to the effective date of the registration statement
filed in connection with such registration, the Company shall determine for
any reason not to register the offer and sale of such equity securities,
the Company may, at its election, give written notice of such determination
to each holder of Registrable Securities and, thereupon, shall not be
obligated to register the offer and sale of any Registrable Securities in
connection with such registration (but shall nevertheless pay the
Registration Expenses in connection therewith), without prejudice, however,
to the rights of the THL Parties, on behalf of the THL Group, or RLB to
request that a registration be effected under Section 1.1 or 1.2, as the
case may be;
(c) if, in connection with a registration pursuant to this
Section 2, the managing underwriter of such registration (or, in the case
of an offering that is not underwritten, a nationally recognized investment
banking firm) shall advise the Company in writing (with a copy to each
holder of Registrable Securities requesting registration thereof) that the
number of securities requested and otherwise proposed to be included in
such registration exceeds the number which can be sold in such offering
without materially and adversely affecting the offering price, then in the
case of any registration pursuant to this Section 2, the Company will
include in such registration to the extent of the number which the Company
is so advised can be sold in such offering without such material adverse
effect, first, the securities, if any, being sold by the Company in such
registration for its own account and second, the Registrable Securities of
the THL Group, the Third Party Investors and the Management Stockholders
being sold by them in such registration pursuant to this Section 2, on a
pro rata basis (based on the number of shares of Registrable Securities
owned by each holder of Registrable Securities);
(d) the Company will pay all Registration Expenses in connection
with each registration of the offer and sale of Registrable Securities
requested pursuant to this Section 2, including the reasonable fees and
expenses of one counsel selected by the Management Stockholders by a
majority vote (and reasonably acceptable to the Company) to represent the
Management Stockholders and the Third Party Investors; provided, however,
that if such counsel has a conflict of interest that would prevent such
counsel from representing both the Management Stockholders and the Third
Party Investors, the Company will pay all Registration Expenses in
connection with each registration of the offer and sale of Registrable
Securities requested pursuant to this Section 2, including the reasonable
fees and expenses of one counsel selected by the
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Management Stockholders by a majority vote (and reasonably acceptable to
the Company) to represent the Management Stockholders and one counsel
selected by the Third Party Investors by a majority vote (and reasonably
acceptable to the Company) to represent the Third Party Investors;
provided, further, that each seller of Registrable Securities shall pay all
Registration Expenses to the extent required to be paid by such seller
under applicable law and all underwriting discounts and commissions and
transfer taxes, if any. No registration effected under this Section 2 shall
relieve the Company from its obligation to effect registrations under
Sections 1.1 and 1.2;
(e) notwithstanding the intended method or methods specified by a
holder of Registrable Securities, in the event that the registration giving
rise to the registration rights in this Section 2 is to be effected
pursuant to an underwritten offering, then such method of distribution
shall be pursuant to such underwritten offering and in the event that the
registration giving rise to the registration rights in this Section 2 is to
be effected pursuant to a "shelf" registration, then such method of
distribution shall be pursuant to such "shelf" registration, and the
duration thereof shall not be longer than that of such "shelf"
registration.
(f) the Company shall have no obligation under this Section 2 to
use its best efforts to effect any registration of any shares of
Registrable Securities which any Third Party Investors or Management
Stockholder (other than RLB) has requested be registered, unless shares of
Registrable Securities owned by members of the THL Group shall be included
in such registration or unless the THL Parties determine otherwise;
(g) the Company shall not be required to effect any registration
of Registrable Securities under this Section 2 incidental to the
registration of any of its securities in connection with mergers,
acquisitions, exchange offers, subscription offers, dividend reinvestment
plans or stock option or other executive or employee benefit or
compensation plans; and
(h) in the event of an underwritten IPO covering shares of Common
Stock for the account of the Company, the THL Parties shall have the right
by written notification to the Company at any time to convert such
registration into a registration of shares of Registrable Securities
pursuant to and governed by the provisions of Section 2.
3. Registration Procedures. If and whenever the Company is required to use
its best efforts to effect the registration of the offer and sale of any
Registrable Securities under the Securities Act as provided in Sections 1.1, 1.2
and 2, the Company will promptly:
(a) prepare, and as soon as practicable, but in any event within
60 days thereafter, file with the Commission, a registration statement with
respect to the offer and sale of such Registrable Securities, make all
required filings with the NASD or applicable securities exchange and use
its best efforts to cause such registration statement to become effective
as soon as practicable;
(b) prepare and promptly file with the Commission such amendments
and post-effective amendments and supplements to such registration
statement and the
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prospectus used in connection therewith as may be necessary to keep such
registration statement effective for so long as is required to comply with
the provisions of the Securities Act and to complete the disposition of all
securities covered by such registration statement in accordance with the
intended method or methods of disposition thereof, but in no event for a
period of more than six months after such registration statement becomes
effective;
(c) furnish copies of all documents proposed to be filed with the
Commission in connection with such registration to (i) (x) counsel selected
by the THL Parties in the case of a registration pursuant to Section 1.1,
(y) counsel selected by RLB in the case of registration pursuant to Section
1.2 and (z) in all other circumstances, counsel selected by the THL Parties
and, if different, counsel selected by the holders of a majority of the
Registrable Securities to be sold in such registration, and, in each case,
which counsel may also be counsel to the Company and (ii) each seller of
Registrable Securities (or in the case of the initial filing of a
registration statement, within five business days of such initial filing)
and such documents shall be subject to the review of any such counsel
referred to in clause (i) above. The Company shall not file any
registration statement or any amendment or post-effective amendment or
supplement to such registration statement or the prospectus used in
connection therewith to which such counsel shall have reasonably objected
in writing on the grounds that such amendment or supplement does not comply
(explaining why) in all material respects with the requirements of the
Securities Act or of the rules or regulations thereunder;
(d) furnish to each seller of Registrable Securities, without
charge, such number of conformed copies of such registration statement and
of each such amendment and supplement thereto (in each case including all
exhibits and documents filed therewith) and such number of copies of the
prospectus included in such registration statement (including each
preliminary prospectus and any summary prospectus) and any other prospectus
filed under Rule 424 under the Securities Act, in conformity with the
requirements of the Securities Act, and such other documents, as such
seller may reasonably request in order to facilitate the disposition of the
Registrable Securities owned by such seller in accordance with the intended
method or methods of disposition thereof;
(e) use its best efforts to register or qualify such Registrable
Securities covered by such registration statement under the securities or
blue sky laws of such jurisdictions as each seller shall reasonably
request, and do any and all other acts and things which may be necessary or
advisable to enable such seller to consummate the disposition of such
Registrable Securities in such jurisdictions in accordance with the
intended method or methods of disposition thereof, provided that the
Company shall not for any such purpose be required to qualify generally to
do business as a foreign corporation in any jurisdiction wherein it is not
so qualified, subject itself to taxation in any jurisdiction wherein it is
not so subject, or take any action which would subject it to general
service of process in any jurisdiction wherein it is not so subject;
(f) use its best efforts to cause all Registrable Securities
covered by such registration statement to be registered with or approved by
such other governmental
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agencies, authorities or self-regulatory bodies as may be necessary by
virtue of the business and operations of the Company to enable the seller
or sellers thereof to consummate the disposition of such Registrable
Securities in accordance with the intended method or methods of disposition
thereof;
(g) furnish to the THL Parties, on behalf of the THL Group, and
to RLB, if requested by him in connection with a registration pursuant to
Section 1.2:
(i) an opinion of counsel for the Company experienced in
securities law matters, dated the effective date of the registration
statement (and, if such registration includes an underwritten public
offering, the date of the closing under the underwriting agreement);
and
(ii) a "comfort" letter (unless the registration is pursuant
to Section 2 and such a letter is not otherwise being furnished to the
Company), dated the effective date of such registration statement (and
if such registration includes an underwritten public offering, dated
the date of the closing under the underwriting agreement), signed by
the independent public accountants who have issued an audit report on
the Company's financial statements included in the registration
statement,
covering such matters as are customarily covered in opinions of issuer's
counsel and in accountants' letters delivered to the underwriters in
underwritten public offerings of securities and such other matters as the
THL Parties or RLB, as applicable, may reasonably request;
(h) notify each seller of any Registrable Securities covered by
such registration statement at any time when a prospectus relating thereto
is required to be delivered under the Securities Act of the happening of
any event or existence of any fact as a result of which the prospectus
included in such registration statement, as then in effect, includes 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
not misleading in light of the circumstances then existing, and, as
promptly as is practicable, prepare and furnish to such seller a reasonable
number of copies of a supplement to or an amendment of such prospectus as
may be necessary so that, as thereafter delivered to the purchasers of such
securities, such prospectus shall not include an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in light
of the circumstances then existing;
(i) otherwise comply with all applicable rules and regulations of
the Commission, and make available to its security holders, as soon as
reasonably practicable, an earnings statement of the Company (in form
complying with the provisions of Rule 158 under the Securities Act)
covering the period of at least 12 months, but not more than 18 months,
beginning with the first month after the effective date of such
registration statement;
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(j) notify each seller of any Registrable Securities covered by
such registration statement (i) when the prospectus or any prospectus
supplement or post-effective amendment has been filed, and, with respect to
such registration statement or any post-effective amendment, when the same
has become effective, (ii) of any request by the Commission for amendments
or supplements to such registration statement or to amend or to supplement
such prospectus or for additional information, (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of such
registration statement or the initiation of any proceedings for that
purpose and (iv) of the suspension of the qualification of such securities
for offering or sale in any jurisdiction, or of the institution of any
proceedings for any of such purposes;
(k) use every reasonable effort to obtain the lifting of any stop
order that might be issued suspending the effectiveness of such
registration statement at the earliest possible moment;
(l) use its best efforts (i) (A) to list such Registrable
Securities on any securities exchange on which the equity securities of the
Company are then listed or, if no such equity securities are then listed,
on an exchange selected by the Company, if such listing is then permitted
under the rules of such exchange, or (B) if such listing is not
practicable, to secure designation of such securities as a NASDAQ "national
market system security" within the meaning of Rule 11Aa2-1 under the
Exchange Act or, failing that, to secure NASDAQ authorization for such
Registrable Securities, and, without limiting the foregoing, to arrange for
at least two market makers to register as such with respect to such
Registrable Securities with the NASD, and (ii) to provide a transfer agent
and registrar for such Registrable Securities not later than the effective
date of such registration statement and to instruct such transfer agent (A)
to release any stop transfer order with respect to the certificates with
respect to the Registrable Securities being sold and (B) to furnish
certificates without restrictive legends representing ownership of the
shares being sold, in such denominations requested by the sellers of the
Registrable Securities or the lead underwriter;
(m) enter into such agreements and take such other actions as the
sellers of Registrable Securities or the underwriters reasonably request in
order to expedite or facilitate the disposition of such Registrable
Securities, including, without limitation, preparing for, and participating
in, such number of "road shows" and all such other customary selling
efforts as the underwriters reasonably request in order to expedite or
facilitate such disposition;
(n) furnish to any holder of such Registrable Securities such
information and assistance as such holder may reasonably request in
connection with any "due diligence" effort which such seller deems
appropriate; and
(o) use its best efforts to take all other steps necessary to
effect the registration of such Registrable Securities contemplated hereby.
As a condition to its registration of the offer and sale of
Registrable Securities of any prospective seller, the Company may require
such seller of any Registrable Securities
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as to which any registration is being effected to execute
powers-of-attorney, custody arrangements and other customary agreements
appropriate to facilitate the offering and to furnish to the Company such
information regarding such seller, its ownership of Registrable Securities
and the disposition of such Registrable Securities as the Company may from
time to time reasonably request in writing and as shall be required by law
in connection therewith. Each such holder agrees to furnish promptly to the
Company all information required to be disclosed in order to make the
information previously furnished to the Company by such holder not
materially misleading.
The Company agrees not to file or make any amendment to any
registration statement with respect to any Registrable Securities, or any
amendment of or supplement to the prospectus used in connection therewith,
which refers to (in a capacity as a selling stockholder) any seller of any
Registrable Securities covered thereby by name, or otherwise identifies
such seller as the holder of any Registrable Securities, to which counsel
to the sellers may reasonably object, without the prior written consent of
such seller, which consent shall not be unreasonably withheld.
Each holder of Registrable Securities agrees that upon receipt of any
notice from the Company of the happening of any event of the kind described
in Section 3(h), such holder will promptly discontinue such holder's
disposition of Registrable Securities pursuant to the registration
statement covering such Registrable Securities until such holder's receipt
of the copies of the supplemented or amended prospectus contemplated by
Section 3(h). If so directed by the Company, each holder of Registrable
Securities will deliver to the Company (at the Company's expense) all
copies, other than permanent file copies, in such holder's possession of
the prospectus covering such Registrable Securities at the time of receipt
of such notice. In the event that the Company shall give any such notice,
the period mentioned in Section 3(a) shall be extended by the number of
days during the period from and including the date of the giving of such
notice to and including the date when each seller of any Registrable
Securities covered by such registration statement shall have received the
copies of the supplemented or amended prospectus contemplated by Section
3(h).
4. Underwritten Offerings.
4.1. Underwriting Agreement. If requested by the underwriters for any
underwritten offering pursuant to a registration requested under Section 1.1,
1.2 or 2, the Company shall enter into an underwriting agreement with the
underwriters for such offering, such agreement to be reasonably satisfactory in
substance and form to the underwriters and to the THL Parties (unless the THL
Group is not participating in such registration, in which case, the holders of a
majority of the Registrable Securities to be distributed by such underwriter).
Any such underwriting agreement shall contain such representations and
warranties by the Company and such other terms and provisions as are customarily
contained in agreements of this type, including, without limitation, indemnities
to the effect and to the extent provided in Section 8. The holders of all of the
Registrable Securities to be distributed by such underwriter shall be parties to
such underwriting agreement and may, at their option, require that any or all of
the representations and warranties by, and the agreements on the part of, the
Company to and for the benefit of such underwriters be made to and for the
benefit of such holders of Registrable
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Securities and that any or all of the conditions precedent to the obligations of
such underwriters under such underwriting agreement shall also be conditions
precedent to the obligations of such holders of Registrable Securities. No
underwriting agreement (or other agreement in connection with such offering)
shall require the members of the THL Group or the Management Stockholders or the
Third Party Investors in their respective capacities as stockholders and/or
controlling persons, to make any representations or warranties to or agreements
with the Company or the underwriters other than representations, warranties or
agreements regarding such holder, the ownership of such holder's Registrable
Securities and such holder's intended method or methods of disposition and any
other representation required by law or to furnish any indemnity to any Person
which is broader than the indemnity furnished by such holder pursuant to Section
8.2. No holder of Registrable Securities shall have the right not to enter into
an underwriting agreement described in this Section 4.1 unless it shall have
notified the Company prior to any "road show" for such offering or, if no such
"road show" is contemplated, prior to such time as the Company may reasonably
determine.
4.2. Selection of Underwriters. If the Company at any time proposes to
register any of its securities under the Securities Act for sale for its own
account pursuant to an underwritten offering, the Company will have the right to
select the managing underwriter (which shall be of nationally recognized
standing) to administer the offering; provided, however, that any selection must
be approved by the THL Parties, on behalf of the THL Group, if the THL Group at
such time owns at least 10% of the number of shares of Company Stock they own on
the date hereof. Notwithstanding the foregoing sentence, whenever (i) a
registration requested pursuant to Section 1.1 is for an underwritten offering,
the THL Parties, on behalf of the THL Group, will have the right to select the
managing underwriter (which shall be of nationally recognized standing) to
administer the offering, and (ii) whenever a registration requested under
Section 1.2 is for an underwritten offering, RLB shall have the right to select
the managing underwriter (which shall be of nationally recognized standing), but
only with the approval of the THL Parties and the Company, such approval not to
be unreasonably withheld.
4.3. Block Sales. If the THL Group, as part of a plan of distribution
pursuant to an offer and sale of Registrable Securities under Section 1.1
hereof, effects a registered block sale with one or more market professionals,
RLB shall have the right to participate in such a sale on a pro rata basis with
the THL Group (such percentage to be computed based on the number of Registrable
Securities owned by each such Stockholder).
5. Holdback Agreements.
(a) If and whenever the Company proposes to register the offer
and sale of any of its equity securities under the Securities Act for its
own account (other than pursuant to (x) an employee equity compensation
plan, including an option plan, or (y) an acquisition, strategic or
business combination transaction) or is required to use its best efforts to
effect the registration of the offer and sale of any Registrable Securities
under the Securities Act pursuant to Section 1.1, 1.2 or 2, each holder of
Registrable Securities agrees by acquisition of such Registrable Securities
not to effect any sale or distribution, including any sale pursuant to Rule
144 under the Securities Act, or to request registration under Section 1.1
or 1.2, as the case may be, of any Registrable Securities within seven days
prior to and 90 days (unless advised by the managing underwriter that
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a longer period, not to exceed 180 days, is required, or such shorter
period as the managing underwriter for any underwritten offering may agree)
after the effective date of the registration statement relating to such
registration, except as part of such registration or, in the case that the
offer and sale of Registrable Securities above is underwritten or is a
registered block sale effected by the THL Group, then only except as part
of such underwritten sale or block sale. If requested by such managing
underwriter, each holder of Registrable Securities agrees to execute an
agreement to such effect with the Company and consistent with such managing
underwriter's customary form of holdback agreement.
(b) The Company agrees not to effect any sale or distribution of
its equity securities or securities convertible into or exchangeable or
exercisable for any of such securities within seven days prior to and 90
days (unless advised in writing by the managing underwriter that a longer
period, not to exceed 180 days, is required, or such shorter period as the
managing underwriter for any underwritten offering may agree) after the
effective date of any registration statement filed pursuant to Section 1.1
or 1.2 (except (i) as part of such registration, (ii) as permitted by the
related underwriting, (iii) pursuant to an employee equity compensation
plan, including an option plan, or (iv) pursuant to an acquisition,
strategic or business combination transaction. In addition, upon the
request of the managing underwriter, the Company shall use its best efforts
to cause each holder (other than any holder already subject to Section
5(a)) of its equity securities or any securities convertible into or
exchangeable or exercisable for any of such securities, whether outstanding
on the date of this Agreement or issued at any time after the date of this
Agreement (other than any such securities acquired in a public offering),
to agree not to effect any such sale or distribution of such securities
during such period, except as part of any such registration if permitted,
and to cause each such holder to enter into an agreement to such effect
with the Company and consistent with such managing underwriter's customary
form of holdback agreement.
6. Preparation; Reasonable Investigation. In connection with the
preparation and filing of each registration statement registering the offer and
sale of Registrable Securities under the Securities Act, the Company will give
counsel to the holders of such Registrable Securities so to be registered the
opportunity to participate in the preparation of such registration statement,
each prospectus included therein or filed with the Commission, and each
amendment thereof or supplement thereto, and will give such counsel access to
the financial and other records, pertinent corporate documents and properties of
the Company and its subsidiaries and opportunities to discuss the business of
the Company with its officers and the independent public accountants who have
issued audit reports on its financial statements in each case as shall be
reasonably requested by such counsel in connection with such registration
statement.
7. No Grant of Future Registration Rights. The Company shall not grant any
other demand or incidental registration rights to any other Person without the
prior written consent of the THL Parties, so long as the THL Group continues to
own at least 10% of the number of shares of Company Stock that the THL Group
owns on the date hereof. If the Company grants any other demand registration
rights to any other person, RLB shall have the same participation rights in such
registration as the members of the THL Group.
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8. Indemnification.
8.1. Indemnification by the Company. In the event of any registration
of the offer and sale of any Registrable Securities pursuant to this Agreement,
the Company will indemnify, defend and hold harmless (a) each seller of such
Registrable Securities, (b) the directors, members, stockholders, officers,
partners, employees, agents and Affiliates of such seller, (c) each Person who
participates as an underwriter in the offering or sale of such securities and
(d) each person, if any, who controls (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) any of the foregoing against
any and all losses, claims, damages or liabilities (or actions or proceedings in
respect thereof), jointly or severally, directly or indirectly, based upon or
arising out of (i) any untrue statement or alleged untrue statement of a fact
contained in any registration statement under which the offer and sale of such
Registrable Securities were registered under the Securities Act, any preliminary
prospectus, final prospectus or summary prospectus contained therein or used in
connection with the offering of securities covered thereby, or any amendment or
supplement thereto, or (ii) any omission or alleged omission to state a fact
required to be stated therein or necessary to make the statements therein not
misleading; and the Company will reimburse each such indemnified party for any
legal or any other expenses reasonably incurred by them in connection with
enforcing its rights hereunder or under the underwriting agreement entered into
in connection with such offering or investigating, preparing, pursuing or
defending any such loss, claim, damage, liability, action or proceeding, except
insofar as any such loss, claim, damage, liability, action, proceeding or
expense arises out of or is based upon an untrue statement or omission made in
such registration statement, any such preliminary prospectus, final prospectus,
summary prospectus, amendment or supplement in reliance upon and in conformity
with written information furnished to the Company by such seller expressly for
use in the preparation thereof. Such indemnity shall remain in full force and
effect, regardless of any investigation made by such indemnified party and shall
survive the transfer of such Registrable Securities by such seller. If the
Company is entitled to, and does, assume the defense of the related action or
proceedings provided herein, then the indemnity agreement contained in this
Section 8.1 shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability, action or proceeding if such settlement is effected
without the consent of the Company (which consent shall not be unreasonably
withheld or delayed).
8.2. Indemnification by the Sellers. The Company may require, as a
condition to including any Registrable Securities in any registration statement
filed pursuant to Section 1.1, 1.2 or 2 that the Company shall have received an
undertaking satisfactory to it from each of the prospective sellers of such
Registrable Securities to indemnify and hold harmless, severally, not jointly,
in the same manner and to the same extent as set forth in Section 8.1, the
Company, its directors, officers, employees, agents and each person, if any, who
controls (within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act) the Company with respect to any statement or alleged
statement in or omission or alleged omission from such registration statement,
any preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, if such statement or alleged
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such seller in
such seller's capacity as a selling stockholder expressly for use in the
preparation of such registration statement, preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement. The Company
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and the holders of the Registrable Securities hereby acknowledge and agree that,
unless otherwise expressly agreed to in writing by such holders, the only
information furnished or to be furnished to the Company by such holders in their
capacities as selling stockholders for use in any registration statement or
prospectus relating to the Registrable Securities or in any amendment,
supplement or preliminary materials associated therewith are statements
specifically relating to (a) transactions between such holder and its
Affiliates, on the one hand, and the Company, on the other hand, (b) the
beneficial ownership of shares of Common Stock by such holder and its Affiliates
and (c) the name and address of such holder. If any additional information about
such holder or the plan of distribution (other than for an underwritten
offering) is required by law to be disclosed in any such document, then such
holder shall not unreasonably withhold its agreement referred to in the
immediately preceding sentence of this Section 8.2. Such indemnity shall remain
in full force and effect, regardless of any investigation made by or on behalf
of the Company or any such director, officer or controlling Person and shall
survive the transfer of such Registrable Securities by such seller. The
indemnity agreement contained in this Section 8.2 shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability, action or
proceeding if such settlement is effected without the consent of such seller
(which consent shall not be unreasonably withheld or delayed). The indemnity
provided by each seller of Registrable Securities under this Section 8.2 shall
be limited in amount to the net amount of proceeds actually received by such
seller from the sale of Registrable Securities pursuant to such registration
statement.
8.3. Notices of Claims, etc. Promptly after receipt by an indemnified
party of notice of the commencement of any action or proceeding involving a
claim referred to in the preceding paragraphs of this Section 8, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party, give written notice to the indemnifying party of the
commencement of such action or proceeding, provide that the failure of any
indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under the preceding paragraphs of this
Section 8, except to the extent that the indemnifying party is materially
prejudiced by such failure to give notice. In case any such action is brought
against an indemnified party, the indemnifying party will be entitled to
participate therein and to assume the defense thereof, jointly with any other
indemnifying party similarly notified, to the extent that it may wish, with
counsel reasonably satisfactory to such indemnified party, and after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party will not be liable to such
indemnified party for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof except for the reasonable fees and
expenses of any counsel retained by such indemnified party to monitor such
action or proceeding. Notwithstanding the foregoing, if such indemnified party
reasonably determines, based upon advice of independent counsel, that a conflict
of interest may exist between the indemnified party and the indemnifying party
with respect to such action and that it is advisable for such indemnified party
to be represented by separate counsel, such indemnified party may retain other
counsel, reasonably satisfactory to the indemnifying party, to represent such
indemnified party, and the indemnifying party shall pay all reasonable fees and
expenses of such counsel. No indemnifying party, in the defense of any such
claim or litigation, shall, except with the consent of such indemnified party,
which consent shall not be unreasonably withheld, consent to entry of any
judgment or enter into any settlement which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such indemnified party
of a release from all liability in respect of such claim or litigation.
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8.4. Other Indemnification. Indemnification similar to that specified
in the preceding paragraphs of this Section 8 (with appropriate modifications)
shall be given by the Company and each seller of Registrable Securities with
respect to any required registration (other than under the Securities Act) or
other qualification of such Registrable Securities under any federal or state
law or regulation of any governmental authority.
8.5. Indemnification Payments. Any indemnification required to be made
by an indemnifying party pursuant to this Section 8 shall be made by periodic
payments to the indemnified party during the course of the action or proceeding,
as and when bills are received by such indemnifying party with respect to an
indemnifiable loss, claim, damage, liability or expense incurred by such
indemnified party.
8.6. Other Remedies. If for any reason the foregoing indemnity is
unavailable, or is insufficient to hold harmless an indemnified party, other
than by reason of the exceptions provided therein, then the indemnifying party
shall contribute to the amount paid or payable by the indemnified party as a
result of such losses, claims, damages, liabilities, actions, proceedings or
expenses in such proportion as is appropriate to reflect the relative benefits
to and faults of the indemnifying party on the one hand and the indemnified
party on the other in connection with the offering of Registrable Securities
(taking into account the portion of the proceeds of the offering realized by
each such party) and the statements or omissions or alleged statements or
omissions which resulted in such loss, claim, damage, liability, action,
proceeding or expense, as well as any other relevant equitable considerations.
The relative fault of the indemnifying party and of the indemnified party shall
be determined by reference to, among other things, whether the untrue statement
of a material fact or the omission to state a material fact relates to
information supplied by the indemnifying party or by the indemnified party and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statements or omissions. 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. Notwithstanding the provisions of
this Section 8, no indemnifying party (other than the Company) shall be required
to provide indemnification and/or contribution under this Section 8 in an
aggregate amount in excess of the net proceeds received and retained by such
indemnifying party from the sale of its Registrable Securities covered by the
registration statement filed pursuant hereto, it being understood that (x) net
proceeds, in the case of the THL Group, the Management Stockholders and the
Third Party Investors, shall be calculated, if the THL Group so elects, after
(1) in the case of the THL Group, deducting therefrom the price paid by the THL
Group or its affiliates to acquire the equity securities of THL-Nortek
Investors, LLC pursuant to the Purchase Agreement (as defined in the
Securityholders Agreement) and (2) in the case of the Management Stockholders,
deducting therefrom the Option Cancellation Deferred Amounts (as defined in the
Option Cancellation Agreements) of such Management Stockholders, and (3) in the
case of the Third Party Investors, deducting therefrom the price paid by the
Third Party Investors or its affiliates to acquire the equity securities of
THL-Nortek Investors, LLC and (y) insofar as such net proceeds have been
distributed by any indemnifying party to its partners, stockholders or members,
the amount of such indemnifying party's contribution hereunder shall be limited
to the net proceeds which it actually recovers from its partners, stockholders
or members based upon their relative fault and that to the extent that such
indemnifying party has not distributed such net proceeds, the amount such
indemnifying party's contribution hereunder shall be limited by the percentage
of such net
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proceeds which corresponds to the percentage equity interests in such
indemnifying party held by those of its partners, stockholders or members who
have been determined to be at fault. No party shall be liable for contribution
under this Section 8.6 except to the extent and under such circumstances as such
party would have been liable for indemnification under this Section 8 if such
indemnification were enforceable under applicable law.
9. Representations and Warranties. Each Stockholder represents and warrants
to the Company and each other Stockholder that:
(i) such Stockholder has the power, authority and capacity
(or, in the case of any Stockholder that is a corporation, limited
liability company or limited partnership, all corporate, limited
liability company or limited partnership power and authority, as the
case may be) to execute, deliver and perform this Agreement;
(ii) in the case of a Stockholder that is a corporation,
limited liability company or limited partnership, the execution,
delivery and performance of this Agreement by such Stockholder has
been duly and validly authorized and approved by all necessary
corporate, limited liability company or limited partnership action, as
the case may be;
(iii) this Agreement has been duly and validly executed and
delivered by such Stockholder and constitutes a valid and legally
binding obligation of such Stockholder, enforceable in accordance with
its terms, subject to bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting or relating to creditors'
rights generally and general principles of equity; and
(iv) the execution, delivery and performance of this
Agreement by such Stockholder does not and will not violate the terms
of or result in the acceleration of any obligation under (A) any
material contract, commitment or other material instrument to which
such Stockholder is a party or by which such Stockholder is bound or
(B) in the case of a Stockholder that is a corporation, limited
liability company or limited partnership, the certificate of
incorporation, certificate of formation, certificate of limited
partnership, by-laws, limited liability company agreement or limited
partnership agreement, as the case may be.
10. Definitions. For purposes of this Agreement, the following terms shall
have the following respective meanings:
Affiliate: a Person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
the Person specified.
Board: the board of directors of the Company.
Commission: the Securities and Exchange Commission.
Common Stock: the common stock of the Company, par value $[0.01] per share.
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Company Stock: as defined in the preamble.
Exchange Act: the Securities Exchange Act of 1934, as amended, or any
successor federal statute, and the rules and regulations thereunder which shall
be in effect at the time.
IPO: as defined in the Stockholders Agreement.
THL Group: as defined in the Stockholders Agreement.
NASD: National Association of Securities Dealers, Inc.
NASDAQ: the Nasdaq National Market.
Option Cancellation Agreements: the Option Cancellation agreements entered
into by THL-Nortek Investors, LLC, the Management Stockholders and certain other
parties, dated as of August 27, 2004.
Permitted Transferee: as defined in Section 11.2 herein.
Person: an individual, corporation, partnership, limited liability company,
joint venture, association, trust or other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
Registrable Securities: the shares of Common Stock beneficially owned
(within the meaning of Rule 13d-3 of the Exchange Act) by the THL Group, the
Third Party Investors, the Management Stockholders or the Permitted Transferees.
As to any particular shares of Common Stock, such securities shall cease to be
Registrable Securities when (i) a registration statement with respect to the
sale of such securities shall have become effective under the Securities Act and
such securities shall have been disposed of in accordance with such registration
statement, (ii) a registration statement on Form S-8 with respect to the resale
of such securities shall have become effective under the Securities Act, (iii)
they shall have been sold to the public pursuant to Rule 144 under the
Securities Act, (iv) they shall have been otherwise transferred other than to a
Permitted Transferee or a member of the THL Group and subsequent disposition of
them shall not require registration or qualification of them under the
Securities Act or any similar state law then in force or (v) they shall have
ceased to be outstanding.
Registration Expenses: all expenses incident to the Company's performance
of or compliance with any registration pursuant to this Agreement, including,
without limitation, (i) registration, filing and NASD fees, (ii) fees and
expenses of complying with securities or blue sky laws, (iii) fees and expenses
associated with listing securities on an exchange or NASDAQ, (iv) word
processing, duplicating and printing expenses, (v) messenger and delivery
expenses, (vi) transfer agents', trustees', depositories', registrars' and
fiscal agents' fees, (vii) fees and disbursements of counsel for the Company and
of its independent public accountants, including the expenses of any special
audits or "cold comfort" letters, (viii) reasonable fees and disbursements of
any one counsel retained by the sellers of Registrable Securities, which counsel
shall be designated in the manner specified in Section 3(c) and (ix) any fees
and disbursements of underwriters customarily paid by issuers or sellers of
securities, but excluding underwriting discounts and commissions and transfer
taxes, if any.
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RLB: as defined in Section 1.2(a) of this Agreement.
Securities Act: the Securities Act of 1933 or any successor federal
statute, and the rules and regulations thereunder which shall be in effect at
the time.
Securityholders Agreement: as defined in the Preamble of this Agreement.
11. Miscellaneous.
11.1. Rule 144, etc. If the Company shall have filed a registration
statement pursuant to the requirements of Section 12 of the Exchange Act or a
registration statement pursuant to the requirements of the Securities Act
relating to any class of equity securities, the Company will file the reports
required to be filed by it under the Securities Act and the Exchange Act and the
rules and regulations adopted by the Commission thereunder, and will take such
further action as any holder of Registrable Securities may reasonably request,
all to the extent required from time to time to enable such holder to sell
Registrable Securities without registration under the Securities Act within the
limitation of the exemptions provided by (a) Rule 144 under the Securities Act,
as such rule may be amended from time to time, or (b) any successor rule or
regulation hereafter adopted by the Commission. Upon the request of any holder
of Registrable Securities, the Company will deliver to such holder a written
statement as to whether it has complied with such requirements.
11.2. Successors, Assigns and Transferees. This Agreement shall be
binding upon and insure to the benefit of the parties hereto and their
respective successors and permitted assigns under this Section 11.2. Provided
that an express assignment shall have been made, and the assignee has executed a
joinder agreement agreeing to be bound by all of the assignor's obligations
hereunder, including, without limitation, Section 5 hereof, copies of which
shall have been delivered to the Company, the provisions of this Agreement which
are for the benefit of a holder of Registrable Securities shall be for the
benefit of and enforceable by any subsequent holder of any Registrable
Securities, provided that such transferee acquires such Registrable Securities
in accordance with the terms of the Securityholders' Agreement ("PERMITTED
TRANSFEREES"). Notwithstanding anything herein to the contrary, each Management
Stockholder must exercise all rights hereunder on behalf of any of its Permitted
Transferees, if applicable, and all other parties hereto shall be entitled to
deal exclusively with the Management Stockholder and rely on the consent, waiver
or any other action by the Management Stockholder as the consent, waiver or
other action, as the case may be, of any such Permitted Transferees of such
Management Stockholder.
11.3. Stock Splits. Each holder of Registrable Securities agrees that
it will vote to effect a stock split, reverse stock split, or combination, or
recapitalization having a similar effect, with respect to any Registrable
Securities in connection with any registration of any Registrable Securities
hereunder, or otherwise, if the managing underwriter shall advise the Company in
writing (or, in connection with an offering that is not underwritten, if an
investment banker shall advise the Company in writing) that in its opinion such
a stock split, reverse stock split, recapitalization or combination would
facilitate or increase the likelihood of success of the offering. The Company
shall cooperate in all respects in effecting any such stock split, reverse stock
split, recapitalization or combination.
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11.4. Amendment and Modification. This Agreement may be amended,
modified or supplemented by the Company with the written consent of the THL
Parties and a majority (by number of shares) of any other holders of Registrable
Securities whose interests would be adversely affected by such amendment.
11.5. Additional Management Stockholder. Notwithstanding anything in
this Agreement to the contrary, the Company may, only with the consent of the
THL Parties, admit additional Management Stockholders to this Agreement and
amend Schedule 1 accordingly, provided that (a) any such Management
Stockholder(s) holds Registrable Securities, (b) has become a party to the
Securityholders Agreement and (c) has executed and delivered a joinder agreement
and such other agreements or documents as may reasonably be requested by the
Company and the THL Parties.
11.6. Governing Law. This Agreement and the rights and obligations of
the parties hereunder and the persons subject hereto shall be governed by, and
construed and interpreted in accordance with, the law of the State of Delaware,
without giving effect to the choice of law principles thereof.
11.7. 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.
11.8. Notices. All notices, requests, demands, letters, waivers and
other communications required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been duly given if (a) delivered
personally, (b) mailed, certified or registered mail with postage prepaid, (c)
sent by next-day or overnight mail or delivery or (d) sent by fax, as follows:
(i) If to the Company, to it at:
Nortek Holdings, Inc.
00 Xxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx and Xxxxxxx X. Xxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
with a copy to:
Xxxxxx X. Xxx Partners, L.P.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx X. XxXxxx
Xxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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(ii) If to a Management Stockholder, as listed on the
signature page hereto, or, if not so listed, to it at its address as
reflected in the stock records of the Company, or as such Management
Stockholder shall designate to the Company in writing, with a copy to
the THL Group at its address indicated below (provided that any such
designation shall be effective only upon receipt thereof).
(iii) If to a member of the THL Group, to it at:
c/o Xxxxxx X. Xxx Partners, L.P.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx X. XxXxxx
Xxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(iv) If to a Third Party Investor, as listed on the
signature page hereto, or, if not so listed, to it at its address as
reflected in the stock records of the Company, or as such Third Party
Investor shall designate to the Company in writing, with a copy to the
THL Group at its address indicated above (provided that any such
designation shall be effective only upon receipt therof).
or to such other person or address as any party shall specify by notice in
writing to the Company. All such notices, requests, demands, letters, waivers
and other communications shall be deemed to have been received (w) if by
personal delivery on the day after such delivery, (x) if by certified or
registered mail, on the fifth business day after the mailing thereof, (y) if by
next-day or overnight mail or delivery, on the day delivered or (z) if by fax,
on the next day following the day on which such fax was sent, provided that a
copy is also sent by certified or registered mail.
11.9. Headings, Execution in Counterparts. The headings and captions
contained herein are for convenience and shall not control or affect the meaning
or construction of any provision hereof. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original and
which together shall constitute one and the same instrument.
11.10. Injunctive Relief. Each of the parties recognizes and agrees
that money damages may be insufficient and, therefore, in the event of a breach
of any provision of this Agreement the aggrieved party may elect to institute
and prosecute proceedings in any court of competent jurisdiction to enforce
specific performance or to enjoin the continuing breach of this Agreement. Such
remedies shall, however, be cumulative and not exclusive, and shall be in
addition to any other remedy which such party may have.
11.11. Term. This Agreement shall be effective as of the date hereof
and shall continue in effect thereafter until the earlier of (a) its termination
by the consent of the parties hereto or their respective successors in interest
and (b) the date on which no Registrable Securities remain outstanding. No
termination of this Agreement shall effect any indemnification obligations
hereunder arising prior to such termination.
-21-
11.12. Further Assurances. Subject to the specific terms of this
Agreement, each of the Company and the Stockholders shall make, execute,
acknowledge and deliver such other instruments and documents, and take all such
other actions, as may be reasonably required in order to effectuate the purposes
of this Agreement and to consummate the transactions contemplated hereby.
11.13. Entire Agreement. This Agreement, together with the
Securityholders Agreement, is intended by the parties hereto as a final
expression of their agreement and intended to be a complete and exclusive
statement of their agreement and understanding in respect of the subject matter
contained herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
11.14. Release from Transfer Restrictions. Notwithstanding anything
contained in this Agreement or the Securityholders Agreement to the contrary, to
the extent that any Registrable Securities owned by the Third Party Investors
could be sold under Rule 144(k) of the Securities Act, such Registrable
Securities may be sold irrespective of any restrictions on transfer including,
without limitation, any holdback provisions) contained in this Agreement or the
Securityholders Agreement and all rights and obligations of the Third Party
Investors under this Agreement shall terminate, other than (i) the Third Party
Investor's rights and obligations under Section 8 of this Agreement in respect
of any registration that occurred prior to the date of such termination and (ii)
the Third Party Investor's rights and obligations under Sections 11.2, 11.4,
11.6, 11.7, 11.10 and 11.12.
-22-
IN WITNESS WHEREOF this Agreement has been signed by each of the parties
hereto, and shall be effective as of the date first above written.
[THL-NORTEK INVESTORS,
INC./NORTEK HOLDINGS, INC.]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
NORTEK, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
-23-
XXXXXX X. XXX EQUITY FUND V, L.P.
By: THL Equity Advisors V, LLC,
its general partners
By: Xxxxxx X. Xxx Partners, L.P.,
its sole member
By: Xxxxxx X. Xxx Advisors LLC,
its general partner
By:
------------------------------------
Name:
----------------------------------
Title: Managing Director
XXXXXX X. XXX PARALLEL FUND V, L.P.
By: THL Equity Advisors V, LLC,
its general partner
By: Xxxxxx X. Xxx Partners, L.P.,
its sole member
By: Xxxxxx X. Xxx Advisors LLC,
its general partner
By:
------------------------------------
Name:
----------------------------------
Title: Managing Director
XXXXXX X. XXX CAYMAN FUND V, L.P.
By: THL Equity Advisors V, LLC,
its general partner
By: Xxxxxx X. Xxx Partners, L.P.,
its sole member
By: Xxxxxx X. Xxx Advisors LLC,
its general partner
By:
------------------------------------
Name:
----------------------------------
Title: Xxxxxxxx Xxxxxxxx
-00-
0000 XXXXXX X. XXX NOMINEE TRUST
By: US Bank, N.A., not personally, but
solely as Trustee under the 1997
Xxxxxx X. Xxx Nominee Trust
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
XXXXXX X. XXX INVESTORS LIMITED
PARTNERSHIP
By: THL Investment Management Corp.,
its general partner
By:
------------------------------------
Name: Xxxxxx X. Xxx
Title: Chief Executive Officer
-25-
XXXXXX INVESTMENTS EMPLOYEES' SECURITIES
COMPANY I LLC
By: Xxxxxx Investments Holdings, LLC,
its managing member
By: Xxxxxx Investments, LLC,
its managing member
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
XXXXXX INVESTMENTS EMPLOYEES' SECURITIES
COMPANY II LLC
By: Xxxxxx Investments Holdings, LLC,
its managing member
By: Xxxxxx Investments, LLC,
its managing member
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
XXXXXX INVESTMENTS HOLDINGS, LLC
By: Xxxxxx Investments, LLC,
its managing member
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
-26-
Management Stockholders
[SIGNATURE BLOCKS FOR MANAGEMENT
SECURITYHOLDERS TO BE ADDED AS
APPLICABLE]
-27-
Third Party Investors
RGIP, LLC
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
-28-
EXHIBIT A
SCHEDULE 1
MANAGEMENT STOCKHOLDERS
[To be Revised as Necessary]
Xxxxxxx Xxxxxx
Xxxxxxx Xxxxxxxxx
Xxxxxxx Xxxxxxx
Xxxxxx Xxxxxxxxx
Xxxxxx Xxxxxx
Xxxxx Xxxxxxxx
Xxxxx Xxxxxxx
Xxxxx Xxxx
Xxxxx Xxxxx
Xxxxxxxx Xxxxxx
Xxxxxxx Xxxxxxxx
Xxxxx XxXxxxx
Xxxxxx XxXxxx
Xxxxxxx Xxx
Xxxxxxx Xxxx
Xxxxx Xxxxxxx
Xxxxxxx Xxxxxxxx
Xxxxxx Xxxxxx
Xxxxxx Xxxxx
Xxxxx Xxxxxx
Xxxxx Xxxx
Sham Almed
Xxxxx Xxxxxxx
Xxxxx Xxxxx
Xxxxxx Xxxxx
Xxxxxxx Xxxx
Xxxxxx Xxxxxxxxx
Xxxxx Xxxxxxxx
Xxxx Xxxxxxxxxx
Xxxxxx Xxxxxxxxx
Xxxxx Xxxxxxx
Xxxxxxx Xxxxxxxxx
Xxxxx Xxxxxxxx
Xxxxxx Xxxxxxx
Xxxxxx Xxxxxxxxxx
Xxxxx Xxxxxx
Xxxxx Xxxxxxx
Xxx Xxxxxxxxxxx
Xxxxxx Xxxxxxx
Xxx Xxxx
Xxxxxx Xxxxxxxxx
Xxxx Xxxxxxx
Xxxxxx Xxxxxxxxx
Xxx Xxxxxx
Xxxxxx Xxxxxxx
Xxxxx Xxxxx
Xxxxx XxXxxx
Xxxxxx Xxxxx
Xxxxxxxxx Xxxxxx
Xxxxxxx Xxxxxx
Xxxx Xxxxx
Xxxxxx Xxxxxxx
Xxxxxx Xxxxxx
Xxxxx Xxxxxxx
Xxxx Xxxxxx
Xxxxx Xxxxxxxx
Xxxxxxx Xxxxxxxxxx
Xxxxx Xxxxxx
Xxxxxxx Xxxxxxxxx
Xxxxxx Xxxxxxxxxx
Xxxxxx Xxxxxxx Xxxxx
Xxxxx Xxxxxx
Xxxx Xxxxxx
Xxxxx Xxxxxxx
Xxxxxx Forest
Xxx Xxxxxx
Xxxx Xxxx
Xxxxx Xxxxxx
Additional Management Securityholders Signature Page
The undersigned, by its signature below hereby becomes a party to the
Securityholders Agreement, dated as of August 27, 2004, among THL - Nortek
Investors LLC and certain of its Securityholders (the "Securityholders
Agreement") pursuant to Section 11.3 thereof and agrees to be bound by the terms
of the Securityholders Agreement and, for all purposes thereof, to be a
"Management Securityholder".
IN WITNESS WHEREOF, the undersigned has executed this instrument as of the
20th day of March 2006.
Signature
---------------------------
Print Name: Xxxx Xxxxx
First Amendment, dated February 10, 2005, to
SECURITYHOLDERS AGREEMENT
THL - NORTEK INVESTORS, LLC
Dated as of August 27, 2004
THIS FIRST AMENDMENT, dated as of February 10, 2005 (the "First
Amendment"), amends that certain SECURITYHOLDERS AGREEMENT, dated as of August
27, 2004 (the "Original Agreement"), among THL - Nortek Investors, LLC, a
Delaware limited liability company (the "Company"), Nortek Holdings, Inc., a
Delaware corporation formerly known as THL Buildco Holdings, Inc. ("Holdings"),
Xxxxxx X. Xxx Equity Fund V, L.P. and the other THL Investors (as defined in the
Original Agreement), Xxxxxx Investments Employees' Securities Company I LLC,
Xxxxxx Investments Employees' Securities Company II LLC, Xxxxxx Investments
Holdings, LLC, Third Party Investors (as defined therein) and Management
Securityholders (as defined therein). Capitalized terms used and not otherwise
defined in this Amendment are used herein as defined in the Original Agreement.
As used herein, the term "this Agreement" means the Original Agreement, as
amended by this First Amendment.
WHEREAS, the Securityholders entered into the Original Agreement in August
2004 and the transactions contemplated by the first recital to the Original
Agreement were completed;
WHEREAS, the Company, Holdings and the Securityholders now want to effect a
recapitalization transaction pursuant to which: (i) the Company will transfer to
NTK Holdings, Inc., a new Delaware corporation ("NTK Holdings") all of the
outstanding shares of Holdings in exchange for the issuance to the Company of
shares of the common stock of NTK Holdings, as a result of which exchange NTK
Holdings will become a wholly-owned subsidiary of the Company and Holdings will
become a wholly-owned subsidiary of NTK Holdings, and (ii) NTK Holdings will
issue and sell certain discount notes, it being contemplated that a portion of
the proceeds from such issuance will be used to pay a dividend to the Company
which, in turn, will make a distribution to its members; and
WHEREAS, the Securityholders and NTK Holdings believe it to be in their
respective best interests and in the best interests of the Company that they
enter into this Amendment so that the terms of the Original Agreement will
continue (adjusted appropriately to reflect the interposition of NTK Holdings as
a new intermediate holding company) to provide certain rights and restrictions
with respect to the Securities owned by them or their permitted transferees;
NOW, THEREFORE, in consideration of the mutual covenants and obligations
set forth in this Agreement, the parties hereto agree as follows:
1. Joinder of NTK Holdings. By the execution of this Amendment, NTK
Holdings becomes and is made a party to this Agreement.
2. Changes to Section 1.1.
(a) Section 1.1(a) of the Original Agreement is amended as follows:
(i) The phrase "employees of Holdings or its subsidiaries" is
hereby deleted and replaced with the phrase "employees of NTK Holdings
or its subsidiaries"; and
(ii) The phrase "merges, of Holdings or any of their
subsidiaries" is hereby deleted and replaced with the phrase "merges,
of NTK Holdings or any of their subsidiaries".
(b) Section 1.1(c) of the Original Agreement is amended by deleting
the phrase "common stock of Holdings" and substituting therefor the phrase
"common stock of NTK Holdings".
3. Global Change of "Holdings Stock" to "NTK Holdings Stock".
(a) All references in the Original Agreement to "Holdings Stock"
(including those in clause (ii) of the first sentence of Section 6.4 of the
Original Agreement and in clause (ii) of the first sentence of Section 7.1
of the Original Agreement) are deleted and replaced with references to "NTK
Holdings Stock".
(b) The corresponding change is made in the definitions section
(Section 11.1) so that:
(i) The term "Holdings Stock" and related definition are deleted
and replaced (in the appropriate alphabetical order) with the
following: "The term 'NTK Holdings Stock' means shares of common stock
of NTK Holdings that are distributed by the Company to the
Securityholders";
(ii) In clause (ii) of the definition of Common Stock the word
"NTK" is hereby inserted immediately prior to the words "Holdings
Stock"; and
(iii) In clause (c) of the definition of each of the terms
Management Securities, Third Party Investor Securities and THL
Securities, the phrase "securities of the Company, Holdings or" is
deleted and replaced, in each case, with the phrase "securities of the
Company, NTK Holdings or".
(c) Section 7.1 of the Original Agreement is hereby further amended by
deleting the phrase "and Holdings, in the case of clause (ii) above" and
replacing it with the phrase "and NTK Holdings, in the case of clause (ii)
above".
(d) References in Exhibit A to the Original Agreement (the form or
Registration Rights Agreement) to "Nortek Holdings, Inc." (including
references thereto in the preamble and signature blocks of that form
agreement) will be deemed to be references to "NTK Holdings, Inc."
-2-
4. Change to Subsection 8.2(i). Paragraph (i) of Section 8.2 is amended by
deleting the phrase "each of Holdings and Nortek, Inc." and substituting
therefor the phrase "each of NTK Holdings, Holdings and Nortek, Inc."
5. Additional Definitions. Section 11.1 is further amended by adding the
following additional definitions:
(a) "'First Amendment' means the first amendment, dated February 10,
2005, to this Agreement."
(b) "'NTK Holdings' means NTK Holdings, Inc., a Delaware corporation
and, as of the date of the First Amendment, the holder of all of the
outstanding common stock of Holdings."
6. Additional Provisions.
(a) Effectiveness. This Amendment will take effect from and as of the
time of the exchange of shares described in the recitals of this First
Amendment. The undersigned acknowledge, agree and confirm that their
execution of this Amendment is sufficient to cause this Amendment to take
effect and to be binding upon both them and the other Securityholders, and
constitutes all consents and approvals required under Sections 11.7 and
11.5 of the Original Agreement.
(b) 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 may reasonably request in order to
carry out the intent and accomplish the purposes of this Amendment and the
consummation of the transactions contemplated hereby.
(c) Governing Law. This Amendment and the rights and obligations of
the parties hereunder shall be governed by, and construed and interpreted
in accordance with, the law of the State of Delaware applicable to
agreements signed and to be performed in that state, without giving effect
to any choice of law principles thereof that would cause application of the
laws of another jurisdiction.
(d) Jurisdiction, Severability, Interpretation, etc. The provisions of
Sections 11.13 and 11.14 of the Original Agreement are incorporated into
this Amendment by reference and apply to this Amendment to the same extent
as they would if set forth in full herein.
(e) Headings; Execution in Counterparts. The headings and captions
contained herein are for convenience and shall not control or affect the
meaning or construction of any provision hereof. This Amendment may be
executed in any number of counterparts (or by the parties in separate
counterparts), each of which shall be deemed to be an original and all of
which together shall constitute one and the same instrument.
[Remainder of Page Intentionally Left Blank]
-3-
XXXXXX INVESTMENTS EMPLOYEES' SECURITIES
COMPANY I LLC
By: Xxxxxx Investment Holdings, LLC,
its managing member
By: Xxxxxx Investments, LLC,
its managing member
By: /s/ Xxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Managing Director
XXXXXX INVESTMENTS EMPLOYEES' SECURITIES
COMPANY II LLC
By: Xxxxxx Investment Holdings, LLC,
its managing member
By: Xxxxxx Investments, LLC,
its managing member
By: /s/ Xxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Managing Director
XXXXXX INVESTMENT HOLDINGS, LLC
By: Xxxxxx Investments, LLC,
its managing member
By: /s/ Xxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Managing Director
[SIGNATURE PAGE TO FIRST AMENDMENT TO SECURITYHOLDERS AGREEMENT]
XXXXXX X. XXX EQUITY (CAYMAN)
FUND V, L.P.
By: THL Equity Advisors V, LLC,
its general partner
By: Xxxxxx X. Xxx Partners, L.P.,
its sole member
By: Xxxxxx X. Xxx Advisors LLC,
its general partner
By: /s/ Xxxxxxx X. XxXxxx
------------------------------------
Name: Xxxxxxx X. XxXxxx
Title: Managing Director
1997 XXXXXX X. XXX NOMINEE TRUST
By: US Bank, N.A., not personally,
but solely as Trustee under the 1997
Xxxxxx X. Xxx Nominee Trust
By: /s/ Xxxxxx X. Xxx
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
XXXXXX X. XXX INVESTORS LIMITED
PARTNERSHIP
By: THL Investment Management Corp.,
its general partner
By: /s/ Xxxxxx X. Xxx
------------------------------------
Name: Xxxxxx X. Xxx
Title: Chief Executive Officer
[SIGNATURE PAGE TO FIRST AMENDMENT TO SECURITYHOLDERS AGREEMENT]
XXXXXX X. XXX EQUITY FUND V, L.P.
By: THL Equity Advisors V, LLC,
its general partners
By: Xxxxxx X. Xxx Partners, L.P.,
its sole member
By: Xxxxxx X. Xxx Advisors LLC,
its general partner
By: /s/ Xxxxxxx X. XxXxxx
------------------------------------
Name: Xxxxxxx X. XxXxxx
Title: Managing Director
XXXXXX X. XXX PARALLEL FUND V, L.P.
By: THL Equity Advisors V, LLC,
its general partner
By: Xxxxxx X. Xxx Partners, L.P.,
its sole member
By: Xxxxxx X. Xxx Advisors LLC,
its general partner
By: /s/ Xxxxxxx X. XxXxxx
------------------------------------
Name: Xxxxxxx X. XxXxxx
Title: Managing Director
[SIGNATURE PAGE TO FIRST AMENDMENT TO SECURITYHOLDERS AGREEMENT]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
THL-NORTEK INVESTORS, LLC
By: /s/ Xxxxx Xxxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Secretary
NORTEK HOLDINGS, INC.
(f/k/a THL Buildco Holdings, Inc.)
By: /s/ Xxxxx Xxxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Vice President, General Counsel
and Secretary
NTK HOLDINGS, INC.
By: /s/ Xxxxx Xxxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Vice President, General Counsel
and Secretary
[SIGNATURE PAGE TO FIRST AMENDMENT TO SECURITYHOLDERS AGREEMENT]
MANAGEMENT SECURITYHOLDERS
/s/ Xxxxxxx Xxxxxx /s/ Xxxxxxx Xxxxxxxxx
------------------------------------- ----------------------------------------
Xxxxxxx Xxxxxx, individually Xxxxxxx Xxxxxxxxx, individually
/s/ Xxxxxxx Xxxxxxx /s/ Xxxxxx Xxxxxxxxx
------------------------------------- ----------------------------------------
Xxxxxxx Xxxxxxx, individually Xxxxxx Xxxxxxxxx, individually
/s/ Xxxxxx Xxxxxx /s/ Xxxxx Xxxxxxxx
------------------------------------- ----------------------------------------
Xxxxxx Xxxxxx, individually Xxxxx Xxxxxxxx, individually
/s/ Xxxxx Xxxxxxx /s/ Xxxxx Xxxx
------------------------------------- ----------------------------------------
Xxxxx Xxxxxxx, individually Xxxxx Xxxx, individually
/s/ Xxxxx Xxxxx
------------------------------------- ----------------------------------------
Xxxxx Xxxxx, individually Xxxxxx Xxxxxxxxx, individually
[SIGNATURE PAGE TO FIRST AMENDMENT TO SECURITYHOLDERS AGREEMENT]
