Document:

Exhibit 4.1

 

GMS INC.   INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE SEE REVERSE SIDE FOR   CERTAIN DEFINITIONS FULLY PAID AND NON-ASSESSABLE COMMON SHARES, $0.01 PAR   VALUE, OF GMS INC. transferable on the books of the Corporation byCthe   hOolder Mhereof iMn persoOn or bNy Attorney upon surrender of this   certificate properly endorsed. This certificate is not valid until   countersigned and registered by the Transfer Agent and Registrar. IN WITNESS   WHEREOF, the said Corporation has caused this certificate to be signed by   facsimile signatures of its duly authorized officers. Dated: SIG TO COME SIG   TO COME TITLE TITLE COUNTERSIGNED AND REGISTERED: AMERICAN STOCK TRANSFER   & TRUST COMPANY (Brooklyn, New York) TRANSFER AGENT AND REGISTRAR BY   AUTHORIZED SIGNATURE THIS CERTIFIES THAT is the owner of CUSIP 36251C 10 3 

    

 

The following   abbreviations, when used in the inscription on the face of this certificate,   shall be construed as though they were written out in full according to   applicable laws or regulations: UTMA – Custodian TEN COM TEN ENT JT TEN – as   tenants in common – as tenants by entireties (Cust) (Minor) under Uniform   Transfers to Minors Act – as joint tenants with right of survivorship and not   as tenants in common (State) Additional abbreviations may also be used though   not in the above list. For value received hereby sell, assign, and transfer   unto PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE   (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF   ASSIGNEE) Shares of the capital stock represented by the within Certificate,   and do hereby irrevocably constitute and appoint Attorney to transfer the   said stock on the books of the within-named Corporation with full power of   substitution in the premises. Dated NOTICE: THE SIGNATURE TO THIS ASSIGNMENT   MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN   EVERY PARTICULAR WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.   SIGNATURE GUARANTEED ALL GUARANTEES MUST BE MADE BY A FINANCIAL INSTITUTION   (SUCH AS A BANK OR BROKER) WHICH IS A PARTICIPANT IN THE SECURITIES TRANSFER   AGENTS MEDALLION PROGRAM (“STAMP”), THE NEW YORK STOCK EXCHANGE, INC.   MEDALLION SIGNATURE PROGRAM (“MSP”), OR THE STOCK EXCHANGES MEDALLION PROGRAM   (“SEMP”) AND MUST NOT BE DATED. GUARANTEES BY A NOTARY PUBLIC ARE NOT   ACCEPTABLE.Exhibit 10.2

 

MANAGEMENT AGREEMENT

 

This MANAGEMENT AGREEMENT (as amended, restated, modified or supplemented from time to time, this “Agreement”) is made as of April 1, 2014 by and between GYP Holdings I Corp., a Delaware corporation (the “Company”), GYP Holdings III Corp., a Delaware corporation and indirect wholly-owned subsidiary of the Company (“GYP III”), and AEA Investors LP, a Delaware limited partnership (“AEA” and, together with the Company and GYP III, the “Parties”).

 

WHEREAS, AEA in connection with the transactions contemplated by the Stock Purchase Agreement, dated as of February 11, 2014 (as amended, modified or  supplemented from time to time, the “Purchase Agreement”), by and among GYP III, Gypsum Management and Supply, Inc. and the Sellers (as defined therein), provided certain advisory and consulting services to the Company and its subsidiaries, including GYP III, including investment banking services, due diligence, valuation, financial advisory services and negotiation of the Purchase Agreement (collectively, the “Transaction Advisory Services”), and the Company has agreed to pay AEA a success-based fee in connection with the rendering of the Transaction Advisory Services.

 

WHEREAS, AEA renders advisory and consulting services to selected client companies, and the Company and GYP III desire to retain AEA to render advisory and consulting services to the Company, GYP III and their direct and indirect subsidiaries (collectively, the “Company Group”) and AEA is willing to provide such services on the terms and subject to the conditions hereinafter set forth.

 

NOW, THEREFORE, it is mutually agreed as follows:

 

1.                                      The Company and GYP III hereby retain AEA to render advisory and consulting services to the Company Group, and AEA hereby agrees to render such services, for the period commencing on the date hereof and continuing so long as AEA (or its investor group) directly or indirectly owns any equity, voting or profits interest in the Company Group or until this Agreement is terminated by AEA.  AEA shall render such advisory and consulting services to the Company Group in connection with such financial, management and other matters relating to the business and operations of the Company Group or any of its affiliated companies as the

 

 

Company’s Board of Directors or GYP III’s Board of Directors may from time to time request (the “Services”).

 

2.                                      (a)                                 In consideration of the Transaction Advisory Services rendered by AEA in connection with the Purchase Agreement, the Company and GYP III hereby agree to pay, immediately following the closing of such transactions, a transaction fee of $10,000,000 to AEA.

 

(b)                                 As compensation for the Services rendered pursuant to Section 1 hereof, so long as this Agreement continues in effect the Company and GYP III shall pay or cause to be paid to AEA, an aggregate fee of $2,250,000 per year due and payable (i) immediately following the closing of the transactions contemplated by the Purchase Agreement and (ii) thereafter, quarterly in advance on the first day of each calendar quarter, commencing as of the first full calendar quarter immediately following the date hereof.  The Company and GYP III also agree to the provisions with respect to indemnifying AEA and the other matters set forth in Annex A hereto, which is hereby incorporated by reference into this Agreement (as amended, restated, modified or supplemented from time to time, the “Indemnification Agreement”).

 

(c)                                  It is the understanding of the Parties that AEA may be involved with potential acquisitions, mergers, financings or other major transactions involving any of the members of the Company Group and/or their affiliates, in which case, AEA shall be entitled to such compensation, in addition to the fees provided above, so long as AEA is continuing to provide the Services, in the amounts as the Parties shall mutually agree.

 

(d)                                 In the event that any member of the Company Group employs any employee or consultant of AEA as an officer of any of them or otherwise, and such employment, consultancy, or other arrangement involves a substantial amount of such employee’s or consultant’s time, the Company, GYP III or such member of the Company Group shall compensate such employee or consultant at a reasonable rate to be agreed upon among such employee or such consultant, as applicable, the Company or GYP III, on the one hand, and AEA on the other, and the compensation payable to such employee or such consultant, as applicable, shall not reduce or affect in any way the fees payable to AEA.

 

(e)                                  In addition to the aforementioned fees, the Company and GYP III shall reimburse AEA, its consultants and its affiliates for their reasonable out-of-pocket costs and expenses incurred in connection with the performance of the Transaction Advisory Services and

 

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the Services hereunder.  In addition, the Company and GYP III shall reimburse AEA, its consultants and their respective affiliates for their reasonable out-of-pocket expenses (including, without limitation, legal, accounting, secretarial services, consulting and other professional fees) incurred in connection with (i) monitoring of the investment in the Company Group and the development, preparation, negotiation, printing and execution of any amendment, restatement, modification or supplement to this Agreement or any of the other agreements or documents executed in connection with or related to the investments in the Company Group held by affiliates of AEA and/or (ii) the enforcement, performance and administration of this Agreement or any of the other agreements or documents executed in connection with or related to the investments held by affiliates of AEA in the Company Group.

 

3.                                      Any notice required to be given hereunder shall be in writing and shall be deemed sufficient if delivered in person or mailed by certified mail as follows: if to the Company and/or GYP III, to it or them at its or their offices at 666 Fifth Avenue, 36th Floor New York, New York 10103, or such other address as the Company or GYP III may hereafter designate for that purpose; and if to AEA, to it at its offices at 666 Fifth Avenue, 36th Floor New York, New York 10103, or such other address as AEA may hereafter designate for that purpose.

 

4.                                      This Agreement, together with the Indemnification Agreement, constitutes the entire agreement among the parties hereto, and supersedes all prior agreements and understandings, both written and oral, with respect to the subject matter hereof.  This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, including any corporation or other entity into which any member of the Company Group shall consolidate or merge or to which it shall transfer substantially all of its assets.  This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed entirely within such state.  This Agreement may be executed by facsimile signature (or via email “.pdf” or similar file) and in any number of counterparts, all of which shall be construed together and shall constitute one and the same instrument.

 

[Signature page follows]

 

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date and year first above written.

 

	
 
    	
GYP HOLDINGS I CORP.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Justin de La   Chapelle
    
	
 
    	
Name:
    	
Justin de La Chapelle
    
	
 
    	
Title:
    	
Vice President
    

 

[Signature Page to Management Agreement]

 

 

	
 
    	
GYP HOLDINGS III CORP.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Justin de La   Chapelle
    
	
 
    	
Name:
    	
Justin de La   Chapelle
    
	
 
    	
Title:
    	
Vice President
    

 

[Signature Page to Management Agreement]

 

 

	
 
    	
AEA INVESTORS LP
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Barbara Burns
    
	
 
    	
Name:
    	
Barbara Burns
    
	
 
    	
Title:
    	
Vice President
    

 

[Signature Page to Management Agreement]

 

 

ANNEX A - INDEMNIFICATION AGREEMENT

 

As part of the consideration for the agreement of AEA to furnish its services under this Agreement, the Company and GYP III hereby agree to indemnify and hold harmless AEA and its affiliates and the respective managing directors, officers, directors, investors, shareholders, members, partners, employees and agents of, and persons controlling, AEA or any of its affiliates within the meaning of either Section 15 of the Securities Act of 1933, as amended, or Section 20 of the Securities Exchange Act of 1934, as amended, and each of their respective successors and assigns (collectively, the “Indemnified Persons”) from and against all claims, liabilities, expenses, losses or damages (or actions in respect thereof) related to or arising out of actions taken (or omitted to be taken) by AEA or its affiliates pursuant to the terms of this Agreement and/or in connection with the acquisition or operation of the Business (as defined in the Purchase Agreement), or AEA’s or any of its affiliates’ role in connection therewith; provided, however, that the Company and GYP III shall not be responsible for any claims, liabilities, expenses, losses and damages to the extent that it is finally judicially determined that they result primarily from actions taken or omitted to be taken by AEA or its affiliates in bad faith or due to AEA’s or such affiliate’s gross negligence or willful misconduct.  If for any reason (other than the bad faith, gross negligence or willful misconduct of AEA or its affiliates as provided above) the foregoing indemnity is unavailable to the Indemnified Persons or insufficient to hold the Indemnified Persons harmless, then the Company and GYP III shall contribute to the amount paid or payable by the Indemnified Persons as a result of such claim, liability, expense, loss or damage in such proportion as is appropriate to reflect not only the relative benefits received by the Company and GYP III on the one hand and AEA on the other hand, but also the relative fault of the Company, GYP III and AEA, as well as any relevant equitable considerations, subject to the limitation that in any event AEA’s aggregate contribution to all claims, liabilities, expenses, losses and damages (except to the extent judicially determined to have been primarily caused by the bad faith, gross negligence or willful misconduct of AEA or its affiliates) shall not exceed the amount of fees actually received by AEA pursuant to this Agreement.

 

Promptly after receipt by AEA of notice of any complaint or the commencement of any action or proceeding with respect to which indemnification may be sought against the Company and/or GYP III, AEA will notify the Company and GYP III in writing of the receipt or commencement thereof, but failure to notify the Company and GYP III will relieve the Company and GYP III and from any liability which they may have hereunder only if, and to the extent that, such failure results in the forfeiture of substantial rights and defenses, and will not in any event relieve the Company and GYP III from any other obligation to any Indemnified Person other than under this Indemnification Agreement.  The Company and/or GYP III shall assume the defense of such action (including payment of fees and disbursements of counsel) insofar as such action shall relate to any alleged liability in respect of which indemnity may be sought

 

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against the Company and/or GYP III.  AEA shall have the right to employ separate counsel in any such action and to participate in the defense thereof, but the fees and disbursements of such counsel shall be at the expense of AEA unless employment of such counsel has been specifically authorized by the Company and GYP III in writing.  The Company and GYP III shall pay the fees and expenses of one separate counsel for AEA and any other Indemnified Persons if the named parties to any such action (including any impleaded parties) include the Company and/or GYP III (or any of the directors of the Company and/or GYP III) and AEA and (i) in the good faith judgment of AEA the use of joint counsel would present such counsel with an actual or potential conflict of interest or (ii) AEA shall have been advised by counsel that there may be one or more legal defenses available to it which are different from or additional to those available to the Company and/or GYP III (or the director(s)).  The Company and GYP III shall not be liable to indemnify any person for any settlement of any claim or action effected without written consent of the Company and GYP III, which consent shall not be unreasonably withheld.  In addition, the Company and GYP III hereby agree to reimburse AEA and each other Indemnified Person for all expenses (including reasonable fees and disbursements of counsel if the Company and/or GYP III does not assume the defense of such action) as they are incurred by AEA or any Indemnified Person in connection with investigating, preparing for or defending any such action or claim.  AEA shall have no liability to the Company and GYP III, any of their respective subsidiaries or affiliates or any of their respective directors, officers or employees in connection with the services which AEA renders pursuant to this Agreement, except for AEA’s bad faith, gross negligence or willful misconduct judicially determined as aforesaid.

 

In addition to the foregoing, the Company and GYP III hereby acknowledge that certain of the Indemnified Persons may have rights to indemnification, advancement of expenses and/or insurance provided by certain of their respective affiliates (collectively, the “Fund Indemnitors”).  The Company and GYP III hereby agree that (i) they are the indemnitor of first resort (i.e., their obligations to the Indemnified Persons are primary and any obligation of the Fund Indemnitors to advance expenses or to provide indemnification for the same payment of expenses or liabilities incurred by any Indemnified Person are secondary), and (ii) no payment by the Fund Indemnitors on behalf of any Indemnified Person with respect to any claim for which such Indemnified Person has sought indemnification from the Company and/or GYP III hereunder shall affect the foregoing and the Fund Indemnitors shall have a right of contribution and/or subrogation to the extent of payment to all of the rights of recovery of such Indemnified Person against the Company and/or GYP III.  The Company, GYP III and the Indemnified Persons agree that the Fund Indemnitors are express and intended third party beneficiaries of this paragraph.

 

The indemnification, contribution and expense reimbursement obligations the Company and GYP III have pursuant to this Annex A shall be in addition to any liability the Company and GYP III may otherwise have.  Any right to trial by jury with respect to any action or proceeding arising in connection with or as a result of either

 

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AEA’s engagement or any matter referred to in this Agreement is hereby waived by the parties hereto.  The provisions of this Annex A shall survive any termination or completion of the engagement provided by this Agreement.

 

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