INVESTMENT AGREEMENT
Exhibit 10.1
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
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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 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
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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 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.
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(C) To the extent the aggregate principal amount of Notes so exchanged for shares of Common
Stock pursuant to subsection (B) above is less than the full amount of the Exchange Deficiency,
including after any exchange of Notes for shares of Common Stock by the Investors pursuant to
Section 2(c) and by other holders of outstanding Notes that have elected to receive shares
of Common Stock in the Debt Exchange, all holders of outstanding Notes participating in the Debt
Exchange and electing to receive New Notes or cash in the Debt Exchange will receive, in exchange
for Notes validly exchanged in the Debt Exchange, shares of Common Stock at an exchange price equal
to the Subscription Price pro rata in proportion to the amount of Notes validly exchanged by them
in the Debt Exchange for consideration other than shares of Common Stock.
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
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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 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
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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.
(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,
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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 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.
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(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 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
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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, 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
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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 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”).
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(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, 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
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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 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
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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 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.
-14-
(m) Absence of Certain Changes. Since June 30, 2009, other than as disclosed in the
Company SEC Documents filed before the date hereof, and except for actions required to be taken
pursuant to the Transaction Agreements, (i) there has not been any change in the capital stock of
the Company or its Subsidiaries from that set forth in Section 3(d) (other than an
aggregate of 25,596 shares of restricted Common Stock granted to certain members of the Company’s
Board on August 1, 2009, under the Company’s 2005 Equity Incentive Plan) or any material change in
long-term debt of the Company or any of its Subsidiaries, or any dividend or distribution of any
kind declared, set aside for payment, paid or made by the Company on any class of capital stock;
and (ii) the Company has been operated in the ordinary course of business, consistent with past
practice, and no event, fact or circumstance has occurred that has had or would reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
(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
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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
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
-16-
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,
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
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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 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
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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 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,
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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.
(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.
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(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:
(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
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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 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
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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 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
-23-
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.
(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,
-24-
decree, or order would be reasonably likely to result in the prohibition of or
material impairment of the benefits of the implementation of the Rights Offering or
the Debt Exchange, the issuance and sale of the Unsubscribed Shares and the Investor
Offered Shares to the Investors, the issuance of Exchange Shares (including the
Investor Exchange Shares) for outstanding Notes, or the consummation of the
transactions contemplated by this Agreement or the Recapitalization.
(viii) Representations and Warranties. The representations and warranties
of Company contained in this Agreement shall be true and correct (disregarding all
qualifications and exceptions contained therein relating to materiality, Material
Adverse Effect or similar qualifications, other than such qualifications contained
in Sections 3(i) and 3(j)) as of the date hereof and as of the
Closing Date after giving effect to the transactions contemplated hereby with the
same effect as if made on and as of the Closing Date (except for representations and
warranties made as of a specified date, which shall be true and correct only as of
the specified date), except where the failure to be so true and correct,
individually or in the aggregate, has not had, and would not reasonably be expected
to have, a Material Adverse Effect, other than with respect to the representations
in Sections 3(b), 3(c), 3(d), 3(e), and
3(m)(ii), which shall be true and correct in all respects.
(ix) Covenants. The Company shall have performed and complied in all
material respects with all of its covenants and agreements contained in this
Agreement and in any other Transaction Agreement required to be performed or
complied with on or prior to the Closing Date.
(x) Registration Rights Agreement. The Company shall have executed and
delivered to the Investors the Registration Rights Agreement.
(xi) Debt Exchange. At least ninety-five percent (95%) of the aggregate
principal amount of outstanding Notes shall have been validly exchanged in the Debt
Exchange.
(xii) Settlement. The settlement of the action described on Schedule II
hereto, on the terms set forth in the Memorandum of Understanding described on
Schedule II hereto, shall have received final approval by the Delaware Court of
Chancery, and such action shall have been dismissed with prejudice pursuant to such
approval.
(xiii) Nasdaq. The Offered Shares and Exchange Shares shall have been
approved for listing on the Nasdaq Global Select Market, subject to official notice
of issuance.
(b) Conditions to the Company’s Obligations under this Agreement. The right of the
Company to require the Investors to purchase the Unsubscribed Shares and the obligation of the
Company to issue the Investor Exchange Shares to the Investors in exchange for outstanding
Notes are subject to the following conditions (which may be waived in whole or in part by the
-25-
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 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
-26-
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.
(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
-27-
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 “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
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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 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
-29-
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;
(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;
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(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 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: |
-00-
| Xxxxxx & Xxxx XXX Xxx Xxxxxxxx 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 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 |
-00-
| 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 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.
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15. GOVERNING LAW; VENUE. THIS AGREEMENT WILL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF.
EACH OF THE PARTIES HERETO AGREES TO THE EXCLUSIVE JURISDICTION OF THE COURT OF CHANCERY OF THE
STATE OF DELAWARE IN AND FOR NEW CASTLE COUNTY OR, IF THE COURT OF CHANCERY LACKS SUBJECT MATTER
JURISDICTION, ANY COURT OF THE STATE OF DELAWARE SITUATED IN NEW CASTLE COUNTY OR THE UNITED STATES
DISTRICT COURT FOR THE DISTRICT OF DELAWARE, WITH RESPECT TO ANY CLAIM OR CAUSE OF ACTION ARISING
UNDER OR RELATING TO THIS AGREEMENT, AND WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT,
AND AGREES THAT ALL SERVICE OF PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, DIRECTED TO IT AT ITS ADDRESS AS SET FORTH IN SECTION 12, AND THAT SERVICE SO
MADE SHALL BE TREATED AS COMPLETED WHEN RECEIVED. EACH OF THE PARTIES HERETO WAIVES ANY OBJECTION
BASED ON FORUM NON CONVENIENS AND WAIVES ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED IN ANY
SUCH COURT. THE COMPANY AND EACH OF THE INVESTORS HEREBY IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION, SUIT, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF PARENT OR THE INVESTORS
IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE, AND ENFORCEMENT HEREOF. NOTHING IN THIS PARAGRAPH
SHALL AFFECT THE RIGHT OF THE PARTIES HERETO TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED
BY LAW. NOTWITHSTANDING THE FOREGOING, EACH OF THE PARTIES HERETO AGREES THAT EACH OF THE OTHER
PARTIES HERETO SHALL HAVE THE RIGHT TO BRING ANY ACTION OR PROCEEDING FOR ENFORCEMENT OF A JUDGMENT
ENTERED BY A COURT PERMITTED BY THIS SECTION 15 IN ANY OTHER COURT OR JURISDICTION.
16. Counterparts. This Agreement may be executed in any number of counterparts, all of
which will be considered one and the same agreement and will become effective when counterparts
have been signed by each of the parties and delivered to the other party (including via facsimile
or other electronic transmission), it being understood that each party need not sign the same
counterpart.
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
-34-
equity. All determinations made for the Company prior to the Closing Date with respect to this
Section 17 shall be made by the Special Committee.
18. Adjustment to Shares. If, prior to the Closing Date, the Company effects a
reclassification, stock split (including a reverse stock split), stock dividend or distribution,
recapitalization, merger, issuer tender or exchange offer, or other similar transaction with
respect to any shares of its capital stock, references to the numbers of such shares and the prices
therefore shall be equitably adjusted to reflect such change and, as adjusted, shall, from and
after the date of such event, be subject to further adjustment in accordance herewith.
19. Headings. The headings in this Agreement are for reference purposes only and will not
in any way affect the meaning or interpretation of this Agreement.
20. Publicity. The Company and the Investors shall consult with each other prior to
issuing any press releases (and provide each other a reasonable opportunity to review and comment
upon such releases) or otherwise making public announcements with respect to the transactions
contemplated by this Agreement and prior to making any filings with any third party or any
governmental entity (including any national securities exchange or interdealer quotation service)
with respect thereto, except as may be required by law or by the request of any governmental
entity.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed by their
respective officers thereunto duly authorized, all as of the date first written above.
| BUILDERS FIRSTSOURCE, INC. | ||||||
| By: | /s/ Xxxxx X. Xxxxxxx | |||||
| Name: Xxxxx X. Xxxxxxx | ||||||
| Title: President and Chief Executive Officer | ||||||
| JLL PARTNERS FUND V, L.P. | ||||||
| By: JLL Associates V, L.P., its general partner | ||||||
| By: JLL Associates, G.P. V, LLC, its general partner | ||||||
| By: | /s/ Xxxx X. Xxxx | |||||
| Name: Xxxx X. Xxxx | ||||||
| Title: Managing Member | ||||||
| WARBURG PINCUS PRIVATE EQUITY IX, L.P. | ||||||
| By: Warburg Pincus IX LLC, General Partner | ||||||
| By: Warburg Pincus Partners, LLC, Sole Member | ||||||
| By: Warburg Pincus & Co., Managing Member | ||||||
| By: | /s/ Xxxxx X. Xxxxx | |||||
| Name: Xxxxx X. Xxxxx | ||||||
| Title: Partner | ||||||
-36-
SCHEDULE I
Affiliate |
6 | |||
Affiliated Purchaser |
6 | |||
Aggregate Offering Amount |
1 | |||
Agreement |
1 | |||
Basic Subscription Privilege |
1 | |||
Board |
2 | |||
Business Day |
3 | |||
Closing Date |
6 | |||
Commission |
12 | |||
Common Stock |
1 | |||
Company |
1 | |||
Company SEC Documents |
12 | |||
Debt Exchange |
2 | |||
Eligible Holder |
2 | |||
Exchange Act |
3 | |||
Exchange Deficiency |
4 | |||
Exchange Shares |
6 | |||
Expiration Time |
3 | |||
Holder |
3 | |||
HSR Act |
11 | |||
Indemnified Person |
28 | |||
Indemnifying Party |
28 | |||
Investment Decision Package |
14 | |||
Investor |
1 | |||
Investor Exchange Shares |
6 | |||
Investor Notes |
5 | |||
Investor Offered Shares |
5 | |||
Investors |
1 | |||
Issuer Free Writing Xxxxxxxxxx |
00 | |||
XXX Xxxx X |
0 | |||
Losses |
28 | |||
Material Adverse Effect |
8 | |||
New Notes |
1 | |||
Note Offering Materials |
14 | |||
Notes |
1 | |||
Notice of Offering Results |
5 | |||
Offered Shares |
1 | |||
Old Indenture |
10 | |||
Option |
9 | |||
Options |
9 | |||
Over-Subscription Privilege |
1 | |||
Preferred Stock |
9 | |||
Preliminary Rights Offering Prospectus |
14 | |||
Proceedings |
28 | |||
Proxy Statement |
14 | |||
Put Option |
5 | |||
Recapitalization |
2 | |||
Record Date |
1 | |||
Registration Rights Agreement |
21 | |||
Remaining Offered Shares |
3 | |||
Rights |
1 | |||
Rights Exercise Period |
3 | |||
Rights Offering |
1 | |||
Rights Offering Commencement Date |
3 | |||
Rights Offering Prospectus |
14 | |||
Rights Offering Registration Statement |
14 | |||
Rights Ratio |
2 | |||
SEC Transaction Documents |
18 | |||
Securities Act |
1 | |||
Securities Act Effective Date |
14 | |||
Special Committee |
2 | |||
Stock Plans |
9 | |||
Stockholder Approval |
11 | |||
Subscription Agent |
3 | |||
Subscription Price |
1 | |||
Subsidiary |
8 | |||
Support Agreement |
4 | |||
Transaction Agreements |
9 | |||
Transaction Expenses |
7 | |||
Transfer |
22 | |||
Unsubscribed Shares |
5 | |||
Warburg Pincus |
1 |
SCHEDULE II
Settlement and Release
1. Action
In re: Builders FirstSource, Inc. S’holders and Deriv. Litig., C.A. No. 4900-VCS, pending before
the Court of Chancery of the State of Delaware.
2. Memorandum of Understanding
Memorandum of Understanding, entered into as of October 23, 2009, by and between the parties to In
re: Builders FirstSource, Inc. S’holders and Deriv. Litig., C.A. No. 4900-VCS, pending before the
Court of Chancery of the State of Delaware, by their respective undersigned counsel.
Exhibit A
Terms of New Notes
Issuer
|
Builders FirstSource, Inc. | |
Guarantors
|
All wholly owned domestic subsidiaries of the Issuer that currently guarantee the existing Notes of the Issuer. | |
Principal
|
No more than $145.0 million. | |
| February 15, 2016 (the “Maturity Date”). | ||
Maturity
|
All obligations then outstanding under the New Notes shall be payable in full on the Maturity Date. | |
| 3-month LIBOR (with a 3.0% floor) plus 10.0%. | ||
Interest Rate
|
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. |
| Prior to February 15, 2011 | 105 | % | ||||
Optional Prepayments
|
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
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.
(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, 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
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 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 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 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 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 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
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
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 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 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 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 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
Facsimile: (000) 000-0000
Attention: Xxxxxx X. XxXxxxxxx, Esq.
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
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
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
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.
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
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
Attention: Xxxxxx X. Xxxxxxx, Esq.
Xxxx Xxxxxxxx, Esq.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Facsimile: (000) 000-0000
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.
[SIGNATURE PAGE FOLLOWS]
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.
| BUILDERS FIRSTSOURCE, INC. | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| 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: | ||||||
| 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: | ||||||
| Name: | ||||||
| Title: | ||||||
