INVESTMENT AGREEMENT
Exhibit 10.1
EXECUTION COPY
This INVESTMENT AGREEMENT (this “Agreement”), dated as of October 23, 2009, is made by and
among JLL Partners Fund V, L.P., a Delaware limited partnership (“JLL Fund V”), and Warburg Pincus
Private Equity IX, L.P., a Delaware limited partnership (“Warburg Pincus”) (each of JLL Fund V and
Warburg Pincus, an “Investor,” and collectively, the “Investors”), and Builders FirstSource, Inc.,
a Delaware corporation (the “Company”). Capitalized terms used in this Agreement have the meanings
assigned thereto in the sections indicated on Schedule I hereto.
WHEREAS, as part of the Recapitalization (as defined below) of the Company, the Company
proposes to distribute, at no charge, to each holder of record on a record date to be set by the
Board of Directors of the Company (the “Record Date”) of shares of common stock, par value $0.01
per share, of the Company (the “Common Stock”) transferable rights (the “Rights”) to subscribe for
and purchase a number of shares of Common Stock that, if exercised in full, will provide gross
proceeds to the Company of $205.0 million (the “Aggregate Offering Amount”) (the “Rights
Offering”); and
WHEREAS, each holder of a Right will be entitled (the “Basic Subscription Privilege”) to
purchase up to its pro rata portion of 58,571,428 shares of Common Stock (the “Offered Shares”), at
a price of $3.50 per share (as adjusted for any stock split, combination, reorganization,
recapitalization, stock dividend, stock distribution or similar event, the “Subscription Price”);
and
WHEREAS, each holder of a Right (other than the Investors) that exercises in full its Basic
Subscription Privilege will be entitled (the “Over-Subscription Privilege”) to subscribe for
additional shares of Common Stock at the Subscription Price, to the extent that holders of Rights
do not subscribe for and purchase all of the Offered Shares available under the Basic Subscription
Privilege; and
WHEREAS, as part of the Recapitalization, the Company intends (i) to offer new second lien
debt securities having the terms set forth on Exhibit A hereto (“New Notes”) and cash from
a portion of the gross proceeds of the Rights Offering in exchange for the outstanding Second
Priority Senior Secured Floating Rate Notes due 2012 of the Company (the “Notes”) in transactions
exempt from the registration requirements of the Securities Act of 1933, as amended (the
"Securities Act”), pursuant to Section 4(2) thereunder and (ii) under certain circumstances, to
provide holders of outstanding Notes the right to exchange outstanding Notes for shares of Common
Stock at an exchange price equal to the Subscription Price in transactions exempt from the
registration requirements of the Securities Act, substantially on the terms set forth in that
certain Support Agreement, dated as of the date hereof, between the Company and certain holders of
outstanding Notes signatory thereto (collectively, the “Debt Exchange” and, together with the
Rights Offering, the “Recapitalization”); and
WHEREAS, in order to facilitate the Rights Offering, the Investors and the Company wish to
enter into this Agreement, pursuant to which and upon the terms and subject to
the conditions set forth herein, (i) to the extent that the gross proceeds of the Rights
Offering are less than $75.0 million, the Company shall have the right to require the Investors to
purchase, upon expiration of the Rights Offering, at the Subscription Price, a number of Offered
Shares not subscribed for and purchased by holders of Rights upon exercise thereof under the Basic
Subscription Privilege and Over-Subscription Privilege such that the total gross proceeds of the
Rights Offering equal $75.0 million; and (ii) to the extent that the Rights Offering is not fully
subscribed, the Investors shall agree to exchange the Notes held indirectly by such Investors for
shares of Common Stock at an exchange price equal to the Subscription Price, to the extent of such
deficiency and subject to the rights of other holders of Notes that participate in such exchange;
and
WHEREAS, the Special Committee of the Board of Directors of the Company (the “Special
Committee”) has received an opinion from its financial advisor, Moelis & Company LLC, that the
terms of the Rights Offering are fair from a financial point of view to the holders of Common Stock
other than the Investors and has, based upon such opinion and other factors, unanimously
recommended the Rights Offering, the Debt Exchange, this Agreement, and the transactions
contemplated hereby to the Board of Directors of the Company (the “Board”) for approval; and
WHEREAS, the Board has unanimously approved the Rights Offering, the Debt Exchange, this
Agreement, and the transactions contemplated hereby and recommended that stockholders of the
Company vote in favor of the issuance of shares of Common Stock in the Rights Offering and Debt
Exchange pursuant to the terms hereof.
NOW, THEREFORE, in consideration of the mutual promises, agreements, representations,
warranties and covenants contained herein, each of the parties hereto hereby agrees as follows:
1. Rights Offering; Use of Proceeds.
(a) On the terms and subject to the conditions set forth herein, the Company shall distribute,
at no charge, to the holder of record of each share of Common Stock as of the Record Date (each, an
"Eligible Holder”) a number of Rights per share of Common Stock equal to 58,571,428 divided by the
number of shares of Common Stock outstanding as of the close of business on the Record Date (the
"Rights Ratio”); provided that Rights will be rounded to the nearest whole number so that the
Subscription Price multiplied by the aggregate number of Offered Shares will not exceed the
Aggregate Offering Amount. Each whole Right will entitle the holder thereof to purchase at the
Subscription Price one share of Common Stock. Each such Right shall be transferable separately
from the underlying shares of Common Stock on account of which such Right was distributed.
Eligible Holders and holders to whom Rights have been validly transferred are collectively referred
to as “Holders,” each individually being a “Holder.”
(b) The Rights (including under both the Basic Subscription Privilege and the
Over-Subscription Privilege) may be exercised during a period (the “Rights Exercise Period”)
commencing on the date on which the Rights are issued to Eligible Holders (the “Rights
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Offering
Commencement Date”) and ending at 5:00 p.m. Eastern Standard Time on a Business Day (the
"Expiration Time”) that shall not be less than thirty (30) days after the Rights Offering
Commencement Date, subject to extension at the discretion of the Special Committee; provided,
however, that the Rights Exercise Period shall not be more than forty (40) days without the prior
written consent of the Investors. “Business Day” has the meaning ascribed to such term in Rule
14d-1(g) under the Securities Exchange Act of 1934, as amended and in effect on the date hereof
(the “Exchange Act”).
(c) Each Holder that wishes to exercise all or a portion of its Rights under the Basic
Subscription Privilege shall (i) during the Rights Exercise Period return a duly executed document
to a subscription agent selected by the Company (the “Subscription Agent”) electing to exercise all
or a portion of the Rights held by such Holder and (ii) pay in immediately available funds an
amount equal to the full Subscription Price for the number of shares of Common Stock that such
Holder elects to purchase pursuant to the instructions set forth in the Rights Offering
Registration Statement and related materials by the Expiration Time to an escrow account
established for the Rights Offering. On the Closing Date, subject to the satisfaction (or waiver
of) the conditions to the Rights Offering, the Company shall issue to each Holder that validly
exercised its Rights under the Basic Subscription Privilege the number of Offered Shares to which
such Holder is entitled based on such exercise. The obligation of the Company to consummate the
Rights Offering shall be subject to the conditions set forth in Section 8(c) (which may not
be waived, in whole or in part, by the Company without the prior written consent of the Investors).
(d) Each Holder (other than the Investors) that exercises in full its Basic Subscription
Privilege will be entitled under the Over-Subscription Privilege to subscribe for additional shares
of Common Stock at the Subscription Price pursuant to the instructions set forth in the Rights
Offering Registration Statement and related materials to the extent that other Holders elect not to
exercise all of their respective Rights to subscribe for and purchase all of the Offered Shares
under the Basic Subscription Privilege; provided that no Holder shall be entitled to purchase more
Offered Shares under the Over-Subscription Privilege than such Holder subscribed for under the
Basic Subscription Privilege. If the number of Offered Shares remaining after the exercise of
Rights under the Basic Subscription Privilege (the “Remaining Offered Shares”) is not sufficient to
satisfy all requests for Offered Shares under the Over-Subscription Privilege, the Holders that
exercised their Rights under the Over-Subscription Privilege will be allocated such Remaining
Offered Shares as follows: the number of Remaining Offered Shares allotted to each Holder
participating in the Over-Subscription Privilege shall be the product (rounded to the nearest whole
number so that the Subscription Price multiplied by the aggregate number of Offered Shares does not
exceed the Aggregate Offering Amount) obtained by multiplying the number of Offered Shares such
Holder subscribed for under the Over-Subscription Privilege by a fraction the numerator of which is
the number of Remaining Offered Shares and the denominator of which is the total number of Offered
Shares sought to be subscribed for under the Over-Subscription Privilege by all Holders
participating in such Over-Subscription Privilege.
(e) The first $75.0 million of gross proceeds from the sale of the Offered Shares pursuant to
the Rights Offering or the sale of the Unsubscribed Shares (as defined below) to the Investors
pursuant to the Put Option (as defined below) will be used by the Company for general
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corporate
purposes and to pay all fees and expenses associated with the Recapitalization as provided in
Section 2(h) and all Transaction Expenses (as defined below) as provided in Section
2(i). The remaining proceeds, if any, from the sale of the Offered Shares pursuant to the
Rights Offering will be used to repurchase outstanding Notes pursuant to the Debt Exchange on the
terms set forth in the Support Agreement, dated as of the date hereof, between the Company and
certain holders of outstanding Notes signatory thereto (the “Support Agreement”) and the Note
Offering Materials (as defined below). Holders of outstanding Notes that participate in the Debt
Exchange will be permitted to make an election to exchange, at par, the issued and outstanding
Notes held by them (i) for up to $145.0 million aggregate principal amount of New Notes (as that
amount may be reduced pursuant to subsection (A) below); (ii) for up to $130.0 million in cash from
a portion of the gross proceeds of the Rights Offering (as that amount may be reduced pursuant to
subsections (B) and (C) below); or (iii) for a combination of New Notes and cash (subject to
reduction as provided below). Allocations of New Notes and cash requested by participants in the
Debt Exchange will be made only after the Exchange Deficiency (as defined below), if any, shall
have been satisfied by the exchange of outstanding Notes for shares of Common Stock pursuant to
subsections (B) and (C) below. Amounts of New Notes and cash to which holders of Notes
participating in the Debt Exchange will be entitled shall be subject to the following provisions:
(A) To the extent that less than one hundred percent (100%) of the outstanding Notes are
validly exchanged in the Debt Exchange, then the amount of New Notes available for exchange in the
Debt Exchange shall be reduced on a dollar-for-dollar basis by the aggregate principal amount of
Notes that are not so exchanged. New Notes and cash will be allocated to participants in the Debt
Exchange pro rata in proportion to the amounts of New Notes and cash requested by participants in
such Debt Exchange.
(B) If the Company receives less than $205.0 million of gross proceeds from the Rights
Offering, participants in the Debt Exchange will also be permitted to elect to exchange, and the
Investors will be required pursuant to Section 2(c) to exchange, to the extent of the
excess of the Aggregate Offering Amount over the gross proceeds actually obtained by the Company in
the Rights Offering and from the purchase of the Unsubscribed Shares by the Investors pursuant to
this Agreement (such amount, the “Exchange Deficiency”), Notes held by them for shares of Common
Stock (in lieu of New Notes and cash) at an exchange price equal to the Subscription Price, with
allocations of available shares of Common Stock to be made pro rata in proportion to the aggregate
principal amount of Notes validly exchanged in the Debt Exchange by such holders of Notes
(including by the Investors pursuant to Section 2(c)) for shares of Common Stock.
(C) To the extent the aggregate principal amount of Notes so exchanged for shares of Common
Stock pursuant to subsection (B) above is less than the full amount of the Exchange Deficiency,
including after any exchange of Notes for shares of Common Stock by the Investors pursuant to
Section 2(c) and by other holders of outstanding Notes that have elected to receive shares
of Common Stock in the Debt Exchange, all holders of outstanding Notes participating in the Debt
Exchange and electing to receive New Notes or cash in the Debt Exchange will receive, in exchange
for Notes validly exchanged in the Debt Exchange, shares of Common Stock at an exchange price equal
to the Subscription Price pro rata in proportion to the amount of Notes validly exchanged by them
in the Debt Exchange for consideration other than shares of Common Stock.
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2. Requirement to Purchase Unsubscribed Shares; Exchange Shares; Fees and Expenses.
(a) Upon the terms and subject to the conditions set forth in this Agreement, to the extent
that the gross proceeds from the sale of the Offered Shares pursuant to the Rights Offering
(including upon exercise of Rights under the Over-Subscription Privilege) are less than $75.0
million, the Company shall have the right, upon delivery to the Investors of a Notice of Offering
Results pursuant to Section 2(b), to require (the “Put Option”) each Investor to purchase
on the Closing Date, and each Investor agrees to purchase on the Closing Date, at the Subscription
Price, fifty percent (50%) of that positive number of Offered Shares issuable pursuant to Rights,
if any, equal to (i) 21,428,572 shares of Common Stock minus (ii) the number of shares of Common
Stock validly subscribed for and purchased under the Basic Subscription Privilege and the
Over-Subscription Privilege (such shares of Common Stock equal to such difference, in the
aggregate, the “Unsubscribed Shares”).
(b) The Company hereby agrees and undertakes to notify the Investors as promptly as
practicable and, in any event, by 10:00 a.m., Eastern Time, on the first Business Day after the
Expiration Time by electronic or facsimile transmission of (i) the aggregate number of Rights
validly exercised by Holders under the Basic Subscription Privilege and Over-Subscription Privilege
pursuant to the Rights Offering as of the Expiration Time and the aggregate Subscription Price
therefor, (ii) the number of Unsubscribed Shares, if any, (iii) the aggregate principal amount of
Notes validly submitted for exchange in the Debt Exchange as of the Expiration Time, and (iv) the
allocations of New Notes, cash, and shares of Common Stock requested by participants in such Debt
Exchange (such notification, the “Notice of Offering Results”). Not later than 5:00 p.m., Eastern
Time, on the second (2nd) Business Day following the Expiration Time, notwithstanding
the expiration of the Rights Offering and the Debt Exchange and subject to the Investors’ receipt
of the Notice of Offering Results, each Investor shall be required, and the Company shall permit
each Investor, to make an election whether or not it wishes to exercise its Rights pursuant to the
Basic Subscription Privilege to subscribe for and purchase all or any portion of its pro rata
portion of the Offered Shares pursuant to the Rights Offering (any such Offered Shares, the
“Investor Offered Shares”).
(c) Upon the terms and subject to the conditions set forth in this Agreement, each Investor
shall exchange, or cause to be exchanged, the outstanding Notes indirectly held by it (such Notes,
the “Investor Notes”) in the Debt Exchange for shares of Common Stock at an exchange price equal to
the Subscription Price, and, to the extent that there is an Exchange Deficiency, the Company shall,
on the Closing Date, exchange the Investor Notes for shares of Common Stock at an exchange price
equal to the Subscription Price. Such Investor Notes shall be exchanged by the Company on the
Closing Date for shares of Common Stock only to the extent of any Exchange Deficiency; provided
that the aggregate principal amount of Investor Notes exchanged by each such Investor shall not
exceed $48.909 million; and provided further that allocations of available shares of Common Stock
to be issued to satisfy the Exchange Deficiency will be made pro rata in proportion to the
aggregate principal amount of Notes validly exchanged in the Debt Exchange by holders of Notes
(including by the Investors pursuant to this Section 2(c)) for shares of Common Stock; and
provided further that, to the extent the
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number of shares of Common Stock available for exchange in
the Debt Exchange (after giving effect to any proration of such available shares of Common Stock)
is insufficient for all of the Investor Notes to be exchanged for shares of Common Stock, such
Investor Notes that cannot be exchanged for shares of Common Stock in accordance with this
Section 2(c) shall be exchanged for, and the Investors shall elect to receive with respect
thereto, either New Notes, cash, or a
combination thereof. All such shares of Common Stock received in exchange for outstanding
Notes pursuant to this Agreement and the transactions contemplated herein are referred to as the
“Exchange Shares,” and those Exchange Shares received by the Investors in exchange for outstanding
Investor Notes are referred to as the “Investor Exchange Shares.”
(d) Each Investor shall have the right to arrange for one or more of its respective Affiliates
(each, an “Affiliated Purchaser”) to purchase all or any portion of such Investor’s portion of
Unsubscribed Shares, on the terms and subject to the conditions in this Agreement, by written
notice to the Company at least one (1) Business Day prior to the Settlement Date, which notice
shall be signed by the applicable Investor and each Affiliated Purchaser and shall contain a
confirmation by the Affiliated Purchaser of the accuracy with respect to it of the representations
set forth in Section 4. In no event will any such arrangement relieve such Investor of its
obligations under this Agreement. The term “Affiliate” has the meaning ascribed to such term in
Rule 12b-2 under the Exchange Act.
(e) The closing of the purchase of the Offered Shares (including the Investor Offered Shares,
if any) to be purchased in the Rights Offering, the exchange of outstanding Notes pursuant to the
Debt Exchange, the issuance of any Exchange Shares (including any Investor Exchange Shares)
pursuant to this Agreement, and, if necessary, the purchase of the Unsubscribed Shares to be
purchased by the Investors or their Affiliated Purchasers hereunder will occur at 10:00 a.m.,
Eastern Standard Time, on the fourth (4th) Business Day following the later of the
Expiration Time and the satisfaction of the conditions set forth in Section 8 (or waiver
thereof by the party or parties entitled to waive such conditions) (the “Closing Date”), or such
other time as shall be agreed upon by the Company and the Investors. Delivery of the Unsubscribed
Shares and Investor Offered Shares will be made by the Company on the Closing Date in book-entry
form to the accounts of the Investors (or to such other accounts, including the account of an
Affiliated Purchaser, as the Investors may designate in accordance with this Agreement) against
payment by the Investors of the Subscription Price therefor by wire transfer of immediately
available funds to the account designated in writing by the Company. The Investor Exchange Shares
will be delivered by the Company on the Closing Date in book-entry form to the accounts of the
Investors (or to such other accounts, including the account of an Affiliated Purchaser, as the
Investors may designate in accordance with this Agreement). On the Closing Date, the Company will
also deliver to the Investors a certificate, dated as of the Closing Date, of the transfer agent of
the Company confirming the issuance to the Investors of the Unsubscribed Shares, if any, the
Investor Offered Shares, if any, and the Investor Exchange Shares, if any, and all other documents
and certificates required to be delivered to the Investor pursuant to Section 8(a).
(f) All Unsubscribed Shares, Investor Offered Shares, and Investor Exchange Shares will be
delivered with any and all issue, stamp, transfer, sales and use, or similar taxes or duties
payable in connection with such delivery duly paid by the Company.
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(g) The Company shall notify, or cause the Subscription Agent to notify, the Investors on each
Friday during the Rights Exercise Period and on each Business Day during the five Business Days
prior to the Expiration Time (and any extensions thereto), or more frequently if reasonably
requested by the Investors, of the aggregate number of Rights known by the Company or the
Subscription Agent to have been validly exercised pursuant to the Rights
Offering as of the close of business on the preceding Business Day or the most recent
practicable time before such request, as the case may be. The Company shall also notify, or cause
the exchange agent selected by the Company to notify, the Investors on each Friday during the
thirty (30) days that precede the closing of the Debt Exchange and on each Business Day during the
five Business Days prior to the closing of the Debt Exchange, or more frequently if reasonably
requested by the Investors, of the aggregate principal amount of Notes known by the Company or such
exchange agent to have been validly submitted for exchange in the Debt Exchange and the allocations
of New Notes, cash, and shares of Common Stock requested by participants in such Debt Exchange as
of the close of business on the preceding Business Day or the most recent practicable time before
such request, as the case may be.
(h) The Company shall pay all of its own fees and expenses associated with the
Recapitalization, including, without limitation, filing and printing fees, fees and expenses of any
subscription and information agents, its counsel and financial advisor and accounting fees and
expenses, costs associated with clearing the Offered Shares for sale under applicable state
securities laws, and listing fees.
(i) On the Closing Date, the Company shall promptly reimburse or pay, as the case may be, the
reasonable, documented out-of-pocket costs and expenses incurred by each Investor and its
Affiliated Purchasers, if any, in connection with the Recapitalization, including reasonable fees,
out-of-pocket costs and expenses of Evercore Partners, Inc. and counsel to such Investor
(collectively, “Transaction Expenses”). For the avoidance of doubt, the filing fee, if any,
required to be paid in connection with any filings required to be made by the Investors or their
Affiliates under the HSR Act or any other competition laws or regulations shall be paid by the
Company on behalf of the Investors and their Affiliates, as the case may be, when filings under the
HSR Act or any other competition laws or regulations are made, together with all expenses of the
Investors and their Affiliates incurred to comply therewith and the fees, out-of-pocket costs and
expenses incurred by the Investor in connection with such filings.
3. Representations and Warranties of the Company. The Company represents and warrants to,
and agrees with each of the Investors, as set forth below. Except for representations, warranties
and agreements that are expressly limited as to their date, each representation, warranty and
agreement is made as of the date hereof and as of the Closing Date after giving effect to the
transactions contemplated hereby:
(a) Organization and Qualification. The Company and each of its Subsidiaries has been
duly organized and is validly existing in good standing under the laws of its respective
jurisdiction of incorporation, with the requisite power and authority to own its properties and
conduct its business as currently conducted. Each of the Company and its Subsidiaries has been
duly qualified as a foreign corporation or organization for the transaction of business and is in
good standing under the laws of each other jurisdiction in which the nature of its properties or
business requires such qualification, except to the extent that the failure to be so qualified or
be
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in good standing has not had and would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect. For the purpose of this Agreement, “Material Adverse
Effect” means (i) any material adverse effect on the business, condition (financial or otherwise)
or results of operations of the Company or its Subsidiaries, taken as a whole, or (ii) any material
adverse effect on the ability of the Company, subject to the approvals and other
authorizations set forth in Section 3(g), to consummate the transactions contemplated
by this Agreement, provided, however, that any effect caused by or resulting from the following
shall not constitute, or be taken into account in determining whether there has been, or will be, a
Material Adverse Effect on or with respect to the Company: (I) general changes or developments in
the industry in which the Company and its Subsidiaries operate, (II) political instability, acts of
terrorism or war, (III) any change affecting the United States economy generally or the economy of
any region in which the Company or any of its Subsidiaries conducts business that is material to
the business of the Company and its Subsidiaries, (IV) any change in the price or trading volume of
the Company’s outstanding securities (it being understood that the facts or occurrences giving rise
to or contributing to such change in stock price or trading volume may be deemed to constitute, or
be taken into account in determining whether there has been, or will be, a Material Adverse
Effect), (V) any failure, in and of itself, by the Company to meet any internal or published
projections, forecasts, or revenue or earnings predictions for any period ending on or after the
date of this Agreement (it being understood that the facts or occurrences giving rise to or
contributing to such failure may be deemed to constitute, or be taken into account in determining
whether there has been, or will be, a Material Adverse Effect), (VI) the announcement of the
execution of this Agreement, or the pendency of the consummation of the Recapitalization, or the
performance of this Agreement and the transactions contemplated hereby, including compliance with
the covenants set forth herein, or (VII) any change in any applicable law, rule or regulation or
United States generally accepted accounting principles or interpretation thereof after the date
hereof, unless and to the extent, in the case of clause (I), (II), (III), and (VII) above, such
effect has had or would reasonably be expected to have a materially disproportionate adverse effect
on the business, condition (financial or otherwise) or results of operations of the Company and its
Subsidiaries, taken as a whole, relative to other affected persons. For the purposes of this
Agreement, a “Subsidiary” of any person means, with respect to such person, any corporation,
limited liability company, partnership, joint venture or other legal entity of which such person
(either alone or through or together with any other subsidiary), owns, directly or indirectly, more
than 50% of the stock or other equity interests, has the power to elect a majority of the board of
directors or similar governing body, or has the power to direct the business and policies.
(b) Corporate Power and Authority. The Company has the requisite corporate power and
authority to enter into, execute, and deliver this Agreement and each other agreement, document,
and instrument to which it will be a party or which it will execute and deliver in connection with
the transactions contemplated by this Agreement (this Agreement and such other agreements,
documents, and instruments collectively, the “Transaction Agreements”) and, subject to receipt of
Stockholder Approval (as defined below), to perform its obligations hereunder and thereunder,
including the issuance of the Rights, the Offered Shares (including the Unsubscribed Shares), and
any Exchange Shares, the exchange of outstanding Notes pursuant to the Debt Exchange, and the
payment of the Transaction Expenses. Subject to receipt of Stockholder Approval, the Company has
taken all necessary corporate action required for the due
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authorization of the Transaction
Agreements, including the issuance of the Rights, the Offered Shares (including the Unsubscribed
Shares), and any Exchange Shares and the exchange of Notes pursuant to the Debt Exchange. Based
upon the unanimous recommendation of the Special Committee, the Board has determined to recommend
that stockholders of the Company vote in favor of the issuance of the Offered Shares in the Rights
Offering, the issuance and sale
of the Unsubscribed Shares to the Investors pursuant to the terms hereof, and the issuance of
Exchange Shares in the Debt Exchange pursuant to the terms hereof.
(c) Execution and Delivery; Enforceability. This Agreement and each other Transaction
Agreement will be, at or prior to the Closing Date, duly and validly executed and delivered by the
Company, and each such Transaction Agreement constitutes, or, when executed and delivered, will
constitute, a valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as 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.
(d) Authorized and Issued Capital Stock. The authorized capital stock of the Company
consists of (i) 200,000,000 shares of Common Stock and (ii) 10,000,000 shares of preferred stock,
par value $0.01 per share (“Preferred Stock”). As of September 30, 2009, (i) 36,120,251 shares of
Common Stock were issued and outstanding; (ii) no shares of Common Stock were held in the treasury
of the Company; (iii) 2,581,501 shares of Common Stock were reserved for future issuance pursuant
to outstanding stock options and other rights to purchase shares of Common Stock and vesting of
restricted stock units (each, an “Option” and, collectively, the “Options”) granted under any stock
option or stock-based compensation plan of the Company or otherwise (the “Stock Plans”); and (iv)
no shares of Preferred Stock were issued and outstanding. The issued and outstanding shares of
Common Stock of the Company and each of its Subsidiaries have been duly authorized and validly
issued and are fully paid and nonassessable, and are not subject to any preemptive rights. Except
as set forth in this Section 3(d), as of the date of this Agreement, no shares of capital
stock or other equity securities or voting interest in the Company are issued, reserved for
issuance or outstanding. Since the date of this Agreement, no shares of capital stock or other
equity securities or voting interest in the Company have been issued or reserved for issuance or
become outstanding, other than shares described in this Section 3(d) that have been issued
upon the exercise of outstanding Options granted under the Stock Plans and other than the Offered
Shares, the Unsubscribed Shares, and the Exchange Shares to be issued hereunder. Except as
described in this Section 3(d), and other than the Second Amended and Restated Stockholders
Agreement, dated as of June 2, 2005, neither the Company nor any of its Subsidiaries is party to or
otherwise bound by or subject to any outstanding option, warrant, call, subscription or other right
(including any preemptive right), agreement or commitment that (w) obligates the Company or any of
its Subsidiaries to issue, deliver, sell or transfer, or repurchase, redeem or otherwise acquire,
or cause to be issued, delivered, sold or transferred, or repurchased, redeemed or otherwise
acquired, any shares of the capital stock of, or other equity or voting interests in, the Company
or any of its Subsidiaries or any security convertible or exercisable for or exchangeable into any
capital stock of, or other equity or voting interest in, the Company or any of its Subsidiaries,
(x) obligates the Company or any of its Subsidiaries to issue, grant, extend or enter into any such
option, warrant, call, right,
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security, commitment, contract, arrangement or undertaking, (y)
restricts the transfer of any shares of capital stock of the Company (other than pursuant to
restricted stock award agreements under the Stock Plans), or (z) relates to the voting of any
shares of capital stock of the Company. All issued and outstanding shares of capital stock and
equity interests (as applicable) of each Subsidiary are owned beneficially and of record by the
Company or another Subsidiary, free and clear of any and all liabilities, obligations, liens,
security interests, mortgages, pledges, charges,
or similar encumbrances, other than as provided under (1) the Loan and Security Agreement,
dated December 14, 2007, among the Company, the Borrowers party thereto, the Guarantors party
thereto, the Lenders party thereto, Wachovia Bank, National Association, as Administrative Agent
and Collateral Trustee, UBS Securities LLC, as Syndication Agent, General Electric Capital
Corporation, as Documentation Agent, and Wachovia Capital Markets, LLC and UBS Securities LLC, as
Joint Lead Bookrunners and (2) the Indenture, dated as of February 11, 2005, among the Company, the
Guarantors party thereto, and Wilmington Trust Company, as Trustee, governing the Notes (the “Old
Indenture”).
(e) Issuance. The Offered Shares to be issued and sold by the Company to Holders
pursuant to the Rights Offering, when such Offered Shares are issued and delivered against payment
therefor, will, upon receipt of Stockholder Approval, be duly authorized, validly issued and
delivered and fully paid and nonassessable, free and clear of all taxes, liens, preemptive rights,
rights of first refusal, subscription and similar rights. The Unsubscribed Shares, if any, to be
issued and sold by the Company to the Investors or any Affiliated Purchaser hereunder, when such
Unsubscribed Shares are issued and delivered against payment therefor by the Investors hereunder,
and the Exchange Shares, if any, to be issued by the Company in exchange for outstanding Notes
pursuant to the Debt Exchange will, upon receipt of approval of the Company’s stockholders, be duly
authorized, validly issued and delivered and fully paid and nonassessable, free and clear of all
taxes, liens, preemptive rights, rights of first refusal, subscription and similar rights.
(f) No Conflict. The distribution of the Rights, the sale, issuance and delivery of
the Offered Shares upon exercise of the Rights, the issuance and delivery of the Unsubscribed
Shares in accordance with the terms hereof, the consummation of the Rights Offering by the Company,
the issuance and delivery of the Exchange Shares (including the Investor Exchange Shares) pursuant
to the Debt Exchange in accordance with the terms hereof, the exchange of Notes and issuance of New
Notes and payment of cash in exchange therefor pursuant to the Debt Exchange, and the execution and
delivery by the Company of the Transaction Agreements and performance of and compliance with all of
the provisions hereof and thereof by the Company and the consummation of the transactions
contemplated herein and therein (i) will not conflict with, or result in a breach or violation of,
any of the terms or provisions of, or constitute a default under (with or without notice or lapse
of time, or both), or result, in the acceleration of, or the creation of any lien under, any
indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the
Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound or to which any of the property or assets of the Company or any of its Subsidiaries is
subject, (ii) will not result in any violation of the provisions of the Amended and Restated
Certificate of Incorporation or Amended and Restated By-laws of the Company or any of the
organizational or governance documents of its Subsidiaries, and (iii) will not result in any
violation of, or any termination or impairment of any
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rights under, any statute or any license,
authorization, injunction, judgment, order, decree, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company or any of its Subsidiaries or any of their
properties, except in any such case described in subclauses (i) and (iii) for any conflict, breach,
violation, default, acceleration, lien, termination or impairment which would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
(g) Consents and Approvals. No consent, approval, authorization, order, registration
or qualification of or with any third party or any court or governmental agency or body having
jurisdiction over the Company or any of its Subsidiaries or any of their properties is required for
the distribution of the Rights, the sale, issuance and delivery of the Offered Shares upon exercise
of the Rights, the issuance and delivery of the Unsubscribed Shares in accordance with the terms
hereof, the consummation of the Rights Offering by the Company, the issuance and delivery of the
Exchange Shares (including the Investor Exchange Shares) pursuant to the Debt Exchange in
accordance with the terms hereof, the exchange of Notes and issuance of New Notes and payment of
cash in exchange therefor pursuant to the Debt Exchange, and the execution and delivery by the
Company of the Transaction Agreements and performance of and compliance by the Company with all of
the provisions hereof and thereof and the consummation of the transactions contemplated herein and
therein, except (i) the registration under the Securities Act of the issuance of the Rights and the
Offered Shares pursuant to the exercise of Rights, (ii) filings with respect to and the expiration
or termination of the waiting period under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended (the “HSR Act”), relating to the sale or issuance of Unsubscribed Shares and
Investor Exchange Shares to the Investors, (iii) consents solicited by the Company from holders of
outstanding Notes to certain proposed amendments to the Old Indenture that would eliminate certain
restrictive covenants and release all of the liens on the collateral securing the Notes, and (iv)
such consents, approvals, authorizations, registrations or qualifications (y) as may be required
under state securities or Blue Sky laws in connection with the purchase of the Unsubscribed Shares
by the Investors, the issuance of the Exchange Shares to holders of outstanding Notes, or the
distribution of the Rights and the sale of the Offered Shares to Holders, or (z) pursuant to the
rules of The Nasdaq Stock Market, including the approval of the Company’s stockholders of the
issuance and sale of the Offered Shares in the Rights Offering, the issuance and sale of the
Unsubscribed Shares to the Investors pursuant to the terms hereof, and the issuance of the Exchange
Shares (including the Investor Exchange Shares) to holders of outstanding Notes pursuant to the
Debt Exchange (such approval of such transactions, “Stockholder Approval”).
(h) Arm’s Length. The Company acknowledges and agrees that each Investor is acting
solely in the capacity of an arm’s length contractual counterparty to the Company with respect to
the transactions contemplated hereby (including in connection with the negotiation of the terms of
the Recapitalization) and not as a financial advisor or a fiduciary to, or an agent of, the Company
or any other person or entity. Additionally, the Investors are not advising the Company or any
other person or entity as to any legal, tax, investment, accounting or regulatory matters in any
jurisdiction. The Company has consulted with its own advisors concerning such matters and shall be
responsible for making its own independent investigation and appraisal of the transactions
contemplated hereby, and the Investors shall have no responsibility or liability to the Company,
its stockholders and directors not affiliated with the Investors, or its officers,
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employees,
advisors or other representatives with respect thereto. Any review by the Investors of the
transactions contemplated hereby or other matters relating to such transactions will be performed
solely for the benefit of the Investors and shall not be on behalf of the Company, its stockholders
and directors not affiliated with the Investors, or its officers, employees, advisors or other
representatives and shall not affect any of the representations or warranties contained herein or
the remedies of the Investors with respect thereto.
(i) Company SEC Documents. Since December 31, 2007, the Company has filed or
submitted all required reports, schedules, forms, statements and other documents (including
exhibits and all other information incorporated therein) (“Company SEC Documents”) with the United
States Securities and Exchange Commission (the “Commission”). As of their respective dates, each
of the Company SEC Documents complied in all material respects with the requirements of the
Securities Act or the Exchange Act, as applicable, and the rules and regulations of the Commission
promulgated thereunder applicable to such Company SEC Documents. The Company has filed with the
Commission all “material contracts” (as such term is defined in Item 601(b)(10) of Regulation S-K
under the Exchange Act) that are required to be filed as exhibits to the Company SEC Documents. No
Company SEC Document filed after December 31, 2007, when filed, or, in the case of any Company SEC
Document amended or superseded prior to the date of this Agreement, then on the date of such
amending or superseding filing, contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. Any Company SEC Documents
filed with the Commission after the date hereof but prior to the Closing Date, when filed, will not
contain any 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, in light of the circumstances under
which they are made, not misleading.
(j) Financial Statements. The financial statements and the related notes of the
Company and its consolidated Subsidiaries included or incorporated by reference in the Company SEC
Documents, and to be included or incorporated by reference in the Rights Offering Registration
Statement and the Rights Offering Prospectus, comply or will comply, as the case may be, in all
material respects with the applicable requirements of the Securities Act, the Exchange Act, and the
rules and regulation of the Commission thereunder, as applicable, and fairly present in all
material respects the financial position, results of operations and cash flows of the Company and
its Subsidiaries as of the dates indicated and for the periods specified, subject, in the case of
the unaudited financial statements, to the absence of disclosures normally made in footnotes and to
customary year-end adjustments that are not and shall not be material; such financial statements
have been prepared in conformity with U.S. generally accepting accounting principles applied on a
consistent basis throughout the periods covered thereby (except as disclosed in the Company SEC
Documents filed before the date of this Agreement), and the supporting schedules included or
incorporated by reference in the Company SEC Documents, and to be included or incorporated by
reference in the Rights Offering Registration Statement, the Rights Offering Prospectus, and the
Proxy Statement, fairly present the information required to be stated therein; and the other
financial information included or incorporated by reference in the Company SEC Documents, and to be
included or incorporated by reference in the Rights Offering Registration Statement, the Rights
Offering Prospectus, and
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the Proxy Statement, has been or will be derived from the accounting
records of the Company and its Subsidiaries and presents fairly or will present fairly the
information shown thereby; and the pro forma financial information and the related notes included
or incorporated by reference in the Company SEC Documents, and to be included or incorporated by
reference in the Rights Offering Registration Statement, the Rights Offering Prospectus, and the
Proxy Statement, have been or will be prepared in all material respects in accordance with the
applicable requirements of the Securities Act and the Exchange Act, as applicable, and the
assumptions underlying such pro forma financial information are reasonable and are set forth in the
Company SEC Documents
and will be set forth in the Rights Offering Registration Statement, the Rights Offering
Prospectus, and the Proxy Statement.
(k) Rights Offering Registration Statement and Rights Offering Prospectus. The Rights
Offering Registration Statement and any post-effective amendment thereto, as of the Securities Act
Effective Date, and each Issuer Free Writing Prospectus, at the time of use thereof, will comply in
all material respects with the Securities Act and the rules and regulations promulgated thereunder
and will not contain any 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; and as of
the applicable date of the Rights Offering Prospectus and any amendment or supplement thereto and
as of the Closing Date, the Rights Offering Prospectus will not contain any 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, in the light of the circumstances under which they were made, not
misleading. At the time of its distribution and at the Expiration Time, the Investment Decision
Package will not contain 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, in the light of the
circumstances under which they were made, not misleading. Each Preliminary Rights Offering
Prospectus, at the time of filing thereof, will comply in all material respects with the Securities
Act and the rules and regulations promulgated thereunder and will not contain any 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, in the light of the circumstances under which they were made, not
misleading. The Proxy Statement, at the time of filing thereof, will comply in all material
respects with the Exchange Act and the rules and regulations promulgated thereunder and will not
contain any 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, in the light of the circumstances under
which they were made, not misleading. Notwithstanding the foregoing, the Company makes no
representation and warranty with respect to any statements or omissions made in reliance on and in
conformity with information relating to the Investors furnished to the Company in writing by the
Investors expressly for use in the Rights Offering Registration Statement, the Rights Offering
Prospectus, and the Proxy Statement and any amendment or supplement thereto.
For the purposes of this Agreement, (i) the term “Rights Offering Registration Statement”
means the Registration Statement on Form S-1 or Form S-3 to be filed with the Commission relating
to the Rights Offering, including all exhibits thereto, as amended as of the Securities Act
Effective Date, and any post-effective amendment thereto that becomes effective; (ii) the term
“Rights Offering Prospectus” means the final prospectus contained in the Rights Offering
Registration Statement at the Securities Act Effective Date (including information, if
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any, omitted
pursuant to Rule 430A and subsequently provided pursuant to Rule 424(b) under the Securities Act),
and any amended form of such prospectus provided under Rule 424(b) under the Securities Act or
contained in a post-effective amendment to the Rights Offering Registration Statement; (iii) the
term “Investment Decision Package” means the Rights Offering Prospectus, together with any Issuer
Free Writing Prospectus used by the Company to offer the Offered Shares to Holders pursuant to the
Rights Offering, (iv) the term “Issuer Free Writing Prospectus” means each “issuer free writing
prospectus” (as defined in Rule 433 of the rules promulgated under the Securities Act) prepared by
or on behalf of the Company or used or referred to by the Company in connection with the Rights
Offering, (v) the term “Preliminary
Rights Offering Prospectus” means each prospectus included in the Rights Offering Registration
Statement (and any amendments thereto) before it becomes effective, any prospectus filed with the
Commission pursuant to Rule 424(a) under the Securities Act and the prospectus included in the
Rights Offering Registration Statement, at the time of effectiveness that omits information
permitted to be excluded under Rule 430A under the Securities Act; (vi) the term “Securities Act
Effective Date” means the date and time as of which the Rights Offering Registration Statement, or
the most recent post-effective amendment thereto, was declared effective by the Commission; and
(vii) the term “Proxy Statement” means the proxy statement, and all amendments or supplements
thereto, if any, soliciting the approval of the Company’s stockholders of the issuance and sale of
the Offered Shares pursuant to the Rights Offering, the issuance and sale of the Unsubscribed
Shares to the Investors pursuant to the terms hereof, and the issuance of the Exchange Shares
(including the Investor Exchange Shares) to holders of outstanding Notes pursuant to the Debt
Exchange in accordance with the rules of The Nasdaq Stock Market, including a recommendation of the
Board that the stockholders vote to approve the issuance and sale of the Unsubscribed Shares to the
Investors pursuant to the terms hereof and the issuance of the Investor Exchange Shares to the
Investors pursuant to the terms hereof, if any.
(l) Private Placement Materials for Debt Exchange. At the time of its distribution
and at the Expiration Time, any confidential private placement memorandum, including supplements
and amendments thereto, or similar private placement materials relating to the Debt Exchange and
solicitation of consents to certain proposed amendments to the Old Indenture (the “Note Offering
Materials”) that are used by the Company will not contain any 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, in the light of the circumstances under which they were made, not misleading.
(m) Absence of Certain Changes. Since June 30, 2009, other than as disclosed in the
Company SEC Documents filed before the date hereof, and except for actions required to be taken
pursuant to the Transaction Agreements, (i) there has not been any change in the capital stock of
the Company or its Subsidiaries from that set forth in Section 3(d) (other than an
aggregate of 25,596 shares of restricted Common Stock granted to certain members of the Company’s
Board on August 1, 2009, under the Company’s 2005 Equity Incentive Plan) or any material change in
long-term debt of the Company or any of its Subsidiaries, or any dividend or distribution of any
kind declared, set aside for payment, paid or made by the Company on any class of capital stock;
and (ii) the Company has been operated in the ordinary course of business, consistent with past
practice, and no event, fact or circumstance has occurred that has had or would reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
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(n) No Broker’s Fees. Except for Moelis & Company LLC, neither the Company nor any of
its Subsidiaries is a party to any contract, agreement or understanding with any person (other than
this Agreement) that would give rise to a valid claim against the Investors for a financial
advisory fee, brokerage commission, finder’s fee or like payment in connection with the
Recapitalization, the Rights Offering, including the issuance of the Offered Shares upon exercise
of Rights, the issuance and sale of the Unsubscribed Shares in accordance with the terms hereof, or
the issuance of the Exchange Shares, or the Debt Exchange.
4. Representations and Warranties of the Investors. Each Investor individually represents
and warrants and agrees with the Company as set forth below as to such Investor. Each such
representation, warranty and agreement is made as of the date hereof and as of the Closing Date.
(a) Formation. Such Investor has been duly formed and is validly existing as a
limited partnership in good standing under the laws of the jurisdiction of its formation.
(b) Power and Authority. Such Investor has the requisite limited partnership power
and authority to enter into, execute and deliver this Agreement and the other Transaction
Agreements and to perform its obligations hereunder and thereunder and has taken all necessary
limited partnership action required for the due authorization of the Transaction Agreements.
(c) Execution and Delivery. This Agreement and each other Transaction Agreement will
be, at or prior to the Closing Date, duly and validly executed and delivered by such Investor and
constitutes, or, when executed and delivered, will constitute, a valid and binding obligation of
such Investor, enforceable against such Investor in accordance with its terms, except as 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.
(d) No Registration. Such Investor understands that the Unsubscribed Shares and
Investor Exchange Shares have not been registered under the Securities Act by reason of a specific
exemption from the registration provisions of the Securities Act, the availability of which depends
upon, among other things, the bona fide nature of the investment intent and the accuracy of such
Investor’s representations as expressed herein or otherwise made pursuant hereto.
(e) Investment Intent. Except as provided in Section 2(d) hereof, such
Investor is acquiring its portion of the Unsubscribed Shares and the Investor Exchange Shares for
investment for its own account, not as a nominee or agent, and not with the view to, or for resale
in connection with, any distribution thereof not in compliance with applicable securities laws, and
such Investor has no present intention of selling, granting any participation in, or otherwise
distributing the same, except in compliance with applicable securities laws.
(f) Securities Laws Compliance. The Unsubscribed Shares, Investor Offered Shares, and
Investor Exchange Shares will not be offered for sale, sold or otherwise transferred by such
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Investor except pursuant to a registration statement or in a transaction exempt from, or not
subject to, registration under the Securities Act and any applicable state securities laws.
(g) Sophistication. Such Investor has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of its investment in the
Unsubscribed Shares and Investor Exchange Shares being acquired hereunder. Such Investor
understands and is able to bear any economic risks associated with such investment (including,
without limitation, the necessity of holding its portion of the Unsubscribed Shares and Investor
Exchange Shares for an indefinite period of time). Without derogating from or limiting the
representations and warranties of the Company, such Investor acknowledges that it has been
afforded the opportunity to ask questions and receive answers concerning the Company and to
obtain additional information that it has requested to verify the information contained herein.
(h) Legended Securities. Such Investor understands and acknowledges that, upon the
original issuance thereof and until such time as the same is no longer required under any
applicable requirements of the Securities Act or applicable state securities laws, the Company and
its transfer agent shall make such notation in the stock book and transfer records of the Company
as may be necessary to record that the Unsubscribed Shares and Investor Exchange Shares have not
been registered under the Securities Act and that the Unsubscribed Shares, Investor Offered Shares,
and Investor Exchange Shares may not be resold without registration under the Securities Act or
pursuant to an exemption from the registration requirements thereof.
(i) No Conflict. The purchase of its portion of the Unsubscribed Shares by such
Investor, the acquisition of its portion of the Investor Exchange Shares by such Investor, any
purchase of the Investor Offered Shares by such Investor, the execution and delivery by such
Investor of each of the Transaction Agreements to which it is a party and the performance of and
compliance with all of the provisions hereof and thereof by the Investor, and the consummation of
the transactions contemplated herein and therein (i) will not conflict with, or result in a breach
or violation of, any of the terms or provisions of, or constitute a default under (with or without
notice or lapse of time, or both), or result, in the acceleration of, or the creation of any lien
under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Investor is a party or by which the Investor is bound or to which any of the property or
assets of the Investor or any of its Subsidiaries is subject, (ii) will not result in any violation
of the provisions of the certificate of limited partnership, limited partnership agreement, or
similar governance documents of the Investor, and (iii) will not result in any material violation
of, or any termination or material impairment of any rights under, any statute or any license,
authorization, injunction, judgment, order, decree, rule or regulation of any court or governmental
agency or body having jurisdiction over the Investor or any of its properties, except in any such
case described in subclauses (i) and (iii) for any conflict, breach, violation, default,
acceleration or lien which would not reasonably be expected, individually or in the aggregate, to
prohibit, materially delay or materially and adversely affect such Investor’s performance of its
obligations under this Agreement.
(j) Consents and Approvals. No consent, approval, authorization, order, registration
or qualification of or with any court or governmental agency or body having jurisdiction over such
Investor or any of its properties is required to be obtained or made by such Investor for the
purchase of its portion of the Unsubscribed Shares, any purchase of the Investor Offered Shares,
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and the acquisition of its portion of the Investor Exchange Shares in accordance with the terms
hereof and the execution and delivery by such Investor of this Agreement or the other Transaction
Agreements to which it is a party and performance of and compliance by such Investor with all of
the provisions hereof and thereof and the consummation of the transactions contemplated herein and
therein, except filings with respect to and the expiration or termination of the waiting period
under the HSR Act relating to the purchase of Unsubscribed Shares, any purchase of the Investor
Offered Shares, and the acquisition of the Investor Exchange Shares and except for any consent,
approval, authorization, order, registration or qualification which, if not made or obtained, would
not reasonably be expected, individually or in the aggregate, to prohibit,
materially delay or materially and adversely affect such Investor’s performance of its
obligations under this Agreement.
(k) Arm’s Length. Such Investor acknowledges and agrees that the Company is acting
solely in the capacity of an arm’s length contractual counterparty to such Investor with respect to
the transactions contemplated hereby (including in connection with the negotiation of the terms of
the Recapitalization). Additionally, without derogating from or limiting the representations and
warranties of the Company, such Investor is not relying on the Company for any legal, tax,
investment, accounting or regulatory advice, except as specifically set forth in this Agreement.
Without derogating from or limiting the representations and warranties of the Company, such
Investor has consulted with its own advisors concerning such matters and shall be responsible for
making its own independent investigation and appraisal of the transactions contemplated hereby.
(l) Information Furnished. Information relating to such Investor furnished to the
Company in writing by such Investor expressly for use in the SEC Transaction Documents (as defined
below) will not contain 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.
5. Additional Covenants of the Company. Without derogating from the obligations of the
Company set forth elsewhere in this Agreement, the Company agrees with each of the Investors as set
forth below.
(a) Registration Statements and Proxy Statement.
(i) As promptly as practicable following the date of this Agreement, the Company
shall prepare and file (y) the Rights Offering Registration Statement and (z) a
preliminary Proxy Statement.
(ii) The Proxy Statement and the Rights Offering Registration Statement (the “SEC
Transaction Documents”) filed with the Commission shall be consistent in all
material respects with the last forms of such documents provided to the Investors
and their respective counsel to review prior to the filing thereof. The Company
shall: (x) provide the Investors with a reasonable opportunity to review any SEC
Transaction Document that is amended after the date hereof prior to its filing with
the Commission and shall duly consider in good faith any comments of the Investors
and their respective counsel; (y) advise the Investors promptly of the time when
each of the SEC Transaction Documents has been filed and when the
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Rights Offering
Registration Statement has become effective or any Rights Offering Prospectus or
Rights Offering Prospectus supplement has been filed and shall furnish the Investors
with copies thereof; and (z) advise the Investors promptly after it receives notice
of any comments or inquiries by the Commission (and furnish the Investors with
copies of any correspondence related thereto), of the issuance by the Commission of
any stop order or of any order preventing or suspending the use of any SEC
Transaction Document, of the initiation or threatening of any proceeding for any
such purpose, or of any request by the Commission for amending or supplementing any
SEC Transaction Document or
for additional information, and in each such case, provide the Investors with a
reasonable opportunity to review any such comments, inquiries, request or other
communication from the Commission and to review any responses thereto and any
amendment or supplement to any SEC Transaction Document before any filing with the
Commission, and to duly consider in good faith any comments of the Investors and
their respective counsel and in the event of the issuance of any stop order or of
any order preventing or suspending the use of any SEC Transaction Document or
suspending any such qualification, to use promptly its reasonable best efforts to
obtain its withdrawal.
(iii) The Company shall use its reasonable best efforts to have the Proxy Statement
and the Rights Offering Registration Statement cleared or declared effective, as the
case may be, by the Commission as promptly as practicable after they are filed with
the Commission. The Company shall take all action as may be necessary or advisable
so that the Rights Offering and the issuance and sale of the Unsubscribed Shares,
the issuance of the Exchange Shares, and the other transactions contemplated by this
Agreement may be effected in accordance with the applicable provisions of the
Securities Act and the Exchange Act and any state or foreign securities or Blue Sky
laws.
(iv) The Company shall cause the Proxy Statement to be mailed to the Company’s
stockholders as promptly as practicable after the Proxy Statement is cleared by the
Commission. Subject to applicable law, the Board shall set the Record Date and
determine the Rights Ratio, and the Company shall take all action necessary, in
accordance with and subject to the General Corporation Law of the State of Delaware
and the Company’s Amended and Restated Certificate of Incorporation and Amended and
Restated By-laws, to duly call, give notice of and convene and hold, as promptly as
practicable, a special meeting of its stockholders to consider and vote upon the
issuance and sale of the Offered Shares pursuant to the Rights Offering, the
issuance and sale of the Unsubscribed Shares to the Investors pursuant to the terms
hereof, and the issuance of the Exchange Shares (including the Investor Exchange
Shares) to holders of outstanding Notes pursuant to the Debt Exchange, to the extent
required by applicable law or regulations or the rules of The Nasdaq Stock Market.
The Company shall use its reasonable best efforts to obtain the requisite
stockholder approval of such issuance and sale of the Offered Shares pursuant
to the
Rights Offering, issuance and sale of the Unsubscribed Shares to the Investors
pursuant
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to the terms hereof, and issuance of the Exchange Shares (including the
Investor Exchange Shares), if any, to holders of outstanding Notes pursuant to the
Debt Exchange.
(v) If at any time prior to the Expiration Time, any event occurs as a result of
which the Investment Decision Package, as then amended or supplemented, would
include an untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it shall be necessary to amend or
supplement the Investment Decision Package to comply
with applicable law, the Company will promptly notify the Investors of any such
event and prepare an amendment or supplement to the Investor Decision Package that
is reasonably acceptable in form and substance to the Investors that will correct
such statement or omission or effect such compliance.
(b) Private Placement Materials for Debt Exchange. As promptly as practicable
following the date of this Agreement, the Company shall prepare and disseminate to “Holders” (as
that term is defined in the Support Agreement) and such other holders of outstanding Notes as the
Company may determine from time to time, in accordance with applicable law, the Note Offering
Materials consistent with the terms of the Debt Exchange as set forth in the Support Agreement. If
at any time prior to the Expiration Time, any event occurs as a result of which the such Note
Offering Materials, as then amended or supplemented, would include an untrue statement of a
material fact or omit to state any material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading, or if it shall be
necessary to amend or supplement such Note Offering Materials to comply with applicable law, the
Company will promptly notify the Investors of any such event and prepare an amendment or supplement
to such Note Offering Materials that is reasonably acceptable in form and substance to the
Investors that will correct such statement or omission or effect such compliance.
(c) Listing. The Company shall use its commercially reasonable efforts to list and
maintain the listing of the Common Stock, including the Offered Shares and the Exchange Shares, on
the Nasdaq Global Select Market and to list and maintain the listing of the Rights on the Nasdaq
Global Select Market.
(d) Rule 158. The Company will generally make available to the Company’s security
holders as soon as practicable an earnings statement of the Company covering a twelve-month period
beginning after the date of this Agreement, which shall satisfy the provisions of Section 11(a) of
the Securities Act.
(e) HSR. The Company shall use its reasonable best efforts to seek all approvals or
consents that are necessary or advisable under the HSR Act so that any applicable waiting period
shall have expired or been terminated thereunder with respect to the issuance to the Investors of
the Unsubscribed Shares, Investor Offered Shares, and Investor Exchange Shares hereunder and shall
not take any action that is intended or reasonably likely to materially impede or delay the ability
of the parties to obtain any necessary approvals required for the transactions contemplated by this
Agreement.
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(f) No Stabilization. The Company will not take, directly or indirectly, any action
designed to or that would reasonably be expected to cause or result in any stabilization or
manipulation of the price of the shares of Common Stock.
(g) Ordinary Course of Business; Actions Regarding Conditions. During the period from
the date of this Agreement to the Closing Date, the Company shall conduct its business, and shall
cause its Subsidiaries to conduct their business, in the ordinary course and consistent with the
Company’s and its Subsidiaries’ past practice; and the Company for itself and on behalf of its
Subsidiaries agrees to use its commercially reasonable efforts to preserve substantially intact
their business organizations and goodwill, to keep available the services of those of their
present officers, employees, and consultants who are integral to the operation of their businesses
as presently conducted, and to preserve their present relationships with significant customers and
suppliers and with other persons with whom they have significant business relations; and the
Company shall not take any action or omit to take any action that would reasonably be expected to
result in the Company’s failure to satisfy the conditions to the Agreement set forth in Section
8.
(h) Reasonable Best Efforts. The Company shall use its reasonable best efforts (and
shall cause its Subsidiaries to use their respective reasonable best efforts) to take or cause to
be taken all actions, and do or cause to be done all things, reasonably necessary, proper or
advisable on its or their part under this Agreement and applicable laws to cooperate with the
Investors and to consummate and make effective the transactions contemplated by this Agreement and
the Recapitalization, including:
(i) preparing and filing as promptly as practicable all documentation to effect all
necessary notices, reports and other filings and to obtain as promptly as
practicable all consents, registrations, approvals, permits and authorizations
necessary or advisable to be obtained from any third party or governmental entity;
(ii) defending any lawsuits or other actions or proceedings, whether judicial or
administrative, challenging this Agreement or any other agreement contemplated by
this Agreement or the Recapitalization or the consummation of the transactions
contemplated hereby and thereby, including seeking to have any stay or temporary
restraining order entered by any court or other governmental entity vacated or
reversed; and
(iii) executing, delivering and filing, as applicable, any additional ancillary
instruments, documents, or agreements necessary to consummate the transactions
contemplated by this Agreement and the other Transaction Agreements and to fully
carry out the purposes of this Agreement and the transactions contemplated hereby
and thereby, including, without limitation, a Registration Rights Agreement (the
“Registration Rights Agreement”) between the Company and the Investors, in the form
attached hereto as Exhibit B.
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6. Additional Covenants of the Investors. Each Investor agrees with the Company:
(a) Information. To provide the Company with such information as the Company
reasonably requests regarding such Investor for inclusion in the SEC Transaction Documents.
(b) HSR Act. To use reasonable best efforts to obtain all authorizations, approvals
and consents that are necessary or advisable under the HSR Act so that any applicable waiting
period shall have expired or been terminated thereunder and any applicable notification,
authorization, approval or consent shall have been made or obtained with respect to the purchase of
Unsubscribed Shares, Investor Offered Shares, and Investor Exchange Shares hereunder, and not to
take any action that is intended or reasonably likely to materially impede or delay the ability of
the parties to obtain any necessary approvals required for the transactions contemplated by this
Agreement; provided, however, that, notwithstanding anything to the contrary contained herein, such
Investor (and its ultimate parent entities, as such term is used in the HSR Act) shall not be
required to disclose to any other party to this Agreement any information contained in its HSR
Notification and Report Form which such party, in its sole and reasonable discretion, deems
confidential.
(c) Reasonable Best Efforts. Such Investor shall use its reasonable best efforts to
take all actions, and do all things, reasonably necessary, proper or advisable on its part under
this Agreement and applicable laws to cooperate with the Company and to consummate and make
effective the transactions contemplated by this Agreement, including executing, delivering and
filing, as applicable, any additional ancillary instruments or agreements necessary to consummate
the transactions contemplated by this Agreement and the Recapitalization and to fully carry out the
purposes of this Agreement and the transactions contemplated hereby and thereby, including:
(i) preparing and filing as promptly as practicable all documentation to effect all
necessary notices, reports and other filings and to obtain as promptly as
practicable all consents, registrations, approvals, permits and authorizations
necessary or advisable to be obtained from any third party or governmental entity;
(ii) cause the shares of Common Stock beneficially owned by such Investor to be
voted in favor of the issuance and sale of the Offered Shares pursuant to the Rights
Offering, issuance and sale of the Unsubscribed Shares to the Investors pursuant to
the terms hereof, and the issuance of the Exchange Shares (including the Investor
Exchange Shares) to holders of outstanding Notes pursuant to the Debt Exchange at
the special meeting of stockholders called therefor;
(iii) defending any lawsuits or other actions or proceedings to which such Investor
has been named a party, whether judicial or administrative, challenging this
Agreement or the Recapitalization or any other agreement contemplated by this
Agreement or the consummation of the transactions contemplated hereby and thereby,
including seeking to have any stay or temporary restraining order entered by any
court or other governmental entity vacated or reversed; and
(iv) executing, delivering and filing, as applicable, any additional ancillary
instruments, documents, or agreements necessary to consummate the transactions
contemplated by this Agreement and the other Transaction Agreements and to
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fully carry out the purposes of this Agreement and the transactions contemplated
hereby and thereby, including, without limitation, the Registration Rights
Agreement.
(d) No Transfer of Rights. During the Rights Exercise Period, such Investor will not,
without the prior written consent of the Special Committee, sell, assign, transfer, convey,
hypothecate, pledge, encumber, grant a security interest in or otherwise dispose of (whether by
operation of law or otherwise), in whole or in part, or directly or indirectly enter into, or cause
to become subject to, any option, warrant, purchase right, or other contract or commitment that
could require such Investor to sell, assign, transfer, convey, hypothecate, pledge, encumber, grant
a security interest in, or otherwise dispose of (whether by operation of law or otherwise), in
whole or in part (“Transfer”), any Rights distributed, directly or indirectly, to such Investor by
the Company pursuant to the Rights Offering; provided, however, that such Investor may Transfer all
or any portion of its Rights to one or more Affiliates, which shall agree in writing to take such
Rights subject to, and to comply with, the terms of this Agreement.
(e) No Transfer of Notes and Common Stock. Until the earlier to occur of the Closing
Date or the termination of this Agreement pursuant to Section 11(a), such Investor will
not, without the prior written consent of the Special Committee, Transfer any Notes or shares of
Common Stock held, directly or indirectly, by such Investor; provided, however, that such Investor
may Transfer all or any portion of its Notes and shares of Common Stock to one or more Affiliates,
which shall agree in writing to take such securities subject to, and to comply with, the terms of
this Agreement.
(f) No Stabilization. Such Investor will not take, directly or indirectly, any action
designed to or that would reasonably be expected to cause or result in any stabilization or
manipulation of the price of the Shares.
7. Additional Joint Covenant of Company and the Investors. Without limiting the generality
of the undertakings pursuant to Sections 5(e) and 6(b), each of the Company and each Investor agree
to use its respective reasonable best efforts to take, or cause to be taken, all action and to do,
or cause to be done, all things necessary under the HSR Act to consummate and make effective the
transactions contemplated by this Agreement and the other Transaction Agreements, including
furnishing all information required by applicable law in connection with approvals of or filings
with any governmental authority, and filing, or causing to be filed, as promptly as practicable,
any required notification and report forms under other applicable competition laws with the
applicable governmental antitrust authority. Each party shall consult with each other party as to
the appropriate time of filing such notifications and shall agree upon the timing of such filings.
Subject to appropriate confidentiality safeguards, each party shall (i) respond promptly to any
request for additional information made by the antitrust agency; (ii) promptly notify counsel to
each other party of, and if in writing, furnish counsel to each other party with copies of (or, in
the case of material oral communications, advise the other party orally of) any communications from
or with the antitrust agency in connection with any of the transactions contemplated by this
Agreement; (iii) not participate in any meeting with the antitrust agency unless it consults with
counsel to each other party in advance and, to the extent permitted by the agency, give each other
party a reasonable opportunity to attend and participate thereat; (iv) furnish counsel to each
other party with copies of all correspondence, filings and
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communications between it and the antitrust agency with respect to any of the transactions
contemplated by this Agreement; and (v) furnish counsel to each other party with such necessary
information and reasonable assistance as may be reasonably necessary in connection with the
preparation of necessary filings or submission of information to the antitrust agency. Each party
shall use its reasonable best efforts to cause the waiting periods under the applicable competition
laws to terminate or expire at the earliest possible date after the date of filing.
Notwithstanding anything in this Agreement to the contrary, nothing shall require any Investor
or its Affiliates or the Company or its Subsidiaries to dispose of any of its or its respective
Subsidiaries’ or its Affiliates’ assets or to limit its freedom of action with respect to any of
its or its respective Subsidiaries’ businesses, or to consent to any disposition of the Company’s
or its Subsidiaries’ assets or limits on the Company’s or its Subsidiaries’ freedom of action with
respect to the conduct of any of its or its Subsidiaries’ businesses, or to commit or agree to any
of the foregoing, and nothing in this Agreement shall authorize the Company or any of the Company’s
Subsidiaries to commit or agree to any of the foregoing, to obtain any consents, approvals, permits
or authorizations to remove any impediments to the transactions contemplated hereby or by any other
Transaction Agreement relating to antitrust or competition laws or to avoid the entry of, or to
effect the dissolution of, any injunction, temporary restraining order or other order in any action
relating to antitrust or competition laws.
8. Conditions to the Obligations of the Parties.
(a) Conditions to the Investors’ Obligations under this Agreement. The obligations of
each Investor hereunder to consummate the transactions contemplated hereby shall be subject to the
satisfaction prior to the Closing Date of each of the following conditions (which may be waived in
whole or in part by such Investor in its sole discretion):
(i) Registration Statement Effectiveness. The Rights Offering Registration
Statement shall have been declared effective by the Commission and shall continue to
be effective and no stop order shall have been entered by the Commission with
respect thereto.
(ii) Rights Offering. The Rights Offering shall have been conducted in all
material respects in accordance with this Agreement and shall have been consummated
without the waiver of any condition thereto.
(iii) Debt Exchange. The Debt Exchange shall have been consummated in all
material respects in accordance with this Agreement without the waiver of any
condition thereto.
(iv) Antitrust Approvals. All terminations or expirations of waiting
periods imposed under the HSR Act, shall have occurred and all other notifications,
consents, authorizations and approvals required to be made or obtained from any
competition or antitrust authority shall have been made or obtained for the
transactions contemplated by this Agreement.
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(v) Consents. All material governmental and third-party notifications,
filings, consents, waivers and approvals required for the consummation of the
transactions contemplated by this Agreement shall have been made or received.
(vi) Stockholder Approval. Stockholder Approval shall have been received.
(vii) No Legal Impediment to Issuance. No action shall have been taken, no
statute, rule, regulation, or order shall have been enacted, adopted, or issued by
any federal, state, or foreign governmental or regulatory authority, and no
judgment, injunction, decree or order of any federal, state or foreign court shall
have been issued that, in each case, prohibits the implementation of the Rights
Offering or the Debt Exchange, the issuance and sale of the Unsubscribed Shares and
the Investor Offered Shares to the Investors, the issuance of Exchange Shares
(including the Investor Exchange Shares) for outstanding Notes, or the consummation
of the transactions contemplated by this Agreement or the Recapitalization or
materially impairs the benefit of implementation thereof, and no action or
proceeding by or before any federal, state, or foreign governmental or regulatory
authority shall be pending or threatened wherein an adverse judgment, decree, or
order would be reasonably likely to result in the prohibition of or material
impairment of the benefits of the implementation of the Rights Offering or the Debt
Exchange, the issuance and sale of the Unsubscribed Shares and the Investor Offered
Shares to the Investors, the issuance of Exchange Shares (including the Investor
Exchange Shares) for outstanding Notes, or the consummation of the transactions
contemplated by this Agreement or the Recapitalization.
(viii) Representations and Warranties. The representations and warranties
of Company contained in this Agreement shall be true and correct (disregarding all
qualifications and exceptions contained therein relating to materiality, Material
Adverse Effect or similar qualifications, other than such qualifications contained
in Sections 3(i) and 3(j)) as of the date hereof and as of the
Closing Date after giving effect to the transactions contemplated hereby with the
same effect as if made on and as of the Closing Date (except for representations and
warranties made as of a specified date, which shall be true and correct only as of
the specified date), except where the failure to be so true and correct,
individually or in the aggregate, has not had, and would not reasonably be expected
to have, a Material Adverse Effect, other than with respect to the representations
in Sections 3(b), 3(c), 3(d), 3(e), and
3(m)(ii), which shall be true and correct in all respects.
(ix) Covenants. The Company shall have performed and complied in all
material respects with all of its covenants and agreements contained in this
Agreement and in any other Transaction Agreement required to be performed or
complied with on or prior to the Closing Date.
(x) Registration Rights Agreement. The Company shall have executed and
delivered to the Investors the Registration Rights Agreement.
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(xi) Debt Exchange. At least ninety-five percent (95%) of the aggregate
principal amount of outstanding Notes shall have been validly exchanged in the Debt
Exchange.
(xii) Settlement. The settlement of the action described on Schedule II
hereto, on the terms set forth in the Memorandum of Understanding described on
Schedule II hereto, shall have received final approval by the Delaware Court of
Chancery, and such action shall have been dismissed with prejudice pursuant to such
approval.
(xiii) Nasdaq. The Offered Shares and Exchange Shares shall have been
approved for listing on the Nasdaq Global Select Market, subject to official notice
of issuance.
(b) Conditions to the Company’s Obligations under this Agreement. The right of the
Company to require the Investors to purchase the Unsubscribed Shares and the obligation of the
Company to issue the Investor Exchange Shares to the Investors in exchange for outstanding Notes
are subject to the following conditions (which may be waived in whole or in part by the Company in
its sole discretion), provided that the failure of a condition set forth in Section 8(b)(v)
to be satisfied may not be asserted by the Company if such failure results from a breach by the
Company of an obligation hereunder:
(i) Antitrust Approvals. All terminations or expirations of waiting periods
imposed under the HSR Act, shall have occurred and all other notifications,
consents, authorizations and approvals required to be made or obtained from any
competition or antitrust authority shall have been made or obtained for the
transactions contemplated by this Agreement.
(ii) Consents. All material governmental and third-party notifications,
filings, consents, waivers and approvals required for the consummation of the
transactions contemplated by this Agreement shall have been made or received.
(iii) No Legal Impediment to Issuance. No action shall have been taken, no
statute, rule, regulation, or order shall have been enacted, adopted, or issued by
any federal, state, or foreign governmental or regulatory authority, and no
judgment, injunction, decree or order of any federal, state or foreign court shall
have been issued that, in each case, prohibits the implementation of the Rights
Offering or the Debt Exchange, the issuance and sale of the Unsubscribed Shares and
the Investor Offered Shares to the Investors, the issuance of Exchange Shares
(including the Investor Exchange Shares) for outstanding Notes, or the consummation
of the transactions contemplated by this Agreement or the Recapitalization or
materially impairs the benefit of implementation thereof, and no action or
proceeding by or before any federal, state, or foreign governmental or regulatory
authority shall be pending or threatened wherein an adverse judgment, decree, or
order would be reasonably likely to result in the prohibition of or material
impairment of the benefits of the implementation of the Rights Offering or the Debt
Exchange, the issuance and sale of the Unsubscribed Shares and the
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Investor Offered Shares to the Investors, the issuance of Exchange Shares (including
the Investor Exchange Shares) for outstanding Notes, or the consummation of the
transactions contemplated by this Agreement or the Recapitalization.
(iv) Representations and Warranties. The representations and warranties of
the Investors and any Affiliated Purchaser contained in this Agreement or pursuant
to Section 2(d) shall be true and correct (disregarding all qualifications
and exceptions contained therein relating to materiality or material adverse effect
on the Investors’ performance of their obligations or similar qualifications) as of
the date hereof and as of the Closing Date with the same effect as if made on the
Closing Date (except for the representations and warranties made as of a specified
date, which shall be true and correct only as such specified date), except with
respect to each Investor’s representations in all Sections other than Sections
4(b) and 4(c) where the failure to be so true and correct, individually
or in the aggregate, has not prohibited, materially delayed, or materially and
adversely affected, and would not reasonably be expected to prohibit, materially
delay, or materially and adversely affect, the Investors’ performance of their
obligations under this Agreement.
(v) Covenants. The Investors shall have performed and complied in all
material respects with all of their respective covenants and agreements contained in
this Agreement and in any other Transaction Agreement required to be performed or
complied with on or prior to the Closing Date, including, without limitation,
entering into the Registration Rights Agreement.
(vi) Registration Statement Effectiveness. The Rights Offering Registration
Statement shall each have been declared effective by the Commission and shall
continue to be effective and no stop order shall have been entered by the Commission
with respect thereto.
(vii) Rights Offering. The Rights Offering shall have been consummated in
all material respects in accordance with this Agreement.
(viii) Debt Exchange. All conditions to the Company’s obligation to
consummate the Debt Exchange shall have been satisfied (or waived, to the extent
permitted).
(ix) Settlement. The settlement of the action described on Schedule II
hereto, on the terms set forth in the Memorandum of Understanding described on
Schedule II hereto, shall have received final approval by the Delaware Court of
Chancery, and such action shall have been dismissed with prejudice pursuant to such
approval.
(x) Stockholder Approval. Stockholder Approval shall have been received.
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(c) Conditions to the Company’s Obligations to Complete the Rights Offering. The
obligation of the Company to consummate the Rights Offering shall be subject to the satisfaction
prior to the Closing Date of each of the following conditions (which may not be waived, in
whole or in part, without the prior written consent of the Investors):
(i) Consents. All material governmental and third-party notifications,
filings, consents, waivers and approvals required for the consummation of the Rights
Offering shall have been made or received.
(ii) No Legal Impediment to Issuance. No action shall have been taken, no
statute, rule, regulation, or order shall have been enacted, adopted, or issued by
any federal, state, or foreign governmental or regulatory authority, and no
judgment, injunction, decree or order of any federal, state or foreign court shall
have been issued that, in each case, prohibits the implementation of the Rights
Offering and the issuance and sale of the Offered Shares or materially impairs the
benefit of implementation thereof, and no action or proceeding by or before any
federal, state, or foreign governmental or regulatory authority shall be pending or
threatened wherein an adverse judgment, decree, or order would be reasonably likely
to result in the prohibition of or material impairment of the benefits of the
implementation of the Rights Offering and the issuance and sale of the Offered
Shares.
(iii) Registration Statement Effectiveness. The Rights Offering
Registration Statement shall each have been declared effective by the Commission and
shall continue to be effective and no stop order shall have been entered by the
Commission with respect thereto.
(iv) Debt Exchange. All conditions to the Company’s obligation to
consummate the Debt Exchange shall have been satisfied (or waived, to the extent
permitted).
(v) Settlement. The settlement of the action described on Schedule II
hereto, on the terms set forth in the Memorandum of Understanding described on
Schedule II hereto, shall have received final approval by the Delaware Court of
Chancery, and such action shall have been dismissed with prejudice pursuant to such
approval.
(vi) Stockholder Approval. Stockholder Approval shall have been received.
(vii) Conditions under this Agreement. All conditions set forth in
Sections 8(a) and 8(b) (other than the conditions set forth in
Sections 8(a)(ii) and 8(b)(vii)) shall have been satisfied (or
waived, to the extent permitted thereby).
9. Indemnification and Contribution.
(a) Whether or not the Recapitalization is consummated or this Agreement is terminated or the
transactions contemplated hereby, the Company (in such capacity, the
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“Indemnifying Party”) shall
indemnify and hold harmless the Investors, their respective Affiliates (other than the Company),
and their respective officers, directors, members, partners, employees, agents and controlling
persons (each, an “Indemnified
Person”) from and against any and all losses, claims, damages, liabilities and reasonable
expenses, joint or several, arising out of circumstances existing on or prior to the Closing Date
(“Losses”) to which any such Indemnified Person may become subject arising out of or in connection
with any claim, challenge, litigation, investigation or proceeding (“Proceedings”) instituted by a
third party with respect to the Recapitalization, the Rights Offering, the Debt Exchange, this
Agreement or the other Transaction Documents, the Rights Offering Registration Statement, any
Preliminary Rights Offering Prospectus, the Rights Offering Prospectus, any Issuer Free Writing
Prospectus, the Investment Decision Package, the Note Offering Materials, any amendment or
supplement thereto, or the transactions contemplated by any of the foregoing and shall reimburse
such Indemnified Persons for any reasonable legal or other reasonable out-of-pocket expenses
incurred in connection with investigating, responding to or defending any of the foregoing;
provided that the foregoing indemnification will not apply to Losses to the extent that they
directly resulted from (a) any breach by such Indemnified Person of this Agreement, (b) gross
negligence or willful misconduct on the part of such Indemnified Person, or (c) statements or
omissions in the Rights Offering Registration Statement, any Preliminary Rights Offering
Prospectus, the Rights Offering Prospectus, any Issuer Free Writing Prospectus, the Note Offering
Materials, or any amendment or supplement thereto made in reliance upon or in conformity with
information relating to such Indemnified Person furnished to the Company in writing by or on behalf
of such Indemnified Person expressly for use in the Rights Offering Registration Statement, any
Preliminary Rights Offering Prospectus, the Rights Offering Prospectus, any Issuer Free Writing
Prospectus, the Note Offering Materials, or any amendment or supplement thereto. If for any reason
the foregoing indemnification is unavailable to any Indemnified Person (except as set forth in the
proviso to the immediately preceding section) or insufficient to hold it harmless, then the
Indemnifying Party shall contribute to the amount paid or payable by such Indemnified Person as a
result of such Losses in such proportion as is appropriate to reflect not only the relative
benefits received by the Indemnifying Party on the one hand and such Indemnified Person on the
other hand but also the relative fault of the Indemnifying Party on the one hand and such
Indemnified Person on the other hand as well as any relevant equitable considerations. The
indemnity, reimbursement and contribution obligations of the Indemnifying Party under this
Section 9 shall be in addition to any liability that the Indemnifying Party may otherwise
have to an Indemnified Person and shall bind and inure to the benefit of any successors, assigns,
heirs and personal representatives of the Indemnifying Party and any Indemnified Person.
(b) Promptly after receipt by an Indemnified Person of notice of the commencement of any
Proceedings with respect to which the Indemnified Person may be entitled to indemnification
hereunder, such Indemnified Person will, if a claim is to be made hereunder against the
Indemnifying Party in respect thereof, notify the Indemnifying Party in writing of the commencement
thereof; provided that (i) the omission so to notify the Indemnifying Party will not relieve the
Indemnifying Party from any liability that it may have hereunder except to the extent it has been
prejudiced by such failure and (ii) the omission so to notify the Indemnifying Party will not
relieve it from any liability that it may have to an Indemnified Person otherwise than on account
of this Section 9. In case any such Proceedings are brought against any
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Indemnified Person
and it notifies the Indemnifying Party of the commencement thereof, the Indemnifying Party will be
entitled to participate therein, and, to the extent that it may elect by written notice delivered
to such Indemnified Person, to assume the defense thereof, with counsel
reasonably satisfactory to such Indemnified Person; provided that if the defendants in any
such Proceedings include both such Indemnified Person and the Indemnifying Party and such
Indemnified Person shall have concluded that there may be legal defenses available to it that are
different from or additional to those available to the Indemnifying Party, such Indemnified Person
shall have the right to select separate counsel, which selection shall be subject to the reasonable
approval of the Indemnifying Party, to assert such legal defenses and to otherwise participate in
the defense of such Proceedings on behalf of such Indemnified Person. Upon receipt of notice from
the Indemnifying Party to such Indemnified Person of its election so to assume the defense of such
Proceedings and approval by such Indemnified Person of counsel, the Indemnifying Party shall not be
liable to such Indemnified Person for expenses incurred by such Indemnified Person in connection
with the defense thereof (other than reasonable costs of investigation) unless (i) such Indemnified
Person shall have employed separate counsel in connection with the assertion of legal defenses in
accordance with the proviso to the preceding sentence, (ii) the Indemnifying Party shall not have
employed counsel reasonably satisfactory to such Indemnified Person to represent such Indemnified
Person within a reasonable time after notice of commencement of the Proceedings, or (iii) the
Indemnifying Party shall have authorized in writing the employment of counsel for such Indemnified
Person.
(c) The Indemnifying Party shall not be liable for any settlement of any Proceedings effected
without its written consent (which consent shall not be unreasonably withheld). If any settlement
of any Proceeding is consummated with the written consent of the Indemnifying Party or if there is
a final judgment for the plaintiff in any such Proceedings, the Indemnifying Party agrees to
indemnify and hold harmless each Indemnified Person from and against any and all Losses by reason
of such settlement or judgment in accordance with, and subject to the limitations of, the
provisions of this Section 9. The Indemnifying Party shall not, without the prior written
consent of an Indemnified Person (which consent shall not be unreasonably withheld), effect any
settlement of any pending or threatened Proceedings in respect of which indemnity has been sought
hereunder by such Indemnified Person unless (i) such settlement includes an unconditional release
of such Indemnified Person in form and substance satisfactory to such Indemnified Person from all
liability on the claims that are the subject matter of such Proceedings and (ii) such settlement
does not include any statement as to or any admission of fault, culpability or a failure to act by
or on behalf of any Indemnified Person.
10. Survival of Representations and Warranties. The representations and warranties made in
this Agreement will survive the execution and delivery of this Agreement, and the covenants shall
survive in accordance with their specific terms.
11. Termination.
(a) This Agreement may be terminated and the transactions contemplated hereby may be abandoned
at any time prior to the Closing Date:
(i) by mutual written consent of the Company and each Investor;
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(ii) by either the Company or any Investor if the Closing Date shall not have
occurred by February 15, 2010; provided, however, that the right to terminate this
Agreement under this Section 11(a)(ii) shall not be available to any party
whose
failure to comply with any provision of this Agreement has been the cause of, or
resulted in, the failure of the Closing Date to occur on or prior to such date;
(iii) by the Company,
(A) if there has been a breach of any covenant or a breach of any representation or warranty
of an Investor, which breach would cause the failure of any condition precedent set forth in
Section 8(b), provided that any such breach of a covenant or representation or warranty is
not capable of cure on or prior to February 15, 2010; or
(B) upon the occurrence of any event that results in a failure to satisfy any of the
conditions set forth in Section 8(b), which failure is not capable of cure on or prior to
February 15, 2010; provided that all determinations made for the Company prior to the Closing Date
with respect to Section 11(a)(iii)(A) and this Section 11(a)(iii)(B) shall be made
by the Special Committee;
(iv) by any Investor,
(A) if there has been a breach of any covenant or a breach of any representation or warranty
of the Company, which breach would cause the failure of any condition precedent set forth in
Section 8(a), provided that any such breach of a covenant or representation or warranty is
not capable of cure on or prior to February 15, 2010; or
(B) upon the occurrence of any event that results in a failure to satisfy any of the
conditions set forth in Section 8(a), which failure is not capable of cure on or prior to
February 15, 2010.
(b) If this Agreement is terminated, other than pursuant to Section 11(a)(iii)(A), the
Company shall pay to the Investors any Transaction Expenses and any other amounts certified by the
Investors to be due and payable hereunder that have not been paid theretofore. Payment of the
amounts due under this Section 11(b) will be made no later than the close of business on
the third (3rd) Business Day following the date of such termination by wire transfer of
immediately available funds in U.S. dollars to an account specified by the Investors to the
Company.
(c) Upon termination under this Section 11, all rights and obligations of the parties
under this Agreement shall terminate without any liability of any party to any other party except
that (i) nothing contained herein shall release any party hereto from liability for any willful
breach of this Agreement and (ii) the covenants and agreements made by the parties herein in
Sections 2(h) and 2(i) and Sections 9 through 17 will survive
indefinitely in accordance with their terms.
12. Notices. All notices and other communications in connection with this Agreement will
be in writing and will be deemed given (and will be deemed to have been duly given upon receipt) if
delivered personally, sent via electronic transmission, facsimile transmission (with
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confirmation),
mailed by registered or certified mail (return receipt requested), or delivered by an express
courier (with confirmation) to the parties at the following addresses (or at such other address for
a party as will be specified by like notice):
(a) If to the Company:
Builders FirstSource, Inc.
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. XxXxxxxxx, Esq.
Electronic mail: Xxx.XxXxxxxxx@xxxx.xxx
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. XxXxxxxxx, Esq.
Electronic mail: Xxx.XxXxxxxxx@xxxx.xxx
with copies to:
Xxxxxx & Bird LLP
One Atlantic Center
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx Xxxxx Xxxxxxx, Esq.
Electronic mail: Xxxxx.Xxxxxxx@xxxxxx.xxx
Xxxxxx & Bird LLP
One Atlantic Center
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx Xxxxx Xxxxxxx, Esq.
Electronic mail: Xxxxx.Xxxxxxx@xxxxxx.xxx
and:
Morris, Nichols, Arsht & Xxxxxxx LLP
0000 Xxxxx Xxxxxx Xxxxxx, 00xx Floor
X.X. Xxx 0000
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Electronic mail: xxxxxxxxx@xxxx.xxx
0000 Xxxxx Xxxxxx Xxxxxx, 00xx Floor
X.X. Xxx 0000
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Electronic mail: xxxxxxxxx@xxxx.xxx
(b) If to the Investors:
JLL Partners Fund V, L.P.
c/o JLL Partners, Inc.
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx
Xxxxxx Xxxxxxxx
Electronic mail: x.xxxxxxx@xxxxxxxxxxx.xxx
x.xxxxxxxx@xxxxxxxxxxx.xxx
c/o JLL Partners, Inc.
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx
Xxxxxx Xxxxxxxx
Electronic mail: x.xxxxxxx@xxxxxxxxxxx.xxx
x.xxxxxxxx@xxxxxxxxxxx.xxx
and:
Warburg Pincus Private Equity IX, L.P.
c/o Warburg Pincus LLC
c/o Warburg Pincus LLC
-31-
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxx
Xxxxx Xxxxx
Electronic mail: xxxxx.xxxx@xxxxxxxxxxxxx.xxx
xxxxx.xxxxx@xxxxxxxxxxxxx.xxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxx
Xxxxx Xxxxx
Electronic mail: xxxxx.xxxx@xxxxxxxxxxxxx.xxx
xxxxx.xxxxx@xxxxxxxxxxxxx.xxx
with copies to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxx Xxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx, Esq.
Xxxxxxx X. Land, Esq.
Electronic mail: xxx.xxxxxx@xxxxxxx.xxx
xxxxxxx.xxxx@xxxxxxx.xxx
Xxx Xxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx, Esq.
Xxxxxxx X. Land, Esq.
Electronic mail: xxx.xxxxxx@xxxxxxx.xxx
xxxxxxx.xxxx@xxxxxxx.xxx
and:
Xxxxxxx Xxxx & Xxxxxxxxx LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Xxxx Xxxxxxxx, Esq.
Electronic mail: xxxxxxxx@xxxxxxx.xxx
xxxxxxxxx@xxxxxxx.xxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Xxxx Xxxxxxxx, Esq.
Electronic mail: xxxxxxxx@xxxxxxx.xxx
xxxxxxxxx@xxxxxxx.xxx
13. Assignment; Third Party Beneficiaries. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement will be assigned by any of the parties (whether by
operation of law or otherwise) without the prior written consent of the other parties, except to an
Affiliated Purchaser pursuant to Section 2(d). Notwithstanding the previous sentence,
subject to the provisions of Section 2(d), this Agreement, and each Investor’s obligations
hereunder, may be assigned, delegated or transferred, in whole or in part, by any Investor to any
Affiliate of such Investor over which such Investor or any of its Affiliates exercises investment
authority, including, without limitation, with respect to voting and dispositive rights; provided
that any such assignee assumes the obligations of such Investor hereunder and agrees in writing to
be bound by the terms of this Agreement in the same manner as such Investor. Notwithstanding the
foregoing or any other provisions herein, no such assignment will relieve the Investor of its
obligations hereunder if such assignee fails to perform such obligations. Except as provided in
Section 9 with respect to the Indemnified Persons, this Agreement (including the documents
and
-32-
instruments referred to in this Agreement) is not intended to and does not confer upon any
person other than the parties hereto any rights or remedies under this Agreement. Any Indemnified
Persons shall be entitled to enforce and rely on the provisions listed in the immediately preceding
sentence as if they were a party to this Agreement.
14. Prior Negotiations; Entire Agreement. This Agreement, together with the Registration
Rights Agreement and the documents and instruments attached as exhibits to and referred to in this
Agreement and the Registration Rights Agreement, constitutes the entire agreement of the parties
with respect to the Recapitalization and supersedes all prior agreements, arrangements or
understandings, whether written or oral, between the parties with respect to the transactions
contemplated hereby.
15. GOVERNING LAW; VENUE. THIS AGREEMENT WILL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF.
EACH OF THE PARTIES HERETO AGREES TO THE EXCLUSIVE JURISDICTION OF THE COURT OF CHANCERY OF THE
STATE OF DELAWARE IN AND FOR NEW CASTLE COUNTY OR, IF THE COURT OF CHANCERY LACKS SUBJECT MATTER
JURISDICTION, ANY COURT OF THE STATE OF DELAWARE SITUATED IN NEW CASTLE COUNTY OR THE UNITED STATES
DISTRICT COURT FOR THE DISTRICT OF DELAWARE, WITH RESPECT TO ANY CLAIM OR CAUSE OF ACTION ARISING
UNDER OR RELATING TO THIS AGREEMENT, AND WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT,
AND AGREES THAT ALL SERVICE OF PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, DIRECTED TO IT AT ITS ADDRESS AS SET FORTH IN SECTION 12, AND THAT SERVICE SO
MADE SHALL BE TREATED AS COMPLETED WHEN RECEIVED. EACH OF THE PARTIES HERETO WAIVES ANY OBJECTION
BASED ON FORUM NON CONVENIENS AND WAIVES ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED IN ANY
SUCH COURT. THE COMPANY AND EACH OF THE INVESTORS HEREBY IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION, SUIT, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF PARENT OR THE INVESTORS
IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE, AND ENFORCEMENT HEREOF. NOTHING IN THIS PARAGRAPH
SHALL AFFECT THE RIGHT OF THE PARTIES HERETO TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED
BY LAW. NOTWITHSTANDING THE FOREGOING, EACH OF THE PARTIES HERETO AGREES THAT EACH OF THE OTHER
PARTIES HERETO SHALL HAVE THE RIGHT TO BRING ANY ACTION OR PROCEEDING FOR ENFORCEMENT OF A JUDGMENT
ENTERED BY A COURT PERMITTED BY THIS SECTION 15 IN ANY OTHER COURT OR JURISDICTION.
16. Counterparts. This Agreement may be executed in any number of counterparts, all of
which will be considered one and the same agreement and will become effective when counterparts
have been signed by each of the parties and delivered to the other party (including via facsimile
or other electronic transmission), it being understood that each party need not sign the same
counterpart.
-33-
17. Waivers and Amendments. This Agreement may be amended, modified, superseded,
cancelled, renewed or extended, and the terms and conditions of this Agreement may be waived, only
by a written instrument signed by all the parties or, in the case of a waiver, by the party waiving
compliance. No delay on the part of any party in exercising any right, power or
privilege pursuant to this Agreement will operate as a waiver thereof, nor will any waiver on the
part of any party of any right, power or privilege pursuant to this Agreement, nor will any single
or partial exercise of any right, power or privilege pursuant to this Agreement, preclude any other
or further exercise thereof or the exercise of any other right, power or privilege pursuant to this
Agreement. The rights and remedies provided pursuant to this Agreement are cumulative and are not
exclusive of any rights or remedies which any party otherwise may have at law or in equity. All
determinations made for the Company prior to the Closing Date with respect to this Section
17 shall be made by the Special Committee.
18. Adjustment to Shares. If, prior to the Closing Date, the Company effects a
reclassification, stock split (including a reverse stock split), stock dividend or distribution,
recapitalization, merger, issuer tender or exchange offer, or other similar transaction with
respect to any shares of its capital stock, references to the numbers of such shares and the prices
therefore shall be equitably adjusted to reflect such change and, as adjusted, shall, from and
after the date of such event, be subject to further adjustment in accordance herewith.
19. Headings. The headings in this Agreement are for reference purposes only and will not
in any way affect the meaning or interpretation of this Agreement.
20. Publicity. The Company and the Investors shall consult with each other prior to
issuing any press releases (and provide each other a reasonable opportunity to review and comment
upon such releases) or otherwise making public announcements with respect to the transactions
contemplated by this Agreement and prior to making any filings with any third party or any
governmental entity (including any national securities exchange or interdealer quotation service)
with respect thereto, except as may be required by law or by the request of any governmental
entity.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed by their
respective officers thereunto duly authorized, all as of the date first written above.
| BUILDERS FIRSTSOURCE, INC. |
||||
| By: | /s/ Xxxxx X. Xxxxxxx | |||
| Name: | Xxxxx X. Xxxxxxx | |||
| Title: | President and Chief Executive Officer | |||
| JLL PARTNERS FUND V, L.P. By: JLL Associates V, L.P., its general partner By: JLL Associates, G.P. V, LLC, its general partner |
||||
| By: | /s/ Xxxx X. Xxxx | |||
| Name: | Xxxx X. Xxxx | |||
| Title: | Managing Member | |||
| WARBURG PINCUS PRIVATE EQUITY IX, L.P. By: Warburg Pincus IX LLC, General Partner By: Warburg Pincus Partners, LLC, Sole Member By: Warburg Pincus & Co., Managing Member |
||||
| By: | /s/ Xxxxx X. Xxxxx | |||
| Name: | Xxxxx X. Xxxxx | |||
| Title: | Partner | |||
-35-
SCHEDULE I
Affiliate |
6 | |||
Affiliated Purchaser |
6 | |||
Aggregate Offering Amount |
1 | |||
Agreement |
1 | |||
Basic Subscription Privilege |
1 | |||
Board |
2 | |||
Business Day |
3 | |||
Closing Date |
7 | |||
Commission |
12 | |||
Common Stock |
1 | |||
Company |
1 | |||
Company SEC Documents |
12 | |||
Debt Exchange |
2 | |||
Eligible Holder |
3 | |||
Exchange Act |
3 | |||
Exchange Deficiency |
5 | |||
Exchange Shares |
6 | |||
Expiration Time |
3 | |||
Holder |
3 | |||
HSR Act |
12 | |||
Indemnified Person |
28 | |||
Indemnifying Party |
28 | |||
Investment Decision Package |
14 | |||
Investor |
1 | |||
Investor Exchange Shares |
6 | |||
Investor Notes |
6 | |||
Investor Offered Shares |
6 | |||
Investors |
1 | |||
Issuer Free Writing Xxxxxxxxxx |
00 | |||
XXX Xxxx X |
0 | |||
Losses |
28 | |||
Material Adverse Effect |
8 | |||
New Notes |
1 | |||
Note Offering Materials |
15 | |||
Notes |
1 | |||
Notice of Offering Results |
6 | |||
Offered Shares |
1 | |||
Old Indenture |
10 | |||
Option |
10 | |||
Options |
10 | |||
Over-Subscription Privilege |
1 | |||
Preferred Stock |
10 | |||
Preliminary Rights Offering Prospectus |
14 | |||
Proceedings |
28 | |||
Proxy Statement |
15 | |||
Put Option |
5 | |||
Recapitalization |
2 | |||
Record Date |
1 | |||
Registration Rights Agreement |
21 | |||
Remaining Offered Shares |
4 | |||
Rights |
1 | |||
Rights Exercise Period |
3 | |||
Rights Offering |
1 | |||
Rights Offering Commencement Date |
3 | |||
Rights Offering Prospectus |
14 | |||
Rights Offering Registration Statement |
14 | |||
Rights Ratio |
3 | |||
SEC Transaction Documents |
18 | |||
Securities Act |
1 | |||
Securities Act Effective Date |
14 | |||
Special Committee |
2 | |||
Stock Plans |
10 | |||
Stockholder Approval |
12 | |||
Subscription Agent |
3 | |||
Subscription Price |
1 | |||
Subsidiary |
9 | |||
Support Agreement |
4 | |||
Transaction Agreements |
9 | |||
Transaction Expenses |
8 | |||
Transfer |
23 | |||
Unsubscribed Shares |
5 | |||
Warburg Pincus |
1 |
SCHEDULE II
Settlement and Release
1. Action
In re: Builders FirstSource, Inc. S’holders and Deriv. Litig., C.A. No. 4900-VCS, pending before
the Court of Chancery of the State of Delaware.
2. Memorandum of Understanding
Memorandum of Understanding, entered into as of October 23, 2009, by and between the parties to In
re: Builders FirstSource, Inc. S’holders and Deriv. Litig., C.A. No. 4900-VCS, pending before the
Court of Chancery of the State of Delaware, by their respective undersigned counsel.
Exhibit A
Terms of New Notes
Issuer
|
Builders FirstSource, Inc. | |
Guarantors
|
All wholly owned domestic subsidiaries of the Issuer that currently guarantee the existing Notes of the Issuer. | |
Principal
|
No more than $145.0 million. | |
Maturity
|
February 15, 2016 (the “Maturity Date”). All obligations then outstanding under the New Notes shall be payable in full on the Maturity Date. |
|
Interest Rate
|
3-month LIBOR (with a 3.0% floor) plus 10.0%. Payable quarterly on the 15th of February, May, August, and November of each year. Interest will be computed on the basis of a 360-day year of twelve 30-day months. |
|
Default Rate
|
Additional 2.00% | |
Amortization
|
None. |
Optional Prepayments |
Prior to February 15, 2011 | 105 | % | |||||
| After February 15, 2011, and prior to February 15, 2012 | 102.5 | % | ||||||
| After February 15, 2012, and prior to February 15, 2013 | 101 | % | ||||||
| After February 15, 2013 | 100 | % | ||||||
Offer to Purchase
with Asset Sale
Proceeds
|
Same as set forth in the Old Indenture. | |
Collateral
|
All amounts owed in connection with the New Notes shall be secured by a perfected, second priority lien on and security interest in all of the Collateral (as defined in the Old Indenture); provided that, for the avoidance of doubt, the Collateral shall not include “securities” of any of the Company’s “affiliates” (as the terms “securities” and “affiliates) are used in Rule 3-16 of Regulation S-X under the Securities Act). | |
Collateral Trust Fee
|
TBD | |
Covenants
|
Same as set forth in the Old Indenture; provided that (i) the definition of Borrowing Base shall be modified to give pro forma credit for any accounts and inventory acquired since the last quarterly financials, (ii) the basket under Section 4.09(b)(1)(A) shall be reduced from $375 million to the sum of (y) the Borrowing Base (as defined in the Old Indenture) and (z) $75 million, and (iii) the Issuer shall be permitted (y) to refinance any remaining Notes with debt which is secured on a pari passu basis with the New Notes; and (z) to issue additional New Notes in exchange for any Notes outstanding following the closing of the Debt Exchange pursuant to and under the new indenture that will govern the New Notes (and, for purposes of clarity, such additional New Notes will be secured on a pari passu basis with the other New Notes). | |
Events of Default
|
Same as set forth in the Old Indenture. | |
Closing Date
|
The effective date of the Recapitalization. |
Allocation
|
The New Notes will be issued as part of the contemplated Recapitalization. | |
Conditions
Precedent to
Closing
|
Satisfaction of all conditions to the closing of the Debt Exchange and the Rights Offering. | |
Registration Rights
|
A resale shelf registration statement covering sales of the New Notes and shares of Common Stock received in the Debt Exchange will be effective prior to closing. |
