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PURCHASE AGREEMENT

Purchase and Sale Agreement

PURCHASE AGREEMENT | Document Parties: ASSOCIATED MATERIALS, LLC | ACC Management, LLC | Apollo Investment Corporation | GOLDMAN, SACHS & CO | Northwestern Mutual Life Insurance Company You are currently viewing:
This Purchase and Sale Agreement involves

ASSOCIATED MATERIALS, LLC | ACC Management, LLC | Apollo Investment Corporation | GOLDMAN, SACHS & CO | Northwestern Mutual Life Insurance Company

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Title: PURCHASE AGREEMENT
Governing Law: New York     Date: 6/22/2009
Industry: Fabricated Plastic and Rubber     Law Firm: Gibson Dunn;Fried Frank     Sector: Basic Materials

PURCHASE AGREEMENT, Parties: associated materials  llc , acc management  llc , apollo investment corporation , goldman  sachs & co , northwestern mutual life insurance company
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Exhibit 10.1

PURCHASE AGREEMENT

among

ASSOCIATED MATERIALS, LLC,

APOLLO INVESTMENT CORPORATION,

THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY

and

GOLDMAN, SACHS & CO.

Dated as of June 16, 2009,

Relating to:

15% Senior Subordinated Notes Due 2012 of Associated Materials, LLC.

 

 


 

TABLE OF CONTENTS

 

 

 

 

 

 

 

Page

 

 

 

 

 

 

SECTION 1. DEFINITIONS AND ACCOUNTING TERMS

 

 

1

 

1.1 Definitions

 

 

1

 

1.2 Computation of Time Periods

 

 

9

 

1.3 Terms Generally

 

 

9

 

 

 

 

 

 

SECTION 2. AUTHORIZATION AND ISSUANCE OF NOTES

 

 

9

 

2.1 Authorization of Issue

 

 

9

 

2.2 Sale and Purchase of the Notes

 

 

9

 

2.3 Closing

 

 

9

 

 

 

 

 

 

SECTION 3. CONDITIONS TO CLOSING

 

 

10

 

3.1 Conditions to the Obligations of the Parties

 

 

10

 

3.2 Conditions to the Obligations of the Purchasers

 

 

10

 

3.3 Conditions to the Obligations of the Company

 

 

12

 

 

 

 

 

 

SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

 

12

 

4.1 Organization

 

 

12

 

4.2 Due Authorization; Non-Contravention

 

 

13

 

4.3 Governmental Approval; Regulation

 

 

13

 

4.4 Validity

 

 

13

 

4.5 No Material Adverse Effect

 

 

13

 

4.6 Litigation

 

 

13

 

4.7 Labor Matters

 

 

14

 

4.8 Subsidiaries

 

 

14

 

4.9 Ownership of Properties

 

 

14

 

4.10 Taxes

 

 

14

 

4.11 Pension and Welfare Plans

 

 

14

 

4.12 Environmental Warranties

 

 

15

 

4.13 Accuracy of Information

 

 

17

 

4.14 Regulations U and X

 

 

17

 

4.15 Solvency

 

 

17

 

4.16 Private Offering; No Integration or General Solicitation; Rule 144A Eligibility

 

 

17

 

4.17 Affiliate Transactions

 

 

18

 

4.18 Brokerage Fees

 

 

18

 

4.19 Fees

 

 

18

 

 

 

 

 

 

SECTION 5. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE PURCHASERS

 

 

18

 

5.1 Purchase for Investment

 

 

18

 

 

 

 

 

 

SECTION 6. COVENANT REGARDING REFINANCING

 

 

19

 

6.1 Existing Note Refinancing

 

 

19

 

 

 


 

 

 

 

 

 

 

 

Page

 

 

 

 

 

 

SECTION 7. TERMINATION

 

 

20

 

7.1 By Mutual Consent

 

 

20

 

7.2 By Purchasers

 

 

20

 

7.3 By the Company

 

 

21

 

7.4 Failure to Close

 

 

21

 

7.5 Effects of Termination

 

 

21

 

 

 

 

 

 

SECTION 8. INDEMNIFICATION AND CONTRIBUTION

 

 

21

 

8.1 Expenses

 

 

21

 

8.2 Indemnification

 

 

22

 

8.2 Waiver of Punitive Damages

 

 

22

 

8.3 Survival

 

 

22

 

8.4 Tax Treatment of Indemnification Payments

 

 

22

 

 

 

 

 

 

SECTION 9. MISCELLANEOUS

 

 

22

 

9.1 Disclosure of Transactions and Other Material Information

 

 

22

 

9.2 Notices

 

 

23

 

9.3 Benefit of Agreement; Assignments and Participations

 

 

23

 

9.4 No Waiver; Remedies Cumulative

 

 

24

 

9.5 Amendments, Waivers and Consents

 

 

24

 

9.6 Counterparts

 

 

24

 

9.7 Reproduction

 

 

24

 

9.8 Headings

 

 

25

 

9.9 Survival of Covenants and Indemnities

 

 

25

 

9.10 Governing Law; Submission to Jurisdiction; Venue

 

 

25

 

9.11 Severability

 

 

26

 

9.12 Entirety

 

 

26

 

9.13 Survival of Representations and Warranties

 

 

26

 

9.14 Construction

 

 

26

 

9.15 Incorporation

 

 

26

 

9.16 Intent to Limit Interest to Maximum

 

 

26

 

9.17 Confidentiality

 

 

27

 

9.18 No Personal Obligations

 

 

27

 

9.19 Home Office Payment

 

 

27

 

 

 

 

 

 

EXHIBITS:

 

 

 

 

 

 

 

 

 

Exhibit A — Indenture

 

 

 

 

 

 

 

 

 

SCHEDULES:

 

 

 

 

 

 

 

 

 

Schedule 2.2     —   Information Relating to Purchasers

 

 

 

 

Schedule 4.2     —   Due Authorization; Non-Contravention

 

 

 

 

Schedule 4.8     —   Subsidiaries

 

 

 

 

Schedule 4.12   —   Environmental Warranties

 

 

 

 

Schedule 4.18   —   Brokerage Fees

 

 

 

 

 

 


 

PURCHASE AGREEMENT

PURCHASE AGREEMENT, dated as of June 16, 2009, by and among Associated Materials, LLC., a Delaware limited liability company (together with its successors and permitted assigns, the “ Company ”), Apollo Investment Corporation, a Maryland corporation (together with its successors and permitted assigns, “ Apollo ”), The Northwestern Mutual Life Insurance Company, a Wisconsin corporation (together with its successors and permitted assigns, “ Northwestern Mutual ”) and Goldman, Sachs & Co., a New York limited partnership (together with its successors and permitted assigns, “ Goldman ”, and together with Apollo and Northwestern Mutual, the “ Purchasers ”).

RECITALS

WHEREAS, the Company desires to issue to the Purchasers, upon the terms and subject to the conditions set forth in this Agreement and the Indenture, $20,000,000 in aggregate original principal amount of the Company’s 15.00% Senior Subordinated Notes Due 2012 (the “ Notes ”); and

WHEREAS, the Purchasers desire to purchase the Notes from the Company upon the terms and subject to the conditions set forth in this Agreement and the Indenture.

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein contained, and intending to be legally bound hereby, the parties agree as follows:

SECTION 1.

DEFINITIONS AND ACCOUNTING TERMS

1.1 Definitions . As used herein, the following terms shall have the meanings specified herein unless the context otherwise requires:

8-K Filing ” is defined in Section 9.1 .

ABL Facility ” means the Loan and Security Agreement, dated as of October 3, 2008, by and among the Company and Gentek Building Products, Inc., as U.S. Borrowers, Gentek, as Canadian Borrower, Associated Materials Holdings, LLC, Gentek Holdings, LLC and Alside, Inc., as Guarantors, the lenders and issuing bank from time to time party thereto, Wachovia Bank, National Association, as administrative and collateral agent, Wachovia Capital Markets, LLC and CIT Capital Securities, LLC, as joint lead arrangers and joint lead bookrunners, and The CIT Group/Business Credit, Inc., as syndication agent.

Accredited Investor ” means any Person that is an “accredited investor” within the meaning of Rule 501(a) under the Securities Act.

Affiliate ” is defined in the Indenture.

Agreement ” is defined in Section 9.5 .

 

 


 

Amended ABL Facility ” means the ABL Facility, as amended in connection with the Note Refinancing.

AMH ” means AMH Holdings, LLC, a Delaware limited liability company, and its successors.

AMH II ” means AMH Holdings II, Inc., a Delaware corporation, and its successors.

Apollo ” is defined in the Preamble.

Applicable Law ” means as to any Person, the articles or certificate of incorporation and by-laws or other organizational or governing documents of such Person, and all laws, statutes, treaties, rules, codes (including building codes), ordinances, regulations, certificates, orders and licenses of, and legally binding interpretations by, any Governmental Authority and judgments, decrees, injunctions, writs, permits, orders or like governmental action of any Governmental Authority (including, without limitation, Environmental Laws) applicable to such Person or any of its Subsidiaries or any of their property, assets or operations.

Business Day ” means any day other than a Legal Holiday.

Canadian Pension Plan ” means (a) a “pension plan” or “plan” which is subject to applicable pension benefits legislation in any jurisdiction of Canada and is applicable to employees of the Company or any of its Subsidiaries resident in Canada, or (b) any pension benefit plan or similar arrangement applicable to employees of the Company or any of its Subsidiaries resident in Canada.

Canadian Welfare Plan ” means any medical, health, hospitalization, insurance or other employee benefit or welfare plan, agreement or arrangement applicable to employees of the Company or any of its Subsidiaries resident in Canada.

Capital Stock ” means (a) in the case of a corporation, corporate stock, (b) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited) and (c) in the case of an association or other business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock.

CERCLA ” means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended.

CERCLIS ” means the Comprehensive Environmental Response Compensation Liability Information System List.

Closing ” is defined in Section 2.3 .

Closing Date ” is defined in Section 2.3 .

 

2


 

Code ” means the Internal Revenue Code of 1986, as amended from time to time, and the rules and regulations promulgated thereunder from time to time.

Commission ” means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act or, if at any time after the execution of this Agreement such Commission is not existing and performing the duties now assigned to it under the Exchange Act, the body performing such duties at such time.

Company Exchange Notes ” means (a) notes or other Indebtedness and any other consideration of the Company issued in exchange for the Existing Company Notes, (b) the Existing Company Notes, after any amendment to the terms and conditions thereof or of the Existing Company Notes Indenture, and (c) in each case, if applicable, other consideration in exchange for, or the net proceeds of which are used to Refinance, all or a portion of the Existing Company Notes.

Controlled Group ” means all members of a controlled group of corporations and all members of a controlled group of trades or businesses (whether or not incorporated) under common control which, together with the Company, are treated as a single employer under Section 414(b) or 414(c) of the Code or Section 4001 of ERISA.

Default ” means any event, act or condition that is, or with the giving of notice, lapse of time or both would constitute, an Event of Default.

Enforceability Exceptions ” means, with respect to any specified obligation, (a) any limitations on the enforceability of such obligation due to bankruptcy, insolvency, reorganization, moratorium, and other similar laws of general applicability relating to or affecting creditors’ rights or general equity principles, and (b) that rights to indemnification or contribution may be limited by federal or state securities laws or applicable public policy (other than with respect to usury).

Environmental Laws ” means the common law and all applicable U.S. and Canadian federal, state, provincial or local statutes, laws, ordinances, codes, rules, regulations and guidelines having the force and effect of law (including consent decrees and administrative orders) relating to public health and safety, or pollution or protection of the environment (including ambient air, surface water, groundwater, soil, subsurface strata and natural resources such as flora and fauna) including without limitation the Clean Air Act, as amended, CERCLA, the Superfund Amendments and Reauthorization Act of 1986, as amended, the Resource Conservation and Recovery Act, the Toxic Substances Control Act of 1976, as amended, the Federal Water Pollution Control Act Amendments of 1972, the Clean Water Act of 1977, as amended, the Hazardous Materials Transportation Act, as amended, and any other law having a similar subject matter.

Environmental Matter ” means any matter relating to pollution, contamination, protection of the environment, human health or safety, and health or safety of employees, and any matter relating to emissions, discharges, releases or threatened releases, of Hazardous Materials into the air (indoor and outdoor), surface water, groundwater, soil, land surface or subsurface, buildings, facilities, real or personal property or fixtures or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials.

 

3


 

Environmental Permits ” is defined in Section 4.12(d) .

Equity Investors ” means the holders of Capital Stock of AMH II, other than Harvest and Investcorp.

ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated thereunder.

Event of Default ” is defined in the Indenture.

Exchange Act ” means the Securities Exchange Act of 1934, as amended.

Existing AMH Indenture ” means the indenture, dated as of March 4, 2004, between Wilmington Trust Company, as trustee, and AMH, providing for the issuance of the Existing AMH Notes, as such indenture may be amended, supplemented or otherwise modified from time to time.

Existing AMH Notes ” means the 11 1 / 4 % Senior Discount Notes due 2014 of AMH.

Existing Company Notes ” means the Company’s outstanding 9 3 / 4 % Senior Subordinated Notes due 2012.

Existing Company Notes Indenture ” means the indenture, dated as of April 23, 2002, by and among the Company, the subsidiary guarantors party thereto, and Wilmington Trust Company, as trustee, providing for the issuance of the Existing Company Notes, as such indenture may be amended, supplemented or otherwise modified from time to time.

Foreign Subsidiary ” means any Subsidiary of the Company which is organized under the laws of any jurisdiction outside of the United States of America.

GAAP ” means generally accepted accounting principles in the United States of America as in effect from time to time, including those set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession.

Gentek ” means Gentek Building Products Limited, a corporation organized and existing under the laws of Ontario, Canada.

Goldman ” is defined in the Preamble.

Governmental Authority ” means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to such governments.

 

4


 

Harvest ” means certain affiliates of Harvest Partners, LLC that own Capital Stock of AMH II.

Hazardous Materials ” means (a) any “hazardous substance”, as defined by CERCLA, (b) any “hazardous waste”, as defined by the Resource Conservation and Recovery Act, as amended, (c) any solid waste that is generated in the diagnosis, treatment (e.g., provision of medical services) or immunization of human beings or animals, in research pertaining thereto, or in the production or testing of biologicals, and (d) any pollutant or contaminant or hazardous, dangerous or toxic chemical, material or substance (including, without limitation, crude oil and any petroleum product) subject to regulation, or which can give rise to liability, under any Environmental Law.

Holder ” means a Person in whose name a Note is registered on the Security Register.

Indebtedness ” is defined in the Indenture.

Indemnitees ” is defined in Section 8.2 .

Indenture ” means that certain indenture, in the form attached as Exhibit A hereto, by and among the Company, the subsidiary guarantors party thereto, and Deutsche Bank Trust Company Americas, as trustee, providing for the issuance of the Notes.

Institutional Investor ” means (a) any original purchaser of a Note and any transferee that is an Affiliate of any original purchaser, (b) any Holder of a Note holding more than 25% of the aggregate principal amount of the Notes then outstanding, or (c) any bank, trust company, savings and loan association or other financial institution, any pension plan, any investment company or investment fund, any insurance company, any broker or dealer, or any other similar financial institution or entity, regardless of legal form organized under the laws of the United States, any state thereof, or the District of Columbia, with capital and surplus in excess of $50,000,000.

Investcorp ” means certain funds affiliated with Investcorp S.A. which own Capital Stock of AMH II.

Legal Holiday ” means a Saturday, a Sunday or a day on which banking institutions in New York, Minnesota or at a place of payment are authorized by law, regulation or executive order to remain closed.

Lien ” is defined in the Indenture.

Material Adverse Effect ” means a material adverse effect on the condition (financial or otherwise), business, operations, assets, liabilities (contingent or otherwise), properties or prospects of the Company and its Subsidiaries, taken as a whole.

 

5


 

Northwestern Mutual ” is defined in the Preamble.

Notes ” is defined in the Recitals.

Note Refinancing ” means any amendment (or other modification) in any manner of any of the material terms of, or any Refinancing of, all or any part of the Obligations under the Existing Company Notes or the Existing AMH Notes, or both, including (a) any amendment of the Existing Company Notes or the Existing Company Notes Indenture or the issuance of notes or other Indebtedness of the Company and, if applicable, other consideration in exchange for, or the net proceeds of which are used to Refinance, all or any part of the Existing Company Notes, whether or not the principal amount of any such notes or other Indebtedness being issued is less or greater than the principal amount of the Existing Company Notes, whether such notes or other Indebtedness is secured or unsecured, senior or subordinated, and irrespective of the terms of any indenture or other debt agreement or agreements evidencing such notes or other Indebtedness, but in each case subject to the limitations set forth in this Agreement and the Indenture, (b) the issuance of notes or other Indebtedness of the Company and, if applicable, other consideration in exchange for, or the net proceeds of which are used to Refinance, all or any part of the Existing AMH Notes, whether or not the principal amount of such notes or other Indebtedness is less or greater than the principal amount of the Existing AMH Notes, whether such notes or other Indebtedness is secured or unsecured, senior or subordinated, and irrespective of the terms of any indenture or other debt agreement or agreements evidencing such notes or other Indebtedness, but in each case subject to the limitations set forth in this Agreement and the Indenture, (c) any amendment of the ABL Facility, including, among other things, to permit the other transactions taking place as part of the transactions referred to in clause (a), (b) or (d) hereof, or (d) the issuance of the Replacement Notes, including in each case the payment of accrued interest and fees and expenses in connection therewith.

Obligations ” means all obligations for principal, premium, interest, penalties, fees, indemnification, reimbursements and damages under the documentation governing any Indebtedness.

Permitted Liens ” means (a) “Permitted Liens” as such term is defined in the ABL Facility and (b) Liens that are permitted under the terms of the Indenture and the Existing Company Notes Indenture.

Person ” means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity.

principal ” is defined in the Indenture.

Purchase Price ” is defined in Section 2.2 .

Purchasers ” is defined in the Preamble.

Refinance ” means, in respect of any Indebtedness, to refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or to issue other Indebtedness in exchange or replacement for, such Indebtedness.

 

6


 

Regulation FD ” is defined in Section 9.17 .

Regulation S ” means Regulation S under the Securities Act (or any successor provision), as it may be amended from time to time.

Regulation T ” means Regulation T of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor regulation to all or a portion thereof.

Regulation U ” means Regulation U of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor regulation to all or a portion thereof.

Regulation X ” means Regulation X of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor regulation to all or a portion thereof.

Release ” means a “release”, as such term is defined in CERCLA.

Replacement Notes ” is defined in Section 6.1(a) .

Replacement Notes Indenture ” means the indenture governing the Replacement Notes.

Responsible Officer ” means the chief executive officer, the president or the chief accounting officer of the Company or any other officer having substantially the same authority and responsibility; or, with respect to compliance with financial covenants or delivery of financial information, the chief financial officer or the treasurer of the Company or any other officer having substantially the same authority and responsibility.

Restricted Subsidiaries ” is defined in the Indenture.

Rule 144 ” means Rule 144 under the Securities Act (or any successor provision), as it may be amended from time to time.

Rule 144A ” means Rule 144A under the Securities Act (or any successor provision), as it may be amended from time to time.

Securities Act ” means the Securities Act of 1933, as amended from time to time.

Security Register ” is defined in the Indenture.

Senior Indebtedness ” is defined in the Existing Company Notes Indenture.

 

7


 

Solvent ” means, with respect to any Person and its Subsidiaries on a particular date, that on such date (a) the fair value of the property of such Person and its Subsidiaries on a consolidated basis is greater than the total amount of liabilities, including contingent liabilities, of such Person and its Subsidiaries on a consolidated basis, (b) the present fair salable value of the assets of such Person and its Subsidiaries on a consolidated basis is not less than the amount that will be required to pay the probable liability of such Person and its Subsidiaries on a consolidated basis on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it or its Subsidiaries will, incur debts or liabilities beyond the ability of such Person and its Subsidiaries to pay such debts and liabilities as the same mature, and (d) such Person and its Subsidiaries on a consolidated basis is not engaged in business or a transaction, and such Person and its Subsidiaries on a consolidated basis is not about to engage in business or a transaction, for which the property of such Person and its Subsidiaries on a consolidated basis would constitute an unreasonably small capital. The amount of contingent liabilities at any time shall be computed as the amount that, in light of all the facts and circumstances existing at such time, can reasonably be expected to become an actual or matured liability.

Subsidiary ” means, with respect to any Person, (a) any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person (or a combination thereof) and (b) any partnership (i) the sole general partner or the managing general partner of which is such Person or a Subsidiary of such Person or (ii) the only general partners of which are such Person or one or more Subsidiaries of such Person (or any combination thereof). Unless the context otherwise specifically requires, the term “Subsidiary” shall be a reference to a Subsidiary of the Company.

Taxes ” means any and all income, stamp or other taxes, duties, levies, imposts, charges, fees, deductions or withholdings, now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority, and all interest and penalties with respect thereto.

Transaction Documents ” means, collectively, this Agreement, the Indenture, the Notes and all certificates, instruments and other documents made or delivered in connection herewith and therewith.

Transactions ” means the issuance of the Notes and all other transactions provided for in, or contemplated by, the Transaction Documents.

United States ” shall have the meaning assigned to such term in Regulation S.

U.S. Multiemployer Plan ” means a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA.

U.S. Pension Plan ” means a “pension plan”, as such term is defined in Section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a U.S. Multiemployer Plan), and to which the Company or any corporation, trade or business that is, along with the Company, a member of a Controlled Group, has liability (actual or contingent), including any liability by reason of having been a substantial employer within the meaning of Section 4063 of ERISA at any time during the preceding five years, or by reason of being deemed to be a contributing sponsor under Section 4069 of ERISA.

 

8


 

U.S. Welfare Plan ” means a “welfare plan”, as such term is defined in Section 3(l) of ERISA.

1.2 Computation of Time Periods . For purposes of computation of periods of time hereunder, the word “from” means “from and including” and the words “to” and “until” each mean “to but excluding.”

1.3 Terms Generally . Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s successors and assigns, and (c) the word “including” shall mean “including without limitation.”

SECTION 2.

AUTHORIZATION AND ISSUANCE OF NOTES

2.1 Authorization of Issue . On or prior to the execution and delivery of this Agreement, the Company will authorize the issue and sale of the Notes. The Notes shall be in the form specified in the Indenture.

2.2 Sale and Purchase of the Notes . Subject to the terms and conditions of this Agreement, the Company will issue and sell to the Purchasers, and the Purchasers will purchase from the Company, at the Closing provided for in Section 2.3 , the Notes, for an aggregate cash purchase price (the “ Purchase Price ”) equal to 100% of the aggregate principal amount of the Notes being so purchased. Each Purchaser shall, in exchange for the payment by such Purchaser of the portion of the Purchase Price set forth opposite such Purchaser’s name on Schedule 2.2 , receive the aggregate principal amount of Notes set forth opposite such Purchaser’s name on Schedule 2.2 . The obligations hereunder of the Purchasers to purchase and pay for Notes are several and not joint, and no Purchaser shall have any liability to any Person for the performance or non-performance by any other Purchaser.

2.3 Closing . The sale and purchase of the Notes shall occur at the offices of Gibson, Dunn & Crutcher LLP, 200 Park Avenue, 48th Floor, New York, New York 10166-1093 at 10:00 a.m. local time, at a closing (the “ Closing ”) on the Business Day following the satisfaction or, to the extent permitted by law, waiver of all conditions to the obligations of the parties set forth in Section 3 (other than such conditions as may, by their terms, only be satisfied at the Closing or on the Closing Date), or at such other place or time or on such other date thereafter as may be agreed upon by the Company and the Purchasers (in either case, the date and time of the Closing is referred to herein as the “ Closing Date ”). At the Closing, the Company will deliver to each Purchaser the Notes to be purchased by such Purchaser on the Closing Date, in such denominations (which will be a multiple of $1,000 principal amount) as such Purchaser may request, dated the Closing Date and registered in such Purchaser’s name, against payment by such Purchaser to the Company of immediately available funds in the amount of the applicable portion of the Purchase Price (as provided in Section 2.2 ) by wire transfer of immediately available funds to such bank account or accounts as the Company may request in writing at least one Business Day prior to the Closing Date.

 

9


 

SECTION 3.

CONDITIONS TO CLOSING

3.1 Conditions to the Obligations of the Parties . The obligation of the Parties to consummate the transactions contemplated by this Agreement is subject to the fulfillment (or waiver) on or before the Closing Date of the following:

(a) Each Purchaser’s purchase of the Notes shall (i) be permitted by the laws and regulations of each jurisdiction to which it is subject, and (ii) not violate any Applicable Laws (including, without limitation, Regulation U, Regulation T or Regulation X).

3.2 Conditions to the Obligations of the Purchasers . The obligation of the Purchasers to consummate the transactions contemplated by this Agreement is subject to the fulfillment (or waiver) on or before the Closing Date of the following:

(a) Each of the representations and warranties of the Company in this Agreement and in each of the other Transaction Documents that are modified by materiality or Material Adverse Effect qualifiers shall be true and correct when made and on and as of the Closing Date as if made on and as of the Closing Date (unless stated to relate to a specific earlier date, in which case such representations and warranties shall be true and correct as of such earlier date), and each of the representations and warranties of the Company in this Agreement and in each of the other Transaction Documents that are not so qualified as to materiality or Material Adverse Effect shall be true and correct in all material respects when made and on and as of the Closing Date as if made on and as of the Closing Date (unless stated to relate to a specific earlier date, in which case such representations and warranties shall be true and correct as of such earlier date).

(b) The Company and its Subsidiaries, to the extent parties hereto or thereto, shall each have performed and complied in all material respects with all agreements and covenants contained in this Agreement and each of the other Transaction Documents required to be performed or complied with by it prior to or at the Closing (or such compliance shall have been waived on terms and conditions reasonably satisfactory to each Purchaser) and, after giving effect to the issue and sale of the Notes and the other Transactions (and the application of the proceeds thereof as contemplated by this Agreement and the other Transaction Documents), no Default or Event of Default shall have occurred and be continuing, and no default or event of default shall have occurred and be continuing under any of the other Transaction Documents.

(c) The Company shall have delivered to each Purchaser an Officer’s Certificate, dated as of the Closing Date, in the form previously agreed to by the parties, certifying as to the Company’s organizational documents and resolutions attached thereto, the incumbency and signatures of certain officers of the Company and other corporate proceedings of the Company relating to the authorization, execution and delivery of the Notes, this Agreement and the other Transaction Documents to which the Company is a party and that the conditions specified in Section 3.2 (other than Section 3.2(d) ) have been fulfilled, except as to matters which require the approval or satisfaction of each Purchaser.

 

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(d) Gibson, Dunn & Crutcher LLP, New York counsel for the Company, shall have furnished to each Purchaser its written opinion, dated the Closing Date, in the form previously agreed to by the parties.

(e) On the Closing Date the Company shall have delivered to the Purchasers the entire $20,000,000 original principal amount of Notes.

(f) Except as disclosed in the reports, notices, prospectuses, registration statements and other filings which the Company has filed with the Commission prior to the date of this Agreement, no event or events shall have occurred since December 31, 2008, which, individually or in the aggregate, has had or would reasonably be expected to have a material adverse effect on the assets, liabilities, results of operations, financial condition or business of the Company and its Subsidiaries, taken as a whole; provided that none of the following shall, in any case, be deemed to constitute a material adverse effect, nor shall any of the following be considered in determining whether a material adverse effect has occurred: (i) changes (x) in economic, financial market, regulatory or political conditions generally or (y) generally affecting the building products/siding and windows industry or principal markets in which the Company or any of its Subsidiaries conducts business that, in the case of clause (y), do not adversely affect the Company and its Subsidiaries, taken as a whole, disproportionately to other companies in the building products/siding and windows industry, (ii) changes in laws, rules, regulations, or orders of any Governmental Authority or interpretations thereof by any Governmental Authority or changes in accounting requirements or principles, (iii) the announcement or pendency of the Transactions, or (iv) any natural disaster or any act of terrorism, sabotage, military action or war (whether or not declared) or any escalation or worsening thereof; in each case, which do not adversely affect the Company and its Subsidiaries, taken as a whole, disproportionately to other Persons affected thereby.

(g) All corporate, limited liability company and other proceedings in connection with the Transactions, and all documents and instruments incident thereto and the terms thereof, shall be reasonably satisfactory to each Purchaser and the Purchasers’ special counsel, and each Purchaser and the Purchasers’ special counsel shall have received all such certified or other copies of such documents as it or they may reasonably request.

(h) The issuance of the Notes by the Company shall not violate any provision of the Existing Company Notes Indenture or the Existing AMH Indenture and no default or event of default shall occur thereunder as a result thereof.

(i) Each Purchaser shall have received true and correct copies of all Transaction Documents and such documents (i) shall have been duly executed and delivered by the parties thereto, (ii) shall be in form and substance reasonably satisfactory to each Purchaser and the Purchasers’ special counsel and (iii) shall be valid and binding obligations of the parties thereto, enforceable against each of them in accordance with its respective terms, subject to the Enforceability Exceptions.

 

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(j) The Purchasers shall have received from the Company or a Subsidiary of the Company a payment in cash equal, in the aggregate, to $1,500,000 by wire transfer of immediately available funds according to the wire transfer instructions set forth on Schedule 2.2 (which payment shall be apportioned pro rata between the Purchasers according to the principal amount of the Notes purchased by each Purchaser as set forth on Schedule 2.2 ).

3.3 Conditions to the Obligations of the Company . The obligation of the Company to consummate the transactions contemplated by this Agreement is subject to the fulfillment (or waiver) on or before the Closing Date of the following:

(a) Each of the representations and warranties of each of the Purchasers in this Agreement and in each of the other Transaction Documents that are modified by materiality or material adverse effect qualifiers shall be true and correct when made and on and as of the Closing Date as if made on and as of the Closing Date (unless stated to relate to a specific earlier date, in which case such representations and warranties shall be true and correct as of such earlier date), and each of the representations and warranties of each of the Purchasers in this Agreement and in each of the other Transaction Documents that are not so qualified as to materiality or material adverse effect shall be true and correct in all material respects when made and on and as of the Closing Date as if made on and as of the Closing Date (unless stated to relate to a specific earlier date, in which case such representations and warranties shall be true and correct as of such earlier date).

(b) Each of the Purchasers, to the extent parties hereto or thereto, shall each have performed and complied in all material respects with all agreements and covenants contained in this Agreement and each of the other Transaction Documents required to be performed or complied with by it prior to or at the Closing (or such compliance shall have been waived on terms and conditions reasonably satisfactory to the Company).

(c) On or prior to the Closing Date, (i) AMH II shall have received additional equity capital from its shareholders and/or (ii) the availability to make “Restricted Payments” pursuant to Section 4.04 of the Existing AMH Indenture shall have been increased, in an aggregate amount of at least $8 million.

SECTION 4.

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

In order to induce the Purchasers to enter into this Agreement and the Indenture and to purchase the Notes, the Company makes the following representations and warranties as of the date hereof and as of the Closing Date (except as specifically provided herein, both before and after giving pro forma effect to the consummation on the Closing Date of the transactions contemplated by this Agreement and the other Transaction Documents, and the issuance of the Notes to be issued on the Closing Date and the application of the proceeds thereof) that:

4.1 Organization . Each of the Company and its Subsidiaries (a) is validly organized and existing and in good standing under the laws of the state or jurisdiction of its incorporation or organization, (b) is duly qualified to do business and is in good standing as a foreign entity in each jurisdiction where the nature of its business requires such qualification and where the failure to be so qualified would reasonably be expected to have a Material Adverse Effect and (c) has full corporate, partnership or limited liability company power and authority, as the case may be, to own and hold under lease its property and to conduct its business substantially as currently conducted by it.

 

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4.2 Due Authorization; Non-Contravention . Each of the Company’s and its Subsidiaries’ participation in the consummation of all aspects of the Transactions, and the execution, delivery and performance by the Company and its Subsidiaries of the Transaction Documents are in each case within each such Person’s corporate, partnership or limited liability company powers, as the case may be, have been duly authorized by all necessary corporate, partnership or limited liability company action, as the case may be, and, except as disclosed on Schedule 4.2 , do not (a) contravene any (i) articles or certificate of incorporation and by-laws or other organizational or governing documents of the Company or any of its Subsidiaries, (ii) material contractual restriction binding on or affecting the Company or any of its Subsidiaries, (iii) court decree or order binding on or affecting the Company or any of its Subsidiaries or (iv) material law or governmental regulation binding on or affecting the Company or any of its Subsidiaries, or (b) result in, or require the creation or imposition of, any Lien on any of the Company or any of its Subsidiaries’ properties (except for Permitted Liens).

4.3 Governmental Approval; Regulation . Except for any filing required to be made under applicable securities law (including the Securities Act and the Exchange Act), no material authorization or approval or other action by, and no material notice to or filing with, any Governmental Authority or other Person is required for (a) the due execution, delivery or performance by the Company and its Subsidiaries of any Transaction Document to which it is a party or (b) the conduct of the business of AMH and its Subsidiaries as currently conducted. Neither the Company, nor any of its Subsidiaries is an “investment company” within the meaning of the Investment Company Act of 1940, as amended, or a “holding company”, or a “subsidiary company” of a “holding company”, or an “affiliate” of a “holding company” or of a “subsidiary company” of a “holding company”, within the meaning of the Public Utility Holding Company Act of 1935, as amended.

4.4 Validity . Each Transaction Document constitutes, or, upon the due execution and delivery thereof, will constitute, a legal, valid and binding obligation of the Company and its Subsidiaries, to the extent a party thereto, enforceable against them in accordance with its terms (subject to the Enforceability Exceptions).

4.5 No Material Adverse Effect . Except as disclosed in the reports, notices, prospectuses, registration statements and other filings which the Company has filed with the Commission prior to the date of this Agreement, there has been no event, occurrence, omission or change which has resulted in a Material Adverse Effect since December 31, 2008.

4.6 Litigation . There is no pending or, to the knowledge of the Company, threatened litigation, action, investigation or proceeding (a) affecting the Company or any of its Subsidiaries or any of their respective properties, businesses, assets or revenues, which would reasonably be expected to have a Material Adverse Effect or (b) which purports to affect the legality, validity or enforceability of any Transaction Document.

 

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4.7 Labor Matters . There is no labor strike, work stoppage, lockout or other work action or other labor controversy, and no such dispute or controversy is actually pending or, to the Company’s knowledge, threatened against or affecting the Company or of any of its Subsidiaries that has had or would reasonably be expected to have a Material Adverse Effect.

4.8 Subsidiaries . The Company has no Subsidiaries, except those Subsidiaries which are identified on Schedule 4.8 , none of which are Foreign Subsidiaries other than Gentek. Schedule 4.8 , as of the Closing Date, lists the percentage of shares of the Capital Stock of each Subsidiary owned by the Company or another Subsidiary.

4.9 Ownership of Properties . The Company and each of its Subsidiaries maintains (a) in the case of material owned real property, good and marketable fee title to, (b) in the case of material owned personal property, good and valid title to, or (c) in the case of material leased real or personal property, valid and enforceable leasehold interests (as the case may be) in, all of such properties and assets, real and personal, tangible and intangible, of any nature whatsoever, free and clear in each case of all Liens, except for Permitted Liens.

4.10 Taxes . The Company and each of its Subsidiaries has timely filed all material Tax returns and reports required by law to have been filed by it, has timely withheld all material Taxes that were required to be withheld in respect of compensation or other amounts paid to any employee or independent contractor (or, in the case of independent contractors, the Company or the relevant Subsidiary has the right to indemnification with respect thereto) and has timely paid all material Taxes and governmental charges thereby shown or required to be due and owing, except any such Taxes or charges which are being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books.

4.11 Pension and Welfare Plans .

(a) During the twelve-consecutive-month period prior to the date of the execution and delivery of this Agreement (i) no steps have been taken to terminate any U.S. Pension Plan, (ii) no contribution failure has occurred with respect to any U.S. Pension Plan sufficient to give rise to a Lien under Section 302(f) of ERISA and (iii) no steps have been taken to effect a partial or complete withdrawal from any U.S. Multiemployer Plan, in each case which could (individually or in the aggregate) reasonably be expected to result in liabilities of the Company or any of its Subsidiaries in excess of $5,000,000 or a Material Adverse Effect. No condition exists or event or transaction has occurred with respect to any U.S. Pension Plan which could reasonably be expected to result in the incurrence by the Company or any member of the Controlled Group of any material liability, fine or penalty, that could (individually or in the aggregate) reasonably be expected to result in liabilities in excess of $5,000,000 or a Material Adverse Effect. Neither the Company nor any member of the Controlled Group has any contingent liability with respect to any post-retirement benefit under a U.S. Welfare Plan, other than liability for continuation coverage described in Part 6 of Subtitle B of Title I of ERISA, which could reasonably be expected to result in a Material Adverse Effect.

 

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(b) During the twelve-consecutive-month period before the date of the execution and delivery of this Agreement, (i) no steps have been taken to terminate any Canadian Pension Plan and (ii) no contribution failure has occurred with respect to any Canadian Pension Plan, in each case that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. No condition exists and no event or transaction has occurred with respect to any Canadian Pension Plan which could reasonably be expected to result in the incurrence by the Company or any of its Subsidiaries of any liability, fine or penalty that could (individually or in the aggregate) reasonably be expected to result in liabilities in excess of $5,000,000 or a Material Adverse Effect. Neither the Company nor any of its Subsidiaries has any liability, including without limitation a contingent liability, with respect to any benefit under a Canadian Pension Plan or Canadian Welfare Plan which, in each case could reasonably be expected to result in a Material Adverse Effect.

(c) (i) Each Canadian Pension Plan is in compliance in all material respects with all applicable pension benefits and tax laws; (ii) all contributions (including employee contributions made by authorized payroll deductions or other withholdings) required to be made to the appropriate funding agency in accordance with all Applicable Laws and the terms of each Canadian Pension Plan have been made in accordance with all Applicable Laws and the terms of each Canadian Pension Plan; (iii) all liabilities under each Canadian Pension Plan are being funded, on a going concern and solvency basis, in accordance with the terms of the respective Canadian Pension Plan, the requirements of applicable pension benefits laws and of applicable regulatory authorities and the most recent actuarial report filed with respect to such Canadian Pension Plan; and (iv) no event has occurred and no conditions exist with respect to any Canadian Pension Plan that has resulted or could reasonably be expected to result in any Canadian Pension Plan having its registration revoked or refused for the purposes of any applicable pension benefits or tax laws or being placed under the administration of any relevant pension benefits regulatory authority or being required to pay any Taxes or penalties under any applicable pension benefits or tax laws, except for any exceptions to clauses (i) through (iv) above that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

4.12 Environmental Warranties . Except as disclosed in Schedule 4.12 :

(a) all facilities and property (including underlying groundwater) owned or leased by the Company or any of its Subsidiaries and their operations are in compliance with all Environmental Laws, except for any such noncompliance that could not (individually or in the aggregate) reasonably be expected to have a Material Adverse Effect;

(b) there are no pending or, to the knowledge of the Company, any threatened (i) claims, complaints, notices, requests for information, proceedings, or investigation against or involving the Company or any of its Subsidiaries with respect to any alleged violation of any Environmental Law, or (ii) complaints, notices or inquiries to the Company or any of its Subsidiaries regarding actual or potential liability under any Environmental Law, that, with respect to clauses (i) and (ii) of this paragraph, could (individually or in the aggregate) reasonably be expected to have a Material Adverse Effect;

(c) there have been no Releases of Hazardous Materials at, on or under or from any property or facility now owned, leased or operated by the Company or any of its Subsidiaries, or to the knowledge of the Company, previously owned, leased or operated by the Company or any of its Subsidiaries, that could (individually or in the aggregate) reasonably be expected to have a Material Adverse Effect;

 

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(d) The Company and its Subsidiaries have been issued all permits, certificates, approvals, licenses and other authorizations pursuant to Environmental Laws necessary for the operation of their business (“ Environmental Permits ”) and are in compliance with all Environmental Permits (except to the extent the failure to have or be in compliance with any such Environmental Permit could not (individually or in the aggregate) reasonably be expected to have a Material Adverse Effect);

(e) no property or facility, now or previously, leased or operated by the Company or its Subsidiaries is listed, or proposed for listing, on the National Priorities List pursuant to CERCLA, on the CERCLIS or on any similar state list of sites with respect to any clean up responsibility or similar liability of the Company or a Subsidiary which would be reasonably likely to result in a Material Adverse Effect;

(f) there are no underground storage tanks or related piping, active or abandoned, including petroleum storage tanks, on or under any property now owned or leased by the Company or any of its Subsidiaries or, to the knowledge of the Company, at any property previously owned or leased by the Company or any of its Subsidiaries, that could (individually or in the aggregate) reasonably be expected to have a Material Adverse Effect;

(g) neither the Company nor any of its Subsidiaries has transported or arranged for the transportation of any Hazardous Material to any location which is listed or proposed for listing on the National Priorities List pursuant to CERCLA, on the CERCLIS or on any similar state list or which, to the Company’s knowledge, is the subject of federal, state or local enforcement actions or other investigations which may lead to material claims against the Company or such Subsidiary for any investigatory or remedial work, damage to natural resources or personal injury or property damage, including claims under CERCLA, which could (individually or in the aggregate) reasonably be expected to have a Material Adverse Effect;

(h) there are no polychlorinated biphenyls or friable asbestos present at any property now or previously owned or leased by the Company or any of its Subsidiaries that could (individually or in the aggregate) reasonably be expected to have a Material Adverse Effect;

(i) neither the Company nor any of its Subsidiaries has manufactured or sold any product containing asbestos, the result of which could (individually or in the aggregate) reasonably be expected to result in a Material Adverse Effect; and

(j) no conditions exist at, on or under any property now or previously owned or leased by the Company or any of its Subsidiaries, or to the knowledge of the Company, at any property previously owned or leased by the Company or any of its Subsidiaries, that could, with the passage of time, or the giving of notice or both, reasonably be expected (individually or in the aggregate) to have a Material Adverse Effect under any Environmental Law.

 

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4.13 Accuracy of Information . None of the reports, notices, prospectuses, registration statements and other filings which the Company has filed with the Commission contains any untrue statements of material fact, or omits to state any material facts necessary in either case to make such information taken as a whole not materially misleading in light of the circumstances under which such information was provided. Notwithstanding the foregoing, all “forward-looking statements” and projections contained in any filings that the Company has made with the Commission have been prepared in good faith based upon assumptions believed by Responsible Officers of the Company to be reasonable at the time such assumptions were made (it being recognized by each Purchaser, however, that forward-looking statements and projections as to future events are not to be viewed as facts and that the actual results during the period or periods covered by the forward-looking statements or projections will probably differ from the forward-looking or projected results and such differences may be material).

4.14 Regulations U and X . Neither the Company nor any of its Subsidiaries is engaged in the business of extending credit for the purpose of purchasing or carrying margin stock, and no proceeds of the issuance and sale of the Notes will be used to purchase or carry margin stock or otherwise for a purpose which violates, or would be inconsistent with Regulation U or Regulation X. Terms for which meanings are provided in Regulation U or Regulation X or any regulations substituted therefor, as from time to time in effect, are used in this section with such meanings.

4.15 Solvency . As of the Closing Date, the Company and its Subsidiaries (taken together) are, and after giving effect to the Transactions, will be Solvent.

4.16 Private Offering; No Integration or General Solicitation; Rule 144A Eligibility .

(a) Assuming the accuracy of the representations and warranties of each Purchaser set forth in Section 5 , it is not necessary in connection with the offer, issue, sale and delivery of the Notes to the Purchasers in the manner contemplated by this Agreement and the other Transaction Documents to register the Notes under the Securities Act.

(b) Neither the Company nor any of its Subsidiaries has, directly or indirectly, offered, issued, sold or solicited any offer to buy nor will any of them, directly or indirectly, offer, issue, sell or solicit any offer to buy, any security of a type or in a manner which would be integrated with the sale of the Notes and require the Notes to be registered under the Securities Act. None of the Company, any of its Subsidiaries, their Affiliates or any person acting on any of their behalf (other than the Purchasers and their assignees, as to whom neither the Company nor any of its Subsidiaries makes any representation or warranty except as provided in this Section 4 ) has engaged or will engage in any form of general solicitation or general advertising (within the meaning of Rule 502(c) under the Securities Act) in connection with the offering of the Notes.

(c) The Notes are eligible for resale pursuant to Rule 144A and the Notes will not, at the Closing Date, be of the same class as securities listed on a national securities exchange registered under Section 6 of the Exchange Act or quoted on a U.S. automated interdealer quotation system.

 

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4.17 Affiliate Transactions . As of the Closing Date, all transactions with Affiliates of the Company and any of its Subsidiaries which are required to have been disclosed pursuant to the rules and regulations of the Commission have been disclosed in the public filings of the Company. Neither the Company nor any of its Subsidiaries has entered into a material transaction with an Affiliate since the date of the last such filing of the Company.

4.18 Brokerage Fees . Except as set forth on Schedule 4.18 , neither the Company nor any of its Subsidiaries has paid, or is obligated to pay, to any Person any brokerage or finder’s fees in connection with the transactions contemplated hereby or by any other Transaction Documents.

4.19 Fees . All fees payable in connection with the consummation of the Transactions to the Equity Investors, Harvest, or Investcorp or any of their respective Affiliates, in each case by AMH II or any of its Subsidiaries, have been disclosed to each Purchaser on or prior to the date hereof.

SECTION 5.

REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE PURCHASERS

Each Purchaser, severally but not jointly, represents and warrants to the Company as of the date hereof and as of the Closing Date as follows:

5.1 Purchase for Investment .

(a) Such Purchaser is acquiring Notes for its own account, for investment and not with a view to any distribution thereof within the meaning of the Securities Act.

(b) Such Purchaser understands that the Notes have not been registered under the Securities Act and the Notes are being issued by the Company in a transaction exempt from the registration requirements of the Securities Act and the Notes may not be offered or sold except pursuant to effective registration statements under the Securities Act or pursuant to applicable exemptions from registration under the Securities Act and in compliance with applicable State laws.

(c) Such Purchaser further understands that the exemption from registration afforded by Rule 144 (the provisions of which are known to the Purchaser) promulgated under the Securities Act depends on the satisfaction of various conditions, and that, if applicable, Rule 144 may afford the basis for sales only in limited amounts.

(d) Such Purchaser did not employ any broker or finder in connection with the transactions contemplated in this Agreement and no fees or commissions are payable to the Purchaser except as otherwise provided for in this Agreement.

(e) Such Purchaser is an Accredited Investor. Such Purchaser is financially able to hold the Notes for long term investment and to suffer a complete loss of its investment in the Notes. Such Purchaser has had the opportunity to ask questions of the Company and its officers and employees and to receive to its satisfaction such information about the business and financial condition of the Company as it considers necessary or appropriate for deciding whether to purchase the Notes, and the Purchaser is fully capable of understanding and evaluating the risks associated with the ownership of the Notes.

 

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(f) Such Purchaser has or will on the Closing Date have funds sufficient to purchase the Notes to be purchased by it hereunder. The source of funds to be used by such Purchaser to pay the purchase price of the Notes purchased by such Purchaser hereunder does not include assets of any employee benefit plan (other than a plan exempt from the coverage of ERISA) or plan or any other entity the assets of which consist of “plan assets” of employee benefit plans or plans as defined in Department of Labor regulation Section 2510.3-101. As used in this Section 5.1(f) , the term “employee benefit plan” shall have the meaning assigned to such term in Section 3 of ERISA, and the term “plan” shall have the meaning assigned thereto in Section 4975(e)(1) of the Code.

(g) Such Purchaser is a corporation duly organized and validly existing under the laws of the state of its incorporation and has the power and authority to deliver and perform the transactions contemplated by this Agreement.

SECTION 6.

COVENANT REGARDING REFINANCING

6.1 Existing Note Refinancing .

(a) In the event of the consummation of a Note Refinancing by the Company or AMH, the Company shall promptly notify the Holders of such Note Refinancing and the Holders of a majority of the outstanding principal amount of the Notes may elect, at any time from the date of such consummation through and including 30 days thereafter, in writing to have the Company exchange all of the Notes owned by the Holders for an equal principal amount of notes (such notes issued in exchange for the Notes, the “ Replacement Notes ”). Within 30 days of such election by the Holders, all Holders (including Persons that become Holders following the date hereof) and the Company shall exchange the Notes for the Replacement Notes, which Replacement Notes and the related Replacement Notes Indenture shall have terms and conditions identical to the Notes being exchanged and the Indenture (including, for the avoidance of doubt, Section 4.03(e) thereof) (with references in the Replacement Notes Indenture to the “Securities” being to the Replacement Notes), except :

(i) if the Company Exchange Notes are not subordinated in right of payment and/or constitute Senior Indebtedness (rather than being subordinated in right of payment as in the case of the Existing Company Notes), (i) such Replacement Notes will not be subordinated in right of payment and, if applicable, will be Senior Indebtedness, and (ii) in lieu of Section 4.03(d) of the Indenture as applies to the Notes, the Replacement Notes Indenture will include the equivalent of Section 4.03(d) of the Existing AMH Indenture;

(ii) if any of the Company Exchange Notes are secured by a Lien on any assets of the Company or its Restricted Subsidiaries, such Replacement Notes will be secured by a Lien on the same collateral which Lien shall rank equal with the Lien securing the Company Exchange Notes pursuant to an intercreditor agreement (with all decisions with respect to such intercreditor agreement to be made by holders of a majority in principal amount of the holders of the Company Exchange Notes and Replacement Notes, voting together as one class) or senior to the Lien securing the Company Exchange Notes;

 

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(iii) at the election of the Holders of a majority of the outstanding principal amount of the Notes, the covenants and events of default (and related definitions) included in the Replacement Notes Indenture will be those included in the indenture or other debt instrument governing the Company Exchange Notes, rather than those included in the Indenture;

(iv) If the yield to maturity, calculated on a per annum basis according to standard market practices based on a 360 day convention and quarterly interest payments (including increased or decreased principal amount (or accreted value, in the case of a security issued with original issue discount) and upfront fees) on the Company Exchange Notes is greater than 17%, then the per annum interest rate on the Replacement Notes shall be increased such that the yield to maturity on the Replacement Notes equals the yield to maturity on the Company Exchange Notes. For the purpose of such interest rate increase, any interest beyond 18% per annum can be payable at the Company’s option in additional Replacement Notes; and

(v) If the Company Exchange Notes are not callable by the Company for a specified period of time after their issuance, the Replacement Notes will not be callable by the Company for the same period of time. If the holders of the Company Exchange Notes receive warrants to purchase Capital Stock of the Company, the holders of the Replacement Notes shall be entitled to a proportionate share of such warrants.

(b) The Note Refinancing may not occur unless the Amended ABL Facility, if any, is comprised entirely of a revolving credit facility and does not contain any term debt component.

SECTION 7.

TERMINATION

7.1 By Mutual Consent . This Agreement may be terminated at any time prior to the Closing Date by the mutual written consent of the Company and the Purchasers.

7.2 By Purchasers . This Agreement may be terminated by the Purchasers, if the Company breaches or fails to perform in any respect any of its representations, warranties or covenants contained in this Agreement and such breach or failure to perform (a) would give rise to the failure of a condition set forth in Section 3.2 , (b) cannot be cured prior to the Cutoff Date or has not been cured within 15 days following delivery of written notice of such breach or failure to perform and (c) has not been waived by the Purchasers.

 

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7.3 By the Company . This Agreement may be terminated by the Company, if the Purchasers breach or fail to perform in any respect any of their representations, warranties or covenants contained in this Agreement and such breach or failure to perform (a) would give rise to the failure of a condition set forth in Section 3.3 , (b) cannot be cured prior to the Cutoff Date or has not been cured within 15 days following delivery of written notice of such breach or failure to perform and (c) has not been waived by the Company.

7.4 Failure to Close . If the Closing does not occur by June 30, 2009 (the “ Cutoff Date ”), then either the Purchasers or the Company may terminate this Agreement by delivery of written notice of termination to the other parties hereto; provided , however , any party that is in material breach of this Agreement shall not have the right to terminate this Agreement pursuant to this Section 7.4 .

7.5 Effect of Termination . If this Agreement is terminated as provided in this Section 7 , then this Agreement will forthwith become null and void and there will be no liability on the part of any party hereto to any other party hereto or any other person or entity in respect thereof, except in connection with Section 8 hereof, provided that no such termination will relieve any party from liability for breach of its obligations under this Agreement, and in such event the other parties shall have all rights and remedies available at law or equity, including the right of specific performance against such party.

SECTION 8.

INDEMNIFICATION AND CONTRIBUTION

8.1 Expenses . On the Closing Date, the Company will pay all reasonable out-of-pocket costs and expenses (including reasonable and documented attorneys’ fees and disbursements; provided , that in connection with the consummation of the Transactions, the Company will pay fees and disbursements of only one counsel to the Purchasers) incurred by each Purchaser (a) in connection with the Transactions and (b) in connection with any amendments, waivers or consents under or in respect of this Agreement or the other Transaction Documents (whether or not such amendment, waiver or consent becomes effective), including, without limitation, the following: (i) the reasonable and documented out-of-pocket costs and expenses incurred in enforcing, defending or declaring (or determining whether or how to enforce, defend or declare) any rights or remedies under this Agreement or the other Transaction Documents or in responding to any subpoena or other legal process or informal investigative demand issued in connection with this Agreement or the other Transaction Documents, or by reason of being a Holder of any Note; and (ii) the reasonable and documented out-of-pocket costs and expenses, including reasonable and documented consultants’ and advisors’ fees, incurred in connection with the insolvency or bankruptcy of the Company or any Subsidiary of the Company or in connection with any work-out or restructuring of the transactions contemplated hereby, or by the Transaction Documents; provided , however , that for the purposes of clause (b) above, reasonable out-of-pocket costs and expenses shall not include, and the Company shall not be required to pay, the reasonable and documented attorneys’ fees and disbursements of counsel to the Purchasers, unless such amendment, waiver or consent results from the circumstances described in clause (i) or clause (ii) above. The Company will pay, and will save each Purchaser and each other Holder of a Note harmless from, all claims in respect of any fees, costs or expenses if any, of brokers and finders engaged by the Company or any of its Subsidiaries in relation to the Transactions. For the avoidance of doubt, the Company shall not be required to pay any out-of-pocket costs and expenses of the Purchasers in connection with the issuance of the Replacement Notes by the Company to the Purchasers in connection with Section 6.1(a) .

 

21


 

8.2 Indemnification . The Company shall, and shall cause each of its Subsidiaries to indemnify and hold harmless each Purchaser and each of their Affiliates, partners, stockholders, members, directors, agents, employees and controlling persons (collectively, the “ Indemnitees ”) from and against any and all actual losses, claims, damages or liabilities to any such Indemnitee in connection with or as a result of (a) the execution or delivery of any Transaction Document or any other agreement or instrument contemplated thereby or the performance by the parties to the Transaction Documents of their respective obligations hereunder or the consummation of the Transactions or any other transactions contemplated hereby, (b) the issuance of the Notes or the use of the proceeds therefrom, (c) any liability with respect to Environmental Matters or (d) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages or liabilities (i) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the bad faith, gross negligence or willful misconduct of such Indemnitee or breach of its obligations under this Agreement or (ii) result from a change in the market value of the Notes.

8.3 Waiver of Punitive Damages . To the extent permitted by Applicable Law, none of the Company or any of its Subsidiaries shall assert, and each hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement or any agreement or instrument contemplated hereby, the Transactions, any Transaction Document, the Notes or the use of the proceeds thereof.

8.4 Survival . The obligations of the Company and its Subsidiaries under this Section 8 will survive the payment or transfer of any Note, the enforcement, amendment or waiver of any provision of this Agreement and the termination of this Agreement.

8.5 Tax Treatment of Indemnification Payments . Any indemnification payment pursuant to this Agreement shall, to the extent permitted by applicable law, be treated for federal, state, local and foreign Tax purposes as an adjustment to the Purchase Price.

SECTION 9.

MISCELLANEOUS

9.1 Disclosure of Transactions and Other Material Information . On the fourth Business Day after the date hereof, the Company shall issue a press release and file a Current Report on Form 8-K describing the terms of the transactions contemplated by the Transaction Documents in the form required by the Exchange Act and attaching the Transaction Documents (including all attachments, the “ 8-K Filing ”). Without the prior written consent of any applicable Purchaser, neither the Company nor any of its Subsidiaries or Affiliates shall disclose the name of such Purchaser in any filing (other than in the exhibit index of and the exhibits to the 8-K Filing), announcement, release or otherwise, except as otherwise required by any law, rule or regulation applicable to the Company after consultation with such Purchaser.

 

22


 

9.2 Notices . Except as otherwise expressly provided herein, all notices and other communications shall have been duly given and shall be effective (a) when delivered, (b) when transmitted via telecopy (or other facsimile device) to the number set out below if the sender on the same day sends a confirming copy of such notice by a recognized overnight delivery service (charges prepaid), (c) the day following the day (except if not a Business Day then the next Business Day) on which the same has been delivered prepaid to a reputable national overnight air courier service for overnight delivery or (d) the third Business Day following the day on which the same is sent by certified or registered mail, postage prepaid, in each case to the respective parties at the addresses set forth below, or at such other address as such party may specify by written notice to the other party hereto:

(a) if to a Purchaser or its nominee, to such Purchaser or its nominee at the address specified for such communications in Schedule 2.2 , with a copy to Fried, Frank, Harris, Shriver & Jacobson LLP, One New York Plaza, New York, New York 10004, or by facsimile at (212) 859-4000, in each case addressed to the attention of Emil Buchman, Esq., or at such other address as such Purchaser or its nominee shall have specified to the Company in writing;

(b) if to the Company, to it at (i) 3773 State Road, Cuyahoga Falls, Ohio 44223, or by facsimile at (330) 922-2296, in each case addressed to the attention of Thomas N. Chieffe and (ii) c/o Investcorp International Inc., 280 Park Avenue, New York, New York 10017, or by facsimile at (212) 329-6741, in each case addressed to the attention of James Christopoulos, with a copy to Gibson, Dunn & Crutcher LLP, 200 Park Avenue, 49 th Floor, New York, New York 10166-0193, or by facsimile at (212) 351-4035, in each case addressed to Joerg E. Esdorn, or at such other address as the Company shall have specified to the Purchasers in writing.

9.3 Benefit of Agreement; Assignments and Participations . This Agreement may not be assigned without the express written consent of the Company and the Holders holding a majority in principal amount of all outstanding Notes (which consent may be granted or withheld in the sole discretion of the Company or such Holders); provided , that a Purchaser may, without such consent, assign its rights and obligations under this Agreement to its affiliates in connection with a transfer of Notes in accordance with the Indenture to such affiliate so long as such affiliate agrees in writing to be bound by this Agreement as if it were a Holder hereunder. Nothing set forth herein shall be construed as or deemed to limit the right of the Purchasers to transfer the Notes in accordance with the terms of the Indenture. Notwithstanding the foregoing, the Purchasers may not transfer the Notes unless the transferee agrees to be bound by the provisions of Section 6.1(a) . In furtherance of the foregoing, in the event that a Holder consents to the exchange of such Holder’s Notes for Replacement Notes pursuant to Section 6.1(a) and, after such consent but prior to such exchange, such Holder transfers its Notes such Holder’s election to exchange its Notes for Replacement Notes shall be binding upon any such transferee of such Notes.

 

23


 

9.4 No Waiver; Remedies Cumulative . No failure or delay on the part of any party hereto in exercising any right, power or privilege hereunder or under the Notes and no course of dealing between the Company and any other party shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or privilege hereunder or under the Notes preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder or thereunder. The rights and remedies provided herein and in the Notes are cumulative and not exclusive of any rights or remedies that the parties would otherwise have. No notice to or demand on the Company in any case shall entitle the Company to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of the other parties hereto or the Holders to any other or further action in any circumstances without notice or demand.

9.5 Amendments, Waivers and Consents . This Agreement may be amended, and the observance of any term hereof may be waived (either retroactively or prospectively) with (and only with) the written consent of the Company and the Holders holding a majority in principal amount of all outstanding Notes. No amendment or waiver of this Agreement will extend to or affect any obligation, covenant or agreement, not expressly amended or waived or thereby impair any right consequent thereon. As used herein, the term this “ Agreement ” and references thereto shall mean this Agreement as it may from time to time be amended, supplemented or modified.

9.6 Counterparts . This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall constitute one and the same instrument. It shall not be necessary in making proof of this Agreement to produce or account for more than one such counterpart. Each counterpart may consist of a number of copies hereof, each signed by less than all, but together signed by all, of the parties hereto. For the purposes of the Closing, signatures transmitted via telecopy (or other facsimile device) will be accepted as original signatures if the sender on the same day sends a manually executed signature page by a recognized overnight delivery service (charges prepaid).

9.7 Reproduction . This Agreement, the other Transaction Documents and all documents relating hereto and thereto, including, without limitation, (a) consents, waivers and modifications that may hereafter be executed, (b) documents received by the parties at the Closing (except the Notes themselves), and (c) financial statements, certificates and other information previously or hereafter furnished in connection herewith, may be reproduced by any photographic, photostatic, microfilm, microcard, miniature photographic or other similar process and any original document so reproduced may be destroyed. The parties agree and stipulate that, to the extent permitted by Applicable Law, any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding (whether or not the original is in existence and whether or not such reproduction was made in the regular course of business) and any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence. This Section 9.7 shall not prohibit any party hereto from contesting any such reproduction to the same extent that it could contest the original or from introducing evidence to demonstrate the inaccuracy of any such reproduction.

 

24


 

9.8 Headings . The headings of the sections and subsections hereof are provided for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement.

9.9 Survival of Covenants and Indemnities . All covenants and indemnities set forth herein shall survive the execution and delivery of this Agreement, the issuance of the Notes, and, except as otherwise expressly provided herein with respect to covenants, the payment of principal of the Notes and any other obligations hereunder.

9.10 Governing Law; Submission to Jurisdiction; Venue .

(a)  THIS AGREEMENT AND THE NOTES SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF NEW YORK, EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.

(b) If any action, proceeding or litigation shall be brought by any Purchaser in order to enforce any right or remedy under this Agreement or any of the Notes, the Company hereby consents and will submit to the jurisdiction of any state or federal court of competent jurisdiction sitting within the area comprising the Southern District of New York on the date of this Agreement. The Company hereby irrevocably waives any objection, including, but not limited to, any objection to the laying of venue or based on the grounds of forum non conveniens , which they may now or hereafter have to the bringing of any such action, proceeding or litigation in such jurisdiction. The Company further agrees that it shall not bring any action, proceeding or litigation arising out of this Agreement or the Notes in any state or federal court other than any state or federal court of competent jurisdiction sitting within the area comprising the Southern District of New York on the date of this Agreement.

(c) The Company irrevocably consents to the service of process of any of the aforementioned courts in any such action, proceeding or litigation by the mailing of copies thereof by registered or certified mail, postage prepaid, to the Company at its address set forth in Section 9.2 , such service to become effective thirty (30) days after such mailing.

(d) Nothing herein shall affect the right of each Purchaser to serve process in any other manner permitted by law or to commence legal proceedings or otherwise proceed against the Company in any other jurisdiction. If service of process is made on a designated agent it should be made by either (i) personal delivery or (ii) mailing a copy of summons and complaint to the agent via registered or certified mail, return receipt requested.

(e)  THE COMPANY AND THE PURCHASERS WAIVE ANY AND ALL RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, PROCEEDING OR LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE NOTES.

 

25


 

9.11 Severability . If any provision of this Agreement is determined to be illegal, invalid or unenforceable, such provision shall be fully severable to the extent of such illegality, invalidity or unenforceability and the remaining provisions shall remain in full force and effect and shall be construed without giving effect to the illegal, invalid or unenforceable provisions.

9.12 Entirety . This Agreement together with the other Transaction Documents represents the entire agreement of the parties hereto and thereto, and supersedes all prior agreements and understandings, oral or written, if any, relating to the Transaction Documents or the transactions contemplated herein or therein.

9.13 Survival of Representations and Warranties . All representations and warranties made by the Company herein shall survive the execution and delivery of this Agreement, the issuance and transfer of all or any portion of the Notes, and the payment of principal of the Notes, and any other obligations hereunder, regardless of any investigation made at any time by or on behalf of any Purchaser or any other Holder that is an affiliate of any Purchaser.

9.14 Construction . Each covenant contained herein shall be construed (absent express provision to the contrary) as being independent of each other covenant contained herein, so that compliance with any one covenant shall not (absent such an express contrary provision) be deemed to excuse compliance with any other covenant. Where any provision herein refers to action to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such Person, whether or not expressly specified in such provision.

9.15 Incorporation . All Schedules attached hereto are incorporated as part of this Agreement as if fully set forth herein.

9.16 Intent to Limit Interest to Maximum . In no event shall the interest rate payable on the Notes under the Indenture, plus any other amounts paid by the Company to the Purchasers in connection therewith, exceed the highest rate permissible under law that a court of competent jurisdiction shall, in the final determination, deem applicable. The Company and the Purchasers, in executing and delivering this Agreement, intend legally to agree upon the rate or rates of interest and the manner of payment stated within the Indenture; provided , however , that, anything contained herein to the contrary notwithstanding, if said rate or rates of interest or manner of payment exceed the maximum allowable under Applicable Law, then, ipso facto as of the date of this Agreement, the Company shall be liable only for the payment of such maximum as allowed by law, and payment received from the Company in excess of such legal maximum, whenever received, shall be applied to reduce the principal balance of any Notes then outstanding to the extent of such excess, or, if such excess exceeds the then outstanding principal balance, such excess shall be first set-off against any other amounts then due and owing by the Company and then refunded to the Company.

 

26


 

9.17 Confidentiality . The parties hereto agree to exercise their best efforts to keep any non-public information delivered pursuant to this Agreement or the Indenture confidential from Persons other than those employed by or engaged by each party; provided that such engaged party agrees to keep such non-public information confidential. This subsection shall not apply to disclosures required to be made by the parties to any regulatory or governmental agency or pursuant to legal process. Notwithstanding the foregoing, (a) the parties hereto may disclose to any and all persons the tax treatment and tax structure of the transactions contemplated hereby and (b) at any time that the Company is subject to Regulation FD of the Commission (“ Regulation FD ”), the Company will not be required to deliver any material non-public information to any Purchaser unless and until such Purchaser has executed a confidentiality agreement reasonably acceptable to the Company if the Company is advised by counsel that the delivery of such information to a Purchaser would require the public disclosure of such information pursuant to Regulation FD.

9.18 No Personal Obligations . Notwithstanding anything to the contrary contained herein or in any Transaction Document, it is expressly understood and each Purchaser expressly agrees that nothing contained herein or in any other Transaction Document or in any other document contemplated hereby or thereby (whether from a covenant, representation, warranty or other provision herein or therein) shall create, or be construed as creating, any personal liability of any stockholder, director, officer, employee, agent, partner or Affiliate of the Company and its Subsidiaries (excluding any such Person which is the Company or any Subsidiary of the Company) in such Person’s capacity as such or otherwise.

9.19 Home Office Payment . So long as a Purchaser or its nominee shall be the Holder of any Note, and notwithstanding anything contained in this Agreement, the Indenture or such Note to the contrary, the Company will pay all sums becoming due on such Note for principal, premium, if any, and interest by such method and at the address specified for such purpose in Schedule 2.2 or at such other address as such Purchaser shall have from time to time specified to the Company in writing for such purpose, without the presentation or surrender of such Note or the making of any notation thereon, except that upon written request of the Company made concurrently with or reasonably promptly after payment or prepayment in full of any Note, such Purchaser shall surrender such Note for cancellation reasonably promptly after any such request, to the Company at its principal executive office. Prior to any sale or other disposition of any Note held by a Purchaser or its nominee, such Purchaser will, at its election, either endorse thereon the amount of principal paid thereon and the last date to which interest has been paid thereon or surrender such Note to the Company in exchange for a new Note or Notes pursuant to Section 2.06 of the Indenture. The Company will afford the benefits of this Section 9.19 to any Institutional Investor that is the direct or indirect transferee of any Note purchased by a Purchaser under this Agreement and that has made the same agreement relating to such Note as such Purchaser made in this Section 9.19 . The term “Purchaser” as used in this section shall include only the Purchasers party hereto and any such Institutional Investor that has made such agreement.

[S ignature pages follow ]

 

27


 

IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be duly executed and delivered as of the date first written above.

 

 

 

 

 

 

ASSOCIATED MATERIALS, LLC
 

 

 

By:  

/s/ Cynthia Sobe  

 

 

 

Name:  

Cynthis Sobe 

 

 

 

Title:  

Vice President, Chief Financial Officer, Treasurer and Secretary 

 

PURCHASE AGREEMENT SIGNATURE PAGE

 

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

APOLLO INVESTMENT CORPORATION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

 

Apollo Investment Management, L.P., as Advisor

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

 

ACC Management, LLC, as its General Partner

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

 

/s/ Rajay Bagaria

 

Name: Rajay Bagaria

 

 

 

 

 

 

 

 

 

 

Title: Partner

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

 

/s/ Richard A. Strait

 

 

 

 

 

 

 

 

 

 

 

 

 

Name: Richard A. Strait

 

 

 

 

 

 

Title: Its Authorized Representative

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GOLDMAN, SACHS & CO.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

 

/s/ Albert Dombrowski

 

 

 

 

 

 

 

 

 

 

 

 

 

Name: Albert Dombrowski

 

 

 

 

 

 

Title: Authorized Signatory

 

 

PURCHASE AGREEMENT SIGNATURE PAGE

 

 


 

EXHIBIT A

INDENTURE

 

 


 

ASSOCIATED MATERIALS, LLC

as Issuer,

THE SUBSIDIARY GUARANTORS

INDENTURE

Dated as of June [     ], 2009

DEUTSCHE BANK TRUST COMPANY AMERICAS

as Trustee

 

 


 

TABLE OF CONTENTS

 

 

 

 

 

 

 

Page

 

 

 

 

 

 

ARTICLE 1 Definitions and Incorporation by Reference

 

 

7

 

SECTION 1.01. Definitions

 

 

7

 

SECTION 1.02. Other Definitions

 

 

34

 

SECTION 1.03. TIA Provisions

 

 

35

 

SECTION 1.04. Rules of Construction

 

 

35

 

 

 

 

 

 

ARTICLE 2 The Securities

 

 

35

 

SECTION 2.01. Form and Dating

 

 

35

 

SECTION 2.02. Execution and Authentication

 

 

35

 

SECTION 2.03. Registrar and Paying Agent

 

 

36

 

SECTION 2.04. Paying Agent to Hold Money in Trust

 

 

36

 

SECTION 2.05. Securityholder Lists

 

 

37

 

SECTION 2.06. Transfer and Exchange

 

 

37

 

SECTION 2.07. Replacement Securities

 

 

37

 

SECTION 2.08. Outstanding Securities

 

 

38

 

SECTION 2.09. Temporary Securities

 

 

38

 

SECTION 2.10. Cancellation

 

 

38

 

SECTION 2.11. Defaulted Interest

 

 

39

 

SECTION 2.12. CUSIP Numbers

 

 

39

 

 

 

 

 

 

ARTICLE 3 Redemption

 

 

39

 

SECTION 3.01. Notices to Trustee

 

 

39

 

SECTION 3.02. Selection of Securities To Be Redeemed

 

 

39

 

SECTION 3.03. Notice of Redemption

 

 

40

 

SECTION 3.04. Effect of Notice of Redemption

 

 

40

 

SECTION 3.05. Deposit of Redemption Price

 

 

40

 

SECTION 3.06. Securities Redeemed in Part

 

 

41

 

 

 

 

 

 

ARTICLE 4 Covenants

 

 

41

 

SECTION 4.01. Payment of Securities

 

 

41

 

SECTION 4.02. SEC Reports

 

 

41

 

SECTION 4.03. Limitations on Indebtedness

 

 

42

 

SECTION 4.04. Limitation on Restricted Payments

 

 

42

 

SECTION 4.05. Limitation on Restrictions on Distributions from Restricted Subsidiaries

 

 

49

 

SECTION 4.06. Limitation on Sales of Assets and Subsidiary Stock

 

 

50

 

SECTION 4.07. Limitation on Affiliate Transactions

 

 

53

 

SECTION 4.08. Limitation on the Sale or Issuance of Capital Stock of Restricted Subsidiaries

 

 

54

 

SECTION 4.09. Change of Control

 

 

55

 

SECTION 4.10. Future Guarantors

 

 

56

 

SECTION 4.11. Compliance Certificate

 

 

56

 

SECTION 4.12. Further Instruments and Acts

 

 

56

 

SECTION 4.13. Dividend Blocker Carveout

 

 

56

 

 

i


 

Table of Contents
(Continued)

 

 

 

 

 

 

 

Page

 

 

 

 

 

 

ARTICLE 5 Successor Company

 

 

57

 

SECTION 5.01. When Company May Merge or Transfer Assets

 

 

57

 

 

 

 

 

 

ARTICLE 6 Defaults and Remedies

 

 

58

 

SECTION 6.01. Events of Default

 

 

58

 

SECTION 6.02. Acceleration

 

 

60

 

SECTION 6.03. Other Remedies

 

 

61

 

SECTION 6.04. Waiver of Past Defaults

 

 

61

 

SECTION 6.05. Control by Majority

 

 

61

 

SECTION 6.06. Limitation on Suits

 

 

62

 

SECTION 6.07. Rights of Holders To Receive Payment

 

 

62

 

SECTION 6.08. Collection Suit by Trustee

 

 

62

 

SECTION 6.09. Trustee May File Proofs of Claim

 

 

62

 

SECTION 6.10. Priorities

 

 

62

 

SECTION 6.11. Undertaking for Costs

 

 

63

 

SECTION 6.12. Waiver of Stay or Extension Laws

 

 

63

 

 

 

 

 

 

ARTICLE 7 Trustee

 

 

64

 

SECTION 7.01. Duties of Trustee

 

 

64

 

SECTION 7.02. Rights of Trustee

 

 

65

 

SECTION 7.03. Individual Rights of Trustee

 

 

66

 

SECTION 7.04. Trustee’s Disclaimer

 

 

66

 

SECTION 7.05. Notice of Defaults

 

 

66

 

SECTION 7.06. Reports by Trustee to Holders

 

 

66

 

SECTION 7.07. Compensation and Indemnity

 

 

67

 

SECTION 7.08. Replacement of Trustee

 

 

67

 

SECTION 7.09. Successor Trustee by Merger

 

 

68

 

SECTION 7.10. Eligibility; Disqualification

 

 

69

 

SECTION 7.11. Preferential Collection of Claims Against Company

 

 

69

 

 

 

 

 

 

ARTICLE 8 Discharge of Indenture; Defeasance

 

 

69

 

SECTION 8.01. Discharge of Liability on Securities; Defeasance

 

 

69

 

SECTION 8.02. Conditions to Defeasance

 

 

70

 

SECTION 8.03. Application of Trust Money

 

 

71

 

SECTION 8.04. Repayment to Company

 

 

71

 

SECTION 8.05. Indemnity for Government Obligations

 

 

71

 

SECTION 8.06. Reinstatement

 

 

71

 

 

 

 

 

 

ARTICLE 9 Amendments

 

 

72

 

SECTION 9.01. Without Consent of Holders

 

 

72

 

SECTION 9.02. With Consent of Holders

 

 

73

 

SECTION 9.03. Compliance with Trust Indenture Act

 

 

74

 

SECTION 9.04. Revocation and Effect of Consents and Waivers

 

 

74

 

SECTION 9.05. Notation on or Exchange of Securities

 

 

74

 

 

ii


 

Table of Contents
(Continued)

 

 

 

 

 

 

 

Page

 

SECTION 9.06. Trustee To Sign Amendments

 

 

74

 

SECTION 9.07. Payment for Consent

 

 

74

 

 

 

 

 

 

ARTICLE 10 Subordination

 

 

75

 

SECTION 10.01. Agreement To Subordinate

 

 

75

 

SECTION 10.02. Liquidation, Dissolution, Bankruptcy

 

 

75

 

SECTION 10.03. Default on Senior Indebtedness of the Company

 

 

76

 

SECTION 10.04. Acceleration of Payment of Securities

 

 

77

 

SECTION 10.05. When Distribution Must Be Paid Over

 

 

77

 

SECTION 10.06. Subrogation

 

 

77

 

SECTION 10.07. Relative Rights

 

 

77

 

SECTION 10.08. Subordination May Not Be Impaired by Company

 

 

77

 

SECTION 10.09. Rights of Trustee and Paying Agent

 

 

78

 

SECTION 10.10. Distribution or Notice to Representative

 

 

78

 

SECTION 10.11. Article 10 Not To Prevent Events of Default or Limit Right to Accelerate

 

 

78

 

SECTION 10.12. Trust Moneys Not Subordinated

 

 

78

 

SECTION 10.13. Trustee Entitled to Rely

 

 

78

 

SECTION 10.14. Trustee To Effectuate Subordination

 

 

79

 

SECTION 10.15. Trustee Not Fiduciary for Holders of Senior Indebtedness of the Company

 

 

79

 

SECTION 10.16. Reliance by Holders of Senior Indebtedness of the Company on Subordination Provisions

 

 

79

 

 

 

 

 

 

ARTICLE 11 Subsidiary Guaranties

 

 

79

 

SECTION 11.01. Guaranties

 

 

79

 

SECTION 11.02. Limitation on Liability

 

 

81

 

SECTION 11.03. Successors and Assigns

 

 

81

 

SECTION 11.04. No Waiver

 

 

82

 

SECTION 11.05. Modification

 

 

82

 

SECTION 11.06. Release of Subsidiary Guarantor

 

 

82

 

 

 

 

 

 

ARTICLE 12 Subordination of Subsidiary Guaranties

 

 

82

 

SECTION 12.01. Agreement To Subordinate

 

 

82

 

SECTION 12.02. Liquidation, Dissolution, Bankruptcy

 

 

83

 

SECTION 12.03. Default on Senior Indebtedness of Subsidiary Guarantor

 

 

83

 

SECTION 12.04. Demand for Payment

 

 

84

 

SECTION 12.05. When Distribution Must Be Paid Over

 

 

84

 

SECTION 12.06. Subrogation

 

 

84

 

SECTION 12.07. Relative Rights

 

 

85

 

SECTION 12.08. Subordination May Not Be Impaired by Company

 

 

85

 

SECTION 12.09. Rights of Trustee and Paying Agent

 

 

85

 

SECTION 12.10. Distribution or Notice to Representative

 

 

86

 

SECTION 12.11. Article 12 Not To Prevent Events of Default or Limit Right To Demand Payment

 

 

86

 

SECTION 12.12. Trustee Entitled To Rely

 

 

86

 

SECTION 12.13. Trustee To Effectuate Subordination

 

 

86

 

SECTION 12.14. Trustee Not Fiduciary for Holders of Senior Indebtedness of Subsidiary Guarantor

 

 

86

 

SECTION 12.15. Reliance by Holders of Senior Indebtedness of Subsidiary Guarantors on Subordination Provisions

 

 

87

 

 

iii


 

Table of Contents
(Continued)

 

 

 

 

 

 

 

Page

 

 

 

 

 

 

ARTICLE 13 Miscellaneous

 

 

87

 

SECTION 13.01. Trust Indenture Act Controls

 

 

87

 

SECTION 13.02. Notices

 

 

87

 

SECTION 13.03. Communication by Holders with Other Holders

 

 

88

 

SECTION 13.04. Certificate and Opinion as to Conditions Precedent

 

 

88

 

SECTION 13.05. Statements Required in Certificate or Opinion

 

 

88

 

SECTION 13.06. When Securities Disregarded

 

 

89

 

SECTION 13.07. Rules by Trustee

 

 

89

 

SECTION 13.08. Legal Holidays

 

 

89

 

SECTION 13.09. GOVERNING LAW; WAIVER OF JURY TRIAL

 

 

89

 

SECTION 13.10. No Recourse Against Others

 

 

89

 

SECTION 13.11. Successors

 

 

90

 

SECTION 13.12. Multiple Originals

 

 

90

 

SECTION 13.13. Table of Contents; Headings

 

 

90

 

SECTION 13.14. No Adverse Interpretations of Other Agreements

 

 

90

 

SECTION 13.15. Force Majeure

 

 

90

 

SECTION 13.16. U.S.A. Patriot Act

 

 

90

 

 

iv


 

CROSS-REFERENCE TABLE

 

 

 

 

 

 

 

TIA

 

 

Indenture

 

Section

 

 

Section

 

 

310

 

(a)

 

 

7.10

 

 

 

(a)(3)

 

 

N.A.

 

 

 

(a)(4)

 

 

N.A.

 

 

 

(b)

 

 

7.03, 7.08, 7.10

 

 

 

(b)(1)

 

 

7.10

 

 

 

(c)

 

 

N.A.

 

311

 

 

 

 

7.03

 

311

 

(a)

 

 

7.11

 

 

 

(b)

 

 

7.11

 

 

 

(c)

 

 

N.A.

 

312

 

(a)

 

 

2.05

 

 

 

(b)

 

 

13.03

 

 

 

(c)

 

 

13.03

 

313

 

(a)

 

 

7.06

 

 

 

(b)(1)

 

 

N.A.

 

 

 

(b)

 

 

7.06

 

 

 

(c)

 

 

N.A.

 

 

 

(d)

 

 

N.A.

 

314

 

(a)

 

 

4.02

 

314

 

(a)(4)

 

 

4.11

 

 

 

(b)

 

 

N.A.

 

 

 

(c)(1)

 

 

N.A.

 

 

 

(c)(2)

 

 

N.A.

 

 

 

(c)(3)

 

 

N.A.

 

 

 

(d)

 

 

N.A.

 

 

 

(e)

 

 

N.A.

 

 

 

(f)

 

 

N.A.

 

315

 

(a)

 

 

7.01

 

 

 

(b)

 

 

N.A.

 

 

 

(c)

 

 

N.A.

 

 

 

(d)

 

 

N.A.

 

 

 

(e)

 

 

N.A.

 

316

 

(a)(last sentence)

 

 

N.A.

 

 

 

(a)(1)(A)

 

 

N.A.

 

 

 

(a)(1)(B)

 

 

N.A.

 

 

 

(a)(2)

 

 

N.A.

 

 

 

(b) N

 

 

.A.

 

317

 

(a)(1)

 

 

N.A.

 

 

 

(a)(2)

 

 

N.A.

 

 

 

(b) N

 

 

.A.

 

318

 

(a) N

 

 

.A.

 

 

5


 

Rule 144A/Regulation S Appendix

Exhibit 1 — Form of Security

Exhibit 2 — Affiliate Subordination Agreement

 

6


 

INDENTURE dated as of June [       ], 2009, among ASSOCIATED MATERIALS, LLC, a Delaware limited liability company (the “Company”), the Subsidiary Guarantors and DEUTSCHE BANK TRUST COMPANY AMERICAS, a New York banking corporation, as trustee (the “Trustee”).

Each party agrees as follows for the benefit of the other parties and for the equal and ratable benefit of the Holders of the Company’s Securities.

ARTICLE 1

Definitions and Incorporation by Reference

SECTION 1.01. Definitions.

“Additional Assets” means:

(1) any property, plant, equipment or other assets used or usable in a Related Business;

(2) the Capital Stock of a Person that becomes a Restricted Subsidiary as a result of the acquisition of such Capital Stock by the Company or another Restricted Subsidiary; or

(3) Capital Stock constituting a minority interest in any Person that at such time is a Restricted Subsidiary;

provided, however, that any such Restricted Subsidiary described in clause (2) or (3) above is primarily engaged in a Related Business.

“Affiliate” of any specified Person means any other Person, directly or indirectly, controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, “control” when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing. For purposes of Sections 4.04 and 4.07 only, “Affiliate” shall also mean any beneficial owner of Capital Stock representing 10% or more of the total voting power of the Voting Stock (on a fully diluted basis) of the Company or of rights or warrants to purchase such Capital Stock (whether or not currently exercisable) and any Person who would be an Affiliate of any such beneficial owner pursuant to the first sentence hereof.

“Affiliate Subordinated Indebtedness” means Subordinated Obligations of the Company or any Restricted Subsidiary issued to and held by a Person that is an Affiliate of the Company immediately prior to its incurrence that (a) has a stated maturity and provides for no payment of the principal of or cash interest or premium, if any, thereof, prior to six months after the Stated Maturity of the Securities and (b) is contractually subordinated and junior in right of payment to the prior payment in full in cash of all Obligations of the Company under the Securities and this Indenture pursuant to a subordination agreement substantially in the form of Exhibit 2 or otherwise as acceptable to the holders of a majority in principal amount of the Securities.

 

7


 

“AMH” means AMH Holdings, LLC, a Delaware limited liability company, and its successors.

“AMH Exchange Notes” means notes or other Indebtedness of the Company issued in exchange for the Existing AMH Notes, and in each case, if applicable, other consideration in exchange for, or the net proceeds of which are used to Refinance, all or a portion of the Existing AMH Notes.

“AMH Restricted Subsidiary” means a “Restricted Subsidiary” of AMH as that term is used in the Existing AMH Indenture.

“AMH II” means AMH Holdings II, Inc. a Delaware corporation, and its successors.

“AMI Exchange Notes” means (a) notes or other Indebtedness and any other consideration of the Company issued in exchange for the Existing AMI Notes; (b) the Existing AMI Notes, after any amendment to the terms and conditions thereof or of the Existing AMI Indenture, and (c) in each case, if applicable, other consideration in exchange for, or the net proceeds of which are used to Refinance, all or a portion of the Existing AMI Notes.

“Asset Disposition” means any sale, lease (other than operating leases entered into in the ordinary course of business), transfer or other disposition (or series of related sales, leases, transfers or dispositions) by the Company or any Restricted Subsidiary, including any disposition by means of a merger, consolidation or similar transaction (each referred to for the purposes of this definition as a “disposition”), of

(1) any shares of Capital Stock of a Restricted Subsidiary (other than directors’ qualifying shares or shares required by applicable law to be held by a Person other than the Company or a Restricted Subsidiary);

(2) all or substantially all the assets of any division or line of business of the Company or any Restricted Subsidiary; or

(3) any other assets of the Company or any Restricted Subsidiary outside of the ordinary course of business of the Company or such Restricted Subsidiary,

other than, in the case of clauses (1), (2) and (3) above,

(A) a disposition or transfer by a Restricted Subsidiary to the Company or by the Company or a Restricted Subsidiary to a Restricted Subsidiary;

(B) for purposes of Section 4.06 only, (x) a disposition that constitutes a Restricted Payment permitted by Section 4.04 or a Permitted Investment or (y) a disposition of all or substantially all the assets of the Company in accordance with Section 5.01;

 

8


 

(C) sales or other dispositions of obsolete, uneconomical, negligible, damaged, worn-out or surplus assets in the ordinary course of business (including but not limited to equipment, inventory and intellectual property);

(D) a disposition of assets with a fair market value of less than or equal to $1.0 million, not to exceed $5.0 million in the aggregate in any 12 month period;

(E) sale or discount of accounts receivable in connection with the compromise or collection thereof;

(F) sale or exchange of equipment in connection with the purchase or other acquisition of equipment; and

(G) sales or grants of licenses to use intellectual property;

provided, however, that a disposition of all or substantially all the assets of the Company and its Restricted Subsidiaries taken as a whole will be governed by the provisions of this Indenture described under Section 4.09 and/or the provisions described under Section 5.01 and not by the provisions described under Section 4.06.

“Attributable Debt” in respect of a Sale/Leaseback Transaction means, as at the time of determination, the present value (discounted at the interest rate borne by the Securities, compounded annually) of the total obligations of the lessee for rental payments during the remaining term of the lease included in such Sale/Leaseback Transaction (including any period for which such lease has been extended); provided, however, that if such Sale/Leaseback Transaction results in a Capital Lease Obligation, the amount of Indebtedness represented thereby will be determined in accordance with the definition of “Capital Lease Obligation.”

“Average Life” means, as of the date of determination, with respect to any Indebtedness, the quotient obtained by dividing

(1) the sum of the products of the numbers of years from the date of determination to the dates of each successive scheduled principal payment of or redemption or similar payment with respect to such Indebtedness multiplied by the amount of such payment by

(2) the sum of all such payments.

“Bank Facilities” means the bank facilities under the Credit Agreement as in effect on April 23, 2002.

“Bank Indebtedness” means all Obligations pursuant to the Credit Agreement.

“Board of Directors” with respect to a Person means the Board of Directors of such Person or any committee thereof duly authorized to act on behalf of such Board.

 

9


 

“Business Day” means each day which is not a Legal Holiday.

“Capital Lease Obligation” means an obligation that is required to be classified and accounted for as a capital lease for financial reporting purposes in accordance with GAAP, and the amount of Indebtedness represented by such obligation shall be the capitalized amount of such obligation determined in accordance with GAAP; and the Stated Maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be terminated by the lessee without payment of a penalty.

“Capital Stock” of any Person means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) equity of such Person, including any Preferred Stock, but excluding any debt securities convertible into such equity.

“Change of Control” means the occurrence of any of the following events:

(1) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than (directly or indirectly) one or more Permitted Holders, is or becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that such person shall be deemed to have “beneficial ownership” of all shares that any such person has the right to acquire, whether such right is exercisable immediately or only after the passage of time, and except that in the case of a “group” pursuant to Rule 13d-5(b)(1) of the Exchange Act which group includes one or more Permitted Holders (or one or more Permitted Holders are deemed to share beneficial ownership with one or more other Persons of any shares of Voting Stock), (i) such “group” shall be deemed not to have beneficial ownership of any shares held by a Permitted Holder forming a part of such group and (ii) any Person (other than a Permitted Holder) that is a member of such group (or sharing such beneficial ownership) shall be deemed not to have beneficial ownership of any shares held by a Permitted Holder that is a part of such group (or in which such person shares beneficial ownership)), directly or indirectly, of more than 35% of the total voting power of the Voting Stock of the Company; provided, however, that the Permitted Holders beneficially own (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, in the aggregate a lesser percentage of the total voting power of the Voting Stock of the Company than such other person and do not have the right or ability by voting power, contract or otherwise to elect or designate for election a majority of the Board of Directors of the Company (for the purposes of this clause (1), (a) such other person shall be deemed to beneficially own any Voting Stock of a specified Person held by a parent entity if (and any such parent entity shall be deemed to beneficially own such Voting Stock only if) such other person is the beneficial owner (as defined in this provision), directly or indirectly, of more than 35% of the voting power of the Voting Stock of such parent entity and the Permitted Holders beneficially own (as defined in this provision), directly or indirectly, in the aggregate a lesser percentage of the voting power of the Voting Stock of such parent entity and do not have the right or ability by voting power, contract or otherwise to elect or designate for election a majority of the Board of Directors of such parent entity);

 

10


 

(2) individuals who upon the Issue Date constituted the Board of Directors of the Company or Parent (together with any new directors whose election by such Board of Directors of the Company of the Parent Board or whose nomination for election by the shareholders of the Company or the Parent, as the case may be, was approved by a vote of a majority of the directors of the Company or the Parent, as the case may be, then still in office who were either directors on the Issue Date or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board of Directors of the Company or the Parent then in office;

(3) the adoption of a plan relating to the liquidation or dissolution of the Company;

(4) the merger or consolidation of the Company with or into another Person or the merger of another Person with or into the Company, or the sale of all or substantially all the assets of the Company to another Person (other than a Person that is controlled by the Permitted Holders), and, in the case of any such merger or consolidation, the securities of the Company that are outstanding immediately prior to such transaction and which represent 100% of the aggregate voting power of the Voting Stock of the Company are changed into or exchanged for cash, securities or property, unless pursuant to such transaction such securities are changed into or exchanged for, in addition to any other consideration, securities of the surviving corporation that represent immediately after such transaction, at least a majority of the aggregate voting power of the Voting Stock of the surviving corporation; or

(5) while any Existing AMI Notes remain outstanding, a “Change of Control” as defined under the Existing AMI Indenture has occurred that requires the Company to purchase Existing AMI Notes pursuant to Section 4.09 of the Existing AMI Indenture and such requirement has not been waived.

“Code” means the Internal Revenue Code of 1986, as amended.

“Company” means the party named as such in this Indenture until a successor replaces it and, thereafter, means the successor.

“Company Order” means a written order from the Company to the Trustee requesting the Trustee to authenticate the Securities.

“Consolidated Coverage Ratio” as of any date of determination means the ratio of (x) the aggregate amount of EBITDA for the period of the most recent four consecutive fiscal quarters for which internal financial statements are available on or prior to the date of such determination to (y) Consolidated Interest Expense for such four fiscal quarters; provided, however, that:

(1) if the Company or any Restricted Subsidiary has Incurred any Indebtedness since the beginning of such period that remains outstanding or if the transaction giving rise to the need to calculate the Consolidated Coverage Ratio is an Incurrence of Indebtedness, or both, EBITDA and Consolidated Interest Expense for such period shall be calculated after giving effect on a pro forma basis to such Indebtedness as if such Indebtedness had been Incurred on the first day of such period (and, if such Indebtedness is revolving Indebtedness, the amount of Indebtedness deemed to be outstanding for such period shall be the average outstanding amount of such Indebtedness during such period);

 

11


 

(2) if the Company or any Restricted Subsidiary has repaid, repurchased, defeased or otherwise discharged any Indebtedness since the beginning of such period or if any Indebtedness is to be repaid, repurchased, defeased or otherwise discharged (in each case other than Indebtedness Incurred under any revolving credit facility unless such Indebtedness has been permanently repaid and has not been replaced) on the date of the transaction giving rise to the need to calculate the Consolidated Coverage Ratio, EBITDA and Consolidated Interest Expense for such period shall be calculated on a pro forma basis as if such discharge had occurred on the first day of such period and as if the Company or such Restricted Subsidiary had not earned the interest income actually earned during such period in respect of cash or Temporary Cash Investments used to repay, repurchase, defease or otherwise discharge such Indebtedness;

(3) if since the beginning of such period the Company or any Restricted Subsidiary shall have made any Asset Disposition, EBITDA for such period shall be reduced by an amount equal to EBITDA (if positive) attributable to the assets which are the subject of such Asset Disposition for such period, or increased by an amount equal to EBITDA (if negative), attributable thereto for such period and Consolidated Interest Expense for such period shall be reduced by an amount equal to the Consolidated Interest Expense attributable to any Indebtedness of the Company or any Restricted Subsidiary repaid, repurchased, defeased or otherwise discharged with respect to the Company and its continuing Restricted Subsidiaries in connection with such Asset Disposition for such period (or, if the Capital Stock of any Restricted Subsidiary is sold, the Consolidated Interest Expense for such period attributable to the Indebtedness of such Restricted Subsidiary to the extent the Company and its continuing Restricted Subsidiaries are no longer liable for such Indebtedness after such sale);

(4) if since the beginning of such period the Company or any Restricted Subsidiary (by merger or otherwise) shall have made an Investment in any Restricted Subsidiary (or any person which becomes a Restricted Subsidiary) or an acquisition of assets, including any acquisition of assets occurring in connection with a transaction requiring a calculation to be made hereunder, which constitutes all or substantially all of an operating unit of a business, EBITDA and Consolidated Interest Expense for such period shall be calculated after giving pro forma effect thereto (including the Incurrence of any Indebtedness) as if such Investment or acquisition occurred on the first day of such period; and

(5) if since the beginning of such period any Person (that subsequently became a Restricted Subsidiary or was merged with or into the Company or any Restricted Subsidiary since the beginning of such period) shall have made any Asset Disposition, any Investment or acquisition of assets that would have required an adjustment pursuant to clause (3) or (4) above if made by the Company or a Restricted Subsidiary during such period, EBITDA and Consolidated Interest Expense for such period shall be calculated after giving pro forma effect thereto as if such Asset Disposition, Investment or acquisition occurred on the first day of such period.

 

12


 

For purposes of this definition, whenever pro forma effect is to be given to an acquisition of assets (including Capital Stock), the amount of income or earnings relating thereto and the amount of Consolidated Interest Expense associated with any Indebtedness Incurred in connection therewith, the pro forma calculations shall be determined in accordance with Regulation S-X under the Exchange Act or as otherwise acceptable to the SEC. If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the date of determination had been the applicable rate for the entire period (taking into account any Interest Rate Agreement applicable to such Indebtedness if such Interest Rate Agreement has a remaining term in excess of 12 months).

“Consolidated Interest Expense” means, for any period, the total interest expense of the Company and its consolidated Restricted Subsidiaries, plus, to the extent not included in such total interest expense, and to the extent Incurred by the Company or its Restricted Subsidiaries, without duplication,

(1) interest expense attributable to Capital Lease Obligations and the interest expense attributable to leases constituting part of a Sale/Leaseback Transaction;

(2) amortization of debt discount and debt issuance cost (to the extent not excluded under clause (a) of the proviso below);

(3) capitalized interest;

(4) non-cash interest expense;

(5) commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptance financing;

(6) net payments or receipts pursuant to Hedging Obligations;

(7) dividends declared and paid in cash or Disqualified Stock in respect of (A) all Preferred Stock of Restricted Subsidiaries and (B) all Disqualified Stock of the Company, in each case held by Persons other than the Company or a Wholly Owned Subsidiary and, in each case, excluding dividends payable in Qualified Stock;

(8) interest incurred in connection with Investments in discontinued operations;

(9) interest accruing on any Indebtedness of any other Person (other than a Subsidiary) to the extent such Indebtedness is Guaranteed by (or secured by the assets of) the Company or any Restricted Subsidiary and such Indebtedness is accelerated or any payment is actually made in respect of such Guarantee; and

 

13


 

(10) the cash contributions to any employee stock ownership plan or similar trust to the extent such contributions are used by such plan or trust to pay interest or fees to any Person (other than the Company or a Restricted Subsidiary thereof) in connection with Indebtedness Incurred by such plan or trust,

and less, to the extent included in such interest expense, (a) the amortization during such period of debt issuance costs; provided, however, that the aggregate amount of amortization relating to any such debt issuance costs deducted in calculating Consolidated Interest Expense shall not exceed 5.0% of the aggregate amount of the financing giving rise to such debt issuance costs and (b) the write-off of debt issuance costs and debt discount paid in connection with any early extinguishment of Indebtedness during such period.

“Consolidated Net Income” means, for any period, the sum of (1) net income of the Company and its Subsidiaries and (2) to the extent deducted in calculating net income of the Company and its Subsidiaries, any non-recurring fees, expenses or charges related to the Transactions or any Note Refinancing ; provided, however, that there shall not be included in such Consolidated Net Income:

(1) any net income of any Person (other than the Company) if such Person is not a Restricted Subsidiary, except that:

(A) subject to the exclusion contained in clause (3) below, the Company’s equity in the net income of any such Person for such period shall be included in such Consolidated Net Income up to the aggregate amount of cash actually distributed by such Person during such period to the Company or a Restricted Subsidiary as a dividend or other distribution (subject, in the case of a dividend or other distribution paid to a Restricted Subsidiary, to the limitations contained in clause (2) below); and

(B) the Company’s equity in a net loss of any such Person for such period shall be included in determining such Consolidated Net Income;

(2) any net income of any Restricted Subsidiary if such Restricted Subsidiary is subject to restrictions, directly or indirectly, on the payment of dividends or the making of distributions by such Restricted Subsidiary, directly or indirectly, to the Company, except that:

(A) subject to the exclusion contained in clause (3) below, the Company’s equity in the net income of any such Restricted Subsidiary for such period shall be included in such Consolidated Net Income up to the aggregate amount of cash that could have been distributed by such Restricted Subsidiary during such period to the Company or another Restricted Subsidiary as a dividend or other distribution (subject, in the case of a dividend or other distribution paid to another Restricted Subsidiary, to the limitation contained in this clause); and

(B) the Company’s equity in a net loss of any such Restricted Subsidiary for such period shall be included in determining such Consolidated Net Income;

 

14


 

(3) any gain or loss (and the related tax effects) realized upon the sale or other disposition of any assets of the Company, its consolidated Restricted Subsidiaries or any other Person (including pursuant to any sale-and-leaseback arrangement) which is not sold or otherwise disposed of in the ordinary course of business and any gain or loss realized upon the sale or other disposition of any Capital Stock of any Person;

(4) extraordinary, non-cash or non-recurring gains, losses or charges, including (i) those related to impairment of goodwill and other intangible assets, (ii) the write-off of capitalized financing costs and related premiums paid in connection with any early extinguishment of Indebtedness and the related tax effects, and (iii) any gains, losses or charges relating to any Note Refinancing;

(5) the cumulative effect of a change in accounting principles; and

(6) any net income or loss attributable to discontinued operations.

Notwithstanding the foregoing, for the purposes of Section 4.04 only, there shall be excluded from Consolidated Net Income any repurchases, repayments or redemptions of Investments, proceeds realized on the sale of Investments or return of capital to the Company or a Restricted Subsidiary to the extent such repurchases, repayments, redemptions, proceeds or returns increase the amount of Restricted Payments permitted under Section 4.04(a)(3)(D).

“Credit Agreement” means the Credit Agreement dated as of April 19, 2002, by and among the Company, the lenders referred to therein, UBS AG, Stamford Branch, as Administrative Agent, Credit Suisse First Boston, as Syndication Agent, and CIBC World Markets Corp., as Documentation Agent, together with the related documents thereto (including any guarantees and security documents, whether in effect on April 23, 2002 or entered into thereafter), as amended, extended, renewed, restated, supplemented or otherwise modified. For the avoidance of doubt, within the meaning of “Credit Agreement” shall be the Loan and Security Agreement, dated as of October 3, 2008, by and among the Company and Gentek Building Products, Inc., as U.S. Borrowers, Gentek Building Products Limited, as Canadian Borrower, Associated Materials Holdings, Gentek Holdings, LLC and Alside, Inc., as guarantors, the lenders and issuing bank from time to time party thereto, Wachovia Bank, National Association, as administrative and collateral agent, Wachovia Capital Markets, LLC and CIT Capital Securities, LLC, as joint lead arrangers and joint lead bookrunners, and The CIT Group/Business Credit, Inc., as syndication agent, as amended, extended, renewed, restated, supplemented or otherwise modified.

“Credit Facilities” means, with respect to the Company and its Restricted Subsidiaries, one or more debt facilities (including under the Credit Agreement) or commercial paper facilities with banks, insurance companies or other institutional lenders providing for revolving credit loans, term loans, notes, factoring or other receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from or issue securities to such lenders against such receivables) or letters of credit or other credit facilities, in each case, as amended, modified, supplemented, increased or restated from time to time, or refunded, refinanced, restructured, replaced, renewed, repaid or extended from time to time (whether with the original agents and lenders or other agents or lenders or otherwise, and whether provided under the original credit agreement or other credit agreements or otherwise).

 

15


 

“Currency Agreement” means in respect of a Person any foreign exchange contract, currency swap agreement or other similar agreement designed to protect such Person against fluctuations in currency values.

“Default” means any event which is, or after notice or passage of time or both would be, an Event of Default.

“Designated Senior Indebtedness”, with respect to a Person, means

(1) the Bank Indebtedness; and

(2) any other Senior Indebtedness of such Person which, at the date of determination, has an aggregate principal amount outstanding of, or under which, at the date of determination, the holders thereof are committed to lend up to, at least $25.0 million and is specifically designated by such Person in the instrument evidencing or governing such Senior Indebtedness as “Designated Senior Indebtedness” for purposes of this Indenture.

“Disqualified Stock” means, with respect to any Person, that portion of any Capital Stock which by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable at the option of the holder) or upon the happening of any event:

(1) matures (excluding any maturity as a result of an optional redemption by the issuer thereof) or is mandatorily redeemable (other than redeemable only for Capital Stock of such Person which is not itself Disqualified Stock) pursuant to a sinking fund obligation or otherwise;

(2) is convertible or exchangeable at the option of the holder for Indebtedness or Disqualified Stock; or

(3) is mandatorily redeemable or must be purchased upon the occurrence of certain events or otherwise, in whole or in part;

in each case on or prior to the date that is 91 days after the Stated Maturity of the Securities; provided, however, that if such Capital Stock is issued to any employee or to any plan for the benefit of employees of the Company or its Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by the Company in order to satisfy obligations as a result of such employee’s death or disability; and provided, further, however, that any Capital Stock that would not constitute Disqualified Stock but for provisions thereof giving holders thereof the right to require such Person to purchase or redeem such Capital Stock upon the occurrence of an “asset sale” or “change of control” occurring prior to the date that is 91 days after the Stated Maturity of the Securities shall not constitute Disqualified Stock if the “asset sale” or “change of control” provisions applicable to such Capital Stock are not more favorable to the holders of such Capital Stock than the terms applicable to the Securities in Section 4.06 and 4.09 of this Indenture.

 

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The amount of any Disqualified Stock that does not have a fixed redemption, repayment or repurchase price shall be calculated in accordance with the terms of such Disqualified Stock as if such Disqualified Stock were redeemed, repaid or repurchased on any date on which the amount of such Disqualified Stock is to be determined pursuant to this Indenture; provided, however, that if such Disqualified Stock could not be required to be redeemed, repaid or repurchased at the time of such determination, the redemption, repayment or repurchase price shall be the book value of such Disqualified Stock as reflected in the most recent financial statements of such Person.

“EBITDA” for any period means the sum of Consolidated Net Income, plus the following to the extent deducted in calculating such Consolidated Net Income:

(1) all income tax expense of the Company and its consolidated Restricted Subsidiaries;

(2) Consolidated Interest Expense;

(3) depreciation and amortization expense of the Company and its consolidated Restricted Subsidiaries (excluding amortization expense attributable to a prepaid operating activity item that was paid in cash in a prior period); and

(4) all other non-cash charges of the Company and its consolidated Restricted Subsidiaries (excluding any such non-cash charge to the extent that it represents an accrual of or reserve for cash expenditures in any future period);

in each case for such period determined in accordance with GAAP. Notwithstanding the foregoing, the provision for taxes based on the income or profits of, and the depreciation and amortization and non-cash charges of, a Restricted Subsidiary shall be added to Consolidated Net Income to compute EBITDA only to the extent (and in the same proportion, including by reason of minority interest) that the net income of such Restricted Subsidiary was included in calculating Consolidated Net Income and only if a corresponding amount would be permitted at the date of determination to be dividended to the Company by such Restricted Subsidiary without prior approval (that has not been obtained), pursuant to the terms of its charter and all agreements, instruments, judgments, decrees, orders, statutes, rules and governmental regulations applicable to such Restricted Subsidiary or its stockholders. In addition, to the extent reducing EBITDA for any period, all costs and charges directly relating to the Transactions and the Note Refinancing shall be excluded.

“Equity Financing” means the financing by Parent of at least $172.0 million of equity capital to provide a portion of the funds for the Equity Tender Offer and the Merger.

“Equity Offering” means a primary offering of common stock or common equity of Parent or the Company.

“Equity Tender Offer” means the cash tender offer for 100% of the shares of common stock of the Company at a price of $50.00 per share.

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.

 

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“Existing AMH II Notes” means AMH II’s 13.625% Senior Notes Due 2014.

“Existing AMH Indenture” means the Indenture dated as of March 4, 2004, between AMH and Wilmington Trust Company, as trustee.

“Existing AMH Notes” means AMH’s 11 1/4% Senior Discount Notes Due 2014.

“Existing AMI Notes” means the Company’s 9 3 / 4 % Senior Subordinated Notes Due 2012.

“Existing AMI Indenture” means the Indenture dated as of April 23, 2002, among the Company and Wilmington Trust Company, as trustee, as amended.

“GAAP” means generally accepted accounting principles in the United States of America as in effect as of April 23, 2002, including those set forth in

(1) the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants;

(2) statements and pronouncements of the Financial Accounting Standards Board;

(3) such other statements by such other entity as approved by a significant segment of the accounting profession; and

(4) the rules and regulations of the SEC governing the inclusion of financial statements (including pro forma financial statements) in periodic reports required to be filed pursuant to Section 13 of the Exchange Act, including opinions and pronouncements in staff accounting bulletins and similar written statements from the accounting staff of the SEC.

All ratios and computations based on GAAP contained in this Indenture shall be computed in conformity with GAAP.

“Guarantee” means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Indebtedness of any Person and any obligation, direct or indirect, contingent or otherwise, of such Person

(1) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness of such Person (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services, to take-or-pay or to maintain financial statement conditions or otherwise); or

(2) entered into for the purpose of assuring in any other manner the obligee of such Indebtedness of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part);

 

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provided, however, that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business. The term “Guarantee” used as a verb has a corresponding meaning.

“Guaranty” means each Subsidiary Guaranty, as applicable.

“Guaranty Agreement” means a supplemental indenture, in a form satisfactory to the Trustee, pursuant to which a Subsidiary Guarantor guarantees the Company’s obligations with respect to the Securities on the terms provided for in this Indenture.

“Harvest Management Services Agreement” means the management agreement, dated as of April 19, 2002 between Harvest Partners, Inc. and the Company entered into in connection with the Transaction.

“Hedging Obligations” of any Person means the obligations of such Person pursuant to any Interest Rate Agreement or Currency Agreement or similar Agreement.

“Holder” or “Securityholder” means the Person in whose name a Security is registered on the Registrar’s books.

“Holding Companies” means Parent, AMH and AMH II or any other direct or indirect parent of the Company.

“Incur” means issue, assume, Guarantee, incur or otherwise become liable for; provided, however, that any Indebtedness or Capital Stock of a Person existing at the time such Person becomes a Restricted Subsidiary (whether by merger, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Person at the time it becomes a Restricted Subsidiary. The term “Incurrence” when used as a noun shall have a correlative meaning.

“Indebtedness” means, with respect to any Person on any date of determination (without duplication):

(1) the principal in respect of (A) indebtedness of such Person for borrowed money and (B) indebtedness evidenced by notes, debentures, bonds or other similar instruments for the payment of which such Person is responsible or liable, including, in each case, any premium on such indebtedness to the extent such premium has become due and payable;

(2) all Capital Lease Obligations of such Person and all Attributable Debt in respect of Sale/Leaseback Transactions entered into by such Person;

(3) all obligations of such Person issued or assumed as the deferred purchase price of property, all conditional sale obligations of such Person and all obligations of such Person under any title retention agreement (but excluding trade accounts payable arising in the ordinary course of business);

 

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(4) all obligations of such Person for the reimbursement of any obligor on any letter of credit, bankers’ acceptance or similar credit transaction (other than obligations with respect to letters of credit securing obligations (other than obligations described in clauses (1) through (3) above) entered into in the ordinary course of business of such Person to the extent such letters of credit are not drawn upon or, if and to the extent drawn upon, such drawing is reimbursed no later than the tenth Business Day following payment on the letter of credit);

(5) the amount of all obligations of such Person with respect to the redemption, repayment or other repurchase of any Disqualified Stock of such Person or, with respect to any Preferred Stock of any Subsidiary of such Person, the principal amount of such Preferred Stock to be determined in accordance with this Indenture (but excluding, in each case, any accrued dividends);

(6) all obligations of the type referred to in clauses (1) through (5) of other Persons and all dividends of other Persons for the payment of which, in either case, such Person is responsible or liable, directly or indirectly, as obligor, guarantor or otherwise, including by means of any Guarantee;

(7) all obligations of the type referred to in clauses (1) through (6) of other Persons secured by any Lien on any property or asset of such Person (whether or not such obligation is assumed by such Person), the amount of such obligation being deemed to be the lesser of the value of such property or assets and the amount of the obligation so secured; and

(8) to the extent not otherwise included in this definition, Hedging Obligations of such Person.

The amount of Indebtedness of any Person at any date shall be the outstanding balance at such date of all unconditional obligations as described above and the maximum liability, upon the occurrence of the contingency giving rise to the obligation, of any contingent obligations at such date; provided, however, that in the case of Indebtedness sold at a discount, the amount of such Indebtedness at any time will be the accreted value thereof at such time.

“Indenture” means this Indenture as amended or supplemented from time to time.

“Independent Qualified Party” means an investment banking firm, accounting firm or appraisal firm of national standing; provided, however, that such firm is not an Affiliate of the Company.

“Interest Rate Agreement” means the obligations of any Person pursuant to any arrangement with any other Person, whereby, directly or indirectly, such Person is entitled to receive from time to time periodic payments calculated by applying either a floating or a fixed rate of interest on a stated notional amount in exchange for periodic payments made by such other Person calculated by applying a fixed or a floating rate of interest on the same notional amount and shall include interest rate swaps, caps, floors, collars and similar agreements to protect such Person against fluctuations in interest rates.

 

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“Investcorp Management Services Agreements” means (i) the Agreement for Management Advisory, Strategic Planning and Consulting Services, dated as of December 22, 2004, between Investcorp International Inc. and the Company, (ii) the Financing Advisory Services Agreement, dated as of December 22, 2004, between Investcorp International Inc. and the Company, and (iii) M&A Advisory Services Agreement, dated as of December 5, 2004, between Investcorp Internatio