FORM OF EXCHANGE AGREEMENT
FORM OF
This EXCHANGE AGREEMENT (as it may be amended from time to time in accordance with the terms hereof, the “Agreement”), dated as of [ ], 2018, is made by and among US LBM Holdings, Inc., a Delaware corporation (“IPOco”), LBM Midco, LLC, a Delaware limited liability company (“US LBM LLC”), and the holders of Units (as defined herein) and shares of Class B Common Stock (as defined herein) from time to time party hereto (each, a “Holder”).
WHEREAS, the parties hereto desire to provide for the exchange of Units, together with the transfer to IPOco of a corresponding number of shares of Class B Common Stock, for shares of Class A Common Stock (as defined herein) or cash at IPOco’s option, on the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and undertakings contained herein and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
Section 1.1. Definitions.
The following definitions shall be for all purposes, unless otherwise clearly indicated to the contrary, applied to the terms used in this Agreement.
“Affiliate” means, with respect to a specified Person, any Person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with the specified Person. As used in this definition, the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.
“Agreement” has the meaning set forth in the preamble.
“Business Day” means any day that is not a Saturday, a Sunday or other day on which banks are required or authorized by law to be closed in New York City.
“Cash Exchange Payment” means an amount in cash equal to the product of (x) the number of Units exchanged, (y) the then-applicable Exchange Rate, and (z) the average of the daily volume weighted average price (“VWAP”) of a share of Class A Common Stock for the five (5) Trading Days immediately prior to the Exchange Date; provided that in calculating such average, (i) the VWAP shall be determined by calculating the arithmetic average price of a share of Class A Common Stock on the principal U.S. securities exchange or automated or electronic quotation system on which Class A Common Stock trades, as reported by Bloomberg, L.P., or its successor, for each of the five (5) consecutive full Trading Days ending on and including the last full Trading Day immediately prior to the Exchange Date, subject to appropriate and equitable adjustment for any stock splits, reverse splits, stock dividends or similar events affecting the
Class A Common Stock; and (ii) if the Class A Common Stock no longer trades on a securities exchange or automated or electronic quotation system, then a majority of the independent members of the board of directors of IPOco shall determine the fair market value of a share of Class A Common Stock in good faith.
“Class A Common Stock” means the Class A common stock, par value $0.01 per share, of IPOco.
“Class B Common Stock” means the Class B common stock, par value $0.0001 per share, of IPOco.
“Code” means the Internal Revenue Code of 1986, as amended.
“Continuing LLC Owner” means LBM Acquisition, LLC, a Delaware limited liability company.
“Continuing LLC Owner Tax Receivable Agreement” means the Tax Receivable Agreement, dated on or about the date hereof, between IPOco, Continuing LLC Owner, US LBM LLC and any other person from time to time a party thereto; as such agreement may be amended or supplemented from time to time.
“Election of Exchange” has the meaning set forth in Section 2.1(b) of this Agreement.
“Exchange” has the meaning set forth in Section 2.1(a) of this Agreement.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Exchange Date” means the date of delivery of the relevant Election of Exchange.
“Exchange Rate” means the number of shares of Class A Common Stock for which one Unit (together with the cancellation of a share of Class B Common Stock) is entitled to be Exchanged. On the date of this Agreement, the Exchange Rate shall be 1, subject to adjustment pursuant to Section 2.2 of this Agreement.
“First Exchange Time” means six months from the date hereof.
“Governmental Entity” means the United States of America or any other nation, any state or other political subdivision thereof, or any entity exercising executive, legislative, judicial, regulatory or administrative functions of government, including any court, in each case, having jurisdiction over US LBM LLC or any of its Subsidiaries or any of the property or other assets of US LBM LLC or any of its Subsidiaries.
“Holder” has the meaning set forth in the preamble.
“IPOco” has the meaning set forth in the preamble hereto.
“IPOco Charter” means the certificate of incorporation of IPOco in effect on the date hereof, as may be amended from time to time.
“LLC Agreement” means the Amended and Restated Limited Liability Company Agreement of US LBM LLC, dated on or about the date hereof, as amended from time to time.
“Paired Interest” means one Unit together with one share of Class B Common Stock.
“Permitted Transferee” has the meaning given to such term in Section 4.1 of this Agreement.
“Person” means an individual, a partnership (including a limited partnership), a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, association or other entity or a Governmental Entity.
“Registration Rights Agreement” means the registration rights agreement by and among IPOco and the stockholders party thereto, dated as of the date hereof, as amended from time to time.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder.
“Stockholders Agreement” means the stockholders agreement by and among IPOco and the stockholders party thereto, dated as of the date hereof, as amended from time to time.
“Subsidiary” means, with respect to any Person, any corporation, limited liability company, partnership, association or business entity of which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof, or (ii) if a limited liability company, partnership, association or other business entity (other than a corporation), a majority of partnership or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by any Person or one or more Subsidiaries of that Person or a combination thereof. For purposes hereof, a Person or Persons shall be deemed to have a majority ownership interest in a limited liability company, partnership, association or other business entity (other than a corporation) if such Person or Persons shall be allocated a majority of limited liability company, partnership, association or other business entity gains or losses or shall control the management of any such limited liability company, partnership, association or other business entity. For purposes hereof, references to a “Subsidiary” of any Person shall be given effect only at such times that such Person has one or more Subsidiaries and, unless otherwise indicated, the term “Subsidiary” refers to a Subsidiary of US LBM LLC.
“Trading Day” means a day on which the New York Stock Exchange or such other principal United States securities exchange on which the shares of Class A Common Stock is listed or admitted to trading is open for the transaction of business (unless such trading shall have been suspended for the entire day), or if the shares of Class A Common Stock are not listed or
admitted to trading on such an exchange, on the automated quotation system on which the shares of Class A Common Stock are then authorized for quotation.
“Units” means the Common Units (as such term is defined in the LLC Agreement).
“US LBM LLC” has the meaning set forth in the preamble.
“Voting Securities” mean any securities which are entitled to vote generally in matters submitted for a vote of stockholders or generally in the election of the board of directors.
ARTICLE II
Section 2.1. Exchange of Units for Class A Common Stock.
(a) Subject to Section 2.1(g), from and after the First Exchange Time, each Holder shall be entitled at any time and from time to time, upon the terms and subject to the conditions hereof, to transfer and surrender Paired Interests free and clear of all liens, encumbrances, rights of first refusal, and the like, to IPOco. Upon such surrender and transfer, the shares of Class B Common Stock shall be canceled and each Unit surrendered will be exchangeable for, at the option of IPOco, (i) a Cash Exchange Payment made to such Holder calculated with respect to such surrendered Units, payable in accordance with the instructions provided in the Election of Exchange or (ii) a number of shares of Class A Common Stock issued to such Holder that is equal to the product of the number of Units surrendered by such Holder multiplied by the Exchange Rate (such exchange, an “Exchange”). As any such existing owner exchanges its Units (together with the cancellation of a corresponding number of shares of Class B Common Stock), the number of Units owned by IPOco will increase. Each such exchange of Units for Class A Common Stock shall, to the extent permitted by law, be treated for U.S. federal income tax reporting purposes as a taxable exchange of the Holder’s Units for Class A Common Stock and corresponding payments under the Continuing LLC Owner Tax Receivable Agreement.
(b) A Holder shall exercise its right to effect an Exchange as set forth in Section 2.1(a) above by delivering to IPOco all certificates and instruments representing the Paired Interests that are being surrendered, together with a written election of exchange in respect of the Units to be Exchanged substantially in the form of Exhibit A hereto (the “Election of Exchange”), duly executed by such Holder or such Holder’s duly authorized attorney, in each case delivered to IPOco at its address set forth in Section 4.2(a). Each Exchange shall be deemed to be effective immediately prior to the close of the business on the date on which the Election of Exchange is delivered to IPOco and IPOco shall cause the transfer agent and registrar to reflect the Exchange on its records and, if IPOco does not elect a Cash Exchange Payment, the exchanging Holder shall be deemed to be a holder of Class A Common Stock from and after that time; provided, however, that if the Holder has specified that the Exchange shall be contingent upon the consummation of a purchase by another Person or effective upon a specified future date in accordance with Section 2.1(c), such Exchange shall be deemed to be effective immediately prior to the close of the business on the date on which such contingency is met or at such specified future date, as applicable, and, if IPOco does not elect a Cash Exchange Payment, the exchanging Holder shall be deemed to be a holder of Class A Common Stock from and after that time or date. As promptly as practicable following the delivery of the Election of Exchange,
IPOco shall deliver or cause to be delivered to the exchanging Holder the number of shares of Class A Common Stock deliverable upon such Exchange, registered in the name of such Holder, or cash, as applicable.
(c) An Election of Exchange from a Holder may specify that the Exchange is to be (x) contingent (including as to the timing) upon the consummation of a purchase by another Person (whether in a tender or exchange offer, an underwritten offering or otherwise) of shares of Class A Common Stock into which the Units are exchangeable and/or (y) effective upon a specified future date.
(d) Notwithstanding anything herein to the contrary, a Holder may withdraw or amend an Election of Exchange, in whole or in part, at any time prior to the effectiveness of the Exchange by delivery of a written notice of withdrawal to IPOco and US LBM LLC specifying (1) the number of withdrawn Paired Interests, (2) if any, the number of Paired Interests as to which the Election of Exchange remains in effect and (3) if the Holder so determines, revised timing of the Exchange or any other new or revised information permitted in the Election of Exchange.
(e) Subject to Section 2.3(c), the shares of Class A Common Stock issued upon an Exchange, other than any such shares issued in an Exchange subject to a registration statement, shall bear a legend in substantially the following form:
THE TRANSFER OF THESE SECURITIES HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY OTHER JURISDICTION AND MAY NOT BE SOLD OR TRANSFERRED OTHER THAN IN ACCORDANCE WITH THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED (OR OTHER APPLICABLE LAW), OR AN EXEMPTION THEREFROM.
(f) If (i) any shares of Class A Common Stock may be sold pursuant to a registration statement that has been declared effective by the Securities and Exchange Commission, (ii) all of the applicable conditions of Rule 144 under the Securities Act are met, or (iii) if a Holder otherwise requests removal of the legend, IPOco, upon the written request of the Holder thereof and, in the case of clauses (ii) and (iii), receipt of an opinion of counsel to such Holder reasonably acceptable to IPOco, shall take all necessary action promptly to remove such legend and, if the shares of Class A Common Stock are certificated, issue to such Holder new certificates evidencing such shares of Class A Common Stock without the legend and, if not certificated, shall provide any notice required by applicable law.
(g) Subject to Section 2.3 and the terms of the Registration Rights Agreement, IPOco and each exchanging Holder shall bear their own respective expenses in connection with the consummation of any Exchange by such Holder, whether or not any such Exchange is ultimately consummated; provided, however, that IPOco will pay any transfer taxes, stamp taxes or duties, or other similar taxes in connection with, or arising by reason of, any Exchange; provided, further, that, subject to Section 2.3, if any shares of Class A Common Stock are to be delivered in a name other than that of the Holder that requested the Exchange or its permitted transferee (or The Depository Trust Company or its nominee for the account of a participant of The Depository
Trust Company that will hold the shares for the account of such Holder or its permitted transferee), then such Holder and/or the person in whose name such shares are to be delivered shall pay to IPOco the amount of any transfer taxes, stamp taxes or duties, or other similar taxes in connection with, or arising by reason of, such Exchange or shall establish to the reasonable satisfaction of IPOco that such tax has been paid or is not payable.
(h) Notwithstanding anything to the contrary in this Article II, a Holder shall not be entitled to effect an Exchange (and, if attempted, any such Exchange shall be, to the fullest extent permitted by applicable law, void ab initio), and IPOco shall have the right to refuse to honor any request to effect an Exchange, at any time or during any period, if IPOco shall reasonably determine that such Exchange (i) would be prohibited by any applicable law or regulation (including the unavailability of any requisite registration statement filed under the Securities Act or any exemption from the registration requirements thereunder), provided this subsection Section 2.1(h) shall not limit IPOco’s or US LBM LLC’s obligations under Section 2.3(c), (ii) could cause US LBM LLC to be treated as a “publicly traded partnership” under section 7704 of the Code or (iii) would not be permitted under (x) the LLC Agreement, (y) other agreements with IPOco or its Subsidiaries to which such Holder may be subject or (z) any written policies of IPOco or any of its Subsidiaries related to unlawful or inappropriate trading applicable to its directors, officers or other employees to which the Holder or its directors and officers are subject. Upon such determination, IPOco shall notify the Holder requesting the Exchange of such determination, which such notice shall include an explanation in reasonable detail as to the reason that the Exchange has not been effected.
Section 2.2. Adjustment.
(a) The Exchange Rate and/or the components of a Paired Interest shall be adjusted accordingly if there is: (i) any subdivision (by any stock or unit split, stock or unit distribution, reclassification, reorganization, recapitalization or otherwise) or combination (by reverse stock or unit split, reclassification, reorganization, recapitalization or otherwise) of the shares of Class B Common Stock or Units that is not accompanied by a substantially equivalent subdivision or combination of the Class A Common Stock; or (ii) any subdivision (by any stock split, stock dividend or distribution, reclassification, reorganization, recapitalization or otherwise) or combination (by reverse stock split, reclassification, reorganization, recapitalization or otherwise) of the Class A Common Stock that is not accompanied by a substantially equivalent subdivision or combination of the shares of Class B Common Stock and Units. If there is any reclassification, reorganization, recapitalization or other similar transaction in which the Class A Common Stock are converted or changed into another security, securities or other property, then upon any subsequent Exchange, an exchanging Holder shall be entitled to receive the amount of such security, securities or other property that such exchanging Holder would have received if such Exchange had occurred immediately prior to the effective date of such reclassification, reorganization, recapitalization or other similar transaction, taking into account any adjustment as a result of any subdivision (by any split, distribution or dividend, reclassification, reorganization, recapitalization or otherwise) or combination (by reverse split, reclassification, recapitalization or otherwise) of such security, securities or other property that occurs after the effective time of such reclassification, reorganization, recapitalization or other similar transaction. For the avoidance of doubt, if there is any reclassification, reorganization, recapitalization or other similar transaction in which the Class A Common Stock are converted or changed into another security, securities or
other property, this Section 2.2 shall continue to be applicable, with respect to such other security or property. To the fullest extent permitted by applicable law, this Agreement shall apply to the Paired Interests held by the Holders and their Permitted Transferees as of the date hereof, as well as any Paired Interests hereafter acquired by a Holder and his or her or its Permitted Transferees, subject to Section 4.1. This Agreement shall apply to, and all references to “Paired Interests” shall be deemed to include, any security, securities or other property of IPOco or US LBM LLC which may be issued in respect of, in exchange for or in substitution of shares of Class B Common Stock or Units, as applicable, by reason of any distribution or dividend, split, reverse split, combination, reclassification, reorganization, recapitalization, merger, exchange (other than an Exchange) or other transaction.
Section 2.3. Class A Common Stock to be Issued; Class B Common Stock to be Cancelled.
(a) IPOco shall at all times reserve and keep available out of its authorized but unissued Class A Common Stock, solely for the purpose of issuance upon an Exchange, the maximum number of shares of Class A Common Stock as shall be deliverable upon the transfer and surrender of all then-outstanding Paired Interests; provided, that nothing contained herein shall be construed to preclude IPOco from satisfying its obligations in respect of an Exchange by delivery of shares of Class A Common Stock that are held in the treasury of IPOco or held by any of its Subsidiaries or by delivery of purchased shares of Class A Common Stock (which may or may not be held in the treasury of IPOco or held by any Subsidiary thereof). IPOco covenants that all shares of Class A Common Stock issued upon an Exchange will, upon delivery in accordance with this Agreement, be validly issued, fully paid and non-assessable.
(b) When a Paired Interest has been transferred and surrendered in accordance with this Agreement, the share of Class B Common Stock corresponding to such Paired Interest shall be immediately cancelled and retired by IPOco and such shares shall not be reissued and the Unit corresponding to such Paired Interest shall be held by IPOco and be outstanding.
(c) Subject to the terms of the Registration Rights Agreement, IPOco covenants and agrees to deliver shares of Class A Common Stock, if requested, pursuant to an effective registration statement under the Securities Act with respect to any Exchange to the extent that a registration statement is effective and available for such shares. In the event that any Exchange in accordance with this Agreement is to be effected at a time when any required registration has not become effective or otherwise is unavailable, upon the request and with the reasonable cooperation of the Holders requesting such Exchange, IPOco shall use reasonable best efforts to promptly facilitate such Exchange pursuant to any reasonably available exemption from such registration requirements. IPOco shall use reasonable best efforts to list the Class A Common Stock required to be delivered upon Exchange prior to such delivery upon each national securities exchange or inter-dealer quotation system upon which the outstanding Class A Common Stock may be listed or traded at the time of such delivery.
(d) IPOco agrees that it has taken all or will take such steps as may be required to cause to qualify for exemption under Rule 16b-3(d) or (e), as applicable, under the Exchange Act, and to be exempt for purposes of Section 16(b) under the Exchange Act, any acquisitions from, or dispositions to, IPOco of equity securities of IPOco (including derivative securities with respect
thereto) and any securities that may be deemed to be equity securities or derivative securities of IPOco for such purposes that result from the transactions contemplated by this Agreement, by each executive officer (including the chief accounting officer) or director of IPOco.
ARTICLE III
Section 3.1. Representations and Warranties of IPOco and of US LBM LLC. Each of IPOco and US LBM LLC represents and warrants that (i) it is a corporation or limited liability company duly incorporated or formed and is existing in good standing under the laws of Delaware, (ii) it has all requisite corporate or limited liability company power and authority to enter into and perform this Agreement and to consummate the transactions contemplated hereby and, in the case of IPOco, to issue the Class A Common Stock in accordance with the terms hereof, (iii) the execution and delivery of this Agreement by it and the consummation by it of the transactions contemplated hereby (including without limitation, in the case of IPOco, the issuance of the Class A Common Stock) have been duly authorized by all necessary corporate or limited liability company action on its part and (iv) this Agreement constitutes a legal, valid and binding obligation of it enforceable against it in accordance with its terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting creditors’ rights generally.
Section 3.2. Representations and Warranties of the Holders. Each Holder, severally and not jointly, represents and warrants that (i) if it is not a natural person, that it is duly incorporated or formed and, to the extent such concept exists in its jurisdiction of organization, is in good standing under the laws of such jurisdiction, (ii) it has all requisite legal capacity and authority to enter into and perform this Agreement and to consummate the transactions contemplated hereby, (iii) if it is not a natural person, the execution and delivery of this Agreement by it and the performance of the transactions contemplated hereby have been duly authorized by all necessary corporate or other entity action on the part of such Holder and (iv) this Agreement constitutes a legal, valid and binding obligation of such Holder enforceable against it in accordance with its terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting creditors’ rights generally.
ARTICLE IV
Section 4.1. Additional Holders. To the extent a Holder validly transfers any or all of such Holder’s Paired Interests to another person in a transaction in accordance with, and not in contravention of, the LLC Agreement, the IPOco Charter, the Stockholders Agreement, the Continuing LLC Owner Tax Receivable Agreement or the Registration Rights Agreement, then such transferee (each, a “Permitted Transferee”) shall have the right to execute and deliver a joinder to this Agreement, substantially in the form of Exhibit B hereto, whereupon such Permitted Transferee shall become a Holder hereunder. To the extent US LBM LLC issues Units and IPOco issues Class B Common Stock to a Person in the future, then the holder of such Units and Class B Common Stock shall have the right to execute and deliver a joinder to this Agreement, substantially in the form of Exhibit B hereto, whereupon such holder shall become a Holder hereunder.
Section 4.2. Addresses and Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in person, by courier service, by fax (delivery receipt requested), by electronic mail or by registered or certified mail (postage prepaid, return receipt requested) to the respective parties at the following addresses (or at such other address for a party as shall be as specified in a notice given in accordance with this Section 4.2):
(a) If to IPOco, to:
0000 Xxxxxxxxx Xxxxx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxx 00000
Fax: 000-000-0000
E-mail: xxxxxxxx.xxxxxxx@xxxxx.xxx
Attention: Xxxxxxxx Xxxxxxx, Esq.
with a copy (which shall not constitute notice) to:
Debevoise and Xxxxxxxx LLP
000 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000
E-mail: xxxxxxx@xxxxxxxxx.xxx
Fax: 000 000 0000
Attention: Xxxxxx X. Xxxxx, Esq.
(b) If to US LBM LLC, to:
US LBM LLC
c/o US LBM Holdings, Inc.
0000 Xxxxxxxxx Xxxxx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxx 00000
Fax: 000-000-0000
E-mail: xxxxxxxx.xxxxxxx@xxxxx.xxx
Attention: Xxxxxxxx Xxxxxxx, Esq.
with a copy (which shall not constitute notice) to:
Debevoise and Xxxxxxxx LLP
000 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000
E-mail: xxxxxxx@xxxxxxxxx.xxx
Fax: 000 000 0000
Attention: Xxxxxx X. Xxxxx, Esq.
(c) If to Continuing LLC Owner, addressed to it at:
Xxxxx & Company
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
E-mail: xxxxxxxx@xxxxx.xxx
Fax: 000 000 0000
Attention: Xxxxx Xxxxxxx, XX, Esq.
and
with a copy (which shall not constitute notice) to:
Debevoise and Xxxxxxxx LLP
000 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000
E-mail: xxxxxxx@xxxxxxxxx.xxx
Fax: 000 000 0000
Attention: Xxxxxx X. Xxxxx, Esq.
(d) If to any Holder other than Continuing LLC Owner, to the address and other contact information set forth in the records of IPOco or US LBM LLC from time to time.
Section 4.3. Further Action. The parties shall execute and deliver all documents, provide all information and take or refrain from taking action as may be necessary or appropriate to achieve the purposes of this Agreement.
Section 4.4. Binding Effect. This Agreement shall be binding upon and inure to the benefit of all of the parties and, to the extent permitted by this Agreement, their successors, executors, administrators, heirs, legal representatives and assigns.
Section 4.5. Severability. If any term or other provision of this Agreement is held to be invalid, illegal or incapable of being enforced by any rule of law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions is not affected in any manner materially adverse to any party. Upon a determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.
Section 4.6. Amendment. The provisions of this Agreement may be amended only by the affirmative vote or written consent of each of (i) IPOco, (ii) US LBM LLC, (iii) Continuing LLC Owner and (iv) the Holders of Units holding a majority of the then outstanding Units (excluding all Units held by IPOco), except that any amendment materially detrimental to any Holder shall require the written consent of such Holder.
Section 4.7. Waiver. No failure by any party to insist upon the strict performance of any covenant, duty, agreement or condition of this Agreement or to exercise any right or remedy consequent upon a breach thereof shall constitute waiver of any such breach of any other covenant, duty, agreement or condition.
Section 4.8. Submission to Jurisdiction; Waiver of Jury Trial.
(a) The parties irrevocably consent to the exclusive jurisdiction of the courts of the State of Delaware and of the federal courts sitting in the state of Delaware in connection with any action relating to this Agreement and each party agrees (i) to the extent such party is not otherwise subject to service of process in the State of Delaware, to appoint and maintain an agent in the State of Delaware as such party’s agent for acceptance of legal process and notify the other parties hereto of the name and address of such agent, and (ii) that, to the fullest extent permitted by applicable law, service of process may also be made on such party by prepaid certified mail with a proof of mailing receipt validated by the United States Postal Service constituting evidence of valid service, and that service made pursuant to (i) or (ii) above shall, to the fullest extent permitted by applicable law, have the same legal force and effect as if served upon such party personally within the State of Delaware. Any action against any party relating to the foregoing shall be brought in the Delaware Court of Chancery (or, solely if the Delaware Court of Chancery declines to accept jurisdiction over any action, to the exclusive jurisdiction of the Superior Court of the State of Delaware (Complex Commercial Division) or, if the subject matter jurisdiction over the action is vested exclusively in the federal courts of the United States of America, the United States District Court for the District of Delaware), and any appellate courts of any thereof. To the extent not prohibited by applicable law, each party hereto waives and agrees not to assert, by way of motion, as a defense or otherwise, in any such proceeding brought in the above-named courts, any claim that such party is not subject personally to the jurisdiction of such courts, that such party’s property is exempt or immune from attachment or execution, that such proceeding is brought in an inconvenient forum, that the venue of such proceeding is improper, or that this Agreement or the subject matter thereof, may not be enforced in or by such courts.
(b) TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH CANNOT BE WAIVED, EACH PARTY HERETO HEREBY WAIVES AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE) ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE OR ACTION, CLAIM, CAUSE OF ACTION OR SUIT (IN CONTRACT, TORT OR OTHERWISE), INQUIRY, PROCEEDING OR INVESTIGATION ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE SUBJECT MATTER HEREOF OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE TRANSACTIONS CONTEMPLATED HEREBY, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING. EACH PARTY HERETO ACKNOWLEDGES THAT IT HAS BEEN INFORMED BY THE OTHER PARTIES HERETO THAT THIS SECTION 4.8(b) CONSTITUTES A MATERIAL INDUCEMENT UPON WHICH THEY ARE RELYING AND WILL RELY IN ENTERING INTO THIS AGREEMENT. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 4.8(b) WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF EACH SUCH PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.
Section 4.9. Counterparts. This Agreement may be executed and delivered (including by facsimile transmission or by e-mail delivery of a “.pdf” format data file) in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed and delivered shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement. Copies of executed counterparts transmitted by telecopy, by e-mail delivery of a “.pdf” format data file or other electronic transmission service shall be considered original executed counterparts for purposes of this Section 4.9.
Section 4.10. Tax Treatment. For U.S. federal income tax purposes only, this Agreement shall be treated as part of the LLC Agreement as described in Section 761(c) of the Code and Sections 1.704-1(b)(2)(ii)(h) and 1.761-1(c) of the Treasury Regulations promulgated thereunder. As required by the Code and the Treasury Regulations, the parties shall report any Exchange consummated hereunder as a taxable sale of the Units and shares of Class B Common Stock by a Holder to IPOco, and no party shall take a contrary position on any income tax return or amendment thereof unless an alternate position is permitted under the Code and Treasury Regulations and IPOco consents in writing.
Section 4.11. Specific Performance. The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that, to the fullest extent permitted by applicable law, the parties shall be entitled to specific performance of the terms and provisions hereof, in addition to any other remedy to which they are entitled at law or in equity.
Section 4.12. Independent Nature of Holders’ Rights and Obligations. The obligations of each Holder hereunder are several and not joint with the obligations of any other Holder, and no Holder shall be responsible in any way for the performance of the obligations of any other Holder under hereunder. The decision of each Holder to enter into to this Agreement has been made by such Holder independently of any other Holder. Nothing contained herein, and no action taken by any Holder pursuant hereto, shall be deemed to constitute the Holders as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Holders are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated hereby.
Section 4.13. Applicable Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without giving effect to any choice or conflict of laws provision or rule that would cause the application of the laws of any other jurisdiction. The parties hereto hereby declare that it is their intention that this Agreement shall be regarded as made under the laws of the State of Delaware and that the laws of said State shall be applied in interpreting its provisions in all cases where legal interpretation shall be required. Each of the parties hereto agrees (a) that this Agreement involves at least $100,000.00, and (b) that this Agreement has been entered into by the parties hereto in express reliance upon 6 Del. C. § 2708.
[Signature Pages Follow]
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the date first set forth above.
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LBM MIDCO, LLC | |
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LBM ACQUISITION, LLC | |
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[Signature Page to Exchange Agreement]
EXHIBIT A
[FORM OF]
ELECTION OF EXCHANGE
US LBM Holdings, Inc.
0000 Xxxxxxxxx Xxxxx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxx Xxxxxxx, Esq.
LBM MIDCO, LLC
US LBM Holdings, Inc.
0000 Xxxxxxxxx Xxxxx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxx Xxxxxxx, Esq.
Reference is hereby made to the Exchange Agreement, dated as of [ ], 2018 (the “Exchange Agreement”), among US LBM Holdings, Inc., a Delaware corporation, LBM Midco, LLC, a Delaware limited liability company, and the holders of Paired Interests (as defined therein) from time to time party thereto. Capitalized terms used but not defined herein shall have the meanings given to them in the Exchange Agreement.
The undersigned Holder hereby transfers and surrenders to IPOco the number of Paired Interests set forth below, for purposes of (a) the cancellation of Class B Common Stock and (b) an Exchange of Units for a Cash Exchange Payment to the account set forth below or for shares of Class A Common Stock to be issued in its name as set forth below, in accordance with the terms of the Exchange Agreement.
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Cash Exchange Payment Instructions: |
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The undersigned hereby represents and warrants that (i) the undersigned has full legal capacity to execute and deliver this Election of Exchange and to perform the undersigned’s obligations hereunder; (ii) this Election of Exchange has been duly executed and delivered by the undersigned and is the legal, valid and binding obligation of the undersigned enforceable against it in accordance with the terms thereof or hereof, as the case may be, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally and the availability of equitable remedies; (iii) the shares of Class B Common Stock and Units subject to this Election of Exchange are being transferred to IPOco free and clear of any pledge, lien, security interest, encumbrance, equities or claim; and (iv) no consent, approval, authorization, order, registration or qualification of any third party or with any court or governmental agency or body having
jurisdiction over the undersigned or the shares of Class B Common Stock or the Units subject to this Election of Exchange is required to be obtained by the undersigned for the transfer of such shares of Class B Common Stock or Units to IPOco.
The undersigned hereby irrevocably constitutes and appoints any officer of IPOco as the attorney of the undersigned, with full power of substitution and resubstitution in the premises, to do any and all things and to take any and all actions that may be necessary to transfer to IPOco the shares of Class B Common Stock and Units subject to this Election of Exchange and to deliver to the undersigned the shares of Class A Common Stock or cash to be delivered in Exchange therefor.
IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this Election of Exchange to be executed and delivered by the undersigned or by its duly authorized attorney.
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EXHIBIT B
[FORM OF]
JOINDER AGREEMENT
This Joinder Agreement (“Joinder Agreement”) is a joinder to the Exchange Agreement, dated as of [ ], 2018 (the “Agreement”), among US LBM Holdings, Inc., a Delaware corporation (the “IPOco”), LBM Midco, LLC, a Delaware limited liability company (“US LBM LLC”), and the holders of Units (as defined therein) from time to time party thereto. Capitalized terms used but not defined in this Joinder Agreement shall have their meanings given to them in the Agreement. This Joinder Agreement shall be governed by, and construed in accordance with, the law of the State of Delaware, without giving effect to any choice or conflict of law provision or rule that would cause the application of the laws of any other jurisdiction. In the event of any conflict between this Joinder Agreement and the Agreement, the terms of this Joinder Agreement shall control.
The undersigned, having acquired shares of Class B Common Stock and Units, hereby joins and enters into the Agreement. By signing and returning this Joinder Agreement to IPOco, the undersigned (i) accepts and agrees to be bound by and subject to all of the terms and conditions of and agreements of a Holder contained in the Agreement, with all attendant rights, duties and obligations of a Holder thereunder and (ii) makes each of the representations and warranties of a Holder set forth in Section 3.2 of the Agreement as fully as if such representations and warranties were set forth herein. The parties to the Agreement shall treat the execution and delivery hereof by the undersigned as the execution and delivery of the Agreement by the undersigned and, upon receipt of this Joinder Agreement by IPOco and by US LBM LLC, the signature of the undersigned set forth below shall constitute a counterpart signature to the signature page of the Agreement.
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