**EXHIBIT 10.31**
**EXECUTION COPY**
**TAX SHARING AGREEMENT**
     This Tax Sharing Agreement (the “Agreement”), dated as of March 4, 2004, is made byand among AMH HOLDINGS, INC., a Delaware corporation (“AMH”), ASSOCIATED MATERIALS HOLDINGSINC., a Delaware corporation (“Holdings”), and ASSOCIATED MATERIALS INCORPORATED, aDelaware corporation (“AMI”).
RECITALS
     WHEREAS, AMH, Holdings and AMI are members of an affiliated group (the “AffiliatedGroup”) as defined in Section 1504(a) of the Internal Revenue Code of 1986, as amended (the“Code”); and
     WHEREAS, the Affiliated Group intends to file consolidated United States federal, andconsolidated, combined or unitary state and local, income tax returns; and
     WHEREAS, AMH, Holdings and AMI desire to establish a method for (i) allocating theconsolidated United States federal, and consolidated, combined or unitary state and local, incometax liabilities of the Affiliated Group among the AMH, Holdings and AMI and (ii) reimbursing AMHfor payment of such tax liabilities; and
     NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties agreeas follows:
     1. Payment of Income Taxes of Affiliated Group. AMH shall file all consolidatedUnited States federal income tax returns on behalf of the Affiliated Group and pay all consolidatedUnited States federal income tax liabilities of the Affiliated Group. In addition, AMH shall fileall Consolidated State Returns (as such term is defined in Section 4 of this Agreement) on behalfof the Affiliated Group and pay to the appropriate taxing authority all tax liabilities of theAffiliated Group with respect to such Consolidated State Returns.
     2. Contribution by Member for Tax Liability. Holdings and/or AMI shall compute andpay to AMH, in the aggregate, an amount equal to the consolidated United States federal incometaxes that Holdings and AMI, and any direct or indirect subsidiaries of the foregoing (the“Subsidiaries”), would be required to pay with respect to such taxable year were Holdings,AMI and the Subsidiaries to pay such taxes on a hypothetical separate consolidated basis.
     3. Estimated Tax Payments. Holdings and/or AMI shall compute on the same basis as setforth in Section 2 their respective amount of the estimated United States federal income taxinstallments due for each taxable period, and Holdings and/or AMI shall pay suchamount, in the aggregate, to AMH on a timely basis. Any amounts paid under this Section 3shall be credited against the amounts payable by Holdings and/or AMI to AMH under Section 2.
     4. State and Local Taxes. If, under the laws of any state or locality in which theAffiliated Group is subject to income tax, AMH, Holdings and AMI are required or permitted to filetheir income tax returns on a consolidated, combined or unitary basis (such a tax return, a
 

 

“Consolidated State Return”), then Holdings and/or AMI shall compute and pay to AMH theaggregate tax liabilities and estimated tax installment liabilities of the Affiliated Group withrespect to the Consolidated State Returns in the manner set forth in Sections 2 and 3.
     5. Deficiencies and Refunds. If there should be any factual circumstance (includingany tax audit) or any application or amendment of any tax laws, either retroactively orprospectively, that would affect the income tax liability of Holdings, AMI and the Subsidiaries forany year, or portion thereof, and that if applied to the tax computed under Section 2 or 4 for suchperiod would have resulted in a determination that the amount of tax computed and paid to AMH byHoldings and/or AMI under Section 2 or 4, as the case may be, was greater than the amount of thecorrect tax liability of Holdings, AMI and the Subsidiaries for such period, AMH will refund toHoldings or AMI the amount of the excess payment. Likewise, if any such circumstance or anyapplication or amendment of the tax laws would have resulted in a determination that the amount ofthe tax computed under Section 2 or 4 was understated and that, therefore, the amount of correcttax liability of Holdings, AMI and the Subsidiaries for such period was in excess of the amountpaid to AMH under Section 2 or 4, as the case may be, then Holdings and/or AMI shall pay to AMH, inthe aggregate, such excess amount.
     6. Time and Form of Payment. Payments pursuant to Sections 2, 3, 4 and 5 hereof shallbe made by check no later than seven (7) days prior to the due date of the Affiliated Group’sconsolidated United States federal income tax return or the relevant Consolidated State Return, asthe case may be, for the taxable year with respect to which such a return is filed on behalf of theAffiliated Group (hereinafter referred to as the “Taxable Period”), not includingextensions. If the due date for such return is extended, such payments shall be made on anestimated basis and shall be recalculated no later than seven (7) days prior to the extended duedate for such return, and any difference between such recalculated payments and such estimatedpayments shall be paid by check to the party entitled thereto at the time of such recalculationwith interest from such due date at the rate provided for in Section 6621 of the Internal RevenueCode of 1986, as amended.
     7. Resolution of Disputes. Any dispute concerning the calculation or basis ofdetermination of any payment provided for hereunder shall be resolved by the independent publicaccountants for AMH, whose judgment shall be final, conclusive and binding upon the parties.
     8. Cooperation. Holdings and AMI shall, and shall cause the Subsidiaries to,cooperate with AMH in the filing of any consolidated United States federal income tax return orConsolidated State Return for the Affiliated Group which AMH elects to file by maintaining suchbooks and records and, within sixty (60) days following the close of every Taxable Period,providing such information as may be necessary or useful in the filing of such returns andexecuting any documents and taking any actions which AMH may reasonably request inconnection therewith. AMH, Holdings and AMI will provide one another such informationconcerning such returns and the application of this Agreement as AMH, Holdings or AMI mayreasonably request of one another.
     9. Adjudications. In any audit, conference or other proceeding with the InternalRevenue Service or any other taxing authority, or in any judicial proceedings concerning
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thedetermination of the United States federal, state or local income tax liabilities of the AffiliatedGroup, the Affiliated Group shall be represented by persons selected by AMH. The settlement andterms of settlement of any issues relating to such proceeding shall be in the sole discretion ofAMH, and each of Holdings and AMI hereby appoints AMH as its agent for the purpose of proposing andconcluding any such settlement.
     10. Counterparts. This Agreement may be executed in two or more counterparts, each ofwhich shall constitute an original, but all of which, when taken together, shall constitute but oneinstrument.
     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed by their dulyauthorized representative as of the date first above written.       AMH HOLDINGS, INC.      By: /s/ D. Keith LaVanway       Name: D. Keith LaVanwayTitle: Chief Financial Officer       ASSOCIATED MATERIALS HOLDINGS INC.      By: /s/ D. Keith LaVanway       Name: D. Keith LaVanwayTitle: Chief Financial Officer       ASSOCIATED MATERIALS INCORPORATED      By: /s/ D. Keith LaVanway       Name: D. Keith LaVanwayTitle: Chief Financial Officer
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