INVESTMENT AGREEMENT
Exhibit
99
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
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rata in proportion to the
amount of Notes validly exchanged by them in the Debt Exchange for consideration
other than shares of Common Stock.
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,
-9-
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
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would
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.
(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
-15-
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,
-16-
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
-18-
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.
6. Additional Covenants of the
Investors. Each Investor agrees with the Company:
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(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.
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(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
-30-
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
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
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
(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
and:
Warburg
Pincus Private Equity IX, L.P.
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
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
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
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
-33-
via
facsimile or other electronic transmission), it being understood that each party
need not sign the same counterpart.
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]
-34-
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/ Xxxxxx XxXxxxxxx | ||
|
Name:
|
Xxxxxx XxXxxxxxx | ||
|
Title:
|
Senior Vice President | ||
|
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 Xxxxx | ||
|
Name:
|
Xxxxx Xxxxx | ||
|
Title:
|
Partner | ||
-35-
SCHEDULE
I
|
Affiliate
|
6
|
Offered
Shares
|
1
|
|
|
Affiliated
Purchaser
|
6
|
Old
Indenture
|
10
|
|
|
Aggregate
Offering Amount
|
1
|
Option
|
10
|
|
|
Agreement
|
1
|
Options
|
10
|
|
|
Basic
Subscription Privilege
|
1
|
Over-Subscription
Privilege
|
1
|
|
|
Board
|
2
|
Preferred
Stock
|
10
|
|
|
Business
Day
|
3
|
Preliminary
Rights Offering Prospectus
|
14
|
|
|
Closing
Date
|
7
|
Proceedings
|
28
|
|
|
Commission
|
12
|
Proxy
Statement
|
15
|
|
|
Common
Stock
|
1
|
Put
Option
|
5
|
|
|
Company
|
1
|
Recapitalization
|
2
|
|
|
Company
SEC Documents
|
12
|
Record
Date
|
1
|
|
|
Debt
Exchange
|
2
|
Registration
Rights Agreement
|
21
|
|
|
Eligible
Holder
|
3
|
Remaining
Offered Shares
|
4
|
|
|
Exchange
Act
|
3
|
Rights
|
1
|
|
|
Exchange
Deficiency
|
5
|
Rights
Exercise Period
|
3
|
|
|
Exchange
Shares
|
6
|
Rights
Offering
|
1
|
|
|
Expiration
Time
|
3
|
Rights
Offering Commencement Date
|
3
|
|
|
Holder
|
3
|
Rights
Offering Prospectus
|
14
|
|
|
HSR
Act
|
12
|
Rights
Offering Registration Statement
|
14
|
|
|
Indemnified
Person
|
28
|
Rights
Ratio
|
3
|
|
|
Indemnifying
Party
|
28
|
SEC
Transaction Documents
|
18
|
|
|
Investment
Decision Package
|
14
|
Securities
Act
|
1
|
|
|
Investor
|
1
|
Securities
Act Effective Date
|
14
|
|
|
Investor
Exchange Shares
|
6
|
Special
Committee
|
2
|
|
|
Investor
Notes
|
6
|
Stock
Plans
|
10
|
|
|
Investor
Offered Shares
|
6
|
Stockholder
Approval
|
12
|
|
|
Investors
|
1
|
Subscription
Agent
|
3
|
|
|
Issuer
Free Writing Prospectus
|
14
|
Subscription
Price
|
1
|
|
|
JLL
Fund V
|
1
|
Subsidiary
|
9
|
|
|
Losses
|
28
|
Support
Agreement
|
4
|
|
|
Material
Adverse Effect
|
8
|
Transaction
Agreements
|
9
|
|
|
New
Notes
|
1
|
Transaction
Expenses
|
8
|
|
|
Note
Offering Materials
|
15
|
Transfer
|
23
|
|
|
Notes
|
1
|
Unsubscribed
Shares
|
5
|
|
|
Notice
of Offering Results
|
6
|
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.
|
Exhibit
B
Form of Registration Rights
Agreement
[SEE
ATTACHED]
Exhibit
B
REGISTRATION
RIGHTS AGREEMENT
This
REGISTRATION RIGHTS AGREEMENT (“Agreement”), dated as
of [_______], 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”).
W I T N E S S E T
H
WHEREAS,
as of the date of this Agreement, JLL Fund V beneficially owns 8,952,551.5
shares of common stock, par value $0.01 per share, of the Company (“Common Stock”) and
Warburg Pincus beneficially owns 9,055,392.5 shares of Common Stock;
and
WHEREAS,
as part of the Recapitalization (as defined below) of the Company, the Company
intends 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 “Board”) of shares of
Common Stock transferable rights (“Rights”) to subscribe
for and purchase 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”)
up to its pro rata
portion of 58,571,428 shares of Common Stock (the “Offered Shares”) such
that, if the Rights are exercised in full, the Company will receive gross
proceeds of $205.0 million (the “Rights Offering”);
and
WHEREAS,
as part of the Recapitalization, the Company also intends (i) to offer new
second lien debt securities (“New Notes”) and cash
from a portion of the 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 October 23, 2009, 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,
pursuant to that certain Investment Agreement, dated as of October 23, 2009
(the “Investment
Agreement”), upon the terms and subject to the satisfaction or waiver of
the conditions described therein, (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,
in consideration of the Investors’ commitment to purchase Common Stock and
exchange Notes pursuant to, upon the terms, and subject to the conditions set
forth in the Investment Agreement, the Company has agreed, among other things,
to provide registration rights to the Investors with respect to all shares of
Common Stock owned or hereinafter acquired by the Investors and their respective
Affiliates (as defined below).
NOW,
THEREFORE, in consideration of the mutual covenants and agreements set forth
herein and for good and valuable consideration, the receipt of which is hereby
acknowledged, the parties agree as follows:
ARTICLE
I
Certain
Definitions
For
purposes of this Agreement, the following terms shall have the following
meanings:
(a) The
term “Affiliate” means a
Person that directly, or indirectly through one or more intermediaries, controls
or is controlled by, or is under common control with, the Person specified, the
term “control” (including the terms “controlling,” “controlled by,” and “under
common control with”) meaning the possession, direct or indirect, of the power
to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract, or
otherwise
(b) The
term “Commission” means the
United States Securities and Exchange Commission or any successor
agency.
(c) The
term “Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder.
(d) The term
“Fair Market
Value” means the fair market value per share of the Common Stock as of a
particular date determined as: (i) the average closing sales price
per share of the Common Stock on the national securities exchange on which the
Common Stock is principally traded, for the last five preceding dates on which
there was a sale of such Common Stock on such exchange; or (ii) if the shares of
Common Stock are then traded in an over-the-counter market, the average of the
closing bid and asked prices for the shares of Common Stock in such
over-the-counter market for the last five preceding dates on which there was a
sale of such Common Stock in such market; or (iii) if the shares of Common Stock
are not then listed on a national securities exchange or traded in an
over-the-counter market, such value as the Board, in its good faith judgment,
shall determine.
2
(e) The
term “Person”
means any individual, firm, corporation, partnership, limited liability company,
trust, or other entity and shall include any successor (by merger or otherwise)
of such entity.
(f) The
term “Public
Offering” means a public offering of equity securities of the Company
pursuant to an effective registration statement under the Securities Act (other
than (i) a registration statement filed under Regulation A or on Form S-4 or any
successor form or (ii) a registration statement filed on Form S-8 or any
successor form).
(g) The
term “Registrable
Securities” means the Shares, provided, however, that as to any
particular Registrable Securities, such securities shall cease to be Registrable
Securities when (i) a registration statement registering such securities under
the Securities Act has been declared effective and such securities have been
sold or otherwise transferred by the holder thereof pursuant to such effective
registration statement; or (ii) such securities are sold in accordance with Rule
144 (or any successor provision) promulgated under the Securities Act; or (iii)
such securities are transferred under circumstances in which any legend borne by
the certificates for such securities or noted in the Company’s stock book and
transfer records relating to restrictions on transferability thereof, under the
Securities Act or otherwise, is removed by the Company.
(h) The
term “Requisite
Amount” means such number of shares of Registrable Securities having an
aggregate Fair Market Value of $125,000.
(i) The
term “Shares”
means (i) all shares of Common Stock owned as of the date hereof by JLL Fund V
and Warburg Pincus and their respective Affiliates, including, without
limitation, Building Products, LLC and JWP LLC; and (ii) additional shares of
Common Stock acquired by JLL Fund V and Warburg Pincus and their respective
Affiliates, including, without limitation, Building Products, LLC and JWP LLC,
in any manner after the date hereof.
ARTICLE
II
Representations and
Warranties
Section
2.01 Representations and Warranties of
the Investors. Each Investor individually represents and
warrants to the Company the following:
(a) Such
Investor has the requisite power and authority to enter into, execute, and
deliver this Agreement and to consummate the transactions contemplated hereby in
accordance with the terms hereof. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have been
duly authorized by all necessary action on the part of such Investor;
and
(b) This
Agreement has been duly and validly executed and delivered by such Investor and
is, assuming due execution and delivery hereof by the Company and that the
Company has full legal power and right to enter into this Agreement, a valid and
binding obligation of such Investor, enforceable against such Investor in
accordance with its terms, except as enforcement thereof may be limited by the
effect of bankruptcy, insolvency,
3
reorganization,
moratorium, fraudulent conveyance, or similar laws affecting the enforcement of
creditors’ rights generally, and subject to principles of equity and public
policy; and
(c) The
Investor understands and acknowledges that, until such time as the same is no
longer required under any applicable requirements of the Securities Act and the
rules and regulations thereunder 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 or, in the case of certificated Shares, imprint
legends as may be necessary to record that the transfer of the Shares must be
registered under the Securities Act (subject to any applicable
exemptions).
Section
2.02 Representations and Warranties of
the Company. The Company represents and warrants to each of
the Investors the following:
(a) The
Company is a corporation duly organized and validly existing in good standing
under the laws of the State of Delaware and has the requisite corporate power
and authority to enter into, execute, and deliver this Agreement and to
consummate the transactions contemplated hereby in accordance with the terms
hereof. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of the Company; and
(b) This
Agreement has been duly and validly executed and delivered by the Company and
is, assuming due execution and delivery hereof by each of the Investors and that
each of the Investors has full legal power and right to enter into this
Agreement, a valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, except as enforcement thereof may be
limited by the effect of bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance, or similar laws affecting the enforcement of creditors’
rights generally, and subject to principles of equity and public
policy.
ARTICLE
III
Registration
Rights
Section
3.01 Demand
Registrations.
(a) Requests for
Registration. At any time after the date of this Agreement,
subject to the conditions set forth herein, each Investor shall be entitled to
make, on its own behalf or on behalf of any of its Affiliates, a written request
of the Company (a “Demand”) for
registration under the Securities Act of all or any portion of the Registrable
Securities owned by such Investor (or such Investor’s Affiliates) (a “Demand
Registration”). The Investor making such Demand (the “Demanding Investor”)
shall give written notice (a “Demand Notice”) to
the Company and to the other Investor specifying: (i) the
Demanding Investor’s intent to exercise a Demand; (ii) the aggregate number
of Registrable Securities requested to be registered, provided that such
Registrable Securities must have an aggregate Fair Market Value of at least
$10,000,000; and (iii) the intended method of distribution in connection
with such Demand Registration to the extent then known. Within ten
(10) business days of receipt of a Demand Notice, the other Investor,
should it wish to participate in the Demand
4
Registration,
shall give written notice (a “Demand Participation
Notice”) to the Company and the Demanding Investor specifying the
aggregate number of Registrable Securities that such Investor, on its own behalf
or on behalf of any of its Affiliates, wishes to be included in the Demand
Registration. Participation by such Investor in such Demand
Registration pursuant to a Demand Participation Notice shall not be counted as a
Demand of such Investor. Subject to Section 3.01(f), the Company
shall include in the Demand Registration all Registrable Securities requested to
be included in such Demand Registration by the Demanding Investor and the other
Investor, as set forth in the Demand Participation Notice.
(b) Number of
Demands. Each Investor shall be entitled to four (4) Demand
Registrations.
(c) Satisfaction of
Obligations. Subject to the provisions of Section 3.03, a
registration shall not be treated as a permitted Demand for a Demand
Registration until (i) the applicable registration statement under the
Securities Act has been filed with the Commission with respect to such Demand
Registration (which shall include any registration statement that is not
withdrawn by holders of Registrable Securities in the circumstances contemplated
by Section 3.03); and (ii) such registration statement shall have been
maintained continuously effective for a period of at least one hundred eighty
(180) days or, in the case of a registration statement registering securities
pursuant to Rule 415 under the Securities Act, until all securities registered
under such registration statement are sold.
(d) Availability of Short Form
Registrations. The Company shall use its commercially
reasonable efforts to comply with the requirements for use of short form
registration for the sale of Registrable Securities under the Securities
Act.
(e) Restrictions on Demand
Registrations. The Company shall not be obligated (i) in the
case of a Demand Registration, to maintain the effectiveness of a registration
statement under the Securities Act for a period of at least 180 days or, in the
case of a registration statement registering securities pursuant to Rule 415
under the Securities Act, until all securities registered under such Demand
Registration are sold; or (ii) to effect any Demand Registration requested by an
Investor within one hundred eighty (180) days of the effective date of (A) a
registration in which such Investor, on its own behalf or on behalf of any of
its Affiliates, exercised “piggyback” rights pursuant to Section 3.02
hereof (provided that, with respect to such a registration in which such
piggyback rights were exercised, such Investor was permitted to include in such
registration at least twenty-five percent (25%) of the Registrable Securities
that such Investor and its Affiliates sought to include therein) or (B) any
other Demand Registration. In addition, the Company shall be entitled
to postpone (upon written notice to each Investor) for up to ninety (90) days
the filing or the effectiveness of a registration statement in respect of a
Demand (but no more than once in any period of twelve (12) consecutive months)
if the Board determines in good faith and in its reasonable judgment that
effecting the Demand Registration in respect of such Demand would have a
material adverse effect on any proposal or plan by the Company to engage in any
debt or equity offering, material acquisition, or disposition of assets (other
than in the ordinary course of business) or any merger, consolidation, tender
offer, or other similar transaction or otherwise would be materially detrimental
to the Company. In the event of a postponement by the Company of the
filing or effectiveness of a registration statement in
5
respect
of a Demand, the Demanding Investor shall have the right to withdraw such Demand
in accordance with Section 3.03 hereof.
(f) Participation in Demand
Registrations. Except with the prior written consent of the
Demanding Investor, the Company may not include any securities to be sold for
the Company’s account or for the account of other Persons that are not holders
of Registrable Securities, other than the other Investor and its Affiliates, in
a Demand Registration. If, in connection with a Demand Registration,
any managing underwriter advises the Company and the Demanding Investor that, in
its opinion, the inclusion of all the Registrable Securities and, if authorized
pursuant to this Article III, other securities of the Company, in each
case, sought to be registered in connection with such Demand Registration would
adversely affect the marketability of the Registrable Securities sought to be
sold pursuant thereto, then the Company shall include in the registration
statement applicable to such Demand Registration only such securities as the
Company, the Demanding Investor, and the other Investor are advised by such
underwriter can be sold without such an effect (the “Maximum Demand
Number”), as follows and in the following order of priority:
(i) first, the number of
Registrable Securities sought to be registered by the Demanding Investor, on its
own behalf or on behalf of any of its Affiliates, pursuant to such Demand and
the number of Registrable Securities, if any, sought to be registered by the
other Investor, on its own behalf or on behalf of any of its Affiliates,
pursuant to a Demand Participation Notice; provided, however, that, in the event
that the aggregate number of Registrable Securities to be sold pursuant to this
clause (i) exceeds the Maximum Demand Number, then the number of Registrable
Securities to be registered by each of the Demanding Investor and the other
Investor shall be reduced pro
rata in proportion to the number of Registrable Securities sought to be
registered by each such Investor such that the total number of Registrable
Securities to be registered equals the Maximum Demand Number; and
(ii) second, and only if
the number of Registrable Securities to be included under clause (i) above is
less than the Maximum Demand Number, the number of securities sought to be
included by the Company, which in the aggregate, when added to the number of
securities to be included pursuant to clause (i) above, equals the Maximum
Demand Number; and
(iii) third, and only if
the number of Registrable Securities to be included under clauses (i) and (ii)
above is less than the Maximum Demand Number, the number of securities sought to
be sold for the account of other Persons that the Company is obligated to
register pursuant to written contractual arrangements with such Persons, pro rata in proportion to the
number of securities sought to be sold by such Persons, which in the aggregate,
when added to the number of securities to be included pursuant to clauses (i)
and (ii) above, equals the Maximum Demand Number.
(g) Selection of
Underwriters. If the Demanding Investor requests that such
Demand Registration be an underwritten offering, then the Demanding Investor
shall select
6
a
nationally recognized underwriter or underwriters to manage and administer such
offering, such underwriter or underwriters, as the case may be, to be subject to
the approval of the Company and the other Investor (to the extent such other
Investor has delivered a Demand Participation Notice), which approval shall not
be unreasonably withheld or delayed.
(h) Other
Registrations. If the Company has received a Demand and if the
applicable registration statement in respect of such Demand has not been
withdrawn or abandoned, the Company shall not file or cause to be effected any
other registration of any of its equity securities or securities convertible or
exchangeable into or exercisable for its equity securities under the Securities
Act (other than a registration relating to the Company’s employee benefit plans,
exchange offers by the Company, or a merger or acquisition of a business or
assets by the Company, including, without limitation, a registration on Form S-4
or Form S-8 or any successor form), whether on its own behalf or at the request
of any holder or holders of such securities, until a period of at least ninety
(90) days has elapsed from the effective date of any Demand Registration, unless
a shorter period of time is approved by the Demanding
Investor. Notwithstanding the foregoing, the Company shall be
entitled to postpone any such Demand Registration and may file or cause to be
effected such other registration in accordance with the terms of
Section 3.01(e) hereof.
Section
3.02 Piggyback
Registrations.
(a) Right to
Piggyback. Whenever the Company proposes to register any
shares of its Common Stock or Common Stock held by any stockholders of the
Company under the Securities Act (other than a registration under Regulation A
or relating to the Company’s employee benefit plans, exchange offers by the
Company, or a merger or acquisition of a business or assets by the Company,
including, without limitation, a registration on Form S-4 or Form S-8 or any
successor form) (a “Piggyback
Registration”), the Company shall give each of the Investors prompt
written notice thereof (but not less than ten (10) business days prior to the
filing by the Company with the Commission of any registration statement with
respect thereto). Such notice (a “Piggyback Notice”)
shall specify the number of securities proposed to be registered, the proposed
date of filing of such registration statement with the Commission, the proposed
means of distribution, the proposed managing underwriter or underwriters (if any
and if known), and a good faith estimate by the Company of the proposed minimum
offering price of such securities. Upon the written request of an
Investor, on its own behalf or on behalf of any of its Affiliates, given to the
Secretary of the Company within ten (10) business days of the receipt by such
Investor of the Piggyback Notice requesting that the Company include in such
registration Registrable Securities owned by such Investor or its Affiliates in
an amount equal to or greater than the Requisite Amount (which written request
shall specify the number of Registrable Securities intended to be disposed of by
such Investor and its Affiliates and the intended method of distribution
thereof), the Company shall include in such registration all Registrable
Securities with respect to which the Company has received such written requests
for inclusion, in accordance with the terms hereof.
(b) Priority on Piggyback
Registrations. If, in connection with a Piggyback
Registration, any managing underwriter (or, if such Piggyback Registration is
not an underwritten offering, a nationally recognized independent underwriter
selected by the Company) advises the Company and the holders of the Registrable
Securities to be included in
7
such
Piggyback Registration, that, in its opinion, the inclusion of all the
securities sought to be included in such Piggyback Registration by the Company,
by any Persons other than the Investors who have sought to have shares
registered thereunder pursuant to rights to demand (other than pursuant to
so-called “piggyback” or other incidental or participation registration rights)
such registration (such demand rights, being “Other Demand Rights”
and such other Persons, being “Other Demanding
Sellers”), by any holders of securities (including the Investors) seeking
to sell such securities in such Piggyback Registration (“Piggyback Sellers”),
in each case, if any would materially adversely affect the marketability of the
securities sought to be sold pursuant thereto, then the Company shall include in
the registration statement applicable to such Piggyback Registration only such
securities as the Company, the Other Demanding Sellers, and the Piggyback
Sellers are so advised by such underwriter can be sold without such an effect
(the “Maximum
Piggyback Number”), as follows and in the following order of
priority:
(i) if
the Piggyback Registration is an offering on behalf of the Company and not a
Demanding Investor pursuant to Section 3.01 hereof or any Person exercising
Other Demand Rights (whether or not other Persons seek to include securities
therein pursuant to so-called “piggyback” or other incidental or participatory
registration rights) (a “Primary Offering”),
then (A) first,
such number of securities to be sold by the Company as the Company, in its
reasonable judgment and acting in good faith and in accordance with sound
financial practice, shall have determined; and (B) second, if the number
of securities to be included under clause (A) above is less than the Maximum
Piggyback Number, pro
rata in proportion to the securities sought to be registered by all the
Piggyback Sellers which in the aggregate, when added to the number of securities
to be registered under clause (A) above, equals the Maximum Piggyback Number;
and
(ii) if
the Piggyback Registration is an offering other than pursuant to a Primary
Offering or a Demand Registration, then (A) first, such number of
securities sought to be registered by each Other Demanding Seller, pro rata in proportion to the
number of securities sought to be registered by all such Other Demanding
Sellers; and (B) second, if the number
of securities to be included under clause (A) above is less than the Maximum
Piggyback Number, the number of securities sought to be registered by each
Piggyback Seller, pro
rata in proportion
to the securities sought to be registered by all the Piggyback Sellers, which in
the aggregate, when added to the number of securities to be registered under
clause (A) above, equals the Maximum Piggyback Number; and (C) third, if the number
of securities to be included under clauses (A) and (B) above is less than the
Maximum Piggyback Number, the number of securities to be sold by the Company for
its own account, which in the aggregate, when added to the number of securities
to be registered under clauses (A) and (B) above, equals the Maximum Piggyback
Number.
(c) Withdrawal by the
Company. If, at any time after giving written notice of its
intention to register any of its securities as set forth in this
Section 3.02 and prior to the time the registration statement filed in
connection with such registration is declared effective, the Company shall
determine not to go forward with a Primary Offering, the Company may,
at
8
its
election, give written notice of such determination to each Investor and
thereupon shall be relieved of its obligation to register any Registrable
Securities in connection with such particular withdrawn or abandoned
registration (but not from its obligation to pay the Registration Expenses in
connection therewith as provided herein).
Section
3.03 Withdrawal Rights. Any
Investor that has, on its own behalf or on behalf of any of its Affiliates,
notified or directed the Company to include any Registrable Securities in a
registration statement under the Securities Act shall have the right to withdraw
any such notice or direction with respect to any or all of the Registrable
Securities designated for registration thereby by giving written notice to such
effect to the Company prior to the effective date of such registration
statement. In the event of any such withdrawal, the Company shall not
include such Registrable Securities in the applicable registration, and such
Registrable Securities shall continue to be Registrable Securities
hereunder. No such withdrawal shall affect the obligations of the
Company with respect to the Registrable Securities not so withdrawn; provided
that in the case of a Demand Registration, if such withdrawal shall reduce the
number of Registrable Securities sought to be included in such registration
below $10,000,000 of aggregate Fair Market Value as of such date, then the
Company shall as promptly as practicable give each holder of Registrable
Securities sought to be registered notice to such effect, referring to this
Agreement and summarizing this Section 3.03, and within five (5) business
days of the effectiveness of such notice either the Company or the holders of a
majority of the Registrable Securities sought to be registered may, by written
notices made to each holder of Registrable Securities sought to be registered
and the Company, elect that such registration statement not be filed or, if
theretofore filed, be withdrawn. During such period of five (5)
business days, the Company shall not file such registration statement if not
theretofore filed, or, if such registration statement has been theretofore
filed, the Company shall not seek, and shall use its best efforts to prevent,
the effectiveness thereof. Any Demand Registration withdrawn in
accordance with an election by the Demanding Investor subsequent to the
effectiveness of the applicable Demand Registration Statement shall be counted
as a Demand Registration unless such Demanding Investor reimburses the Company
for its reasonable out-of-pocket expenses related to the preparation and filing
of such registration statement (in which event such registration statement shall
not be counted as a Demand Registration hereunder).
Section
3.04 Holdback
Agreements. Each Investor agrees not to effect any public sale
or distribution (including sales pursuant to Rule 144 (or any successor
provision) promulgated under the Securities Act) of equity securities of the
Company, or any securities convertible into or exchangeable or exercisable for
such securities, during the twenty (20) day period prior to the date on which
the Company intends to commence a Public Offering (provided the Investors are
notified in writing of such commencement date) through the ninety (90) day
period immediately following the effective date of any such Public Offering
(except as part of such registration), or, if later, the ninety (90) day period
immediately following the execution date of any underwriting agreement with
respect thereto.
Section
3.05 Registration
Procedures.
(a) Whenever
the Investors have, on their own behalf or on the behalf of any of their
respective Affiliates, requested that any Registrable Securities be registered
pursuant to this Agreement, the Company (subject to its right to withdraw such
registration as
9
contemplated
by Section 3.02(c)) shall use commercially reasonable efforts to effect the
registration and the sale of such Registrable Securities in accordance with the
intended method of disposition thereof, and, in connection therewith, the
Company shall:
(i) use
commercially reasonable efforts to (A) register the Registrable Securities on
Form S-3 or another available short form registration statement, to the extent
permitted under the Securities Act and the rules and regulations thereunder, (B)
cause the registration statement to remain effective for a continuous period of
not less than 180 days (or, if earlier, until all of the Registrable Securities
included in such registration statement have been sold thereunder), subject to
Section 3.05(c), and (C) obtain the withdrawal of any order suspending the
registration or qualification (or the effectiveness thereof) or suspending or
preventing the use of any related prospectus in any jurisdiction with respect
thereto;
(ii) promptly
notify each seller of Registrable Securities of each of (A) the filing and
effectiveness of the registration statement and prospectus and any amendment or
supplements thereto, (B) the receipt of any comments from the Commission or any
state securities law authorities or any other governmental authorities with
respect to any such registration statement or prospectus or any amendments or
supplements thereto, and (C) any oral or written stop order with respect to such
registration, any suspension of the registration or qualification of the sale of
such Registrable Securities in any jurisdiction, or any initiation or
threatening of any proceedings with respect to any of the
foregoing;
(iii) furnish
to each seller of Registrable Securities, the underwriters, and the sales or
placement agent, if any, and counsel for each of the foregoing, a conformed copy
of such registration statement and each amendment and supplement thereto (in
each case, including all exhibits thereto and documents incorporated by
reference therein) and such additional number of copies of such registration
statement, each amendment, and supplement thereto (in such case without such
exhibits and documents), the prospectus (including each preliminary prospectus)
included in such registration statement, and prospectus supplements and all
exhibits thereto and documents incorporated by reference therein, and such other
documents as such seller, underwriter, agent, or counsel may reasonably request
in order to facilitate the disposition of the Registrable Securities owned by
such seller;
(iv) use
commercially reasonable efforts to register or qualify such Registrable
Securities under such securities or “blue sky” laws of such jurisdictions as the
holders of Registrable Securities reasonably request and do any and all other
acts and things that may be reasonably necessary or advisable to enable the
holders of Registrable Securities to consummate the disposition in such
jurisdictions of the Registrable Securities owned by such holders and keep such
registration or qualification in effect for so long as the registration
statement remains effective under the Securities Act (provided that the Company
shall not be required to (x) qualify generally to do business in any
jurisdiction in which it
10
would
not otherwise be required to qualify but for this paragraph, (y) subject itself
to taxation in any such jurisdiction in which it would not otherwise be subject
to taxation but for this paragraph, or (z) consent to the general service of
process in any jurisdiction in which it would not otherwise be subject to
general service of process but for this paragraph);
(v) notify
each seller of such Registrable Securities, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act and the
rules and regulations thereunder, upon the discovery that, or of the happening
of any event as a result of which, the registration statement covering such
Registrable Securities, as then in effect, contains an untrue statement of a
material fact or omits to state any material fact required to be stated therein
or any fact necessary to make the statements therein not misleading, and
promptly prepare and furnish to each such seller a supplement or amendment to
the prospectus contained in such registration statement so that such
Registration Statement shall not, and such prospectus as thereafter delivered to
the purchasers of such Registrable Securities shall not, contain an untrue
statement of a material fact or omit to state any material fact required to be
stated therein or any fact necessary to make the statements therein not
misleading;
(vi) use
commercially reasonable efforts to cause all such Registrable Securities to be
listed on any national securities exchange or established over-the-counter
market on which or through which similar securities of the Company are then
listed or traded and, if not so listed or traded, to use commercially reasonable
efforts to cause such Registrable Securities to be listed on The Nasdaq Stock
Market or to be listed on an automated quotation system and to secure
designation of all such Registrable Securities covered by such registration
statement as an “NMS Security” within the meaning of Regulation NMS under the
Exchange Act;
(vii) provide
and cause to be maintained a transfer agent and registrar for all such
Registrable Securities covered by such registration statement not later than the
effective date of such registration statement;
(viii) make
available for inspection by any seller of Registrable Securities and any
attorney, accountant, or other agent retained by any such seller or underwriter
all financial and other records, pertinent corporate documents, and properties
of the Company, and cause the Company’s officers, directors, employees,
attorneys, and independent accountants to supply all information reasonably
requested by any such sellers, attorneys, accountants, or agents in connection
with such registration statement. Information that the Company
determines, in good faith, to be confidential shall not be disclosed by such
Persons unless (x) the disclosure of such information is necessary to avoid or
correct a misstatement or omission in such registration statement, or (y) the
release of such information is ordered pursuant to a subpoena or other order
from a court of competent jurisdiction. Each seller of Registrable
Securities agrees, on its own behalf and on behalf of all its accountants,
attorneys, and agents, that the
11
information
obtained by it as a result of such inspections shall be deemed confidential and
shall not be used by it as the basis for any market transactions in the
securities of the Company unless and until such is made generally available to
the public. Each seller of Registrable Securities further agrees, on
its own behalf and on behalf of all its accountants, attorneys, and agents, that
it will, upon learning that disclosure of such information is sought in a court
of competent jurisdiction, give notice to the Company and allow the Company, at
the Company’s expense, to undertake appropriate action to prevent disclosure of
the information deemed confidential;
(ix) use
commercially reasonable efforts to comply with all applicable laws related to
such registration statement and offering and sale of securities and all
applicable rules and regulations of governmental authorities in connection
therewith (including, without limitation, the Securities Act and the Exchange
Act) and make generally available to its security holders as soon as practicable
(but in any event not later than fifteen (15) months after the effectiveness of
such registration statement) an earnings statement of the Company and its
subsidiaries complying with Section 11(a) of the Securities Act;
(x) permit
any Investor, which Investor, in its sole and exclusive judgment, might be
deemed to be an underwriter or controlling Person of the Company, to participate
in the preparation of such registration statement and to require the insertion
therein of material, furnished to the Company in writing, that in the reasonable
judgment of such holder and such holder’s counsel should be included;
and
(xi) use
commercially reasonable efforts to furnish to each seller of Registrable
Securities a signed counterpart of (x) an opinion of counsel for the Company and
(y) a “comfort” letter signed by the independent public accountants who have
certified the Company’s financial statements included or incorporated by
reference in such registration statement, covering such matters with respect to
such registration statement and, in the case of the accountants’ comfort letter,
with respect to events subsequent to the date of such financial statements, as
are customarily covered in opinions of issuer’s counsel and in accountants’
comfort letters delivered to the underwriters in underwritten public offerings
of securities for the account of, or on behalf of, an issuer of common stock,
such opinion and comfort letters to be dated the date of such opinions and
comfort letters are customarily dated in such transactions, and covering in the
case of such legal opinion, such other legal matters and, in the case of such
comfort letter, such other financial matters, as the holders of a majority of
the Registrable Securities being sold may reasonably request.
(b) Underwriting. Without
limiting any of the foregoing, in the event that the offering of Registrable
Securities is to be made by or through an underwriter, the Company shall enter
into an underwriting agreement with a managing underwriter or underwriters
containing representations, warranties, indemnities, and agreements customarily
included (but not inconsistent with the agreements contained herein) by an
issuer of common
12
stock
in underwriting agreements with respect to offerings of common stock for the
account of, or on behalf of, such an issuer. In connection with the
sale of Registrable Securities hereunder, any seller of such Registrable
Securities may, at its option, require that any and all representations and
warranties by, and indemnities and agreements of, the Company to or for the
benefit of such underwriter or underwriters (or which would be made to or for
the benefit of such an underwriter or underwriters if such sale of Registrable
Securities were pursuant to a customary underwritten offering) be made to and
for the benefit of such seller and that any or all of the conditions precedent
to the obligations of such underwriter or underwriters (or which would be so for
the benefit of such underwriter or underwriters under a customary underwriting
agreement) be conditions precedent to the obligations of such seller in
connection with the disposition of its securities pursuant to the terms
hereof. In connection with any offering of Registrable Securities
registered pursuant to this Agreement, the Company shall (x) furnish to the
underwriter, if any (or, if no underwriter, the sellers of such Registrable
Securities), unlegended certificates representing ownership of the Registrable
Securities being sold, in such denominations as requested and (y) instruct any
transfer agent and registrar of the Registrable Securities to release any stop
transfer order with respect thereto.
(c) Return of
Prospectuses. Each seller of Registrable Securities hereunder
agrees that upon receipt of any notice from the Company of the happening of any
event of the kind described in Section 3.05(a)(v), such seller shall
forthwith discontinue such seller’s disposition of Registrable Securities
pursuant to the applicable registration statement and prospectus relating
thereto until such seller’s receipt of the copies of the supplemented or amended
prospectus contemplated by Section 3.05(a)(v) and, if so directed by the
Company, deliver to the Company all copies, other than permanent file copies,
then in such seller’s possession of the prospectus current at the time of
receipt of such notice relating to such Registrable Securities. In
the event the Company shall give such notice, the one hundred and eighty (180)
day period during which such registration statement must remain effective
pursuant to Section 3.05(a)(i) of this Agreement (or such shorter period as
permitted by Section 3.05(a)(i)) shall be extended by the number of days
during the period from the date of giving of a notice regarding the happening of
an event of the kind described in Section 3.05(a)(v) to the date when all
such sellers shall receive such a supplemented or amended prospectus and such
prospectus shall have been filed with the Commission.
Section
3.06 Registration
Expenses. All expenses incident to the Company’s performance
of, or compliance with, its obligations under this Agreement, including, without
limitation, all registration and filing fees, all fees and expenses of
compliance with securities and “blue sky” laws (including, without limitation,
the fees and expenses of counsel for underwriters or placement or sales agents
in connection therewith), all printing and copying expenses, all messenger and
delivery expenses, all fees and expenses of underwriters and sales and placement
agents in connection therewith (excluding discounts and commissions of such
underwriters or placement agents), all fees and expenses of the Company’s
independent certified public accountants and counsel (including, without
limitation, with respect to “comfort” letters and opinions) (collectively, the
“Registration
Expenses”) shall be borne by the Company. Notwithstanding the
foregoing, all underwriting discounts and commissions allocable to each Investor
selling, or effecting the sale of, Registrable Securities on its own behalf or
on behalf of any of its Affiliates shall be borne by such
Investor. The Company shall not be responsible for the fees and
expenses of any additional counsel, or any of the accountants, agents, or
experts
13
retained
by the Investors in connection with the sale of Registrable
Securities. The Company will pay its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties, the expense of any annual audit, and the
expense of any liability insurance) and the expenses and fees for listing the
securities to be registered on each securities exchange and included in each
established over-the-counter market on which similar securities issued by the
Company are then listed or traded or for listing on any other exchange or
automated quotation system.
Section
3.07 Indemnification.
(a) By the
Company. The Company agrees to indemnify, to the fullest
extent permitted by law, each holder of Registrable Securities being sold, its
directors, officers, employees, members, managers, partners, agents, and each
other Person, if any, who controls (within the meaning of the Securities Act and
the rules and regulations thereunder) such holder against all losses, claims,
damages, liabilities, and expenses (including legal fees and expenses and all
costs incident to investigation or preparation with respect to such losses,
claims, damages, liabilities, and expenses and to reimburse such indemnified
Person for such costs as incurred) (collectively, the “Losses”) caused by,
resulting from, or relating to any untrue or alleged untrue statement of
material fact contained in any registration statement, prospectus, or
preliminary prospectus or any amendment thereof or supplement thereto or any
omission or alleged omission of a material fact required to be stated therein or
a fact necessary to make the statements therein not misleading, except insofar
as the same are caused by or contained in any information furnished to the
Company by or on behalf of such holder in writing expressly for use therein or
by such holder’s failure to deliver a copy of the registration statement or
prospectus or any amendments or supplements thereto after the Company has
furnished such holder with a sufficient number of copies of the same and
notified such holder of such obligation. In connection with an
underwritten offering and without limiting any of the Company’s other
obligations under this Agreement, the Company shall indemnify such underwriters,
their officers, directors, employees, and agents and each Person who controls
(within the meaning of the Securities Act and the rules and regulations
thereunder) such underwriters or such an other indemnified Person to the same
extent as provided above with respect to the indemnification of the holders of
Registrable Securities being sold.
(b) By the
Investors. In connection with any registration statement in
which a holder of Registrable Securities is participating, each such holder
will, if requested, furnish to the Company in writing information regarding such
holder’s ownership of Registrable Securities and, to the extent permitted by
law, shall indemnify the Company, its directors, and each Person who controls
(within the meaning of the Securities Act and the rules and regulations
thereunder) the Company against all Losses caused by, resulting from, or
relating to any untrue or alleged untrue statement of material fact contained in
the registration statement, prospectus, or preliminary prospectus or any
amendment thereof or supplement thereto or any omission or alleged omission of a
material fact required to be stated therein or necessary to make the statements
therein not misleading, but only to the extent that such untrue statement or
omission is caused by and contained in such information so furnished to the
Company in writing by or on behalf of such holder; provided, however, that each
holder’s obligation to indemnify the Company hereunder shall be apportioned
between each holder based upon the net amount received by each holder from the
sale of Registrable Securities, as compared to the total net
14
amount
received by all of the holders of Registrable Securities sold pursuant to such
registration statement, no such holder being liable to the Company in excess of
such apportionment.
(c) Notice. Any Person
entitled to indemnification hereunder shall give prompt written notice to the
indemnifying party of any claim with respect to which its seeks indemnification;
provided, however, that the failure to give such notice shall not release the
indemnifying party from its obligation, except to the extent that the
indemnifying party has been materially prejudiced by such failure to provide
such notice.
(d) Defense of
Actions. In any case in which any such action is brought
against any indemnified party and it notifies an indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party, and, after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party will not (so long as it shall continue to have
the right to defend, contest, litigate, and settle the matter in question in
accordance with this paragraph) be liable to such indemnified party hereunder
for any legal or other expense subsequently incurred by such indemnified party
in connection with the defense thereof other than reasonable costs of
investigation, supervision, and monitoring (unless such indemnified party
reasonably objects to such assumption on the grounds that there may be defenses
available to it that are different from or in addition to the defenses available
to such indemnifying party, in which event the indemnified party shall be
reimbursed by the indemnifying party for the expenses incurred in connection
with retaining separate legal counsel). An indemnifying party shall
not be liable for any settlement of an action or claim effected without its
consent. The indemnifying party shall lose its right to defend,
contest, litigate, and settle a matter if it shall fail diligently to contest
such matter (except to the extent settled in accordance with the next following
sentence). No matter shall be settled by an indemnifying party
without the consent of the indemnified party (which consent shall not be
unreasonably withheld).
(e) Survival. The
indemnification provided for under this Agreement shall remain in full force and
effect regardless of any investigation made by or on behalf of the indemnified
Person and will survive the transfer of the Registrable Securities and the
termination of this Agreement.
(f) Contribution. If
recovery is not available under the foregoing indemnification provisions for any
reason or reasons other than as specified therein, any Person who would
otherwise be entitled to indemnification by the terms thereof shall nevertheless
be entitled to contribution with respect to any Losses with respect to which
such Person would be entitled to such indemnification but for such reason or
reasons. In determining the amount of contribution to which the
respective Persons are entitled, there shall be considered the Persons’ relative
knowledge and access to information concerning the matter with respect to which
the claim was asserted, the opportunity to correct and prevent any statement or
omission, and other equitable considerations appropriate under the
circumstances. It is hereby agreed that it would not necessarily be
equitable if the amount of such contribution were determined by pro rata or per capita
allocation. No Person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not
15
found
guilty of such fraudulent misrepresentation. Notwithstanding the
foregoing, no Investor (and no Affiliate of such Investor) shall be required to
make a contribution in excess of the net amount received by such Investor (or
its Affiliate) from the sale of Registrable Securities.
ARTICLE
IV
Miscellaneous
Section
4.01 Inconsistent
Agreements. Without the prior written consent of each
Investor, the Company shall not enter into any registration rights agreement
that conflicts, or is inconsistent, with the provisions of Article III
hereof.
Section
4.02 Specific
Performance. Each of the Investors and the Company acknowledge
and agree that, in the event of any breach of this Agreement, the non-breaching
party or parties would be irreparably harmed and could not be made whole by
monetary damages. The Investors and the Company hereby agree that, in
addition to any other remedy to which the Investors may be entitled at law or in
equity, each Investor shall be entitled to compel specific performance of this
Agreement in any action instituted in any court of the United States or any
state thereof having subject matter jurisdiction for such action.
Section
4.03 Headings. The
headings in this Agreement are for convenience of reference only and shall not
control or affect the meaning or construction of any provisions
hereof.
Section
4.04 Entire
Agreement. This Agreement constitutes the entire agreement and
understanding of the parties hereto in respect of the subject matter contained
herein, and there are no restrictions, promises, representations, warranties,
covenants, conditions, or undertakings with respect to the subject matter
hereof, other than those expressly set forth or referred to
herein. This Agreement amends and supersedes all prior agreements and
understandings between the parties hereto with respect to the subject matter
hereof, including that certain Second Amended and Restated Stockholders
Agreement, dated as of June 2, 2005, among the Company, Building Products, LLC,
Xxxxx X. Xxxxxxx, Xxxxxxx X. Xxxx, Xxxxx X. X’Xxxxx, and Xxxxxx X.
XxXxxxxxx.
Section
4.05 Notices. All
notices and other communications hereunder shall be in writing and shall be
delivered personally, by next-day courier, by electronic or facsimile
transmission, or telecopied with confirmation of receipt to the parties at the
addresses specified below (or at such other address for a party as shall be
specified by like notice; provided that notices of change of address shall be
effective only upon receipt thereof). Any such notice shall be
effective upon receipt, if personally delivered, delivered by electronic or
facsimile transmission, or telecopied, or one day after delivery to a courier
for next-day delivery.
If to the Company, to:
Builders
FirstSource, Inc.
0000
Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxx,
Xxxxx 00000
16
Facsimile: (000)
000-0000
Attention: Xxxxxx
X. XxXxxxxxx, Esq.
with
a copy to:
Xxxxxx
& Bird LLP
One
Atlantic Center
0000
Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx,
Xxxxxxx 00000-0000
Facsimile: (000)
000-0000
Attention: Xxxxxxx
Xxxxx Xxxxxxx
If
to JLL Fund V, to:
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
with
a copy to:
Skadden,
Arps, Slate, Xxxxxxx & Xxxx LLP
Xxx
Xxxxxx Xxxxxx
Xxxxxxxxxx,
Xxxxxxxx 00000
Facsimile: (000)
000-0000
Attention: Xxxxxx
X. Xxxxxx, Esq.
Xxxxxxx
X. Land, Esq.
If
to Warburg Pincus, to:
Warburg
Pincus Private Equity IX, L.P.
c/o
Warburg Pincus LLC
000
Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Facsimile:
(000) 000-0000
Attention:
Xxxxx Xxxx
Xxxxx Xxxxx
with
a copy to:
Xxxxxxx
Xxxx & Xxxxxxxxx LLP
000
Xxxxxxx Xxxxxx
Xxx
Xxxx, Xxx Xxxx 00000-0000
Facsimile:
(000) 000-0000
17
Attention:
Xxxxxx X. Xxxxxxx, Esq.
Xxxx
Xxxxxxxx, Esq.
Section
4.06 Applicable
Law. The substantive laws of the State of Delaware shall
govern the interpretation, validity, and performance of the terms of this
Agreement, regardless of the law that might be applied under applicable
principles of conflicts of laws.
Section
4.07 Severability. The
invalidity, illegality, or unenforceability of one or more of the provisions of
this Agreement in any jurisdiction shall not affect the validity, legality, or
enforceability of the remainder of this Agreement in such jurisdiction or the
validity, legality, or enforceability of this Agreement, including any such
provision, in any other jurisdiction, it being intended that all rights and
obligations of the parties hereunder shall be enforceable to the fullest extent
permitted by law.
Section
4.08 Successors;
Assigns. The provisions of this Agreement shall be binding
upon the parties hereto and their respective heirs, successors, and permitted
assigns, including, without limitation and without the need for an express
assignment or assumption, any successor in interest to an Investor, whether by a
sale of all or substantially all of its assets, merger, consolidation, or
otherwise. Neither this Agreement nor the rights or obligations of
any party hereunder may be assigned, except as otherwise provided in this
Agreement. Any such attempted assignment in contravention of this
Agreement shall be void and of no effect.
Section
4.09 Amendments. This
Agreement may not be amended, modified, or supplemented unless such modification
is in writing and signed by the Company and each Investor.
Section
4.10 Waiver. Any waiver
(express or implied) of any default or breach of this Agreement shall not
constitute a waiver of any other or subsequent default or breach.
Section
4.11 Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original but all of which shall constitute one and the same
Agreement.
Section
4.12 Term. Unless earlier
terminated, this Agreement shall terminate upon the seventh anniversary of the
date of this Agreement; provided, however, that to the extent that any Demand
Registration or Piggyback Registration has commenced at such time, this
Agreement shall remain in effect until the termination or expiration of such
Demand Registration or Piggyback Registration, as the case may be, and the
Investors’ obligations pursuant to Section 3.04 hereof shall continue until
ninety (90) days following the effectiveness of the registration statement
related thereto. Notwithstanding the foregoing, each Investor may at
any time provide written notice to the Company of its irrevocable election to
withdraw from all of its rights and obligations under this
Agreement. In such event, from and after the date of such notice,
such Investor shall no longer be bound by any obligations, or be entitled to any
benefits, under this Agreement (other than those that have accrued prior to such
date), and from and after such time, securities held directly or indirectly by
such Investor shall no longer be deemed to be Registrable Securities
hereunder.
18
[SIGNATURE
PAGE FOLLOWS]
19
IN
WITNESS WHEREOF, the undersigned hereby agree to be bound by the terms and
provisions of this Registration Rights Agreement as of the date first above
written.
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BUILDERS
FIRSTSOURCE, INC.
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By:
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Name:
|
|||
|
Title:
|
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|
JLL
PARTNERS FUND V, L.P.
|
|||
|
By:
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JLL
Associates V, L.P., its general partner
|
||
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By:
|
JLL
Associates, G.P. V, LLC, its general partner
|
||
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By:
|
|||
|
Name:
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Xxxx
X. Xxxx
|
||
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Title:
|
Managing
Member
|
||
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WARBURG
PINCUS PRIVATE EQUITY IX, L.P.
|
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By:
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Warburg
Pincus IX LLC, General Partner
|
||
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By:
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Warburg
Pincus Partners, LLC, Sole Member
|
||
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By:
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Warburg
Pincus & Co., Managing Member
|
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By:
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Name:
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Title:
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20
