Limited Liability Company Securityholders Agreement

Exhibit 10.7


EXECUTION COPY


LIMITED LIABILITY COMPANY SECURITYHOLDERS AGREEMENT


Dated June 30, 2006


Among


HAWKEYE INTERMEDIATE, LLC AND THE OTHER PARTIES HERETO


TABLE OF CONTENTS


Page


ARTICLE I

REPRESENTATIONS AND WARRANTIES OF THE PARTIES

1


1.1

Representations and Warranties of the Company

1


1.2

Representations and Warranties of the Securityholders

1


ARTICLE II

VOTING AGREEMENTS

2


2.1

Election of Managers

2


2.2

Actions Requiring Certain Approvals

4


2.3

Other Voting Matters

4


ARTICLE III

TRANSFERS OF SECURITIES

4


3.1

General Restrictions on Transfers of Securities

4


3.2

Right of First Refusal

5


3.3

Rights of Co-Sale

6


3.4

Securities Act Compliance

7


3.5

Transfers in Violation of Agreement

7


3.6

Transfers and Other Actions in Connection with Public Offering or Recapitalization

7


ARTICLE IV

TAKE-ALONG RIGHTS ON APPROVED SALE

9


4.1

Take-Along Right

9


ARTICLE V

INFORMATION RIGHTS

11


5.1

Information Rights

11


ARTICLE VI

PRE-EMPTIVE RIGHTS

11


6.1

Issuance of New Securities

11


ARTICLE VII

AMENDMENT AND TERMINATION

13


7.1

Amendment and Waiver

13


7.2

Termination of Agreement

13


7.3

Termination as to a Party

13


ARTICLE VIII

MISCELLANEOUS

13


8.1

Certain Defined Terms

13


8.2

Legends

18


8.3

Severability

19


8.4

Entire Agreement

19


i


8.5

Successors and Assigns

19


8.6

Counterparts

19


8.7

Remedies

19


8.8

Notices

20


8.9

Governing Law

20


8.10

Consent of THL

21


8.11

Descriptive Headings

21


ii


LIMITED LIABILITY COMPANY SECURITYHOLDERS AGREEMENT


THIS LIMITED LIABILITY COMPANY SECURITYHOLDERS AGREEMENT (this " Agreement" ) is entered into as of June 30, 2006 by and among (i) Hawkeye Intermediate, LLC, a Delaware limited liability company (the " Company" ), (ii) Hawkeye Holdings, L.L.C., an Iowa limited liability company (" HH" ), (iii) THL Hawkeye Acquisition Partners, THL Hawkeye Acquisition Partners II, THL Hawkeye Acquisition Partners III, and certain other parties identified on the signature pages hereto as a " THL Holder" that is or becomes a holder of Units (each, a " THL Holder" and collectively " THL" ), and (iv) the initial parties to this Agreement who are identified as Management Holders on the signature pages hereto (each, a " Management Holder ," collectively, the " Management Holders" ). HH, THL, the Management Holders and each other holder of Securities that is or may become a party to this Agreement as contemplated hereby are sometimes referred to herein collectively as the " Securityholders" and individually as a " Securityholder" . The Securities (as defined below) owned by each Securityholder are set forth on Schedule A attached hereto.


The parties hereto agree as follows:


ARTICLE I REPRESENTATIONS AND WARRANTIES OF THE PARTIES


1.1 Representations and Warranties of the Company . The Company hereby represents and warrants to the Securityholders that as of the date of this Agreement:


(a) it is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware, it has full power and authority to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby, and the execution, delivery and performance by it of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary limited liability company action;


(b) this Agreement has been duly and validly executed and delivered by the Company and constitutes a legal and binding obligation of the Company, enforceable against the Company in accordance with its terms; and


(c) the execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the transactions contemplated hereby will not, with or without the giving of notice or lapse of time, or both (i) violate any provision of law, statute, rule or regulation to which the Company is subject, (ii) violate any order, judgment or decree applicable to the Company or (iii) conflict with, or result in a breach or default under, any term or condition of the Company' s organizational documents or any agreement or instrument to which the Company is a party or by which it is bound.


1.2 Representations and Warranties of the Securityholders . Each Securityholder (as to himself or itself only) represents and warrants to the Company and the other Securityholders that, as of the time such Securityholder becomes a party to this Agreement:


(a) this Agreement (or the separate joinder agreement executed by such Securityholder) has been duly and validly executed and delivered by such Securityholder, and this Agreement constitutes a legal and binding obligation of such Securityholder, enforceable against such Securityholder in accordance with its terms; and


(b) the execution, delivery and performance by such Securityholder of this Agreement (or any joinder to this Agreement, if applicable) and the consummation by such Securityholder of the transactions contemplated hereby (and thereby, if applicable) will not, with or without the giving of notice or lapse of time, or both, (i) violate any provision of law, statute, rule or regulation to which such Securityholder is subject, (ii) violate any order, judgment or decree applicable to such Securityholder or (iii) conflict with, or result in a breach or default under, any term or condition of any agreement or other instrument to which such Securityholder is a party or by which such Securityholder is bound.


ARTICLE II VOTING AGREEMENTS


2.1 Election of Managers .


(a) Size and Composition of the Board . The holders of a majority of the outstanding Class A Common Units shall be entitled to elect the managers to the Board. Each Securityholder, other than the Company, that is a party to this Agreement hereby agrees that such Securityholder will vote, or cause to be voted, all voting securities of the Company over which such Securityholder has the power to vote or direct the voting, and will take all other necessary or desirable reasonable actions within such Securityholder' s control, and the Company will take all necessary and desirable reasonable actions within its control, to cause the authorized number of managers of the Board to be established at up to nine (9) managers, with the initial Board fixed at seven (7) managers, and cause to be continued in office, the following individuals:


(i) one (1) manager designated by HH (the " HH Manager" ); provided , however , that HH shall lose its right to designate a manager when HH (or the HH Members) fails to own at least a majority of the Preferred Units and Class A Common Units it owns as of the date hereof;


(ii) four (4) managers designated by the THL Holders as follows: one (1) manager designated by THL Hawkeye Acquisition Partners or its designee (with the Company to be notified of such designation), two (2) managers designated by THL Hawkeye Acquisition Partners II or its designee (with the Company to be notified of such designation) and one (1) manager designated by THL Hawkeye Acquisition Partners III or its designee (with the Company to be notified of such designation) (collectively, the " THL Managers" ); and


(iii) one (1) manager who shall be the Chief Executive Officer of the Company.


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In addition, the Board will have the right to appoint up to an additional three (3) independent members of the Board, none of whom shall be either an employee of the Company or its Subsidiaries or an Affiliate of THL or HH.


(b) Number of Votes . At each meeting of the Board (or any committee thereof) at which a quorum is present, each manager shall be entitled to one vote on each matter to be voted on at such meeting.


(c) Resignation and Removal . If at any time any manager ceases to serve on the Board (whether due to resignation, removal or otherwise), the Securityholder(s) shall designate a successor manager to fill the vacancy created thereby on the terms and subject to the conditions of paragraph (a) above. If at any time an HH Manager who is an employee of the Company ceases his employment with the Company, such HH Manager shall be removed from the Board and HH shall designate a new HH Manager. Each Person that is a party hereto agrees to vote, or cause to be voted, all voting securities of the Company over which such Person has the power to vote or direct the voting, and shall take all such other reasonable actions as shall be necessary or desirable, to cause the designated successor to be elected to fill such vacancy. Any party or parties hereto entitled to designate a specific manager, may remove such manager, at any time and from time to time, with or without cause (subject to applicable law or the LLC Agreement), in such party' s or parties' sole discretion, and after written notice to each of the parties hereto of the new designee to replace such manager, the Securityholders shall promptly vote, or cause to be voted, all voting securities of the Company over which such Securityholder has the power to vote or direct the voting, and will take all other necessary or desirable reasonable actions within such Securityholder' s control, to elect such designee to the Board in accordance with this Section 2.1 . To the extent any Securityholder entitled to designate a manager pursuant to Section 2.1(a) fails to do so, the individual currently serving as a manager will continue in office until his or her successor is designated and elected.


(d) Removal for Cause . Nothing in this Agreement shall be construed to impair any rights that the Securityholders of the Company may have to remove any manager for cause under applicable law or the LLC Agreement. No such removal of an individual designated pursuant to this Section 2.1 for cause shall affect any of the Securityholders' rights to designate a different individual pursuant to this Section 2.1 to fill the position from which such individual was removed.


(e) Committees of the Board . The Board shall establish an audit committee, compensation committee and nominating committee and such other committees as the Board from time to time may determine. Each committee shall be comprised of three (3) members, two (2) of which shall be THL Managers as provided above.


(f) Transfer of Rights to Designate Managers . In the event any of the THL Holders shall Transfer any of their Preferred Units and Class A Common Units to a third party, THL shall have the right, if it so elects, to permit such Transferee thereafter to have the right to designate such number of managers (who theretofore were THL Managers) as is determined by THL and that is reasonably proportionate to the Preferred Units and


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Class A Common Units transferred to such Transferee. HH' s right to designate a manager is not transferable, other than to the HH Members acting by the consent of the holders of a majority of the Units held by the HH Members.


2.2 Actions Requiring Certain Approvals .


(a) Board Approval . Exhibit A hereto sets forth a list of actions on the part of the Company or its Subsidiaries that require approval of the Board. Notwithstanding the foregoing, the payment of any fees by the Company to any Securityholder or their Affiliates (other than pursuant to the Management Agreement as in effect on the date hereof) or any transactions between the Company and any Affiliate shall require the approval of a majority of the disinterested members of the Board.


(b) Member Approval . The actions on the part of the Company or its subsidiaries set forth on Exhibit A shall also require the approval of the holders of a majority of the outstanding Preferred Units.


2.3 Other Voting Matters . In order to effectuate the provisions of Sections 3.6 and 4.1 , each HH Member and each Management Holder grants to the Chief Executive Officer of the Company, or if he or she shall be unable to exercise this proxy due to illness or absence or if the position of Chief Executive Officer of the Company shall be vacant, to the President and Chief Financial Officer of the Company, a proxy to vote at any annual or special meeting of Securityholders, or to take any action by written consent in lieu of such meeting with respect to, or to otherwise take action in respect of, all of the Securities owned or held of record by such holder in connection with the matters set forth in Sections 3.6 and 4.1 in accordance with the provisions of Sections 3.6 and 4.1 . EACH OF THE PROXIES GRANTED HEREBY IS IRREVOCABLE AND IS COUPLED WITH AN INTEREST. To effectuate the provisions of this Section 2 , the secretary of the Company, or if there be no secretary, such other officer or employee of the Company or as the Board may appoint to fulfill the duties of the secretary, shall not record any vote or consent or other action contrary to the terms of this Section 2 .


ARTICLE III TRANSFERS OF SECURITIES


3.1 General Restrictions on Transfers of Securities .


(a) General . Prior to the second anniversary of the Closing Date, neither HH nor any Management Holder may Transfer any Units without the prior written consent of the Board. Notwithstanding anything to the contrary contained in this Agreement, HH and each Management Holder may Transfer without the necessity of prior approval all or any of its, his or her Units pursuant to an Exempt Transfer and the restrictions in this Section 3.1(a) shall not apply to any Exempt Transfer; provided , however , that Preferred Units or Class A Common Units may not be transferred separately. If a Unitholder proposes to transfer Preferred Units or Class A Common Units, it shall also transfer a pro rata amount of the other class of interests, as the case may be.


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(b) Execution by Transferee of Counterpart Signature Page . No Transfer of any Securities by any Securityholder, other than a Public Sale, shall become effective unless and until the Transferee (unless such Transferee already is a party to this Agreement) executes and delivers to the Company a counterpart to this Agreement and the LLC Agreement, agreeing to be treated in the same manner and have the same status as the transferring Securityholder. Upon such Transfer and such execution and delivery, the Transferee shall be bound by, and entitled to the benefits of this Agreement with respect to the Transferred Securities in the same manner as the transferring Securityholder. Any attempted Transfer of Securities by any Securityholder not in accordance with this Section 3.1 shall not be effective and shall be void.


(c) HH Voting Matters . If HH makes a distribution in kind to any HH Member, any action requiring the consent or vote of HH hereunder will require the consent of the holders of a majority of the Units held by the HH Members.


3.2 Right of First Refusal .


(a) After the second anniversary of the Closing Date, if HH or any Management Holder (the " Transferring Holder" ) proposes to Transfer any Units to a third party (the " Proposed Transferee" ), then the Transferring Holder shall, before such Transfer, deliver to the Company at least twenty (20) days' prior written notice of such proposed Transfer (the " Transfer Notice" ) and the terms of such Transfer, including (A) the number of Units to which the Transfer relates (the " Transfer Units" ), (B) the name and address of the proposed Transferee, and (C) the proposed amount and type of consideration and the terms and conditions of payment proposed by the Transferring Holder.


(b) The Company (or its designees, which may include other Securityholders) shall have the first right to purchase all, but not less than all, of the Transfer Units. If the Company (or its designee) desires to purchase all of the Transfer Units, it shall communicate in writing its election to purchase all of the Transfer Units to the Transferring Holder, which communication shall be given within ten (10) days of the date the Transfer Notice was received by the Company. Such communication shall be deemed to constitute a valid, legally binding and enforceable agreement for the sale and purchase of all of the Transfer Units. Sales of the Transfer Units to be sold to the Company (or its designee) pursuant to this Section 3.2 shall be made at the offices of the Company within sixty (60) days following the date the Transfer Notice was given.


(c) If the Company (or its designee) does not purchase all of the Transfer Units, then the Transfer Units may be sold by the Transferring Holder at any time within ninety (90) days after the date the Transfer Notice was made, subject to the provisions of this Article III . Any such sale shall be to the Proposed Transferee at not less than the price and upon other terms and conditions, if any, not more favorable to the Proposed Transferee than those specified in the Transfer Notice. If the Transfer Units are not sold within such 90-day period, they shall continue to be subject to the requirements of a prior offer pursuant to this Article III , and may not be transferred except in compliance with the provisions of this Article III .


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(d) The provisions of Section 3.2 shall not apply to any Exempt Transfer.


3.3 Rights of Co-Sale .


(a) Tag-Along Rights . Prior to (i) HH making any Transfer of Units (other than a Transfer described in Section 3.3(b) ) with respect to which the Company does not elect to purchase all of such Units pursuant to Section 3.2 , and (ii) THL making any Transfer of Units (other than a Transfer described in Section 3.3(b) ), such holder of Units proposing to make such a Transfer (for purposes of this Section 3.3 , a " Selling Holder" ) shall give at least fifteen (15) days' prior written notice to each other Securityholder (for purposes of this Section 3.3 , each an " Other Holder" ), and the Company, which notice (for purposes of this Section 3.3 , the " Sale Notice" ) shall identify the Units that are proposed to be sold (for purposes of this Section 3.3 , the " Co-Sale Offered Securities" ), and describe in reasonable detail the terms and conditions of such proposed Transfer and identify each prospective Transferee. Any of the Other Holders may, within ten (10) days of the receipt of the Sale Notice, give written notice (each, a " Tag-Along Notice" ) to the Selling Holder that such Other Holder wishes to participate in such proposed Transfer upon the terms and conditions set forth in the Sale Notice, which Tag-Along Notice shall specify the Units such Other Holder desires to include in such proposed Transfer; provided , however , that (1) each Other Holder shall be required, as a condition to being permitted to sell Units pursuant to this Section 3.3(a) in connection with a Transfer of Co-Sale Offered Securities, to sell its proportionate amount (based on the respective Pro Rata Amounts of the Selling Holder and each Other Holder exercising tag-along rights under this Section 3.3(a) ) of the Units proposed to be sold by the Selling Holder and (2) to exercise its tag-along rights hereunder, each Other Holder must agree to make to the Transferee the same representations, warranties, covenants, indemnities and agreements as the Selling Holder agrees to make in connection with the Transfer of the Co-Sale Offered Securities (except that in the case of representations and warranties pertaining specifically to, or covenants made specifically by, the Selling Holder, the Other Holders shall make comparable representations and warranties pertaining specifically to (and, as applicable, covenants by) themselves), and must agree to bear his or its ratable share (which shall be proportionate based on the value of Units that are Transferred but shall not exceed the amount of proceeds received in connection with such Transfer) of all liabilities to the Transferees arising out of representations, warranties and covenants (other than those representations, warranties and covenants that pertain specifically to a given Securityholder, who shall bear all of the liability related thereto), indemnities or other agreements made in connection with the Transfer. Each participating Other Holder will bear its or his pro-rata share (based upon the relative amount of Units sold) of all reasonable and customary costs of the sale of Units pursuant to this Section 3.3(a) to the extent such costs are not otherwise paid by the Transferee. If any holder of Class B Common Units wishes to participate in any sale pursuant to this Section 3.3(a) , appropriate economic adjustments to the Class B Common Units offered for sale in the Tag-Along Notice may be made to reflect the economic value of the Class B Common Units (as determined in accordance with Section 5.4 of the LLC Agreement). Any holder of Class B Common Units shall only be entitled to participate in sales of Common Units hereunder.


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If none of the Other Holders gives the Selling Holder a Tag-Along Notice prior to the expiration of the 10-day period for giving Tag-Along Notices with respect to the Transfer proposed in the Sale Notice, then (notwithstanding the first sentence of this Section 3.3(a) ) the Selling Holder may Transfer such Co-Sale Offered Securities on the terms and conditions set forth, and to or among any of the Transferees identified (or Affiliates of Transferees identified), in the Sale Notice at any time within ninety (90) days after expiration of the 10-day period for giving Tag-Along Notices with respect to such Transfer. Any such Co-Sale Offere ...