Document:

Exhibit 10.3

 

REGISTRATION
RIGHTS AGREEMENT

 

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”),
dated as of April 6, 2005, among Stile Holding Corp., a Canadian federal
corporation (the “Company”), KKR Millennium Fund (Overseas), Limited
Partnership, an Alberta limited partnership (“KKR Millennium”) and KKR
Partners (International), Limited Partnership, an Alberta limited partnership (“KKR
Partners,” and together with KKR Millennium, the “Investors”).

 

RECITALS

 

WHEREAS, as of the date hereof, KKR Millennium
is the holder of 108,790,000 Common Shares (as defined below) and KKR Partners
is the holder of 1,510,000 Common Shares; and

 

WHEREAS, the Company desires to provide to
the Investors and to each other Holder (as defined below) rights to
registration under the Securities Act (as defined below) and Applicable
Canadian Securities Laws (as defined below) of Registrable Securities (as
defined below), on the terms and subject to the conditions set forth herein.

 

NOW, THEREFORE, in consideration of the premises
and of the mutual covenants and agreements herein contained, the parties hereby
agree as follows:

 

AGREEMENT

 

1.             Definitions.  As used
in this Agreement, the following capitalized terms shall have the following
respective meanings:

 

“Applicable Canadian Securities Laws” means the
securities legislation of each of the provinces and territories of Canada, as
amended from time to time, and the rules, regulations, blanket orders and
orders having application to the Company and forms made or promulgated under
that legislation and the policies, instruments, bulletins and notices of one or
more of the Canadian Securities Authorities.

 

“Canadian Preliminary Prospectus” means a
preliminary prospectus of the Company which qualifies the distribution of
Registrable Securities or other Common Shares, prepared in accordance with
Applicable Canadian Securities Laws, which has been filed with and a receipt
issued therefor by any Principal Canadian Securities Authority, including all
amendments thereto and all material incorporated by reference therein.

 

“Canadian Prospectus” means a final prospectus
of the Company which qualifies the distribution of Registrable Securities or
other Common Shares, prepared in accordance with Applicable Canadian Securities
Laws, which has been filed with and a receipt issued therefor by any Principal
Canadian Securities Authority, including all amendments thereto and all
material incorporated by reference therein.

 

 

“Canadian Securities Authorities” means the
British Columbia Securities Commission, Alberta Securities Commission,
Saskatchewan Financial Services Commission (Securities Division), The Manitoba
Securities Commission, Ontario Securities Commission, Autorité des marchés
financiers du Québec, New Brunswick Securities Commission, Nova Scotia
Securities Commission, Prince Edward Island Securities Office, Government of
Newfoundland and Labrador Securities Division, Department of Government
Services and Land, Securities Registry Northwest Territories, Registrar of
Securities (Yukon Justice), Nunavut Legal Registries, and any successor entity
to such securities authority.

 

“Common Shares” means the common shares in the
capital stock of the Company, no par value per share, and any stock into which
such Common Shares may thereafter be converted or exchanged.

 

“Demand Party” means (a) each of the
Investors or (b) any other Holder or Holders, including, without limitation,
any Person that may become an assignee of an Investor’s rights hereunder; provided
that to be a Demand Party under this clause (b), a Holder or Holders must,
either individually or in aggregate with all other Holders with whom it is
acting together to demand registration, own at least 1% of the total number of
Registrable Securities.

 

“Exchange Act” means The Securities
Exchange Act of 1934, as amended from time to time, and the regulations, rules
and instruments promulgated thereunder.

 

“Hedging Counterparty” means a
broker-dealer registered under Section 15(b) of the Exchange Act or an
affiliate thereof or any other financial institution or third party.

 

“Hedging Transaction” means any
transaction involving a security linked to the Registrable Class Securities or
any security that would be deemed to be a “derivative security” (as defined in
Rule 16a-1(c) under the Exchange Act) with respect to the Registrable Class
Securities or any transaction (even if not a security) which would (were it a
security) be considered such a derivative security, or which transfers some or
all of the economic risk of ownership of the Registrable Class Securities,
including, without limitation, any forward contract, equity swap, put or call,
put or call equivalent position, collar, non-recourse loan, sale of
exchangeable security or similar transaction. For the avoidance of doubt, the
following transactions shall be deemed to be Hedging Transactions:

 

(a)           transactions
by a Holder in which a Hedging Counterparty engages in short sales of
Registrable Class Securities pursuant to a prospectus and may use Registrable
Securities to close out its short position;

 

(b)           transactions
pursuant to which a Holder sells short Registrable Class Securities pursuant to
a prospectus and delivers Registrable Securities to close out its short
position; and

 

(c)           transactions
by a Holder in which the Shareholder delivers, in a transaction exempt from
registration under the Securities Act and/or Applicable

 

 

Canadian Securities Laws, Registrable
Securities to the Hedging Counterparty who will then publicly resell or
otherwise transfer such Registrable Securities pursuant to a prospectus or an
exemption from registration under the Securities Act and/or Applicable Canadian
Securities Laws.

 

“Holder” means each of the Investors
and any other holder of Registrable Securities (including any direct or
indirect transferee of an Investor who agrees in writing to be bound by the
provisions of this Agreement).

 

“OSA” means the Securities Act
(Ontario) and the regulations, rules and policies made thereunder, as amended
from time to time.

 

“Person” means any individual,
partnership, joint venture, corporation, limited liability company, trust,
unincorporated organization, government or any department or agency thereof or
any other entity.

 

“Principal Canadian Securities Authorities”
means, collectively, the British Columbia Securities Commission, Alberta
Securities Commission, Ontario Securities Commission, Autorité des marchés
financiers du Québec, and any successor entity of such securities authority.

 

“Registrable Class Securities” means
securities of the Company that are of the same class and series as the
Registrable Securities.

 

“Registrable Securities” means any
Common Shares held by the Investors, and any Common Shares which may be issued
or distributed in respect thereof by way of stock dividend or stock split or
other distribution, recapitalization, reclassification or similar event. Any
particular Registrable Securities that are issued shall cease to be Registrable
Securities when (i) a receipt has been issued by any Canadian Securities
Authority for a Canadian Prospectus and such Registrable Securities have been
distributed pursuant to the plan of distribution set forth in such Canadian
Prospectus, (ii) the Company shall have become a reporting issuer (as such term
is defined in the OSA) and such Registrable Securities are freely transferable
under Applicable Canadian Securities Laws and are not subject to any regulatory
or other escrow requirement, (iii) a Registration Statement with respect to the
sale by the Holder of such Registrable Securities shall have become effective
under the Securities Act and such Registrable Securities shall have been
disposed of in accordance with such Registration Statement, (iv) such
Registrable Securities shall have been distributed to the public pursuant to
Rule 144 (or any successor provision) under the Securities Act, (v) such
Registrable Securities shall have been otherwise transferred (including
pursuant to any prospectus), new certificates for such Registrable Securities
not bearing a legend restricting further transfer under the Securities Act and
Applicable Canadian Securities Laws shall have been delivered by the Company
and subsequent disposition of such Registrable Securities shall not require
registration or qualification of such Registrable Securities under the
Securities Act, Applicable Canadian Securities Laws or any federal, state,
provincial or territorial securities or blue sky laws then in force or (vi)
such Registrable Securities shall have ceased to be outstanding.

 

 

“Registration Expenses” means any and
all expenses incident to performance of or compliance with this Agreement,
including, without limitation, (i) all SEC, Canadian Securities Authority and
stock exchange or National Association of Securities Dealers, Inc. (the “NASD”)
registration and filing fees (including, if applicable, the fees and expenses
of any “qualified independent underwriter,” as such term is defined in
Schedule E to the By-laws of the NASD, and of its counsel), (ii) all fees
and expenses of complying with federal, state, provincial or territorial
securities or blue sky laws (including fees and disbursements of counsel for
the underwriters in connection with blue sky qualifications of the Registrable
Securities), (iii) all printing, messenger and delivery expenses, (iv) all fees
and expenses incurred in connection with the listing of the Registrable
Securities on any securities exchange pursuant to clause (viii) of Section 4
and all rating agency fees, (v) the fees and disbursements of counsel for the
Company (including the fees and disbursements of lead Canadian counsel to the
Company and any required local counsel in each province or territory of Canada,
and including any fees and disbursements with respect to translation and
preparation of a French language version of a Canadian Preliminary Prospectus or
Canadian Prospectus) and of its independent public accountants and chartered
accountants (including the expenses of any special audits and/or “cold comfort”
letters required by or incident to such performance and compliance), (vi) the
reasonable fees and disbursements of counsel selected pursuant to Section 7
hereof by the Holders of the Registrable Securities being registered to
represent such Holders in connection with each such registration, (vii) any
fees and disbursements of underwriters customarily paid by the issuers or
sellers of securities, including liability insurance if the Company so desires
or if the underwriters so require, and the reasonable fees and expenses of any
special experts retained in connection with the requested registration, but excluding
underwriting discounts and commissions and transfer taxes, if any, and (viii)
other reasonable out-of-pocket expenses of Holders (provided that such expenses
shall not include expenses of counsel other than those provided for in clause
(vi) above).

 

“Registration Statement” means any
registration Statement of the Company filed under the Securities Act which
covers any of the Registrable Securities or Common Shares pursuant to the
provisions of this Agreement, including the prospectus related thereto,
amendments and supplements to such registration statement, including
post-effective amendments, all exhibits and all material incorporated by
reference in such registration statement.

 

“Securities Act” means The Securities
Act of 1933, as amended from time to time, and the regulations, rules and
instruments promulgated thereunder.

 

“SEC” means the U.S. Securities and
Exchange Commission.

 

“Securities Regulators” means the SEC,
the Canadian Securities Authorities, and any of their successors.

 

2.             Incidental Registrations. (a)  Right to Include Registrable Securities.
If the Company at any time after the date hereof proposes to register its
Common Stock under the Securities Act or Applicable Canadian Securities Laws
(other than a registration on Form S-4 or

 

 

S-8, or any successor or other
forms promulgated for similar purposes), whether or not for sale for its own
account (but excluding in a registration under Section 3 hereof), in a manner
which would permit registration of Registrable Securities for sale to the
public under the Securities Act and/or Applicable Canadian Securities Laws, it
will, at each such time, give prompt written notice to all Holders of
Registrable Securities of its intention to do so and of such Holders’ rights
under this Section 2. Upon the written request of any such Holder made within
15 days after the receipt of any such notice (which request shall specify the
Registrable Securities intended to be disposed of by such Holder), the Company
will use its best efforts to effect the registration under the Securities Act
or Applicable Canadian Securities Laws, as the case may be, of all Registrable
Securities which the Company has been so requested to register by the Holders
thereof, to the extent required to permit the disposition of the Registrable
Securities so to be registered; provided that (i) if, at any time after
giving written notice of its intention to register any securities and prior to
the effective date of the Registration Statement or Canadian Preliminary
Prospectus filed in connection with such registration, the Company shall
determine for any reason not to proceed with the proposed registration of the
securities to be sold by it, the Company may, at its election, give written
notice of such determination to each Holder of Registrable Securities and,
thereupon, shall be relieved of its obligation to register any Registrable
Securities in connection with such registration (but not from its obligation to
pay the Registration Expenses in connection therewith), and (ii) if such registration
involves an underwritten offering, all Holders of Registrable Securities
requesting to be included in the Company’s registration must sell their
Registrable Securities to the underwriters selected by the Company on the same
terms and conditions as apply to the Company, with such differences, including
any with respect to indemnification and liability insurance, as may be
customary or appropriate in combined primary and secondary offerings. If a
registration requested pursuant to this Section 2(a) involves an underwritten
public offering, any Holder of Registrable Securities requesting to be included
in such registration may elect, in writing prior to the effective date of the
Registration Statement or Canadian Preliminary Prospectus filed in connection
with such registration, not to register such securities in connection with such
registration.

 

(b)           Expenses.
The Company will pay all Registration Expenses in connection with each
registration of Registrable Securities.

 

(c)           Priority
in Incidental Registrations. If a registration pursuant to this Section 2
involves an underwritten offering and the managing underwriter advises the
Company in writing that, in its opinion, the number of securities requested to
be included in such registration exceeds the number which can be sold in such
offering, so as to be likely to have an adverse effect on the price, timing or
distribution of the securities offered in such offering as contemplated by the
Company (other than the Registrable Securities), then the Company will include
in such registration (i) first, 100% of the securities the Company proposes to
sell and (ii) second, to the extent of the number of Registrable Securities
requested to be included in such registration pursuant to this Section 2 which,
in the opinion of such managing underwriter, can be sold without having the
adverse effect referred to above, the number of Registrable Securities which
the Holders have requested to be included in such registration, such amount to
be allocated pro rata among all requesting Holders on the basis of the relative
number of shares of Registrable Securities then held by each such Holder
(provided that any shares thereby allocated to any such Holder that exceed such
Holder’s request will be reallocated among the remaining requesting Holders in
like manner).

 

 

3.             Registration on Request. (a)  Request by the Demand Party. At any
time, upon the written request of the Demand Party requesting that the Company
effect the registration under the Securities Act of, and/or qualify for
distribution under Applicable Canadian Securities Laws, all or part of such
Demand Party’s Registrable Securities and specifying the amount and intended
method of disposition thereof, the Company will promptly give written notice of
such requested registration to all other Holders of such Registrable
Securities, and thereupon will, as expeditiously as possible, use its best
efforts to effect the registration under the Securities Act and/or file a
Canadian Prospectus under Applicable Canadian Securities Laws, as the case may
be, of:

 

(i)            such
Registrable Securities which the Company has been so requested to register by
the Demand Party, and

 

(ii)           all
other Registrable Securities of the same class or series as are to be
registered at the request of a Demand Party and which the Company has been
requested to register by any other Holder thereof by written request given to
the Company within 15 days after the giving of such written notice by the
Company (which request shall specify the amount and intended method of
disposition of such Registrable Securities),

 

all to the
extent necessary to permit the disposition (in accordance with the intended
method thereof as aforesaid) of the Registrable Securities so to be registered;
provided that, unless Holders of a majority of the shares of Registrable
Securities held by Holders consent thereto in writing, the Company shall not be
obligated to file a Registration Statement and/or a Canadian Prospectus
relating to any registration request under this Section 3(a) (x) within a
period of nine months after the effective date of any other Registration
Statement or Canadian Prospectus relating to any registration request under
this Section 3(a) which was not effected on Form S-3 (or any successor or
similar short-form Registration Statement) or relating to any registration
effected under Section 2, or (y) if, with respect thereto, the managing
underwriter, a Securities Regulator, the Securities Act, Applicable Canadian
Securities Laws, or the form on which the Registration Statement is to be
filed, would require the conduct of an audit other than the regular audit
conducted by the Company at the end of its fiscal year, in which case the
filing may be delayed until the completion of such regular audit (unless the
Holders of the Registrable Securities to be registered agree to pay the
expenses of the Company in connection with such an audit other than the regular
audit).

 

(b)           Registration
Statement Form. If any registration requested pursuant to this Section 3
which is proposed by the Company to be effected by the filing of a Registration
Statement on Form S-3 (or any successor or similar short-form Registration
Statement) shall be in connection with an underwritten public offering, and if
the managing underwriter shall advise the Company in writing that, in its
opinion, the use of another form of Registration Statement is of material
importance to the success of such proposed offering, then such registration
shall be effected on such other form.

 

(c)           Expenses.
The Company will pay all Registration Expenses in connection with the first
eight (8) registrations of each class or series of Registrable Securities
pursuant to this Section 3 upon the written request of any of the Holders. All
Registration Expenses for any subsequent registrations of Registrable
Securities pursuant to this Section 3 shall be paid pro rata

 

 

by the Company and
all other Persons (including the Holders) participating in such registration on
the basis of the relative number of shares of Common Stock of each such person
who’s Registrable Securities are included in such registration.

 

(d)           Effectiveness
of Registration. A registration requested pursuant to this Section 3 will
not be deemed to have been effected unless (i) the registration relating to
such requested registration is declared effective by the SEC or (ii) a receipt
is obtained for the Canadian Prospectus relating to such requested registration
from all jurisdictions in Canada where the Registrable Securities are intended
to distributed; provided that if, within 180 days after the
effectiveness of a Registration Statement or the issuance of a receipt for a
Canadian Prospectus, the offering of Registrable Securities pursuant to such
registration is interfered with by any stop order, injunction or other order or
requirement of the SEC, Canadian Securities Authorities or any other
governmental agency or court, such registration will be deemed not to have been
effected.

 

(e)           Selection
of Underwriters. If a requested registration pursuant to this Section 3
involves an underwritten offering, the Holders of a majority of the shares of
Registrable Securities which are held by Holders and which the Company has been
requested to register shall have the right to select the investment banker or
bankers and managers to administer the offering; provided, however,
that such investment banker or bankers and managers shall be reasonably
satisfactory to the Company.

 

(f)            Priority
in Requested Registrations. If a requested registration pursuant to this
Section 3 involves an underwritten offering and the managing underwriter
advises the Company in writing that, in its opinion, the number of securities
requested to be included in such registration (including securities of the
Company which are not Registrable Securities) exceeds the number which can be
sold in such offering, the Company will include in such registration only the
Registrable Securities of the Holders requested to be included in such
registration. In the event that the number of Registrable Securities of the Holders
requested to be included in such registration exceeds the number which, in the
opinion of such managing underwriter, can be sold, the number of such
Registrable Securities to be included in such registration shall be allocated
pro rata among all such requesting Holders on the basis of the relative number
of shares of Registrable Securities then held by each such Holder (provided
that any shares thereby allocated to any such Holder that exceed such Holder’s
request shall be reallocated among the remaining requesting Holders in like
manner). In the event that the number of Registrable Securities requested to be
included in such registration is less than the number which, in the opinion of
the managing underwriter, can be sold, the Company may include in such
registration the securities the Company proposes to sell up to the number of
securities that, in the opinion of the underwriter, can be sold.

 

(g)           Additional
Rights. If the Company at any time grants to any other holders of Common
Stock any rights to request the Company to effect the registration under the
Securities Act or Applicable Canadian Securities Laws of any such shares of
Common Stock on terms more favorable to such holders than the terms set forth
in this Section 3, the terms of this Section 3 shall be deemed amended or
supplemented to the extent necessary to provide the Holders such more favorable
rights and benefits.

 

 

4.             Registration Procedures. If
and whenever the Company is required to use its best efforts to effect or cause
the registration of any Registrable Securities under the Securities Act and/or
Applicable Canadian Securities Laws as provided in this Agreement, the Company
will, as expeditiously as possible:

 

(i)            prepare
and, in any event within 60 days after the end of the period within which a
request for registration may be given to the Company pursuant to Section 2 or
3, file with the SEC and/or the applicable Canadian Securities Authorities
(collectively, the “Securities Regulators”) a Registration Statement or
a Canadian Preliminary Prospectus and Canadian Prospectus, as applicable, with
respect to such Registrable Securities and use its best efforts to cause such
Registration Statement to become effective or Canadian Preliminary Prospectus
and Canadian Prospectus to be receipted; provided, however, that
the Company may discontinue any registration of its securities which is being
effected pursuant to Section 2 at any time prior to the effective date of the
Registration Statement or the issuance of a receipt with respect to a Canadian
Preliminary Prospectus or Canadian Prospectus, as applicable, relating thereto;

 

(ii)           prepare
and file with the Securities Regulators such amendments and supplements to such
Registration Statement and the prospectus used in connection therewith, or
Canadian Preliminary Prospectus and Canadian Prospectus, as applicable, as may
be necessary (A) to keep such Registration Statement effective for a period not
in excess of 180 days or (B) to keep the applicable Registrable Securities in
distribution for  a period not in excess
of 180 days after the issuance of a receipt for such Canadian Prospectus, and
to comply with the provisions of the Securities Act, Exchange Act, Applicable
Canadian Securities Laws and the rules and regulations of the Securities Regulators
thereunder with respect to the disposition of all securities covered by such
Registration Statement or Canadian Prospectus during such period in accordance
with the intended methods of disposition by the seller or sellers thereof set
forth in such Registration Statement or Canadian Prospectus; provided
that before filing a Registration Statement or Canadian Prospectus, or any
amendments or supplements thereto, the Company will furnish to counsel selected
pursuant to Section 7 hereof by the Holders of the Registrable Securities
covered by such Registration Statement or Canadian Prospectus to represent such
Holders, copies of all documents proposed to be filed, which documents will be
subject to the review of such counsel;

 

(iii)          furnish
to each seller of such Registrable Securities and any Hedging Counterparty, if
any, such number of copies of such Registration Statement, the prospectus
included in such Registration Statement (including each preliminary prospectus
and summary prospectus), Canadian Preliminary Prospectus and Canadian
Prospectus, as applicable, and of each amendment and supplement thereto (in
each case including all exhibits filed therewith, including any documents
incorporated by reference), in conformity with the requirements of the Securities
Act and Applicable Canadian Securities Laws, and such other documents as such
seller may reasonably request in order to facilitate the disposition of the
Registrable Securities by such seller or Hedging Counterparty;

 

(iv)          use
its best efforts to register or qualify such Registrable Securities

 

 

covered by such registration in such
jurisdictions as each seller shall reasonably request, and do any and all other
acts and things which may be reasonably necessary or advisable to enable such
seller to consummate the disposition in such jurisdictions of the Registrable
Securities owned by such Seller, except that the Company shall not for any such
purpose be required to qualify generally to do business as a foreign
corporation in any jurisdiction where, but for the requirements of this clause
(iv), it would not be obligated to be so qualified, to subject itself to
taxation in any such jurisdiction or to consent to general service of process
in any such jurisdiction;

 

(v)           use
its best efforts to cause such Registrable Securities covered by such
Registration Statement or Canadian Prospectus to be registered with or approved
by such other governmental agencies or authorities as may be necessary to
enable the seller or sellers thereof to consummate the disposition of such
Registrable Securities;

 

(vi)          notify
each seller of any such Registrable Securities covered by such Registration
Statement, Canadian Preliminary Prospectus or Canadian Prospectus, and any
Hedging Counterparty, if applicable, at any time when a prospectus relating to
such Registration  Statement or a
Preliminary Prospectus or Canadian Prospectus, as applicable, is required to be
delivered under the Securities Act or Applicable Canadian Securities Laws, within
the appropriate period mentioned in clause (ii) of this Section 4, of the
Company’s becoming aware that the prospectus included in such Registration
Statement, Canadian Preliminary Prospectus or the Canadian Prospectus, as then
in effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing, and at
the request of any such seller or Hedging Counterparty, prepare and furnish to
such seller and Hedging Counterparty a reasonable number of copies of an
amended or supplemental prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such Registrable Securities, such amended or
supplemental prospectus shall not include an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances then existing;

 

(vii)         use
its best efforts to comply with all applicable rules and regulations of the
Securities Regulators, and make available to its security holders, as soon as
reasonably practicable (but no later than 45 days after the end of any 12-month
period (or 90 days after the end of any 12-month period if such period is a
fiscal year)) after the effective date of the Registration Statement or the
issuance of a receipt for the Canadian Prospectus, an earnings statement which
shall satisfy the provisions of Section 11(a) of the Securities Act and the
rules and regulations promulgated thereunder;

 

(viii)        (A)
use its best efforts to list such Registrable Securities on any securities
exchange on which the Common Stock is then listed if such Registrable
Securities are not already so listed and if such listing is then permitted
under the rules of such exchange; and (B) use its best efforts to provide a
transfer agent and registrar for such Registrable Securities covered by such
Registration Statement or Canadian Prospectus not later than the effective date
of such Registration Statement or the date of issuance of a receipt for

 

 

such Canadian Prospectus;

 

(ix)           enter
into such customary agreements (including an underwriting agreement in
customary form), which may include indemnification provisions in favor of
underwriters and other persons in addition to, or in substitution for the
provisions of Section 5 hereof, and take such other actions as sellers of a
majority of shares of such Registrable Securities, a Hedging Counterparty, if
any, or the underwriters, if any, reasonably request in order to expedite or
facilitate the disposition of such Registrable Securities or any Registrable
Class Securities in connection with any Hedging Transaction;

 

(x)            obtain
a “cold comfort” letter or letters from the Company’s independent public
accounts in customary form and covering matters of the type customarily covered
by “cold comfort” letters as the seller or sellers of a majority of shares of
such Registrable Securities, or in connection with a Hedging Transaction, a Hedging
Counterparty, shall reasonably request;

 

(xi)           make
available for inspection by any seller of such Registrable Securities covered
by such Registration Statement or Canadian Prospectus, by any underwriter
participating in any disposition to be effected pursuant to such Registration
Statement or Canadian Prospectus, by any Hedging Counterparty, and by any
attorney, accountant or other agent retained by any such seller, any such
underwriter, or any such Hedging Counterparty all pertinent financial and other
records, pertinent corporate documents and properties of the Company, and cause
all of the Company’s officers, directors and employees to supply all
information reasonably requested by any such seller, underwriter, Hedging
Counterparty, attorney, accountant or agent in connection with such
Registration Statement or Canadian Prospectus;

 

(xii)          immediately
notify counsel (selected pursuant to Section 8 hereof) for the Holders of
Registrable Securities included in such Registration Statement or Canadian Prospectus
and the managing underwriter or agent, and confirm such notice in writing (A)
when the Registration Statement or Canadian Preliminary Prospectus and Canadian
Prospectus, as applicable, or any post-effective amendment thereto, shall have
become effective or receipted, or any supplement to the prospectus or any
amended prospectus shall have been filed, (B) of the receipt of any comments
from any Securities Regulator, (C) of any request of any Securities Regulator
to amend or supplement the Registration Statement or related prospectus or the
Canadian Preliminary Prospectus and Canadian Prospectus or for additional
information, and (D) of the issuance by any Securities Regulator of any stop
order suspending the effectiveness of the Registration Statement or Canadian
Prospectus or of any order preventing or suspending the use of any preliminary
prospectus relating to such Registration Statement, Canadian Preliminary
Prospectus or Canadian Prospectus, or of the suspension of the qualification of
the Registration Statement or Canadian Prospectus for the offering or sale of
the Registrable Securities in any jurisdiction, or of the institution or
threatening of any proceedings for any of such purposes;

 

(xiii)         make
every reasonable effort to prevent the issuance of any stop order

 

 

suspending the effectiveness of the
Registration Statement or Canadian Prospectus or of any order preventing or
suspending the use of any preliminary prospectus relating to such Registration
Statement, Canadian Preliminary Prospectus or Canadian Prospectus and, if any
such order is issued, to obtain the withdrawal of any such order at the
earliest possible moment;

 

(xiv)        if
requested by the managing underwriter or agent or any Holder of Registrable
Securities covered by the Registration Statement or Canadian Prospectus,
promptly incorporate in a prospectus supplement or post-effective amendment
such information as the managing underwriter or agent or such Holder reasonably
requests to be included therein, including, without limitation, with respect to
the number of Registrable Securities being sold by such Holder to such
underwriter or agent, the purchase price being paid therefor by such
underwriter or agent and with respect to any other terms of the underwritten
offering of the Registrable Securities to be sold in such offering; and make
all required filings of such prospectus supplement or post-effective amendment
as soon as practicable after being notified of the matters incorporated in such
prospectus supplement or post-effective amendment;

 

(xv)         cooperate
with the Holders of Registrable Securities covered by the Registration
Statement or Canadian Prospectus and the managing underwriter or agent, if any,
to facilitate the timely preparation and delivery of certificates (not bearing
any restrictive legends) representing securities to be sold under the
Registration Statement or Canadian Prospectus, and enable such securities to be
in such denominations and registered in such names as the managing underwriter
or agent, if any, or such Holders may request;

 

(xvi)        obtain
for delivery to the Holders of Registrable Securities being registered and to
the underwriter or agent, and, in connection with a Hedging Transaction, to any
Hedging Counterparty, an opinion or opinions from counsel for the Company in
customary form and in form, substance and scope reasonably satisfactory to such
Holders, underwriters or agents and their counsel; and

 

(xvii)       cooperate
with each seller of Registrable Securities, any Hedging Counterparty, and each
underwriter or agent participating in the disposition of such Registrable
Securities and their respective counsel in connection with any filings required
to be made with the NASD.

 

The Company may require each seller of
Registrable Securities as to which any registration is being effected, and any
Hedging Counterparty, to furnish the Company with such information regarding
such seller or Hedging Counterparty and pertinent to the disclosure
requirements relating to the registration and the distribution of such securities
or any Registrable Class Securities in connection with any Hedging Transaction
as the Company may from time to time reasonably request in writing.

 

Each Holder of Registrable Securities and any
Hedging Counterparty agrees that, upon receipt of any notice from the Company
of the happening of any event of the kind described in clause (vi) of this
Section 4, such Holder or Hedging Counterparty will forthwith

 

 

discontinue
disposition of Registrable Securities pursuant to the Registration Statement or
Canadian Prospectus covering such Registrable Securities until such Holder’s or
Hedging Counterparty’s receipt of the copies of the supplemented or amended
prospectus contemplated by clause (vi) of this Section 4, and, if so directed
by the Company, such Holder or Hedging Counterparty will deliver to the Company
(at the Company’s expense) all copies, other than permanent file copies then in
such Holder’s or Hedging Counterparty’s possession, of the prospectus covering
such Registrable Securities at the time of receipt of such notice. In the event
the Company shall give any such notice, the period mentioned in clause (ii) of
this Section 4 shall be extended by the number of days during the period from
and including the date of the giving of such notice pursuant to clause (vi) of
this Section 4 and including the date when each seller of Registrable
Securities covered by such Registration Statement or Canadian Prospectus shall
have received the copies of the supplemented or amended prospectus contemplated
by clause (vi) of this Section 4.

 

5.             Registration In
Connection With Hedging Transactions.

 

(a)           The
Company acknowledges that from time to time a Holder may seek to enter into one
or more Hedging Transactions with a Hedging Counterparty. Notwithstanding
anything to the contrary provided herein but subject to the limitations of
Section 3(a), the Company agrees that, in connection with any proposed Hedging
Transaction, if, in the reasonable judgment of counsel to the Holder (after
good faith consultation with counsel to the Company), it is necessary or
desirable to register under the Securities Act or Applicable Canadian
Securities Laws such Hedging Transaction or sales or transfers (whether short
or long) of Registrable Class Securities in connection therewith, then the
Company shall use its best efforts to take such actions (which may include
among other things, the filing of a post-effective amendment to any shelf
registration statement to include additional or changed information that is
material or is otherwise required to be disclosed, including, without
limitation, a description of such Hedging Transaction, the name of the Hedging
Counterparty, identification of the Hedging Counterparty or its affiliates as
underwriters or potential underwriters, if applicable, or any change to the
plan of distribution) as may reasonably be required to register such Hedging
Transactions or sales or transfers of Registrable Class Securities in
connection therewith under the Securities Act or Applicable Canadian Securities
Laws in a manner consistent with the rights and obligations of the Company
hereunder with respect to the registration of Registrable Securities.

 

(b)           The
Company agrees to include in each prospectus supplement filed in connection
with any proposed Hedging Transaction language mutually agreed upon by the
Company, the Holder and the Hedging Counterparty describing such Hedging
Transaction.

 

(c)           Any
information regarding the Hedging Transaction included in a registration
statement or prospectus pursuant to this Section 5 shall be deemed to be
information provided by the Holder selling Registrable Securities pursuant to
such registration statement or prospectus for purposes of Section 4 of this
Agreement.

 

(d)           If
in connection with a Hedging Transaction a Hedging Counterparty or any
affiliate thereof is (or may be considered) an underwriter or selling
securityholder, then it shall be required to provide customary indemnities to
the Company regarding itself, the plan of

 

 

distribution and
like matters.

 

6.             Indemnification. (a)  Indemnification by the Company. In the
event of any registration of any securities of the Company under the Securities
Act or Applicable Canadian Securities Laws pursuant to Section 2 or 3, the
Company will, and it hereby does, indemnify and hold harmless, to the extent
permitted by law, the seller of any Registrable Securities covered by such
Registration Statement or Canadian Prospectus, each affiliate of such seller
and their respective directors and officers, members or general and limited partners
(including any director, officer, affiliate, employee, agent and controlling
Person of any of the foregoing), each other Person who participates as an
underwriter in the offering or sale of such securities and each other Person,
if any, who controls such seller or any such underwriter within the meaning of
the Securities Act (collectively, the “Indemnified Parties”), against
any and all losses, claims, damages or liabilities, joint or several, and
expenses (including reasonable attorney’s fees and reasonable expenses of
investigation) to which such Indemnified Party may become subject under the
Securities Act, Applicable Canadian Securities Law, common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof, whether or not such Indemnified Party is a
party thereto) arise out of or are based upon (a) any untrue statement or
alleged untrue statement of any material fact contained in any Registration
Statement, preliminary, final or summary prospectus contained therein, Canadian
Preliminary Prospectus or Canadian Prospectus under which such securities were
registered under the Securities Act or Applicable Canadian Securities Laws, or
any amendment or supplement thereto, or (b) any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein (in the case of a prospectus, in light of the
circumstances under which they were made) not misleading, and the Company will
reimburse such Indemnified Party for any legal or any other expenses reasonably
incurred by it in connection with investigating or defending against any such
loss, claim, liability, action or proceeding; provided that the Company
shall not be liable to any Indemnified Party in any such case to the extent
that any such loss, claim, damage, liability (or action or proceeding in
respect thereof) or expense arises out of or is based upon any untrue statement
or alleged untrue statement or omission or alleged omission made in such
Registration Statement or amendment or supplement thereto or in any such
preliminary, final or summary prospectus or Canadian Preliminary Prospectus or
Canadian Prospectus in reliance upon and in conformity with written information
furnished to the Company through an instrument duly executed by such seller
specifically stating that it is for use in the preparation thereof; and provided,
further, that the Company will not be liable to any Person who
participates as an underwriter in the offering or sale of Registrable
Securities or any other Person, if any, who controls such underwriter within
the meaning of the Securities Act, under the indemnity agreement in this
Section 6(a) with respect to any preliminary prospectus or the final prospectus
or the final prospectus as amended or supplemented, or Canadian Preliminary
Prospectus or Canadian Prospectus, as the case may be, to the extent that any
such loss, claim, damage or liability of such underwriter or controlling Person
results from the fact that such underwriter sold Registrable Securities to a
person to whom there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the final prospectus or Canadian
Prospectus or of the final prospectus or Canadian Prospectus as then amended or
supplemented, whichever is most recent, if the Company has previously furnished
copies thereof to such underwriter. For purposes of the last proviso to the
immediately preceding sentence, the term “prospectus” shall not be deemed to
include the documents, if any, incorporated therein by reference, and no Person
who participates as an underwriter in the

 

 

offering or sale of
Registrable Securities or any other Person, if any, who controls such
underwriter within the meaning of the Securities Act, shall be obligated to
send or give any supplement or amendment to any document incorporated by
reference in any preliminary prospectus or the final prospectus or any Canadian
Prospectus to any person other than a person to whom such underwriter had delivered
such incorporated document or documents in response to a written request
therefor. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of such seller or any Indemnified Party
and shall survive the transfer of such securities by such seller.

 

(b)           Indemnification
by the Seller. The Company may require, as a condition to including any
Registrable Securities in any Registration Statement or Canadian Prospectus
filed in accordance with Section 4 herein, that the Company shall have received
an undertaking reasonably satisfactory to it from the prospective seller of
such Registrable Securities or any underwriter to indemnify and hold harmless
(in the same manner and to the same extent as set forth in Section 6(a)) the
Company and all other prospective sellers with respect to any untrue statement
or alleged untrue statement in or omission or alleged omission from such
Registration Statement, any preliminary, final or summary prospectus contained
therein, any Canadian Preliminary Prospectus or Canadian Prospectus, or any
amendment of or supplement to any of the foregoing, if such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company
through an instrument duly executed by such seller or underwriter specifically
stating that it is for use in the preparation of such Registration Statement,
preliminary, final or summary prospectus, Canadian Preliminary Prospectus or
Canadian Prospectus, or amendment of or supplement to any of the foregoing or a
document incorporated by reference into any of the foregoing. Such indemnity
shall remain in full force and effect regardless of any investigation made by
or on behalf of the Company or any of the prospective sellers, or any of their
respective affiliates, directors, officers or controlling Persons and shall
survive the transfer of such securities by such seller. In no event shall the
liability of any selling Holder of Registrable Securities hereunder be greater
in amount than the dollar amount of the proceeds received by such Holder upon
the sale of the Registrable Securities giving rise to such indemnification
obligation.

 

(c)           Notices
of Claims, Etc. Promptly after receipt by an Indemnified Party hereunder of
written notice of the commencement of any action or proceeding with respect to
which a claim for indemnification may be made pursuant to this Section 6, such
Indemnified Party will, if a claim in respect thereof is to be made against an
indemnifying party, give written notice to the latter of the commencement of
such action; provided that the failure of the Indemnified Party to give
notice as provided herein shall not relieve the indemnifying party of its obligations
under this Section 6, except to the extent that the indemnifying party is
actually prejudiced by such failure to give notice. In case any such action is
brought against an Indemnified Party, unless in such Indemnified Party’s
reasonable judgment a conflict of interest between such Indemnified Party and
indemnifying parties may exist in respect of such claim, the indemnifying party
will be entitled to participate in and to assume the defense thereof, jointly
with any other indemnifying party similarly notified to the extent that it may
wish, with counsel reasonably satisfactory to such Indemnified Party, and after
notice from the indemnifying party to such Indemnified Party of its election so
to assume the defense thereof, the indemnifying party will not be liable to
such Indemnified Party for any legal or other expenses subsequently incurred

 

 

by the latter in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party will consent to entry of any judgment or
enter into any settlement which does not include, as an unconditional term
thereof, the giving by the claimant or plaintiff to such Indemnified Party of a
release from all liability in respect to such claim or litigation.

 

(d)           Contribution.
If the indemnification provided for in this Section 5 from the indemnifying
party is unavailable to an Indemnified Party hereunder in respect of any
losses, claims, damages, liabilities or expenses referred to herein, then the
indemnifying party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such losses, claims, damages, liabilities or expenses in such proportion as
is appropriate to reflect the relative fault of the indemnifying party and such
Indemnified Party in connection with the actions which resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative fault of such indemnifying party and
such Indemnified Party shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a
material fact, has been made by, or relates to information supplied by, such
indemnifying party or Indemnified Parties, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
action. The amount paid or payable by a party under this Section 6(d) as a
result of the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with any investigation or proceeding.

 

The parties hereto agree that it would not be
just and equitable if contribution pursuant to this Section 6(d) were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in the immediately
preceding paragraph. No Person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation.

 

(e)           Other
Indemnification. Indemnification similar to that specified in the preceding
provisions of this Section 6 (with appropriate modifications) shall be given by
the Company and each seller of Registrable Securities with respect to any
required registration or other qualification of securities under any federal or
state law or regulation or governmental authority other than the Securities Act
or Applicable Canadian Securities Law.

 

(f)            Non-Exclusivity.
The obligations of the parties under this Section 6 shall be in addition to any
liability which any party may otherwise have to any other party.

 

7.             Rule
144. The Company covenants that it will file the reports
required to be filed by it under the Securities Act and the Exchange Act and
the rules and regulations adopted by the SEC thereunder (or, if the Company is
not required to file such reports, it will, upon the request of any Demand
Party, make publicly available such information), and it will take such further
action as any Holder of Registrable Securities (or, if the Company is not
required to file reports as provided above, any Demand Party) may reasonably
request, all to the extent required from time to time to enable such Holder to
sell shares of Registrable Securities without registration under the Securities
Act within the limitation of the exemptions provided by (i) Rule

 

 

144 under the
Securities Act, as such Rule may be amended from time to time, or (ii) any
similar rule or regulation hereafter adopted by the SEC. Upon the request of
any Holder of Registrable Securities, the Company will deliver to such Holder a
written statement as to whether it has complied with such requirements. Notwithstanding
anything contained in this Section 7, the Company may deregister under Section
12 of the Exchange Act if it then is permitted to do so pursuant to the
Exchange Act and the rules and regulations thereunder.

 

8.             Selection
of Counsel. In connection with any registration of
Registrable Securities pursuant to Section 2 or 3 hereof, the Holders of a
majority of the Registrable Securities covered by any such registration may
select one counsel to represent all Holders of Registrable Securities covered
by such registration; provided, however, that in the event that
the counsel selected as provided above is also acting as counsel to the Company
in connection with such registration, the remaining Holders shall be entitled
to select one additional counsel to represent all such remaining Holders.

 

9.             Miscellaneous.  (a)  Other
Investors. The Company may enter into agreements with other purchasers or
holders of Common Stock making them parties hereto (and thereby giving them
all, or a portion, of the rights, preferences and privileges of an original
party hereto) with respect to additional shares of Common Stock (the “Supplemental
Agreements”); provided, however, that pursuant to any such
Supplemental Agreement, such purchaser expressly agrees to be bound by all of
the terms, conditions and obligations of this Agreement as if such purchaser
were an original party hereto. All shares of Common Stock issued or issuable
pursuant to, or otherwise covered by, such Supplemental Agreements shall be
deemed to be Registrable Securities to the extent provided therein.

 

(b)           Holdback
Agreement. If any such registration shall be in connection with an
underwritten public offering, each Holder of Registrable Securities agrees not
to effect any public sale or distribution, including any sale pursuant to Rule
144 under the Securities Act or a prospectus exemption under Applicable
Canadian Securities Laws, of any equity securities of the Company, or of any
security convertible into or exchangeable or exercisable for any equity
security of the Company (in each case, other than as part of such underwritten
public offering), within seven days before or such period not to exceed 180
days as the underwriting agreement may require (or such lesser period as the
managing underwriters may permit) after the effective date of such
registration, and the Company hereby also so agrees and agrees to cause each
other holder of any equity security, or of any security convertible into or
exchangeable or exercisable for any equity security, of the Company purchased
from the Company (at any time other than in a public offering) to so agree.

 

(c)           Amendments
and Waivers. This Agreement may be amended and the Company may take any
action herein prohibited, or omit to perform any act herein required to be
performed by it, only if the Company shall have obtained the written consent to
such amendment, action or omission to act, of the Holders of a majority of the
Registrable Securities then outstanding; provided, however, that
no amendment, waiver or consent to the departure from the terms and provisions
of this Agreement that is adverse to the Investors or any of its successors and
assigns shall be effective as against such Person for so long as such Person
holds any Registrable Securities unless consented to in writing by such Person.
Each Holder of any Registrable Securities at the time or thereafter outstanding
shall be bound by any consent

 

 

authorized by this
Section 9(c), whether or not such Registrable Securities shall have been marked
to indicate such consent.

 

(d)           Successors,
Assigns and Transferees. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
assigns. In addition, and whether or not any express assignment shall have been
made, the provisions of this Agreement which are for the benefit of the parties
hereto other than the Company shall also be for the benefit of and enforceable
by any subsequent Holder of any Registrable Securities, subject to the
provisions contained herein. Without limitation to the foregoing, in the event
that the Investors or any of their successors or assigns or any other
subsequent Holder of any Registrable Securities distributes or otherwise
transfers any shares of the Registrable Securities to any of its present or
future shareholders, members, or general or limited partners, the Company
hereby acknowledges that the registration rights granted pursuant to this
Agreement shall be transferred to such shareholders, members or general or
limited partners on a pro rata basis, and that at or after the time of any such
distribution or transfer, any such shareholder, member, general or limited
partner or group of shareholders, members or general or limited partners may
designate a Person to act on its behalf in delivering any notices or making any
requests hereunder.

 

(e)           Notices.
All notices and other communications provided for hereunder shall be in writing
and shall be sent by first class mail, telex, telecopier or hand delivery:

 

	
  If to the Company:

  	
   

  	
  Stile
  Holding Corp.

  
	
   

  	
   

  	
  c/o
  Kohlberg Kravis Roberts & Co. L.P.

  
	
   

  	
   

  	
  9
  West 57th Street

  
	
   

  	
   

  	
  New
  York, New York 10019

  
	
   

  	
   

  	
  Attention:
  Scott Nuttall

  
	
   

  	
   

  	
   

  
	
  with
  a copy to:

  	
   

  	
  Simpson
  Thacher & Bartlett LLP

  
	
  (which
  shall not

  	
   

  	
  425
  Lexington Avenue

  
	
  constitute
  notice)

  	
   

  	
  New
  York, New York 10017

  
	
   

  	
   

  	
  Attention:

  	
  Gary
  I. Horowitz, Esq.

  
	
   

  	
   

  	
   

  	
  Marni
  J. Lerner , Esq.

  
	
   

  	
   

  	
  Facsimile:

  	
  (212)
  455-2502

  
	
   

  	
   

  	
   

  
	
  If
  to the Investors:

  	
   

  	
  KKR
  Millennium Fund (Overseas), Limited Partnership

  
	
   

  	
   

  	
  KKR
  Partners (International), Limited Partnership

  
	
   

  	
   

  	
  c/o
  Kohlberg Kravis Roberts & Co. L.P.

  
	
   

  	
   

  	
  9
  West 57th Street

  
	
   

  	
   

  	
  New
  York, New York 10019

  

 

 

	
  with
  copies to:

  	
   

  	
  Simpson
  Thacher & Bartlett LLP

  
	
  (which
  shall not

  	
   

  	
  425
  Lexington Avenue

  
	
  constitute
  notice)

  	
   

  	
  New
  York, New York 10017

  
	
   

  	
   

  	
  Attention:

  	
  Gary
  I. Horowitz, Esq.

  
	
   

  	
   

  	
   

  	
  Marni
  J. Lerner , Esq.

  
	
   

  	
   

  	
  Facsimile:

  	
  (212)
  455-2502

  

 

If
to any other holder of Registrable Securities, to the address of such other
holder as shown in the stock record book of the Company, or to such other
address as any of the above shall have designated in writing to all of the
other above.

 

All such notices and communications shall be
deemed to have been given or made (A) when delivered by hand, (B) five business
days after being deposited in the mail, postage prepaid or (C) when telecopied,
receipt acknowledged.

 

(f)            Descriptive
Headings. The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning of terms contained
herein.

 

(g)           Severability.
In the event that any one or more of the provisions, paragraphs, words,
clauses, phrases or sentences contained herein, or the application thereof in
any circumstances, is held invalid, illegal or unenforceable in any respect for
any reason, the validity, legality and enforceability of any such provision,
paragraph, word, clause, phrase or sentence in every other respect and of the
remaining provisions, paragraphs, words, clauses, phrases or sentences hereof
shall not be in any way impaired, it being intended that all rights, powers and
privileges of the parties hereto shall be enforceable to the fullest extent
permitted by law.

 

(h)           Counterparts.
This Agreement may be executed in counterparts, and by different parties on
separate counterparts, each of which shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.

 

(i)            Governing
Law; Submission to Jurisdiction. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of New York. The
parties to this Agreement hereby agree to submit to the jurisdiction of the
courts of the State of New York, the courts of the United States of America for
the Southern District of New York, and appellate courts from any thereof in any
action or proceeding arising out of or relating to this Agreement.

 

(j)            Specific
Performance. The parties hereto acknowledge and agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. Accordingly, it is agreed that they shall be entitled to an
injunction or injunctions to prevent breaches of the provisions of this
Agreement and to enforce specifically the terms and provisions hereof in any
court of competent jurisdiction in the United States or any state thereof, in
addition to any other remedy to which they may be entitled at law or in equity.

 

 

IN WITNESS WHEREOF, each of the undersigned
has executed this Agreement or caused this Agreement to be duly executed on its
behalf as of the date first written above.

 

	
   

  	
  STILE HOLDING CORP.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Tagar Olson

  	
   

  	
   

  
	
   

  	
   

  	
  Name: Tagar Olson

  	
   

  
	
   

  	
   

  	
  Title: Vice President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  KKR MILLENNIUM FUND (OVERSEAS), LIMITED
  PARTNERSHIP

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  KKR Associates Millennium (Overseas),
  Limited Partnership, its General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Paul Raether

  	
   

  
	
   

  	
   

  	
   

  	
  Name: Paul Raether

  
	
   

  	
   

  	
   

  	
  Title: Member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  KKR PARTNERS (INTERNATIONAL), LIMITED
  PARTNERSHIP

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  KKR 1996 Overseas, Limited,

  
	
   

  	
   

  	
  its General Partner

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Paul Raether

  	
   

  
	
   

  	
   

  	
   

  	
  Name: Paul Raether

  
	
   

  	
   

  	
   

  	
  Title: MemberExhibit 10.4

 

Kohlberg Kravis Roberts & Co.
L.P. 

9 West 57th Street

New York, New York 10019

 

April 6, 2005

 

Stile U.S. Acquisition Corp.,

Stile Acquisition Corp.,

c/o Masonite International Corporation 

1600 Britannia Road East

Mississauga, Ontario L4W 1J2

 

Ladies
and Gentlemen:

 

This letter serves to confirm the retention
by Stile U.S. Acquisition Corp. and Stile Acquisition Corp. (the “Company”)
of Kohlberg Kravis Roberts & Co. L.P. (“KKR”) to provide management
and advisory services to the Company and its affiliates (collectively, “Masonite”),
as follows:

 

1.             The Company has retained us, and we hereby agree to accept
such retention, to provide to Masonite, when and if called upon, certain
management and advisory services of the type customarily performed by us. The
Company agrees to pay us an annual fee equal to two million dollars
($2,000,000) (the “Annual Fee”), such fee to be increased at a rate of
5% annually, effective as of April 5 of each such year, payable in quarterly
installments in advance at the beginning of each calendar quarter and
commencing on the date hereof (such first payment to be made pro rata based on
the number of days in the quarter remaining).

 

2.             In
consideration for our services rendered in connection with the transactions
contemplated by the Combination Agreement, dated as of December 22, 2004, as
amended and restated on January 16, 2005 and as further amended and restated on
February 17, 2005, between Stile Acquisition Corp., an Ontario corporation, and
Masonite International Corporation (the “Combination Agreement”), which
such services included, but were not limited to, financial advisory services
and capital structure review, the Company agrees to also pay, on the date
hereof, a one-time transaction fee to KKR in the amount of thirty million
dollars ($30,000,000).

 

3.             We
may also invoice the Company for additional fees in connection with acquisition
or divestiture transactions or in the event that we, or any of our respective
affiliates, perform services for Masonite above and beyond those called for by
this agreement.

 

4.             In
addition to any fees that may be payable to us under this agreement, the
Company also agrees to reimburse us and our respective affiliates, from time to
time upon request, for all reasonable out-of-pocket expenses incurred,
including unreimbursed expenses incurred to the date hereof, in connection with
this retention and/or the transactions contemplated

 

 

by the
Combination Agreement, including travel expenses and expenses of our respective
counsel and other advisors.

 

5.             The
Company agrees to indemnify and hold us, our affiliates (including, without
limitation, affiliated investment entities) and their and our respective
partners, executives, officers, directors, employees, agents and controlling
persons (each such person, including us, being an “Indemnified Party”)
harmless from and against (i) any and all losses, claims, damages and
liabilities (including, without limitation, losses, claims, damages and
liabilities arising from or in connection with legal actions brought by or on
behalf of the holders or future holders of the outstanding securities of
Masonite or creditors or future creditors of Masonite), joint, several or
otherwise, to which such Indemnified Party may become subject under any
applicable federal or state law, or otherwise, related to or arising out of any
activity contemplated by this agreement or our retention pursuant to, and our
or our affiliates’ performance of the services contemplated by, this agreement
and (ii) any and all losses, claims, damages and liabilities, joint, several or
otherwise, related to or arising out of any action or omission or alleged
action or omission related to the Company or any of its direct or indirect
subsidiaries or the securities or obligations of any such entities. The Company
will further reimburse any Indemnified Party for all expenses (including
counsel fees and disbursements) upon request as they are incurred in connection
with the investigation of, preparation for or defense of any pending or threatened
claim or any action or proceeding arising from any of the foregoing, whether or
not such Indemnified Party is a party and whether or not such claim, action or
proceeding is initiated or brought by the Company; provided, however,
that the Company will not be liable under the foregoing indemnification
provision (and amounts previously paid that are determined are not required to
be paid by the Company pursuant to the terms of this paragraph shall be repaid
promptly) to the extent that any loss, claim, damage, liability or expense is
found in a final judgment by a court to have resulted from our willful
misconduct or gross negligence. The Company agrees that no Indemnified Party
shall have any liability (whether direct or indirect, in contract or tort or otherwise)
to Masonite related to or arising out of our retention pursuant to, or our
affiliates’ performance of the services contemplated by, this agreement except
to the extent that any loss, claim, damage, liability or expense is found in a
final, non-appealable judgment by a court to have resulted from our willful
misconduct, bad faith or gross negligence.

 

The Company also agrees that, without our
prior written consent, it will not settle, compromise or consent to the entry
of any judgment in any pending or threatened claim, action or proceeding to
which an Indemnified Party is an actual or potential party and in respect of
which indemnification could be sought under the indemnification provision in
the immediately preceding paragraph, unless such settlement, compromise or
consent includes an unconditional release of each Indemnified Party from all
liability arising out of such claim, action or proceeding.

 

Promptly after receipt by an Indemnified
Party of notice of any suit, action, proceeding or investigation with respect
to which an Indemnified Party may be entitled to indemnification hereunder,
such Indemnified Party will notify the Company in writing of the assertion of
such claim or the commencement of such suit, action, proceeding or
investigation, but the failure to so notify the Company shall not relieve the
Company from any liability which it may have hereunder, except to the extent
that such failure has materially prejudiced the

 

 

Company. If the Company so elects within a
reasonable time after receipt of such notice, the Company may participate at
its own expense in the defense of such suit, action, proceeding or
investigation. Each Indemnified Party may employ separate counsel to represent
it or defend it in any such suit, action, proceeding or investigation in which
it may become involved or is named as a defendant and, in such event, the
reasonable fees and disbursements of such counsel shall be borne by the
Company; provided, however, that the Company will not be required
in connection with any such suit, action, proceeding or investigation, or
separate but substantially similar actions arising out of the same general
allegations or circumstances, to pay the fees and disbursements of more than
one separate counsel (other than local counsel) for all Indemnified Parties in
any single action or proceeding. Whether or not the Company participates in the
defense of any claim, the Company and we shall cooperate in the defense thereof
and shall furnish such records, information and testimony, and attend such
conferences, discovery proceedings, hearings, trials and appeals, as may be
reasonably requested in connection therewith.

 

If the indemnification provided for in clause
(i) of the first sentence of this Section 5 is finally judicially determined by
a court of competent jurisdiction to be unavailable to an Indemnified Party, or
insufficient to hold any Indemnified Party harmless, in respect of any losses,
claims, damages or liabilities (other than any losses, claims, damages or
liabilities found in a final judgment by a court to have resulted from our
willful misconduct or gross negligence), then the Company, on the one hand, in
lieu of indemnifying such Indemnified Party, and KKR, on the other hand, will
contribute to the amount paid or payable by such Indemnified Party as a result
of such losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received, or sought to be
received, by Masonite on the one hand and KKR, solely in its capacity as an advisor
under this agreement, on the other hand, in connection with the transactions to
which such indemnification, contribution or reimbursement is sought, or (ii) if
(but only if) the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) but also the relative fault of
Masonite on the one hand and KKR on the other, as well as any other relevant
equitable considerations; provided, however, that in no event
shall KKR’s aggregate contribution hereunder exceed the amount of fees actually
received by it in respect of the transaction at issue pursuant to this
agreement. The amount paid or payable by a party as a result of the losses,
claims, damages and liabilities referred to above will be deemed to include any
legal or other fees or expenses reasonably incurred in defending any action or
claim. The Company and we agree that it would not be just and equitable if
contribution pursuant to this paragraph were determined by pro rata allocation
or by any other method which does not take into account the equitable
considerations referred to in this paragraph. The indemnity, contribution and
expense reimbursement obligations that the Company has under this letter shall
be in addition to any the Company or Masonite may have, and notwithstanding any
other provision of this letter, shall survive the termination of this
agreement.

 

6.             Any
advice or opinions provided by us may not be disclosed or referred to publicly
or to any third party (other than Masonite’s legal, tax, financial or other
advisors), except in accordance with our prior written consent.

 

7.             We
shall act as an independent contractor, with duties solely to Masonite. The
provisions hereof shall inure to the benefit of and shall be binding upon the
parties hereto

 

 

and their respective successors and assigns. Nothing
in this agreement, expressed or implied, is intended to confer on any person
other than the parties hereto or their respective successors and assigns, and,
to the extent expressly set forth herein, the Indemnified Parties, any rights
or remedies under or by reason of this agreement. Without limiting the
generality of the foregoing, the parties acknowledge that nothing in this agreement,
expressed or implied, is intended to confer on any present or future holders of
any securities of the Company or its subsidiaries or affiliates, or any present
or future creditor of the Company or its subsidiaries or affiliates, any rights
or remedies under or by reason of this agreement or any performance hereunder.

 

8.             This
agreement shall be governed by and construed in accordance with the internal
laws of the State of New York.

 

9.             This
agreement shall continue in effect from year to year unless amended or
terminated by the consent of all parties hereto.

 

10.           Each
party hereto represents and warrants that the execution and delivery of this
agreement by such party has been duly authorized by all necessary action of
such party.

 

11.           If
any term or provision of this agreement or the application thereof shall, in
any jurisdiction and to any extent, be invalid and unenforceable, such term or
provision shall be ineffective, as to such jurisdiction, solely to the extent
of such invalidity or unenforceability without rendering invalid or
unenforceable any remaining terms or provisions hereof or affecting the
validity or enforceability of such term or provision in any other jurisdiction.
To the extent permitted by applicable law, the parties hereto waive any
provision of law that renders any term or provision of this agreement invalid
or unenforceable in any respect.

 

12.           Each
party hereto waives all right to trial by jury in any action, proceeding or
counterclaim (whether based upon contract, tort or otherwise) related to or
arising out of our retention pursuant to, or our performance of the services
contemplated by this agreement.

 

13.           It
is expressly understood that the foregoing paragraphs 2-6, 8, 11 and 12, in
their entirety, survive any termination of this agreement.

 

14.           This
agreement may be executed in counterparts, each of which shall be deemed an
original agreement, but all of which together shall constitute one and the same
instrument.

 

[Remainder of page intentionally
left blank.]

 

 

If the foregoing
sets forth the understanding between us, please so indicate on the enclosed
signed copy of this letter in the space provided therefor and return it to us,
whereupon this letter shall constitute a binding agreement among us.

 

	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
  Kohlberg
  Kravis Roberts & Co. L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul Raether

  	
   

  
	
   

  	
   

  	
  Name: Paul Raether

  
	
   

  	
   

  	
  Title: Member

  
	
   

  	
   

  
	
  AGREED
  TO AND ACCEPTED BY:

  
	
   

  
	
   

  	
  Stile
  Holding Corp.

  
	
   

  
	
   

  
	
   

  	
  By:

  	
  /s/
  Tagar Olson

  	
   

  
	
   

  	
  Name:
  Tagar Olson

  	
   

  
	
   

  	
  Title:
  Vice President

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