EXHIBIT 4.6
[EXECUTION COPY]
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT ("Agreement"), dated as of March 3,
2000, is among Stonegate Resources Holdings, LLC, a Delaware limited liability
company ("Stonegate"), Builders FirstSource, Inc., a Delaware corporation and
majority owned subsidiary of Stonegate (the "Company"), and Xxxxxxx X. Xxxxxxxx,
an individual resident of the State of New Jersey ("Xxxxxxxx").
W I T N E S S E T H
WHEREAS, pursuant to the Stock Purchase Agreement, dated as of
August 9, 1999, by and among Blackstone Company, Inc. ("Blackstone"), The
Stockholders of Blackstone Company, Inc. and the Company (the "Stock Purchase
Agreement"), the Company acquired all of the issued and outstanding shares of
capital stock of Blackstone, and Blackstone became a wholly owned subsidiary of
the Company;
WHEREAS, in connection with the transactions contemplated by the
Stock Purchase Agreement, certain stockholders of Blackstone are entitled to
purchase up to five million (5,000,000) shares of common stock, par value $.01
per share, of the Company ("Common Stock") at a purchase price of $1.00 per
share;
WHEREAS, in connection with the transactions contemplated by the
Stock Purchase Agreement, Xxxxxxxx is hereby acquiring an aggregate of two
million (2,000,000) shares (the "Purchased Shares") of Common Stock at a
purchase price of $1.00 per share, in accordance with the terms and provisions,
and subject to the conditions, of this Agreement (the "Stock Purchase");
WHEREAS, in connection with the Stock Purchase, the Company and
Xxxxxxxx have agreed to enter into this Agreement to memorialize certain
agreements of the parties with respect to the Purchased Shares, all in
accordance with the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and for good and valuable consideration, the receipt
of which is hereby acknowledged, the parties agree as follows:
ARTICLE I
Certain Definitions
For purposes of this Agreement, the following terms shall have the
following meanings:
(a) The term "Board" shall mean the Board of Directors of
the Company.
(b) The term "Commission" shall mean the United States
Securities and Exchange Commission or any successor agency.
(c) The term "Common Stock" shall mean the common stock, par
value $.01 per share, of the Company.
(d) The term "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended, and the rules and regulations promulgated thereunder.
(e) The term "Fair Market Value" shall mean the fair market
value of the Common Stock determined by such methods or procedures as shall be
established from time to time by the Board. The per share Fair Market Value of
Common Stock as of a particular date shall mean (i) the average closing sales
price per share of the Common Stock on the national securities exchange on which
the Common Stock is principally traded, for the last five preceding dates on
which there was a sale of such Common Stock on such exchange, or (ii) if the
shares of Common Stock are then traded in an over-the-counter market, the
average of the closing bid and asked prices for the shares of Common Stock in
such over-the-counter market for the last preceding five dates on which there
was a sale of such Common Stock in such market, or (iii) if the shares of Common
Stock are not then listed on a national securities exchange or traded in an
over-the-counter market, such value as the Board, in its good faith judgment,
shall determine.
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(f) The term "Initial Public Offering" shall mean the first
Public Offering of shares of Common Stock.
(g) The term "Permitted Transferee" shall mean, with respect
to each Stockholder bound by the terms of this Agreement, (i) any lineal
descendant of such Stockholder or any Permitted Transferee of such lineal
descendant; (ii) the Company; (iii) in the event of the dissolution, liquidation
or winding up of any such Stockholder that is a partnership or a corporation,
the partners of a partnership that is such Stockholder, the stockholders of a
corporation that is such Stockholder or a successor partnership all of the
partners of which or a successor corporation all of the stockholders of which
are the Persons who were the partners of such partnership or the stockholders of
such corporation immediately prior to the dissolution, liquidation or winding up
of such Stockholder; (iv) a transferee by testamentary or intestate disposition;
(v) a transferee by inter vivos transfer to the transferring Person's spouse,
children and/or other lineal descendants; (vi) a trust transferee by inter vivos
transfer, the beneficiaries of which are the transferring Person, spouse,
children and/or other lineal descendants; or (vii) a successor nominee or
trustee for the beneficial owner of the Shares for which such Person acts as
nominee or trustee, as the case may be.
(h) The term "Person" shall mean any individual, firm,
corporation, partnership, limited liability company, trust or other entity, and
shall include any successor (by merger or otherwise) of such entity.
(i) The term "Public Offering" shall mean a public offering of
equity securities of the Company pursuant to an effective registration statement
under the Securities Act (other than (i) a registration statement filed under
Regulation A or on form S-4 or any successor form or (ii) a registration
statement filed on Form S-8 or any successor form).
(j) The term "Registrable Securities" shall mean (i) the
Purchased Shares and (ii) additional shares of Common Stock acquired by any
Stockholder upon any stock split, dividend, recapitalization, combination or
otherwise after the date hereof. As to any particular Registrable Securities,
such securities shall cease to be Registrable Securities when (i) a registration
statement registering such securities under the Securities Act has been declared
effective and such securities ties have been sold or otherwise transferred by
the holder thereof pursuant to such effective registration statement, or (ii)
such securities are sold in accordance with Rule 144 (or any successor
provision) promulgated under the Securities Act, or (iii) such securities are
transferred under circumstances in which any legend borne by the
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certificates for such securities relating to restrictions on transferability
thereof, under the Securities Act or otherwise, is removed by the Company.
(k) The term "Registration Period" shall mean the period
commencing on the Registration Period Commencement Date and ending on the third
anniversary of the closing date of the Initial Public Offering.
(l) The term "Registration Period Commencement Date" shall
mean the date that is six months following the closing date of the Initial
Public Offering (or, if later, the date upon which the Stockholder's lock-up
agreement entered into with the underwriters in connection with the Initial
Public Offering shall expire).
(m) The term "Requisite Amount" shall mean such number of
shares of Registrable Securities having an aggregate Fair Market Value of
$500,000.
(n) The term "Securities Act" shall mean the Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder.
(o) The term "Shares" shall mean (i) the Purchased Shares and
(ii) additional shares of Common Stock acquired by the Stockholders upon any
stock split, dividend, recapitalization, contribution or otherwise after the
date hereof.
(p) The term "Stockholders" shall mean Xxxxxxx X. Xxxxxxxx and
any Permitted Transferees thereof to whom any of the Purchased Shares are
Transferred in accordance with Article IV hereof.
(q) The term "Transfer" shall mean any voluntary or
involuntary attempt to, directly or indirectly through the transfer of interests
in controlled Affiliates or otherwise, offer, sell, assign, transfer, grant a
participation in, pledge or otherwise dispose of any Shares, or the consummation
of any such transactions, or the soliciting of any offers to purchase or
otherwise acquire, or taking a pledge of, any of the Shares; provided, however,
that the transfer of an interest in any of the Stockholders shall not be deemed
to be a transfer.
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ARTICLE II
Purchase and Sale of Purchased Shares
Section 2.01 Purchase and Sale of the Purchased Shares. Upon the
terms and subject to the conditions of this Agreement, the Company is herewith
issuing, selling, conveying, assigning, transferring and delivering to Xxxxxxxx,
and Xxxxxxxx is herewith purchasing, acquiring and accepting from the Company,
all right, title and interest in and to the Purchased Shares, free and clear of
any and all liens.
Section 2.02 Conveyance. Such issuance, sale, conveyance,
assignment, transfer and delivery is being effected by delivery by the Company
to Xxxxxxxx of a stock certificate representing the Purchased Shares.
Section 2.03 Consideration. Upon the terms and subject to the
conditions of this Agreement, in consideration of such issuance, sale,
conveyance, assignment, transfer and delivery of the Purchased Shares by the
Company to Xxxxxxxx, Xxxxxxxx is herewith paying or causing to be paid to the
Company an aggregate amount equal to $2,000,000 (the "Aggregate Purchase Price")
by wire transfer of immediately available funds to the account designated by the
Company.
Section 2.04 Closing. The closing of the Stock Purchase (the
"Closing") is taking place simultaneously with the execution of this Agreement
at the executive offices of the Company on the date hereof (the "Closing Date").
Section 2.05 Deliveries by the Company. The Company is herewith
delivering to Xxxxxxxx a stock certificate representing the Purchased Shares.
Section 2.06 Deliveries by the Stockholders. Xxxxxxxx is herewith
delivering to the Company the Aggregate Purchase Price by wire transfer of
federal or other immediately available funds to the account designated by the
Company.
Section 2.07 Simultaneous Transactions. All of the transactions
contemplated by this Article II shall be deemed to occur simultaneously, and no
such transaction shall be deemed to have been consummated until all such
transactions have been consummated.
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ARTICLE III
Representations and Warranties
Section 3.01 Representations and Warranties of the Stockholders.
Each Stockholder individually represents and warrants to the Company the
following:
(a) such Stockholder has the requisite power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated plated hereby in accordance with the terms hereof. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary action on the
part of such Stockholder;
(b) this Agreement has been duly and validly executed and
delivered by such Stockholder and is, assuming due execution and delivery hereof
by the Company and that the Company has full legal power and right to enter into
this Agreement, a valid and binding obligation of such Stockholder, enforceable
against such Stockholder in accordance with its terms, except as enforcement
thereof may be limited by the effect of bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance, or similar laws affecting the enforcement of
creditors' rights generally, and subject to principles of equity and public
policy;
(c) such Stockholder will be acquiring the Shares to be
acquired by such Stockholder for investment purposes only, without any intention
of distributing or selling such Shares in violation of federal, state or other
securities laws. If such Stockholder should in the future decide to dispose of
any of such Shares, such Stockholder understands and agrees that it may do so
only in compliance with the terms of Article IV hereof and the Securities Act
and applicable state securities laws, as then in effect. Such Stockholder agrees
to the imprinting, so long as required by law, of legends on certificates
representing all of the Shares to the following effect:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES
LAWS OF ANY STATE. THE SECURITIES MAY NOT BE
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT AND
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APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS.
THE SALE, ASSIGNMENT, HYPOTHECATION, PLEDGE, ENCUMBRANCE OR OTHER
DISPOSITION (EACH A "TRANSFER") OF ANY OF THE SECURITIES REPRESENTED BY
THIS CERTIFICATE ARE RESTRICTED BY THE TERMS OF THE STOCK PURCHASE
AGREEMENT, DATED AS XX XXXXX 0, 0000, XXXXX XXXXXXXXX RESOURCES HOLDINGS,
LLC, BUILDERS FIRSTSOURCE, INC. AND XXXXXXX X. XXXXXXXX. THE COMPANY WILL
NOT REGISTER THE TRANSFER OF SUCH SECURITIES ON THE BOOKS OF THE COMPANY
UNLESS AND UNTIL THE TRANSFER HAS BEEN MADE IN COMPLIANCE WITH THE TERMS
OF THE STOCK PURCHASE AGREEMENT.
(d) such Stockholder understands that the Shares will not be
registered at the time of their issuance under the Securities Act for the reason
that the issuance provided for in this Agreement is exempt pursuant to Section
4(2) of the Securities Act and that the reliance of the Company on such
exemption is predicated in part on such Stockholder's representations set forth
herein. Such Stockholder represents that it is experienced in evaluating
companies such as the Company, has such knowledge and experience in financial
and business matters as to be capable of evaluating the merits and risks of its
investment and has the ability to suffer the total loss of its investment. Such
Stockholder further represents that it has had the opportunity to conduct due
diligence on the Company, to ask questions of and receive answers from the
Company concerning the terms and conditions of the offering and to obtain
additional information to such Stockholder's satisfaction; and
(e) such Stockholder is an "Accredited Investor" within the
meaning of Rule 501 of Regulation D under the Securities Act, as presently in
effect.
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Section 3.02 Representations and Warranties of the Company. The
Company represents and warrants to each of the Stockholders the following:
(a) the Company is a corporation duly organized and validly
existing in good standing under the laws of the State of Delaware and has the
requisite corporate power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby in accordance with the
terms hereof. The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of the Company;
(b) this Agreement has been duly and validly executed and
delivered by the Company and is, assuming due execution and delivery hereof by
each of the Stockholders and that each of the Stockholders has full legal power
and right to enter into this Agreement, a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except as
enforcement thereof may be limited by the effect of bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, or similar laws affecting the
enforcement of creditors' rights generally, and subject to principles of equity
and public policy; and
(c) the Purchased Shares have been duly authorized for
issuance to Xxxxxxxx and when the Purchased Shares are issued and delivered to
Xxxxxxxx as provided in this Agreement, upon receipt by the Company of the
Aggregate Purchase Price, the Purchased Shares will be validly issued, fully
paid and nonassessable. The Purchased Shares will not be issued in violation of,
and will not be subject to, any preemptive, subscription or similar rights, and
will be free and clear of all liens.
ARTICLE IV
Transfer of Shares
Section 4.01 General Restrictions. Neither the Stockholders nor any
of their Permitted Transferees may Transfer any Shares except for Transfers (i)
to any of their Permitted Transferees; provided, however, that, prior to any
such Transfer of Shares, such Permitted Transferee shall agree in writing to
take such Shares subject to, and to comply with, all of the provisions of this
Agreement, a copy of which Agreement shall be executed by such Permitted
Transferee and filed with the Secretary of the Company and shall include the
address of such Permitted
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Transferee to which notices hereunder shall be sent, (ii) pursuant to the
provisions of Section 4.04 or 4.05 hereof or (iii) during the Registration
Period, pursuant to a Public Offering of such Shares, on the terms set forth in
Article V hereof.
Section 4.02 Compliance with Securities Laws. Each Stockholder
agrees that every Transfer of its Shares shall comply with all federal, state
and local securities laws applicable to such Transfer. At the request of the
Company, the transferring Stockholder shall deliver to the Company an opinion of
counsel, which counsel and opinion shall be reasonably satisfactory to the
Company, to the effect that the Transfer satisfies this Section 4.02.
Section 4.03 Transfers Not In Compliance. In the event of any
purported or attempted Transfer of Shares by a Stockholder that does not comply
with this Agreement, the purported transferee or successor by operation of law
shall not be deemed to be a stockholder of the Company for any purpose and shall
not be entitled to any of the rights of a stockholder, including, without
limitation, the right to vote the Shares or to receive a certificate for the
Shares or any dividends or other distributions on or with respect to the Shares.
Section 4.04 Tag-Along Rights. Except as provided below, if, at any
time prior to the Registration Period Commencement Date, Stonegate proposes to
directly or indirectly Transfer more than twenty percent (20%) of its shares of
Common Stock to a Person (other than to a Permitted Transferee), Stonegate shall
provide each Stockholder (each a "Notice Recipient") and the Company with not
less than twenty (20) days' prior written notice (the "Sale Notice") of such
proposed Transfer, which notice shall include all of the terms and conditions of
such proposed Transfer and which shall identify such purchaser; and the Notice
Recipient shall have the option, exercisable by written notice to Stonegate
within ten (10) days after the receipt of the Sale Notice, to require Stonegate
to arrange for such purchaser or purchasers to purchase the same percentage (the
"Percentage") of the Shares then owned by such Notice Recipient as the ratio of
the total number of shares of Common Stock which are to be Transferred by
Stonegate pursuant to the proposed Transfer to the total number of shares of
Common Stock owned by Stonegate immediately prior to such Transfer, or any
lesser amount of Shares as such Notice Recipient shall desire, together with
Stonegate's shares of Common Stock at the same time as, and upon the same terms
and conditions at which, Stonegate sells its shares of Common Stock. If a Notice
Recipient shall so elect, Stonegate agrees that it shall either (a) arrange for
the proposed purchaser or purchasers to purchase all or a portion (as such
Notice Recipient shall specify) of the same Percentage of the Shares then owned
by such Notice Recipient at the same time as and upon the same terms
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and conditions at which Stonegate sells its shares of Common Stock, and provided
that if such purchaser or purchasers shall elect to purchase only such aggregate
number of shares of Common Stock as originally agreed with Stonegate, then the
number of shares of Common Stock to be sold by Stonegate and the number of
Shares to be sold by all Notice Recipients electing to participate in the
proposed Transfer shall be reduced pro rata to such aggregate number, or (b) not
effect the proposed Transfer to such purchaser or purchasers. In the event that
a Notice Recipient does not exercise its right to participate in such Transfer
or declines to so participate, Stonegate shall have 120 days from the date of
such Sale Notice to consummate the transaction on the terms set forth therein
without being required to provide an additional Sale Notice to the remaining
Stockholder and comply with the terms of this Section 3.04.
Section 4.05 Drag-Along Rights. If at any time prior to the
Registration Period Commencement Date, Stonegate together with its Permitted
Transferees proposes to Transfer all or substantially all of its shares of
Common Stock (other than to a Permitted Transferee), Stonegate shall have the
right, upon not less than twenty (20) days' prior written notice of such
proposed sale (the "Purchase Notice"), which notice shall include all of the
terms and conditions of such proposed sale and which shall identify the proposed
purchaser(s) of such shares of Common Stock ("Drag Along Purchaser(s)"), to
require each of the Stockholders to sell to the Drag Along Purchaser(s) that
number of Shares ("Call Shares") equal to the product, rounded down to the
nearest whole number, of (a) a fraction, the numerator of which is the total
number of shares of Common Stock proposed to be sold by Stonegate together with
its Permitted Transferees and the denominator of which is the total number of
shares of Common Stock then owned by Stonegate together with its Permitted
Transferees, multiplied by (b) the number of Shares then owned by such
Stockholder, respectively. If Stonegate shall so elect, Stonegate shall arrange
for such Drag Along Purchaser(s) to purchase the Call Shares at the same time as
and upon the same terms and conditions at which Stonegate and its Permitted
Transferees sells its shares of Common Stock. Upon receipt of the Purchase
Notice, each of the Stockholders shall cooperate with Stonegate and otherwise
take, or cause to be taken, all actions and do, or cause to be done, all things
necessary or appropriate to enter into, consummate and make effective the sale
and purchase of the Call Shares, together with Stonegate's and its Permitted
Transferees' shares of Common Stock being so Transferred.
Section 4.06 Effect of Notices. Notwithstanding any provision hereof
to the contrary, the giving to any Stockholder of any Sale Notice or any
Purchase Notice shall not obligate Stonegate to consummate or effect any
transaction
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referred to therein, and Stonegate shall be free to abandon any such transaction
prior to the effectiveness thereof. If any such transaction is so abandoned, the
Stockholders and Stonegate shall continue to be subject to the terms of this
Article IV with respect to the Shares included in such Sale Notice or Purchase
Notice.
ARTICLE V
Registration Rights
Section 5.01 Piggyback Registrations.
(a) Right to Piggyback. During the Registration Period,
whenever the Company proposes to register any shares of its Common Stock or
Common Stock held by any stockholders of the Company under the Securities Act
(other than a registration under Regulation A or relating to Company employee
benefit plans, exchange offers by the Company or a merger or acquisition of a
business or assets by the Company including, without limitation, a registration
on Form S-4 or Form S-8 or any successor form) (a "Piggyback Registration"), the
Company shall give each of the Stockholders prompt written notice thereof (but
not less than fifteen (15) business days prior to the filing by the Company with
the Commission of any registration statement with respect thereto). Such notice
(a "Piggyback Notice") shall specify the number of securities proposed to be
registered, the proposed date of filing of such registration statement with the
Commission, the proposed means of distribution, the proposed managing
underwriter or underwriters (if any and if known), and a good faith estimate by
the Company of the proposed minimum offering price of such securities. Upon the
written request of a Stockholder given to the Secretary of the Company within
ten (10) business days of such Stockholder's receipt of the Piggyback Notice
requesting that the Company include in such registration Registrable Securities
owned by such Stockholder in an amount equal to or greater than the Requisite
Amount (which written request shall specify the number of Registrable Securities
intended to be disposed of by such Stockholder and the intended method of
distribution thereof), the Company shall include in such registration all
Registrable Securities with respect to which the Company has received such
written requests for inclusion, in accordance with the terms hereof.
(b) Priority on Piggyback Registrations. If, in connection
with a Piggyback Registration, any managing underwriter (or, if such Piggyback
Registration is not an underwritten offering, a nationally recognized
independent
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underwriter selected by the Company advises the Company and the holders of the
Registrable Securities to be included in such Piggyback Registration, that, in
its opinion, the inclusion of all the securities sought to be included in such
Piggyback Registration by the Company, any Persons who have sought to have
shares registered thereunder pursuant to rights to demand (other than pursuant
to so-called "piggyback" or other incidental or participation registration
rights) such registration (such demand rights being "Other Demand Rights" and
such Persons being "Other Demanding Sellers"), any holders of Registrable
Securities seeking to sell such securities in such Piggyback Registration
("Piggyback Sellers") and any other proposed sellers, in each case, if any,
would materially adversely affect the marketability of the securities sought to
be sold pursuant thereto, then the Company shall include in the registration
statement applicable to such Piggyback Registration only such securities as the
Company, the Other Demanding Sellers, and the Piggyback Sellers are so advised
by such underwriter can be sold without such an effect (the "Maximum Piggyback
Number"), as follows and in the following order of priority:
(i) if the Piggyback Registration is an offering on
behalf of the Company and not any Person exercising Other Demand Rights
(whether or not other Persons seek to include securities therein pursuant
to so-called "piggyback" or other incidental or participatory registration
rights) (a "Primary Offering"), then (A) first, such number of securities
to be sold by the Company as the Company, in its reasonable judgment and
acting in good faith and in accordance with sound financial practice,
shall have determined, (B) second, if the number of securities to be
included under clause (A) above is less than the Maximum Piggyback Number,
pro rata in proportion to the Registrable Securities sought to be
registered by all the Piggyback Sellers and all other proposed sellers,
which in the aggregate, when added to the number of securities to be
registered under clause (A) above, equals the Maximum Piggyback Number;
(ii) if the Piggyback Registration is an offering other
than pursuant to a Primary Offering, then (A) first, such number of
securities sought to be registered by each Other Demanding Seller, pro
rata in proportion to the number of securities sought to be registered by
all such Other Demanding Sellers, (B) second, if the number of securities
to be included under clause (A) above is less than the Maximum Piggyback
Number, the number of Registrable Securities sought to be registered by
each Piggyback Seller, pro rata
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in proportion to the Registrable Securities sought to be registered by all
the Piggyback Sellers and all other proposed sellers, which in the
aggregate, when added to the number of securities to be registered under
clause (A) above, equals the Maximum Piggyback Number.
(c) Withdrawal by the Company. If, at any time after giving
written notice of its intention to register any of its securities as set forth
in this Section 5.01 and prior to the time the registration statement filed in
connection with such registration is declared effective, the Company shall
determine not to go forward with a Primary Offering, the Company may, at its
election, give written notice of such determination to each Stockholder and
thereupon shall be relieved of its obligation to register any Registrable
Securities in connection with such particular withdrawn or abandoned
registration (but not from its obligation to pay the Registration Expenses in
connection therewith as provided herein).
Section 5.02 Withdrawal Rights. Any Stockholder having notified or
directed the Company to include any or all of its Registrable Securities in a
registration statement under the Securities Act shall have the right to withdraw
any such notice or direction with respect to any or all of the Registrable
Securities designated for registration thereby by giving written notice to such
effect to the Company prior to the effective date of such registration
statement. In the event of any such withdrawal, the Company shall not include
such Registrable Securities in the applicable registration and such Registrable
Securities shall continue to be Registrable Securities hereunder. No such
withdrawal shall affect the obligations of the Company with respect to the
Registrable Securities not so withdrawn.
Section 5.03 Holdback Agreements. Each Stockholder agrees not to
effect any public sale or distribution (including sales pursuant to Rule 144) of
equity securities of the Company, or any securities convertible into or
exchangeable or exercisable for such securities, during the ten (10) day period
prior to the date which the Company intends to commence a Public Offering
(provided the Stockholders are notified in writing of such commencement date)
through the ninety (90) day period immediately following the effective date of
any Piggyback Registration (except as part of such registration), or, if later,
the 90 day period immediately following the execution date of any underwriting
agreement with respect thereto.
Section 5.04 Registration Procedures.
(a) Whenever the Stockholders have requested that any
Registrable Securities be registered pursuant to this Agreement, the Company
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(subject to its right to withdraw such registration as contemplated by Section
5.01(c)) shall use commercially reasonable efforts to effect the registration
and the sale of such Registrable Securities in accordance with the intended
method of disposition thereof and, in connection therewith, the Company shall:
(i) use commercially reasonable efforts to (A) register
the Registrable Securities on Form S-3 or another available short form
registration statement, to the extent permitted under the Securities Act,
(B) cause the registration statement to remain effective for a continuous
period of not less than 180 days (or, if earlier, until all of the
Registrable Securities included in such registration statement have been
sold thereunder), subject to Section 5.04(c), and (C) obtain the
withdrawal of any order suspending the registration or qualification (or
the effectiveness thereof) or suspending or preventing the use of any
related prospectus in any jurisdiction with respect thereto;
(ii) promptly notify each seller of Registrable Securities of
each of (A) the filing and effectiveness of the registration statement and
prospectus and any amendment or supplements thereto, (B) the receipt of
any comments from the Commission or any state securities law authorities
or any other governmental authorities with respect to any such
registration statement or prospectus or any amendments or supplements
thereto, and (C) any oral or written stop order with respect to such
registration, any suspension of the registration or qualification of the
sale of such Registrable Securities in any jurisdiction or any initiation
or threatening of any proceedings with respect to any of the foregoing;
(iii) furnish to each seller of Registrable Securities,
the underwriters and the sales or placement agent, if any, and counsel for
each of the foregoing, a conformed copy of such registration statement and
each amendment and supplement thereto (in each case, including all
exhibits thereto and documents incorporated by reference therein) and
such additional number of copies of such registration statement, each
amendment and supplement thereto (in such case without such exhibits and
documents) the prospectus (including each preliminary prospectus) included
in such registration statement and prospectus supplements and all exhibits
thereto and documents incorporated by reference
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therein and such other documents as such seller, underwriter, agent or
counsel may reasonably request in order to facilitate the disposition of
the Registrable Securities owned by such seller;
(iv) use commercially reasonable efforts to register or
qualify such Registrable Securities under such securities or "blue sky"
laws of such jurisdictions as the holders of Registrable Securities
reasonably request and do any and all other acts and things which may be
reasonably necessary or advisable to enable the holders of Registrable
Securities to consummate the disposition in such jurisdictions of the
Registrable Securities owned by such holders and keep such registration or
qualification in effect for so long as the registration statement remains
effective under the Securities Act (provided that the Company shall not be
required to (x) qualify generally to do business in any jurisdiction
where it would not otherwise be required to qualify but for this
paragraph, (y) subject itself to taxation in any such jurisdiction where
it would not otherwise be subject to taxation but for this paragraph or
(z) consent to the general service of process in any jurisdiction where it
would not otherwise be subject to general service of process but for this
paragraph);
(v) notify each seller of such Registrable Securities,
at any time when a prospectus relating thereto is required to be delivered
under the Securities Act, upon the discovery that, or of the happening of
any event as a result of which, the registration statement covering such
Registrable Securities, as then in effect, contains an untrue statement of
a material fact or omits to state any material fact required to be stated
therein or any fact necessary to make the statements therein not
misleading, and promptly prepare and furnish to each such seller a
supplement or amendment to the prospectus contained in such registration
statement so that such Registration Statement shall not, and such
prospectus as thereafter delivered to the purchasers of such Registrable
Securities shall not, contain an untrue statement of a material fact or
omit to state any material fact required to be stated therein or any fact
necessary to make the statements therein not misleading;
(vi) cause all such Registrable Securities to be listed
on any securities exchange or established over-the-counter
15
market on which or through which similar securities of the Company are
listed or traded and, if not so listed or traded, to be listed on the NASD
automated quotation system ("Nasdaq") and if listed on Nasdaq, use its
reasonable efforts to secure designation of all such Registrable
Securities covered by such registration statement as a Nasdaq "national
market system security" within the meaning of Rule 11Aa2-1 under the
Exchange Act; or, failing that, to secure Nasdaq authorization for such
Registrable Securities;
(vii) make available for inspection by any seller of
Registrable Securities and any attorney, accountant or other agent
retained by any such seller or underwriter all financial and other
records, pertinent corporate documents and properties of the Company, and
cause the Company's officers, directors, employees, attorneys and
independent accountants to supply all information reasonably requested by
any such sellers, attorneys, accountants or agents in connection with such
registration statement. Information which the Company determines, in good
faith, to be confidential shall not be disclosed by such persons unless
(x) the disclosure of such information is necessary to avoid or correct a
misstatement or omission in such registration statement, or (y) the
release of such information is ordered pursuant to a subpoena or other
order from a court of competent jurisdiction. Each seller of Registrable
Securities agrees, on its own behalf and on behalf of all its accountants,
attorneys and agents, that the information obtained by it as a result of
such inspections shall be deemed confidential and shall not be used by it
as the basis for any market transactions in the securities of the Company
unless and until such is made generally available to the public. Each
seller of Registrable Securities further agrees, on its own behalf and on
behalf of all its accountants, attorneys and agents, that it will, upon
learning that disclosure of such information is sought in a court of
competent jurisdiction, give notice to the Company and allow the Company,
at the Company's expense, to undertake appropriate action to prevent
disclosure of the information deemed confidential;
(viii)use commercially reasonable efforts to comply with
all applicable laws related to such registration statement and offering
and sale of securities and all applicable rules and regulations of
governmental authorities in connection therewith (including, without
limitation, the Securities Act and the Exchange
16
Act) and make generally available to its security holders as soon as
practicable (but in any event not later than fifteen (15) months after the
effectiveness of such registration statement) an earnings statement of
the Company and its subsidiaries complying with Section 11(a) of the
Securities Act;
(ix) permit any Stockholder, which Stockholder, in its
sole and exclusive judgment, might be deemed to be an underwriter or
controlling person of the Company, to participate in the preparation of
such registration statement and to require the insertion therein of
material, furnished to the Company in writing, which in the reasonable
judgment of such holder and such holder's counsel should be included; and
(x) use commercially reasonable efforts to furnish to
each seller of Registrable Securities a signed counterpart of (x) an
opinion of counsel for the Company and (y) a "comfort" letter signed by
the independent public accountants who have certified the Company's
financial statements included or incorporated by reference in such
registration statement, covering such matters with respect to such
registration statement and, in the case of the accountants' comfort
letter, with respect to events subsequent to the date of such financial
statements, as are customarily covered in opinions of issuer's counsel and
in accountants' comfort letters delivered to the underwriters in
underwritten public offerings of securities for the account of, or on
behalf of, an issuer of common stock, such opinion and comfort letters to
be dated the date of such opinions and comfort letters are customarily
dated in such transactions, and covering in the case of such legal
opinion, such other legal matters and, in the case of such comfort letter,
such other financial matters, as the holders of a majority of the
Registrable Securities being sold may reasonably request.
(b) Underwriting. Without limiting any of the foregoing, in
the event that the offering of Registrable Securities is to be made by or
through an underwriter, the Company shall enter into an underwriting agreement
with a managing underwriter or underwriters containing representations,
warranties, indemnities and agreements customarily included (but not
inconsistent with the agreements contained herein) by an issuer of common stock
in underwriting agreements with respect to offerings of common stock for the
account of, or on
17
behalf of, such issuers. In connection with the sale of Registrable Securities
hereunder, any seller of such Registrable Securities may, at its option, require
that any and all representations and warranties by, and indemnities and
agreements of, the Company to or for the benefit of such underwriter or
underwriters (or which would be made to or for the benefit of such an
underwriter or underwriter if such sale of Registrable Securities were pursuant
to a customary underwritten offering) be made to and for the benefit of such
seller and that any or all of the conditions precedent to the obligations of
such underwriter or underwriters (or which would be so for the benefit of such
underwriter or underwriters under a customary underwriting agreement) be
conditions precedent to the obligations of such seller in connection with the
disposition of its securities pursuant to the terms hereof. In connection with
any offering of Registrable Securities registered pursuant to this Agreement,
the Company shall (x) furnish to the underwriter, if any (or, if no underwriter,
the sellers of such Registrable Securities), unlegended certificates
representing ownership of the Registrable Securities being sold, in such
denominations as requested and (y) instruct any transfer agent and registrar of
the Registrable Securities to release any stop transfer order with respect
thereto.
(c) Return of Prospectuses. Each seller of Registrable
Securities hereunder agrees that upon receipt of any notice from the Company of
the happening of any event of the kind described in Section 5.04(a)(iv), such
seller shall forthwith discontinue such seller's disposition of Registrable
Securities pursuant to the applicable registration statement and prospectus
relating thereto until such seller's receipt of the copies of the supplemented
or amended prospectus contemplated by Section 5.04(a)(iv) and, if so directed by
the Company, deliver to the Company all copies, other than permanent file
copies, then in such seller's possession of the prospectus current at the time
of receipt of such notice relating to such Registrable Securities. In the event
the Company shall give such notice, the one hundred and eighty (180) day period
during which such registration statement must remain effective pursuant to
Section 5.4(a)(i) of this Agreement (or such shorter period as permitted by
Section 5.04(a)(i)) shall be extended by the number of days during the period
from the date of giving of a notice regarding the happening of an event of the
kind described in Section 5.04(a)(v) to the date when all such sellers shall
receive such a supplemented or amended prospectus and such prospectus shall have
been filed with the Commission.
Section 5.05 Registration Expenses. All expenses incident to the
Company's performance of, or compliance with, its obligations under this
Agreement including, without limitation, all registration and filing fees, all
fees and expenses of compliance with securities and "blue sky" laws (including,
without limitation, the
18
fees and expenses of counsel for underwriters or placement or sales agents in
connection therewith), all printing and copying expenses, all messenger and
delivery expenses, all fees and expenses of underwriters and sales and placement
agents in connection therewith (excluding discounts and commissions and the fees
and expenses of counsel therefor), all fees and expenses of the Company's
independent certified public accountants and counsel (including, without
limitation, with respect to "comfort" letters and opinions) (collectively, the
"Registration Expenses") shall be borne by the Company; notwithstanding the
foregoing, all underwriting discounts and commissions allocable to each
Stockholder selling Registrable Securities (and the fees of expenses of counsel
for such underwriters or placement agents) shall be borne by such Stockholder.
The Company shall not be responsible for the fees and expenses of any additional
counsel, or any of the accountants, agents or experts retained by the
Stockholders in connection with the sale of Registrable Securities. The Company
will pay its internal expenses (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties,
the expense of any annual audit and the expense of any liability insurance) and
the expenses and fees for listing the securities to be registered on each
securities exchange and included in each established over-the-counter market on
which similar securities issued by the Company are then listed or traded or for
listing on Nasdaq.
Section 5.06 Indemnification.
(a) By the Company. The Company agrees to indemnify, to the
fullest extent permitted by law, each holder of Registrable Securities being
sold, its directors and each Person who controls (within the meaning of the
Securities Act) such holder against all losses, claims, damages, liabilities and
expenses (including legal fees and expenses and all costs incident to
investigation or preparation with respect to such losses, claims, damages,
liabilities and expenses and to reimburse such indemnified Person for such costs
as incurred) (collectively, the "Losses") caused by, resulting from or relating
to any untrue or alleged untrue statement of material fact contained in any
registration statement, prospectus or preliminary prospectus or any amendment
thereof or supplement thereto or any omission or alleged omission of a material
fact required to be stated therein or a fact necessary to make the statements
therein not misleading, except insofar as the same are caused by or contained in
any information furnished to the Company by or on behalf of such holder in
writing expressly for use therein or by such holder's failure to deliver a copy
of the registration statement or prospectus or any amendments or supplements
thereto after the Company has furnished such holder with a sufficient number of
copies of the same and notified such holder of such obligation. In connection
with an underwritten offering and without limiting any of the Company's
19
other obligations under this Agreement, the Company shall indemnify such
underwriters, their officers, directors, employees and agents and each Person
who controls (within the meaning of the Securities Act) such underwriters or
such an other indemnified Person to the same extent as provided above with
respect to the indemnification of the holders of Registrable Securities being
sold.
(b) By Stockholders. In connection with any registration
statement in which a holder of Registrable Securities is participating, each
such holder will, if requested, furnish to the Company in writing information
regarding such holder's ownership of Registrable Securities and, to the extent
permitted by law, shall indemnify the Company, its directors and each Person who
controls (within the meaning of the Securities Act) the Company against all
Losses caused by, resulting from or relating to any untrue or alleged untrue
statement of material fact contained in the registration statement, prospectus
or preliminary prospectus or any amendment thereof or supplement thereto or any
omission or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, but only to the extent
that such untrue statement or omission is caused by and contained in such
information so furnished to the Company in writing by or on behalf of such
holder; provided, however, that each holder's obligation to indemnify the
Company hereunder shall be apportioned between each holder based upon the net
amount received by each holder from the sale of Registrable Securities, as
compared to the total net amount received by all of the holders of Registrable
Securities sold pursuant to such registration statement, no such holder being
liable to the Company in excess of such apportionment.
(c) Notice. Any Person entitled to indemnification hereunder
shall give prompt written notice to the indemnifying party of any claim with
respect to which its seeks indemnification; provided, however, the failure to
give such notice shall not release the indemnifying party from its obligation,
except to the extent that the indemnifying party has been materially prejudiced
by such failure to provide such notice.
(d) Defense of Actions. In any case in which any such action
is brought against any indemnified party, and it notifies an indemnifying party
of the commencement thereof, the indemnifying party will be entitled to
participate therein, and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, 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 (so long as it shall
continue to have the right to defend, contest, litigate
20
and settle the matter in question in accordance with this paragraph) be liable
to such indemnified party hereunder for any legal or other expense subsequently
incurred by such indemnified party in connection with the defense thereof other
than reasonable costs of investigation, supervision and monitoring (unless such
indemnified party reasonably objects to such assumption on the grounds that
there may be defenses available to it which are different from or in addition to
the defenses available to such indemnifying party, in which event the
indemnified party shall be reimbursed by the indemnifying party for the expenses
incurred in connection with retaining separate legal counsel). An indemnifying
party shall not be liable for any settlement of an action or claim effected
without its consent. The indemnifying party shall lose its right to defend,
contest, litigate and settle a matter if it shall fail to diligently contest
such matter (except to the extent settled in accordance with the next following
sentence). No matter shall be settled by an indemnifying party without the
consent of the indemnified party (which consent shall not be unreasonably
withheld).
(e) Survival. The indemnification provided for under this
Agreement shall remain in full force and effect regardless of any investigation
made by or on behalf of the indemnified Person and will survive the transfer of
the Registrable Securities and the termination of this Agreement.
(f) Contribution. If recovery is not available under the
foregoing indemnification provisions for any reason or reasons other than as
specified therein, any Person who would otherwise be entitled to
indemnification by the terms thereof shall nevertheless be entitled to
contribution with respect to any Losses with respect to which such Person would
be entitled to such indemnification but for such reason or reasons. In
determining the amount of contribution to which the respective Persons are
entitled, there shall be considered the Persons' relative knowledge and access
to information concerning the matter with respect to which the claim was
asserted, the opportunity to correct and prevent any statement or omission, and
other equitable considerations appropriate under the circumstances. It is hereby
agreed that it would not necessarily be equitable if the amount of such
contribution were determined by pro rata or per capita allocation. 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 found guilty of such fraudulent misrepresentation. Notwithstanding the
foregoing, no Stockholder shall be required to make a contribution in excess of
the net amount received by such holder from the sale of Registrable Securities.
21
ARTICLE VI
Miscellaneous
Section 6.01 Specific Performance. Each of the Stockholders
acknowledges and agrees that in the event of any breach of this Agreement, the
non-breaching party or parties would be irreparably harmed and could not be
made whole by monetary damages. The Stockholders hereby agree that in addition
to any other remedy to which any party may be entitled at law or in equity, they
shall be entitled to compel specific performance of this Agreement in any action
instituted in any court of the United States or any state thereof having subject
matter jurisdiction for such action.
Section 6.02 Headings. The headings in this Agreement are for
convenience of reference only and shall not control or affect the meaning or
construction of any provisions hereof.
Section 6.03 Entire Agreement. This Agreement constitutes the entire
agreement and understanding of the parties hereto in respect of the subject
matter contained herein, and there are no restrictions, promises,
representations, warranties, covenants, conditions or undertakings with respect
to the subject matter hereof, other than those expressly set forth or referred
to herein. This Agreement supersedes all prior agreements and understandings
between the parties hereto with respect to the subject matter hereof.
Section 6.04 Notices. All notices and other communications hereunder
shall be in writing and shall be delivered personally or by next-day courier or
telecopied with confirmation of receipt, to the parties at the addresses
specified below (or at such other address for a party as shall be specified by
like notice; provided that notices of change of address shall be effective only
upon receipt thereof). Any such notice shall be effective upon receipt, if
personally delivered or telecopied, or one day after delivery to a courier for
next-day delivery.
If to the Stonegate or the Company, to:
Builders FirstSource, Inc.
0000 Xxxx Xxxxxx, Xxxxx 0000 Xxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. XxXxxxxxx, Esq.
Fax: (000) 000-0000
22
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
If to Xxxxxxxx, to:
00 Xxxxxxxxx Xxxxxxx
Xxxxx Xxxxxxxx, XX 00000
Attention: Xxxx Xxxxxxxx
Fax: (000) 000-0000
with a copy to:
Proskauer Rose LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxx X. Xxxxxxx, Esq.
Fax: (000) 000-0000
Section 6.05 Applicable Law. The substantive laws of the State of
Delaware shall govern the interpretation, validity and performance of the terms
of this Agreement, regardless of the law that might be applied under applicable
principles of conflicts of laws.
Section 6.06 Severability. The invalidity, illegality or
unenforceability of one or more of the provisions of this Agreement in any
jurisdiction shall not affect the validity, legality or enforceability of the
remainder of this Agreement in such jurisdiction or the validity, legality or
enforceability of this Agreement, including any such provision, in any other
jurisdiction, it being intended that all rights and obligations of the parties
hereunder shall be enforceable to the fullest extent permitted by law.
Section 6.07 Successors; Assigns. The provisions of this Agreement
shall be binding upon the parties hereto and their respective heirs, successors
and permitted assigns. Neither this Agreement nor the rights or obligations of
any
23
Stockholder hereunder may be assigned, except in connection with the transfer by
a Stockholder of shares of Common Stock to a Permitted Transferee or as
otherwise provided in this Agreement. Any such attempted assignment in
contravention of this Agreement shall be void and of no effect.
Section 6.08 Amendments. This Agreement may not be amended, modified
or supplemented unless such modification is in writing and signed by the
Company, Stonegate and Stockholders owning at least 662/3% of the outstanding
shares of Common Stock subject to this Agreement as of the date hereof.
Section 6.09 Waiver. Any waiver (express or implied) of any default
or breach of this Agreement shall not constitute a waiver of any other or
subsequent default or breach.
Section 6.10 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original but all of which
shall constitute one and the same Agreement.
Section 6.11 Termination. Unless earlier terminated, this Agreement
shall terminate upon the earlier of (i) the third anniversary of the date of the
Initial Public Offering or (ii) the tenth anniversary of the date hereof.
[SIGNATURE PAGES FOLLOW]
24
IN WITNESS WHEREOF, the undersigned hereby agree to be bound by the
terms and provisions of this Stock Purchase Agreement as of the date first above
written.
BUILDERS FIRSTSOURCE, INC.
By: /s/ Xxxxxx X. XxXxxxxxx
-------------------------------------
Name: Xxxxxx X. XxXxxxxxx
Title: Senior Vice President
STONEGATE RESOURCES HOLDINGS, LLC
By: /s/ Xxxxxx X. XxXxxxxxx
-------------------------------------
Name: Xxxxxx X. XxXxxxxxx
Title: Senior Vice President
/s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxxxx
