EXHIBIT 4.9
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GMH HOLDINGS, INC.
INVESTORS' RIGHTS AGREEMENT
December 21, 1995
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TABLE OF CONTENTS
Page
SECTION 1
PUT/CALL
1.1 Put Rights . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Repurchase Rights. . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 2
BULLDOG OPTION
2.1 Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 3
MISCELLANEOUS
3.1 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . 3
3.2 Successors and Assigns; Assignment of Rights . . . . . . . . . 4
3.3 Entire Agreement; Amendment; Waiver. . . . . . . . . . . . . . 4
3.4 Notices, etc.. . . . . . . . . . . . . . . . . . . . . . . . . 4
3.5 Delays or Omissions. . . . . . . . . . . . . . . . . . . . . . 4
3.6 Rights; Separability . . . . . . . . . . . . . . . . . . . . . .5
3.7 Titles and Subtitles . . . . . . . . . . . . . . . . . . . . . .5
3.8 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . .5
3.9 No Third Party Beneficiaries . . . . . . . . . . . . . . . . . .5
3.10 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
3.11 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . .5
GMH HOLDINGS, INC.
INVESTORS' RIGHTS AGREEMENT
This Investors' Rights Agreement (this "Agreement") is
made and entered into as of the 21st day of December, 1995, by
and among GMH HOLDINGS, INC., a Delaware corporation (the
"Company"), the persons identified on Exhibit A attached hereto
(the "Purchasers"), BULLDOG HOLDINGS LLC, a New York limited
liability company ("Bulldog") and THE EQUITABLE LIFE ASSURANCE
SOCIETY OF THE UNITED STATES (the "Equitable").
WHEREAS, the Purchasers are parties to the Securities
Purchase Agreement dated as of the date hereof between the
Company, General Manufactured Housing, Inc. and the Purchasers
(the "Series A Agreement"), certain of the Company's and such
Purchasers' obligations under which are conditioned upon the
execution and delivery by such Purchasers, Bulldog, Equitable and
the Company of this Agreement;
For purposes of Section 1.1, 1.2(c) and 3 of this
Agreement only, Equitable shall be deemed to be a Purchaser.
NOW, THEREFORE, in consideration of the mutual promises
and covenants set forth herein, the parties hereto agree as
follows:
SECTION 1
PUT/CALL
1.1 Put Rights. (a) At any time, and from time to
time, commencing December 30, 2003, a Purchaser may, by notice to
the Company and to the other Purchasers (a "Put Notice") elect to
require the Company (subject to the conditions set forth below),
to purchase (a "Put") all of the Common Stock and Series B Shares
owned by such Purchaser at a price equal to the Fair Market Value
(as defined below) determined as of the date of the Put Notice,
and the Company, subject to the conditions set forth below, shall
thereupon become obligated to purchase all of such Common Stock
and Series B Stock at the Fair Market Value. In the event that
the Fair Market Value is less than the price at which such
Purchaser is willing to Put such Common Stock and Series B Shares
then, within 30 days after the date of the determination of Fair
Market Value, the Purchaser may withdraw such Put Notice and the
obligations of the Purchaser and the Company pursuant to this
Section 1.1 with respect to such Put shall be terminated. During
the thirty (30) day period following the delivery of any Put
Notice, each Purchaser shall have the right to exercise a Put on
equal priority with the Purchaser who delivered the Put Notice
initiating such process with respect to all Common Stock and
Series B Shares owned by such Purchaser.
(b) The Company's obligations with respect to a
Put(s) shall be limited to the extent of its funds legally
available for the purchase of capital stock of the Company. In
the event that the Company is so limited in its ability to
fulfill any Put, the Company will use its reasonable efforts to
arrange financing on commercially reasonable terms and conditions
in an amount sufficient to enable it to fulfill its obligations
in respect of all Common Stock and Series B Shares Put by
Purchasers during the 30 day period following delivery of the
initiating Put Notice. If, notwithstanding such efforts, after a
period of 90 days following the determination of Fair Market
Value as of the date of the initiating Put Notice, the Company is
unable to acquire for cash all of the Common Stock and Series B
Shares which have been Put, then the Company shall issue to each
Purchaser who has Put Common Stock and Series B Shares a
Promissory Note of the Company in the original principal amount
equal to the Fair Market Value of the Common Stock and Series B
Shares so Put which the Company is unable to acquire for cash
(prorating the cash to be paid and principal amount of Promissory
Notes to be delivered based upon the number of shares (calculated
on an as converted and/or as exercised basis) Put by each
Purchaser as compared to the total number of shares Put by all
Purchasers). Any such promissory note shall bear interest at the
rate per annum equal to the then prevailing rate for three year
U.S. Treasury obligations plus 500 basis points on the
outstanding principal amount thereof, shall be mandatorily
prepayable out of excess cash flow of the Company and its
subsidiaries on a consolidation basis, and shall mature on the
third anniversary of the Put Notice applicable thereto. Such
Promissory Note shall contain such subordination provisions as
the Company's senior lenders shall reasonably request. The
Promissory Note shall be secured by a pledge of the securities
with respect to which the Put has been exercised. The Promissory
Note shall be substantially in the form of Exhibit I attached to
this Agreement. The securities pledged to secure the Promissory
Note shall be endorsed in blank, together with assignments
separate from certificates, which are undated and have been
executed by the Company, and shall be delivered to the Purchaser,
together with a pledge agreement executed by the Company in
substantially the form of Exhibit II attached to this Agreement
and the Promissory Note, at the Closing of such Put.
(c) The closing of any Put transaction shall take
place on a date (such date to be as soon as practicable after the
Valuation has been delivered) and at the offices of the Company.
The Company, will pay for the Common Stock and Series B Shares to
be purchased pursuant to a Put by wire transfer to the Purchaser
to the extent provided above, and, if required pursuant to
subparagraph (b) above by delivery of a Promissory Note duly
executed by the Company. The Company, will be entitled to
receive customary representations and warranties from the
Purchaser regarding the sale of the Common Stock and Series B
Shares including a representation that the Purchaser has good and
marketable title to the Common Stock and Series B Shares to be
transferred free and clear of all liens, claims and other
encumbrances.
(d) As used herein, the following terms shall
have the following respective meanings:
Entity Fair Market Value shall mean the fair
market value of the Company and its Subsidiaries
considered as one entity (as established pursuant
to a Valuation), in the event of a sale of the
Company and its Subsidiaries pursuant to an active
marketing process, less any indebtedness of the
Company and its Subsidiaries for borrowed money.
Fair Market Value of a share of Common Stock
shall mean the Entity Fair Market Value divided by
the total number of issued and outstanding shares
of Common Stock of the Company on a fully diluted
basis (including the conversion of all securities
convertible into Common Stock and the exercise of
all warrants which are exercisable into Common
Stock). Fair Market Value of a Series B Share
shall mean the Fair Market Value of a share of
Common Stock multiplied by the number of shares of
Common Stock into which such Series B Share is
then convertible.
"Valuation" shall mean with respect to Entity
Fair Market Value, the agreement of the Company
and the applicable Purchaser(s), or if the Company
and such Purchaser(s) are unable to agree within
30 days after delivery of the Put Notice, the
opinion of an investment banking firm of national
standing designated by mutual agreement of the
Company and the Purchaser. The costs of
conducting the Valuation shall be borne equally by
the applicable Purchaser and the Company.
1.2 Repurchase Rights. (a) At any time commencing
December 30, 2004, the Company may, by notice to the Purchasers
(a "Call Notice"), elect to purchase (a "Call") all of the
Purchasers' Common Stock and Series B Shares at a price equal to
the Fair Market Value thereof, determined as of the date of the
Call Notice. The Call Notice will set forth the time and place
for the closing of the transaction.
(b) At any time commencing December 30, 2004, the
Company may, by a Call Notice to Equitable, elect to Call of
Equitable's Common Stock and Warrants at a price equal to the
Fair Market Value thereof, determined as of the date of the Call
Notice. The Call Notice will set forth the time and place for
the closing of the transaction.
(c) The closing of the transactions contemplated
by this Section 1.2 shall take place on the date and at the place
designated by the Company in the Call Notice which date shall not
be more than 90 days after the delivery of such notice. The
Company will pay for the Common Stock and Series B Shares to be
purchased pursuant to a Call in cash by wire transfer payable to
the holder of such Common Stock and Series B Shares. The Company
will be entitled to receive customary representations and
warranties from each Purchaser regarding the sale of the Common
Stock and Series B Shares, including but not limited to the
representation that the Purchaser has good and marketable title
to the Common Stock and Series B Shares to be transferred free
and clear of all liens, claims and other encumbrances.
SECTION 2
BULLDOG OPTION
2.1 Option. On each dividend payment date with
respect to the Series A Shares (and whether or not any dividend
in respect of the Series A Shares is earned or declared), in the
event that there is an aggregate amount of accrued and unpaid
dividends in respect of the Series A Shares in excess of
$500,000, then Bulldog shall grant to each Purchaser an option to
purchase such Purchaser's pro rata share (as defined below) of
that number of Series B Shares (adjusted for any combinations,
consolidations, stock splits, or stock distributions or dividends
with respect to such shares) (the "Option Shares") owned by
Bulldog as equals .21875 times the difference between (a) the
aggregate amount of accrued and unpaid dividends in respect of
all Series A Shares minus (b) the greater of (x) $500,000 and (y)
the lowest aggregate amount of accrued and unpaid dividends
outstanding in respect of all Series A Shares since the
immediately preceding dividend payment date (or, if Bulldog has
converted some or all of the Series B Shares such that it owns an
insufficient number of Series B Shares to satisfy such option,
then such option shall be for such number of shares of Common
Stock as such number of Option Shares would then convert into at
the then applicable Series B Conversion Price); provided that the
maximum number of Option Shares as to which the Purchasers may be
granted options hereunder shall be that number of Option Shares
as shall represent ten percent (10%) of the Company's Common
Stock on a fully-diluted basis. The option exercise price per
share with respect to any such option shall equal $2.2857 per
share (as adjusted for combinations, consolidations or stock
distributions or dividends with respect to such shares) and the
term of each such option shall be eight years from the date of
grant of such option. Each option may be exercised in whole or
in part provided that options shall be exercised in amounts no
less than the lesser of (i) $10,000 in aggregate exercise price
and (ii) the total dollar amount in exercise price of all
unexercised options held by such optionee. If prior to exercise
of any option granted pursuant to this Section, the Company pays
dividends in respect of the Series A Shares such that the
aggregate amount of accrued and unpaid dividends in respect of
all Series A Shares is less than $500,000, then one-half of the
unexercised options which are then held by such optionee (but
excluding any options which have previously been outstanding at
any time when the aggregate amount of accrued and unpaid
dividends on all Series A Shares is less than $500,000) shall
expire and be of no further force or effect. A Purchaser's pro
rata share shall be that percentage which expresses the ratio
between the number of shares of Common Stock owned by such
Purchaser and the aggregate number of shares of Common Stock
owned by all such Purchasers.
SECTION 3
MISCELLANEOUS
3.1 Governing Law. This Agreement shall be governed
in all respects by the laws of the State of Delaware, as applied
to agreements among Delaware residents entered into and to be
performed entirely within Delaware.
3.2 Successors and Assigns; Assignment of Rights. The
rights and benefits of a Purchaser hereunder (including such
Purchaser's rights and benefits under Section 1.1 hereof) may be
assigned to a transferee or assignee in connection with transfer
or assignment of any Series A Shares owned by such Purchaser (A)
to any person or entity which is a majority-owned subsidiary of a
Purchaser or controls, is controlled by or under common control
with the Purchaser, (B) to any other person or entity provided
that (a) such transfer may otherwise be effected in accordance
with applicable securities laws, (b) such transferee or assignee
acquires at least 160,000 Series A Shares and (c) such assignee
or transferee executes a written instrument agreeing to be bound
by the terms and provisions of this Agreement, (C) to a
constituent partner of a Purchaser, a trust (including
liquidating trusts for the benefit of such a partner or partners)
or the estate of such a constituent partner, and (D) to a
successor trustee of a Purchaser in its capacity as trustee.
Any such transfer or assignment permitted hereby shall inure to
the benefit of, and be binding upon, the successors, assigns,
heirs, executors and administrators of the parties hereto.
3.3 Entire Agreement; Amendment; Waiver. This
Agreement, the Series A Agreement and the other agreements
contemplated thereby constitute the full and entire understanding
and agreement between the parties with regard to the subjects
hereof and thereof. Neither this Agreement nor any term hereof
may be amended, waived, discharged or terminated, except by a
written instrument signed by the Company and the holders of at
least sixty six and 2/3 percent (66-2/3%) of the Series A Shares
and any such amendment, waiver, discharge or termination shall be
binding upon all the parties hereto, but in no event shall the
obligation of any party hereto be materially increased, except
upon the written consent of such party.
3.4 Notices, etc. All notices and other
communications required or permitted hereunder shall be in
writing and shall be mailed by United States first-class mail,
postage prepaid, sent by -facsimile or delivered personally by
hand or nationally recognized courier addressed (a) if to a
Purchaser, as indicated on the list of Purchasers attached hereto
as Exhibit A, or at such other address as such Purchaser or
permitted assignee shall have furnished to the Company in
writing, (b) if to Bulldog to Strategic Investments & Holdings,
Inc., Cyclorama Building, 000 Xxxxxxxx Xxxxxx, Xxxxxxx, Xxx Xxxx
00000; Attention: Xxxx X. Xxxxx or at such other address as shall
have furnished to the Company in writing, or (c) if to the
Company, at such address or facsimile number as the Company shall
have furnished to each Purchaser in writing. All such notices
and other written communications shall be effective on the date
of mailing, facsimile transfer or delivery.
3.5 Delays or Omissions. No delay or omission to
exercise any right, power or remedy accruing to any Purchaser (in
any capacity hereunder), upon any breach or default of the
Company under this Agreement shall impair any such right, power
or remedy of such Purchaser nor shall it be construed to be a
waiver of any such breach or default, or an acquiescence therein,
or of or in any similar breach or default be deemed a waiver of
any other breach or default theretofore or thereafter occurring.
Any waiver, permit, consent or approval of any kind or character
on the part of any Purchaser (in any capacity hereunder) of any
breach or default under this Agreement or any waiver on the part
of any Purchaser of any provisions or conditions of this
Agreement must be made in writing and shall be effective only to
the extent specifically set forth in such writing. All remedies,
either under this Agreement or by law or otherwise afforded to
any Purchaser, shall be cumulative and not alternative.
3.6 Rights; Separability. Unless otherwise expressly
provided herein, a Purchaser's rights hereunder are several
rights, not rights jointly held with any of the other Purchaser.
In case any provision of the Agreement shall be invalid, illegal
or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or
impaired thereby.
3.7 Titles and Subtitles. The titles of the
paragraphs and subparagraphs of this Agreement are for
convenience of reference only and are not to be considered in
construing or interpreting this Agreement.
3.8 Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be an original,
but all of which together shall constitute one instrument.
3.9 No Third Party Beneficiaries. The covenants and
agreements set forth herein are for the sole and exclusive
benefit of the parties hereto and their respective successors and
assigns and such covenants and agreements shall not be construed
as conferring, and are not intended to confer, any rights or
benefits upon any other persons.
3.10 Remedies. The parties to this Agreement
acknowledge and agree that a breach of any of the covenants of
the Company, the Purchasers or Bulldog set forth in this
Agreement may not be compensable by payment of money damages and,
therefore, that the covenants of the foregoing parties set forth
in this Agreement may be enforced in equity by a decree requiring
specific performance. Without limiting the foregoing, if any
disputes arise concerning Section 1 hereof, the parties to this
Agreement agree that an injunction may be issued pending
resolution of such controversy. Such remedies shall be
cumulative and non-exclusive and shall be in addition to any
other rights and remedies the parties may have under this
Agreement. Any transfer or acquisition of Restricted Securities
in violation of this Agreement shall be null and void ab initio.
3.11 Definitions. As used in this Agreement, the
following definitions shall apply:
"Common Stock" shall mean, collectively, the
Company's Class A Common Stock, par value $0.001 per share, the
Company's Class C Common Stock, par value $0.001 per share,
including shares of Class C Common Stock issued or issuable upon
conversion of Series B Shares, and the Company's Class B Common
Stock, par value $0.001 per share, including shares of Class A or
Class B Common Stock issued or issuable upon exercise of the
warrants issued to Equitable on the date hereof.
"Series A Shares" shall mean the Company's Series
A Redeemable Preferred Stock, par value $0.001 per share.
"Series B Shares" shall mean the Company's Series
B Convertible Preferred Stock, par value $0.001 per share.
"Warrant" shall mean those certain warrants to
purchase Common Stock issued to Equitable on the date hereof
pursuant to that certain Note and Warrant Purchase Agreement
dated as of the date hereof among the Company, GMH Acquisition
Corp. and Equitable.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties hereto have executed
this Investors' Rights Agreement effective as of the day and year
first above written.
THE COMPANY: GMH HOLDINGS, INC.
By: /s/ Xxxx X. Xxxxx
Name: Xxxx X. Xxxxx
Title: President
BULLDOG: BULLDOG HOLDINGS LLC
By: SIHI-GMH LLC
Its Managing Member
By: /s/ Xxxx X. Xxxxx
Xxxx X. Xxxxx
President
THE PURCHASERS: RFE INVESTMENT PARTNERS V, L.P.
By: RFE ASSOCIATES V, L.P.,
Its General Partner
By: /s/ [illegible]
A General Partner
STERLING COMMERCIAL CAPITAL, INC.
By: /s/ Xxxxxx Xxxxxxxxxx
Xxxxxx Xxxxxxxxxx,
Executive Vice President
State Treasurer of the State of
Michigan, Custodian of the Michigan
Public School Employees' Retirement
System, State Employees' Retirement
System, Michigan State Police
Retirement System, and Michigan
Judges Retirement System
By: /s/ Xxxx X. Xxxx
Name: Xxxx X. Xxxx
Title: Administrator, Alternative
Investments Division
EQUITABLE: THE EQUITABLE LIFE ASSURANCE
SOCIETY OF THE UNITED STATES
By: /s/ [illegible]
Investment Officer
Exhibit A
SCHEDULE OF PURCHASERS
Purchaser's Name and Address
RFE Investment Partners V, L.P.
00 Xxxxx Xxxxxx
Xxx Xxxxxx, XX 00000
State Treasurer of the
State of Michigan,
Custodian
000 Xxxx Xxxxxxx, 0xx Xxxxx
Xxxxxxx, XX 00000
Sterling Commercial Capital, Inc.
000 Xxxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
INVESTORS' RIGHTS AGREEMENT
EXHIBIT I
PROMISSORY NOTE
FOR VALUE RECEIVED, GMH Holdings, Inc., a Delaware
corporation (hereinafter called the "Company"), with offices at
__________________________________ hereby promises to pay to the
order of ______________________________________[name of person
exercising Put], a __________________________________________
("Payee"), at its office at
_____________________________________________________________
[address of Payee], or at such other office as it designates in
writing to the Company, the principal sum of
_____________________________ Dollars ($_____________), such
payment to be in such coin or currency of the United States of
America as at the time of payment is legal tender for the payment
of public and private debts. The principal amount of this Note
shall be paid in three equal annual installments (or in three
installments as nearly equal as possible), one year, two years,
and three years from the initial issuance date of this Note.
This Note shall bear interest on the unpaid principal amount
hereof from time to time outstanding, payable every three months
from the initial issuance date of this Note, commencing on the
third month from the initial issuance date of this Note in like
money on the principal sum unpaid hereof, from the date hereof,
and upon payment of principal in full, at a rate per annum equal
to [Three year Treasury rate plus 500 basis points] per annum.
Payments of principal and/or interest shall be made at the office
of Payee. Notwithstanding the provisions of this Note, if the
rate of interest payable hereunder is limited by law, the rate
payable hereunder shall be the maximum rate permitted by law.
If, however, the Company pays any interest in excess of the
maximum rate of interest permitted by law, any interest so paid
which exceeds such maximum rate shall automatically be considered
a payment of principal and shall automatically be applied in
reduction of principal due on this Note to the extent of such
excess.
This Note may be prepaid in whole or in part by the
Company. In addition, in the event that at the end of any fiscal
year ending after the date hereof there shall exist "Excess Cash
Flow" (as defined below), then within ten (10) days after the
date upon which the Company's audited consolidated financial
statements with respect to such fiscal year become available, the
Company shall be required to pay to Payee, an amount equal to all
of such Excess Cash Flow. Notwithstanding anything to the
contrary contained in this Note, the Company shall (a) with
respect to any mandatory or permitted prepayment under this
paragraph, prepay this Note and other notes initially issued in
the same year as this Note by reason of the exercise of Put
rights given to holders of certain securities of the Company
pursuant to repurchase rights granted in an Investors' Rights
Agreement dated as of December __, 1995 (the "Investors' Rights
Agreement") between the Company and the Purchasers named therein
pro rata based on the relative aggregate principal amounts
thereof outstanding; and (b) prepay in full Notes issued in early
years by reason of the exercise of Put rights given to holders of
Company securities pursuant to the Investors' Rights Agreement
prior to prepayment of Notes issued in later years.
To secure payment of this Note and of any liability or
liabilities of the Company to the holder, due or to become due or
that may hereafter be contracted or existing, however acquired by
the holder, the Company hereby grants a security interest in and
shall deliver to the holder appropriate documentation, including
a Pledge Agreement of even date herewith, representing such
security interest, securities of the Company which the Company
has delivered to the Payee pursuant to the exercise by the Payee
of the Put option contained in the Investors' Rights Agreement.
Reference to any other agreement referred to in this
Note shall in no way impair the negotiability of this Note or the
absolute and unconditional obligation of the Company to pay both
principal and interest hereon as provided herein.
In case of default in the payment of this Note or
breach of the obligations of the Company contained herein, the
holder shall have all rights given by the Uniform Commercial Code
in the property, assets and securities in which it has a security
interest. In addition, in the case of default in the payment of
this Note or a breach of the obligations of the Company contained
herein, the unpaid balance of the principal and interest due
hereunder shall be immediately due and payable without notice.
The waiver (which may only be by a written instrument) or the
remedying of any default in a reasonable manner shall not operate
as a waiver of the default remedied or any prior or subsequent
default. If any amount payable hereunder is not paid when due in
accordance with the terms hereof, the Company shall pay the
holder hereof all its reasonable costs and expenses of
collection, including but not limited to, its reasonable
attorneys' fees actually incurred.
Presentment for payment, demand, notice of dishonor,
protest and notice of protest are hereby waived.
This Note shall be governed and construed in accordance
with the laws of the State of New York applicable to contracts
made and to be performed wholly within such state.
For purposes of this Note, the following definitions
shall apply.
"Consolidated Net Income" for any period, shall mean
the consolidated net income (or deficit) of the Company and its
subsidiaries for such period, determined in accordance with GAAP,
excluding, however, any gains or losses from the sale or other
disposition of assets (other than sales of inventory in the
ordinary course of business) and any other non-cash extraordinary
or non-recurring gains or losses.
"Excess Cash Flow" for any period, shall mean an amount
equal to the sum of (i) Consolidated Net Income for such period,
plus (ii) an amount equal to the amount of depreciation expense,
depletion expense, non-cash amortization expense (including the
amortization of goodwill), accrued non-cash interest expense and
all other non-cash charges deducted in arriving at such net
income, minus (iii) an amount equal to the amount of capital
expenditures actually incurred by the Company during such period
(up to a maximum amount of $500,000 in any year).
IN WITNESS WHEREOF, GMH Holdings, Inc. has caused this
Note to be duly executed and delivered in its corporate name by
its officers duly authorized on this _____ day of
_______________________, 199__.
GMH HOLDINGS, INC.
By:______________________________
Its:
ATTEST
_________________________________
Secretary
INVESTORS' RIGHTS AGREEMENT
EXHIBIT II
PLEDGE AGREEMENT
THIS AGREEMENT is made as of _____________________,
199__, by and between ___________________________, and
__________________________ corporation ("Pledgor") and [ ]
("Pledgee").
The following is a recital of facts of facts underlying
this Agreement:
Pledgor has sold Common Stock, par value $.001 par
share ("Common Stock") to Pledgee pursuant to a Securities
Purchase Agreement dated as of December __, 1995, by and between
Pledgor, General Manufactured Housing, Inc. and the Purchasers
named therein (the "Purchase Agreement"). Pursuant to an
Investors' Rights Agreement dated as of December __, 1995 between
Pledgee, Pledgor, and certain other Purchasers named therein,
(the "Investors' Rights Agreement"), Pledgor granted to Pledgee
the right to put the Common Stock. Pledgee has exercised its put
rights pursuant to the Investors' Rights Agreement. In
connection with the put, the Pledgor is making payment by
delivering a promissory note in the principal amount of
_________________________________ Dollars ($ ) of even date
herewith (the "Note"). In order to secure payment of the Note
and all other sums due to Pledgee pursuant to the terms of the
Investors' Rights Agreement, Pledgor desires to pledge to Pledgee
its securities of the class and in the number being repurchased
as provided in Investors' Rights Agreement (the "Stock").
NOW, THEREFORE, the parties agree as follows:
1. Pledge. Pledgor pledges and herewith delivers to
Pledgee as security for payment of the Note and all other sums
due to Pledgee pursuant to the Investors' Rights Agreement, in
accordance with their respective terms, all the Stock and given
Pledgee a continuing lien upon the Stock as security therefor.
If Pledgor comes into default under the terms of the Note, and
fails to cure such default within any grace period specifically
provided in the Note, Pledgor authorizes Pledgee to sell all or
any portion of the Stock at public or private sale by completing
the endorsements and/or assignments in blank and to apply the
proceeds, after deducting all expenses of collection and sale
(including reasonable attorney fees) in payment of any and all
obligations of Pledgor evidenced by the Note. Pledgee shall have
all the rights and remedies provided under the Uniform Commercial
Code. Whenever any notice of sale is required to be given to
Pledgor, it shall be considered reasonable if such notice is
given at least (7) days prior to the date of such sale.
Simultaneously with the execution hereof, Pledgor has delivered
the Stock to Pledgee, endorsed in blank, together with
assignments separate from certificates, which are undated and
have been executed by Pledgor.
2. Release of Collateral. When the Note and all sums
due to Pledgee pursuant to the Investors' Rights Agreement are
paid in full, Pledgee shall deliver the certificate(s)
representing the Stock and endorsements and/or assignments
separate from certificates to Pledgor.
3. Pledgee's Rights. So long as Pledgor is not in
default under the Note or terms of this Agreement, Pledgee shall
not have the right to receive any dividends payable with respect
to the Stock and Pledgee shall have no right to vote the Stock
except as provided in the Purchase Agreement. If, however, any
stock dividends or distributions of stock or other securities are
made on account of the Stock, then Pledgor shall promptly deliver
such stock or securities to Pledgee, endorsed in blank, together
with assignments separate from certificates, which are undated
and have been executed by Pledgor, whereupon such stock or
securities shall be subject to the terms of this Agreement and
shall be considered to be Stock as that term is used herein.
Upon the occurrence of any default under the Note Pledge may
exercise all voting rights incident to the Stock (which term
shall include any voting securities issued as a dividend and
distribution made thereon.)
4. Remedies Cumulative. Pledgee may pursue any and
all remedies in connection with the collateral pledged hereunder
notwithstanding the availability of other remedies, all such
remedies shall be cumulative and may be pursued simultaneously or
independently.
5. Notices. Any notices required or desired to be
given hereunder, shall be in writing and shall be considered
sufficiently given for all purposes if delivered by hand or sent
by registered or certified mail, to the parties hereto at the
address set forth below or such other address as they may direct
in writing by similar notice:
If to Pledgor:
[ ]
If to Pledgee:
[ ]
6. Miscellaenous. This Agreement is binding upon the
parties hereto and their successors and assigns. This Agreement
may only be amended by a writing signed by all of the parties
hereto and may be waived only by a writing signed by the party
charged with such waiver. This Agreement may be signed in more
than one counterpart, each of which shall be considered to be an
original, but all of which shall constitute one and the same
Agreement. This Agreement is government by and shall be
construed in accordance with the laws of the State of Delaware.
IN WITNESS WHEREOF, the parties have executed and
delivered this Agreement as of the date first set forth above.
"PLEDGOR"
[ ]
By:________________________________
"PLEDGEE"
[ ]
___________________________________
