INVESTMENT AGREEMENT
EXHIBIT 10.1
This INVESTMENT AGREEMENT (this “Agreement”), dated as of April 26, 2011, is made by and
between Cerberus ABP Investor LLC, a Delaware limited liability company (the “Investor”) and
BlueLinx Holdings, Inc., a Delaware corporation (the “Company”).
WHEREAS, the Company proposes to distribute, at no charge, to each holder of record of shares
of common stock, par value $0.01 per whole share, of the Company (the “Common Stock”) on a record
date to be set by the Board of Directors of the Company (the “Record Date”) 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 $60.0 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 an aggregate number of shares of Common Stock (such number
of shares, the “Offered Shares”) equal to the product of (x) $60 million divided by (y) the
Subscription Price. The “Subscription Price” means the price equal to the lesser of (A) $2.50 per
share and (B) the product of (x) the average per share closing price of the Common Stock as
reported on the NYSE (as reported by Bloomberg L.P. or if not reported thereby, by any other
authoritative source) for the ten trading day period ending two trading days immediately prior to
the date the Rights Offering Registration Statement is declared effective by the Commission and (y)
by 0.66666667 (as adjusted for any stock split, combination, reorganization, recapitalization,
stock dividend, stock distribution or similar event); provided, that, in no event shall the
Subscription Price be less than $2.00 per share; and
WHEREAS, each holder of a Right (other than the Investor) that exercises in full its Basic
Subscription Privilege will be entitled to subscribe for additional shares of Common Stock at the
Subscription Price (the “Over-Subscription Privilege”), 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, in order to facilitate the Rights Offering, the Investor (acting at the request of
the disinterested directors of the Board (the “Disinterested Directors”)) and the Company wish to
enter into this Agreement, pursuant to which and upon the terms and subject to the conditions set
forth herein, to the extent that the gross proceeds of the Rights Offering are less than $60.0
million, the Company shall have the right to require the Investor 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 $60.0
million; and
WHEREAS, the Board of Directors of the Company (the “Board”) has unanimously approved the
Rights Offering; and
WHEREAS, this Agreement and the transactions contemplated hereby, including but not limited to
the Put Option (as defined below), have been approved by the Disinterested Directors in accordance
with Section 144 of the Delaware General Corporation Law.
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.
(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”) one Right for each whole share of Common Stock owned by the Eligible Holder as
of the close of business on the Record Date. Each Right shall entitle the Eligible Holder to
purchase, at the Subscription Price per whole share, a number of shares of
Common Stock equal to the product of (x) the Offered Shares divided by (y) the number of
shares of Common Stock outstanding as of the close of business on the Record Date (the “Rights
Ratio”); provided that the number of shares of Common Stock to be issued 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. Fractional shares resulting from the exercise
of the Rights will be eliminated by rounding down to the nearest whole share. No Rights will be
distributed or issued with respect to any treasury stock. Each such Right shall be transferable
separately from the underlying shares of Common Stock on account of which such Right was
distributed. Eligible Holders and holders to whom Rights have been validly transferred are
collectively referred to as “Holders,” each individually being a “Holder.”
(b) The Rights (including under both the Basic Subscription Privilege and the
Over-Subscription Privilege) may be exercised during a period (the “Rights Exercise Period”)
commencing on the date on which the Rights are issued to Eligible Holders (the “Rights Offering
Commencement Date”) and ending at 5:00 p.m. New York City Time on the 20th Business Day (the
“Expiration Time”) after the Rights Offering Commencement Date, subject to extension at the
discretion of the Disinterested Directors; provided, however, that the Rights Exercise Period shall
not be more than thirty (30) Business Days without the prior written consent of the Investor.
“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 7(c) (which may not
be waived, in whole or in part, by the Company without the prior written consent of the Investor).
(d) Each Holder (other than the Investor) 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. 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 pro rata among the Holders exercising the Over-Subscription Privilege in
proportion to the number of shares of Common Stock each of those Holders owned as of the close of
business on the Record Date, relative to the number of shares owned as of the close of business on
the Record Date by all Holders exercising the Over-Subscription privilege. If this pro rata
allocation results in any Holder receiving a greater number of shares than the Holder subscribed
for pursuant to the exercise of the Over-Subscription Privilege, then such Holder will be allocated
only that number of shares for which the Holder over-subscribed, and the remaining shares will be
allocated among all other Holders exercising the Over-Subscription Privilege on the same pro rata
basis described above. The proration process will be repeated until all of the Remaining Offered
Shares have been allocated.
(e) The aggregate gross proceeds from the sale of the Offered Shares pursuant to the Rights
Offering and the sale of the Unsubscribed Shares (as defined below) to the Investor pursuant to the
Put Option (as defined below) will be used by the Company as described in “Use of Proceeds” in the
draft Registration Statement on Form S-1 to be filed with the Commission relating to the Rights
Offering as soon as practicable after the execution of this Agreement, a copy of
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which has been provided to Investor prior to the execution of this Agreement, and to pay all
fees and expenses associated with the Rights Offering and this Agreement.
(f) The Company hereby confirms that, as of the date hereof, Stadium Capital Management, LLC
(“Stadium”) intends to fully exercise its Rights to purchase its pro rata portion of Shares in the
Rights Offering and to purchase additional Shares, if available, in connection with the
Over-Subscription Privilege and has authorized the Company to include in the Rights Offering
Registration Statement (as defined below) disclosure concerning Stadium’s intention to fully
subscribe to the Rights Offering (including its intention to purchase additional Shares, if
available, in connection with the Over-Subscription Privilege).
(g) As of the date hereof, the Company expects the liquidity improvement initiatives set forth
on Schedule I hereto to result in between $25 million and $35 million of additional liquidity on an
annualized basis.
2. Requirement to Purchase Investor Offered Shares and Unsubscribed Shares; Fees and
Expenses.
(a) Upon the terms and subject to the conditions set forth in this Agreement, the Investor
shall have the right to purchase, and hereby agrees to purchase on the Closing Date, a number of
shares of Common Stock equal to its pro rata portion of the Offered Shares pursuant to the Rights
Offering (the “Investor Offered Shares”) at a per share price equal to the Subscription Price and
further agrees not to elect to exercise or transfer (except as provided in Section 6(c)) the Rights
received by the Investor in connection with the Rights Offering. For purposes of this Agreement,
the Investor Offered Shares shall be included when determining the number of shares of Common Stock
validly subscribed for and purchased under the Basic Subscription Privilege.
(b) 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 Basic Subscription Privilege and the Over-Subscription
Privilege) are less than $60.0 million, the Company shall have the right, upon delivery to the
Investor of a Notice of Offering Results pursuant to Section 2(b), to require (the “Put
Option”) the Investor to purchase on the Closing Date, and the Investor agrees to purchase on the
Closing Date, at the Subscription Price, the positive number of Offered Shares issuable pursuant to
Rights, if any, equal to (i) the Offered Shares 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”).
(c) The Company hereby agrees and undertakes to notify the Investor as promptly as practicable
and, in any event, by noon, New York City 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, and (ii) a
true and accurate determination of the aggregate number of Unsubscribed Shares, if any, (such
notification, the “Notice of Offering Results”).
(d) The Investor shall have the right to arrange for one or more of its Affiliates (each, an
“Affiliated Purchaser”) to purchase all or any portion of the 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 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 the 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 to be purchased in the Rights Offering,
and, the purchase of the Investor Offered Shares to be purchased by the Investor or its Affiliated
Purchasers hereunder, and if necessary, the purchase of the Unsubscribed Shares to be purchased by
the Investor or its Affiliated Purchasers hereunder
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will occur at the offices of Xxxxxxx Xxxx & Xxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 at 10:00 a.m., New York City Time, on the fourth (4th) Business Day
following the later of the Expiration Time and the satisfaction of the conditions set forth in
Section 7 (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 Investor.
On the Closing Date the Investor will purchase, and the Company will sell, only such number of
Unsubscribed Shares as are listed in the Notice of Offering Results, without prejudice to the
rights of the Investor to seek later an upward or downward adjustment if the number of Unsubscribed
Shares in such Notice of Offering Results is inaccurate. 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 Investor (or to such other accounts, including the account of an Affiliated
Purchaser, as the Investor may designate in accordance with this Agreement) against payment by the
Investor of the Subscription Price therefor by wire transfer of immediately available funds to the
account designated in writing by the Company. On the Closing Date, the Company will also deliver to
the Investor a certificate, dated as of the Closing Date, of the transfer agent of the Company
confirming the issuance to the Investor of the Unsubscribed Shares, if any, the issuance to the
Investor of the Investor Offered Shares, and all other documents and certificates required to be
delivered to the Investor pursuant to Section 7(a).
(f) All Unsubscribed Shares and Investor Offered 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 Investor 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 Investor, 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.
(h) The Company shall pay all of its own fees and expenses associated with the Rights
Offering, 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) The Investor and the Company hereby agree that it is the intent of all parties that the
Investor, by virtue of acting hereunder, shall not be deemed an “underwriter” within the definition
of Section 2(a)(11) of the Securities Act or deemed to be engaged in broker-dealer activity
requiring registration under Section 15 of the Exchange Act, and the Investor and the Company shall
in the fulfillment of their obligations hereunder act in accordance with this mutual understanding.
3. Representations and Warranties of the Company. The Company represents and warrants to,
and agrees with the Investor, as set forth below. Except for representations, warranties and
agreements that are expressly limited as to their date, each representation, warranty and agreement
is made as of the date hereof and as of the Closing Date after giving effect to the transactions
contemplated hereby:
(a) Organization and Qualification. The Company and each of its Subsidiaries has been
duly organized and is validly existing in good standing under the laws of its respective
jurisdiction of incorporation, with the requisite power and authority to own its properties and
conduct its business as currently conducted. Each of the Company and its Subsidiaries has been duly
qualified as a foreign corporation or organization for the transaction of business and is in good
standing under the laws of each other jurisdiction in which the nature of its properties or
business requires such qualification, except to the extent that the failure to be so qualified or
be 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
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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 Rights
Offering, 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 disproportionate adverse
effect on the business, condition (financial or otherwise) or results of operations of the Company
and its Subsidiaries, taken as a whole, relative to other affected persons. For the purposes of
this Agreement, a “Subsidiary” of any person means, with respect to such person, any corporation,
limited liability company, partnership, joint venture or other legal entity of which such person
(either alone or through or together with any other subsidiary), owns, directly or indirectly, more
than 50% of the stock or other equity interests, has the power to elect a majority of the board of
directors or similar governing body, or has the power to direct the business and policies.
(b) Corporate Power and Authority. The Company has the requisite corporate power and
authority to enter into, execute, and deliver this Agreement and each other agreement, document,
and instrument to which it will be a party or which it will execute and deliver in connection with
the transactions contemplated by this Agreement (this Agreement and such other agreements,
documents, and instruments collectively, the “Transaction Agreements”) and to perform its
obligations hereunder and thereunder, including the issuance of the Rights, the Offered Shares
(including the Unsubscribed Shares). The Company has taken all necessary corporate action required
for the due authorization of the Transaction Agreements, including the issuance of the Rights and
the Offered Shares (including the Unsubscribed Shares).
(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) 100,000,000 shares of Common Stock and (ii) 30,000,000 shares of preferred stock,
par value $0.01 per share (“Preferred Stock”). As of April 15, 2011, (i) 33,215,906 shares of
Common Stock were issued and outstanding; (ii) no shares of Common Stock were held in the treasury
of the Company; (iii) 915,316 shares of Common Stock were reserved for future issuance pursuant to
outstanding stock options and other rights to purchase shares of Common Stock (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
have not been issued in violation of any preemptive or similar 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
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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 and the Unsubscribed Shares to be issued hereunder. Except
as described in this Section 3(d), 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 or similar 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.
(e) Issuance. The distribution of the Rights and the issuance of the Offered Shares,
including the Investor Offered Shares, have been duly and validly authorized and when such Offered
Shares are issued and delivered against payment therefor, will 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 Investor or any Affiliated Purchaser hereunder, when
such Unsubscribed Shares are issued and delivered against payment therefor by the Investor
hereunder, will 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. Upon the distribution by the Company of the Rights, such Rights will be duly and
validly issued, free and clear of all taxes, liens, preemptive rights, rights of first refusal and
similar rights, and enforceable in accordance with their terms, and holders of Rights will be
entitled to the rights described in the Rights certificates.
(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,
and the execution and delivery by the Company of the Transaction Agreements and performance of and
compliance with all of the provisions hereof and thereof by the Company and the consummation of the
transactions contemplated herein and therein (i) will not conflict with, or result in a breach or
violation of, any of the terms or provisions of, or constitute a default under (with or without
notice or lapse of time, or both), or result, in the acceleration of, or the creation of any lien
under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company or any of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound or to which any of the property or assets of the Company or any of its
Subsidiaries is subject, (ii) will not result in any violation of the provisions of the Amended and
Restated Certificate of Incorporation or Amended and Restated By-laws of the Company or any of the
organizational or governance documents of its Subsidiaries, and (iii) will not result in any
violation of, or any termination or impairment of any 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 other legislative, executive or
judicial 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, 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
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therein, except (i) the registration under the Securities Act of the issuance of the Rights
and the Offered Shares (excluding the Investor Offered Shares) pursuant to the exercise of Rights,
(ii) 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 and Investor Offered Shares by the Investor, or the distribution of the Rights
and the sale of the Offered Shares to Holders, or (z) pursuant to the rules of the New York Stock
Exchange (the “NYSE”) and (iii) to the extent applicable, any filings with respect to, and the
expiration or early termination of the waiting period under, the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended, and the regulations promulgated thereunder (the “HSR Act”),
relating to the acquisition of the Investor Offered Shares and Unsubscribed Shares as contemplated
hereunder.
(h) Arm’s Length. The Company acknowledges and agrees that the Investor is acting
solely in the capacity of an arm’s length contractual counterparty to the Company with respect to
the transactions contemplated hereby and not as a financial advisor or a fiduciary to, or an agent
of, the Company or any other person or entity. Additionally, the Investor is 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 Investor shall have no responsibility or liability to the
Company, its stockholders and directors not affiliated with the Investor, or its officers,
employees, advisors or other representatives with respect thereto in connection with the
transactions contemplated by this Agreement. Any review by the Investor of the transactions
contemplated hereby or other matters relating to such transactions will be performed solely for the
benefit of the Investor and shall not be on behalf of the Company, its stockholders and directors
not affiliated with the Investor, 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
Investor with respect thereto.
(i) Company SEC Documents. Since January 3, 2009, 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, 2008, 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 regulations of the Commission thereunder, as applicable, and fairly present in all
material respects the financial position, results of operations and cash flows of the Company and
its Subsidiaries as of the dates indicated and for the periods specified, subject, in the case of
the unaudited financial statements, to the absence of disclosures normally made in footnotes and to
customary year-end adjustments that are not and shall not be material; such financial statements
have been prepared in conformity with U.S. generally accepting accounting principles applied on a
consistent basis throughout the periods covered thereby (except as disclosed in the Company SEC
Documents filed before the date of this Agreement), and the supporting schedules included or
incorporated by reference in the Company SEC Documents, and to be included or incorporated by
reference in the Rights Offering Registration Statement and the Rights Offering
- 7 -
Prospectus, 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 and the Rights
Offering Prospectus, 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.
(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. 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 Investor furnished to the Company in writing by the Investor expressly for use in
the Rights Offering Registration Statement and the Rights Offering Prospectus, 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 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; and (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.
(l) Absence of Certain Changes. Since January 1, 2011, other than as expressly set
forth in the Company’s Annual Report on Form 10-K filed February 28, 2011 (excluding any disclosure
set forth in the sections titled “Risk Factors” and “Cautionary Statement Concerning
Forward-Looking Statements”, any disclosure set forth in any other section to the extent the
disclosure is a forward-looking statement or cautionary, predictive or forward-looking in nature,
and any exhibits thereto) (i) except for actions required to be
taken pursuant to the Transaction Agreements, there has not been any change in the capital stock of the Company or its Subsidiaries from that set forth in Section 3(d) 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; (ii) except for actions required to be
- 8 -
taken pursuant to the Transaction Agreements, the Company has been operated in the ordinary
course of business, consistent with past practice, and (iii) no event, fact, circumstance change or
occurrence has occurred that has had or would reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect.
(m) No Broker’s Fees. Except for Moelis & Company LLC (the fees and expenses of which
will be paid by the Company), 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 Company or the Investor for a financial advisory fee, brokerage
commission, finder’s fee or like payment in connection with the Rights Offering, including the
issuance of the Offered Shares upon exercise of Rights or the issuance and sale of the Unsubscribed
Shares in accordance with the terms hereof.
4. Representations and Warranties of the Investor. The Investor represents and warrants and
agrees with the Company as set forth below. Each such representation, warranty and agreement is
made as of the date hereof and as of the Closing Date.
(a) Formation. The Investor has been duly formed and is validly existing as a limited
liability company in good standing under the laws of the jurisdiction of its formation.
(b) Power and Authority. The Investor has the requisite limited liability company
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 the Investor and
constitutes, or, when executed and delivered, will constitute, a valid and binding obligation of
the Investor, enforceable against the 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. The Investor understands that the Unsubscribed Shares and the
Investor Offered Shares have not been registered under the Securities Act by reason of a specific
exemption from the registration provisions of the Securities Act, the availability of which depends
upon, among other things, the bona fide nature of the investment intent and the accuracy of the
Investor’s representations as expressed herein or otherwise made pursuant hereto.
(e) Investment Intent. Except as provided in Section 2(d) hereof, the Investor
is acquiring its portion of the Unsubscribed Shares and the Investor Offered 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 the Securities Act and any
applicable state securities or “blue sky” laws, and the Investor has no present intention of
selling, granting any participation in, or otherwise distributing the same, except in compliance
with the Securities Act and any applicable state securities or “blue sky” laws.
(f) Securities Laws Compliance. The Unsubscribed Shares and the Investor Offered
Shares will not be offered for sale, sold or otherwise transferred by the 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 or “blue sky” laws.
(g) Sophistication. The Investor is an “accredited investor” within the meaning of
Rule 501(a) promulgated under the Securities Act and the 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 the Investor Offered Shares being acquired hereunder. The
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
- 9 -
Offered Shares for an indefinite period of time). Without derogating from or limiting the
representations and warranties of the Company, the 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.
Notwithstanding the foregoing, nothing contained herein will operate to modify or limit in any
respect the representations and warranties of the Company or to relieve it from any obligations to
the Investor for breach thereof or the making of misleading statements or the omission of material
facts in connection with the transactions contemplated herein.
(h) Legended Securities. The 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 Offered Shares have not
been registered under the Securities Act and that the Unsubscribed Shares and Investor Offered
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 the
Investor, the purchase of the Investor Offered Shares by the Investor, the execution and delivery
by the Investor of each of the Transaction Agreements to which it is a party and the performance of
and compliance with all of the provisions hereof and thereof by the Investor, and the consummation
of the transactions contemplated herein and therein (i) will not conflict with, or result in a
breach or violation of, any of the terms or provisions of, or constitute a default under (with or
without notice or lapse of time, or both), or result, in the acceleration of, or the creation of
any lien under, any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Investor is a party or by which the Investor is bound or to which any of
the property or assets of the Investor or any of its Subsidiaries is subject, (ii) will not result
in any violation of the provisions of the certificate of limited partnership, limited partnership
agreement, or similar governance documents of the Investor, and (iii) will not result in any
material violation of, or any termination or material impairment of any rights under, any statute
or any license, authorization, injunction, judgment, order, decree, rule or regulation of any court
or governmental agency or body having jurisdiction over the Investor or any of its properties,
except in any such case described in subclauses (i) and (iii) for any conflict, breach, violation,
default, acceleration or lien which would not reasonably be expected, individually or in the
aggregate, to prohibit, materially delay or materially and adversely affect the 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 other legislative, executive or judicial governmental
agency or body having jurisdiction over the Investor or any of its properties is required to be
obtained or made by the Investor for the purchase of its portion of the Unsubscribed Shares and the
purchase of the Investor Offered Shares in accordance with the terms hereof and the execution and
delivery by the Investor of this Agreement or the other Transaction Agreements to which it is a
party and performance of and compliance by the Investor with all of the provisions hereof and
thereof and the consummation of the transactions contemplated herein and therein, except for (i)
such consents, approvals, authorizations, registrations or qualifications as may be required under
state securities or “blue sky” laws in connection with the purchase of the Unsubscribed Shares and
Investor Offered Shares by the Investor, (ii) to the extent applicable, any filings with respect
to, and the expiration or early termination of the waiting period under, the HSR Act relating to
the acquisition of the Investor Offered Shares and Unsubscribed Shares as contemplated hereunder,
and (iii) 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 the Investor’s performance of its obligations
under this Agreement.
(k) Arm’s Length. The Investor acknowledges and agrees that the Company is acting
solely in the capacity of an arm’s length contractual counterparty to the Investor with respect to
the transactions contemplated hereby. Additionally, without derogating from or limiting the
representations and warranties of the Company, the 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,
the Investor has
- 10 -
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 the Investor furnished to the
Company in writing by the Investor expressly for use in the Rights Offering Registration Statement
(as defined below) will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements therein not
misleading.
5. Additional Covenants of the Company. Without derogating from the obligations of the
Company set forth elsewhere in this Agreement, the Company agrees with the Investor as set forth
below.
(a) Registration Statements.
(i) As promptly as practicable following the date of this Agreement, the Company shall prepare
and file the Rights Offering Registration Statement.
(ii) The Rights Offering Registration Statement filed with the Commission shall be consistent
in all material respects with the last forms of such documents provided to the Investor and its
counsel to review prior to the filing thereof. The Company shall: (x) provide the Investor 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
Investor and its counsel; (y) advise the Investor promptly of the time when the Rights Offering
Registration Statement 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 Investor with copies thereof; and (z) advise the Investor promptly
after it receives notice of any comments or inquiries by the Commission (and furnish the Investor
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 Investor 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 Investor and its
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 Rights Offering
Registration Statement cleared or declared effective, as the case may be, by the Commission as
promptly as practicable after it is filed with the Commission. The Company shall take all action as
may be necessary or advisable so that the Rights Offering and the issuance and sale of the
Unsubscribed Shares, 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) 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 Investor 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 Investor that will correct such statement or omission or effect such compliance.
(b) Listing. The Company shall use its commercially reasonable efforts to list and
maintain the listing of the Common Stock, including the Offered Shares, on the NYSE and to list and
maintain the listing of the Rights on the NYSE
- 11 -
during the Rights Exercise Period until the close of trading on the Business Day immediately
prior to the last Business Day of the Rights Exercise Period.
(c) 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.
(d) 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 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 7.
(e) Commercially Reasonable Efforts. The Company shall use its commercially reasonable
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 Investor and to consummate and make effective the transactions contemplated by this Agreement,
including using commercially reasonable efforts to:
(i) prepare and file 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) defend any lawsuits or other actions or proceedings, whether judicial or administrative,
challenging this Agreement 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
(iii) execute, deliver and file, 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, to the extent that the
Investor determines that the Investor Offered Shares or Unsubscribed Shares are not Registrable
Securities (as defined in the Registration Rights Agreement among the Company, the Investor and the
other parties thereto, dated as of May 7, 2004 (the “2004 Registration Rights Agreement”)), then,
promptly upon the request of Investor, the Company agrees to enter into a customary registration
rights agreement with Investor (for the benefit of Investor and any permitted assignees of Investor
hereunder) on customary terms (but no less favorable to Investor than the 2004 Registration Rights
Agreement) between the Company and the Investor providing for registration rights with respect to
the Investor Offered Shares or Unsubscribed Shares (the “New Registration Rights Agreement”).
(f) Public Disclosure. The Company shall prepare and timely file a copy of this
Agreement with the Commission in accordance with the requirements of the Exchange Act.
6. Additional Covenants of the Investor. The Investor agrees with the Company:
(a) Information. To provide the Company with such information as the Company
reasonably requests regarding the Investor for inclusion in the Rights Offering Registration
Statement.
- 12 -
(b) Commercially Reasonable Efforts. The Investor shall use its commercially
reasonable efforts to take all actions, and do all things, reasonably necessary, proper or
advisable on its part under this Agreement and applicable laws to cooperate with the Company and to
consummate and make effective the transactions contemplated by this Agreement, including executing,
delivering and filing, as applicable, any additional ancillary instruments or agreements necessary
to consummate the transactions contemplated by this Agreement and to fully carry out the purposes
of this Agreement and the transactions contemplated hereby and thereby, including using
commercially reasonable efforts to:
(i) prepare and file 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) defend any lawsuits or other actions or proceedings to which the Investor has been named
a party, whether judicial or administrative, challenging this Agreement 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
(iii) execute, deliver and file, 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.
(c) No Transfer of Rights. During the Rights Exercise Period, the Investor will not,
without the prior written consent of the Disinterested Directors, 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 the 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 the Investor by
the Company pursuant to the Rights Offering; provided, however, that the 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.
(d) No Stabilization. In connection with the Rights Offering, the 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 in violation of
Regulation M under the Exchange Act.
7. Conditions to the Obligations of the Parties.
(a) Conditions to the Investor’s Obligations under this Agreement. The obligations of
the 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 the 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) 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.
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(iv) 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, the issuance and sale of the Unsubscribed Shares and the
Investor Offered Shares to the Investor, or the consummation of the transactions contemplated by
this Agreement 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, the issuance and sale of the Unsubscribed Shares and the Investor Offered Shares
to the Investor, or the consummation of the transactions contemplated by this Agreement.
(v) 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(a) through 3(e), and 3(l)(iii), which
shall be true and correct in all respects.
(vi) 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, including,
without limitation, entering into the New Registration Rights Agreement (to the extent requested by
Investor pursuant to Section 5(e)(iii)).
(vii) Liquidity Improvement Initiatives. The Company shall have completed, to the
reasonable satisfaction of the Investor, the liquidity improvement initiatives set forth on
Schedule I hereto.
(viii) NYSE. The Offered Shares shall have been approved for listing on the NYSE,
subject to official notice of issuance.
(ix) HSR. If any filings are required to be made with respect to the HSR Act relating
to the acquisition of the Investor Offered Shares and Unsubscribed Shares as contemplated
hereunder, such filings shall have been made and the applicable waiting period under the HSR Act
shall have expired or been terminated thereunder with respect thereto.
(b) Conditions to the Company’s Obligations under this Agreement. The right of the
Company to require the Investor to purchase the Unsubscribed Shares is subject to the following
conditions (which may be waived in whole or in part by the Company in its sole discretion),
provided that the failure of a condition set forth in Section 7(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) 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.
(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, the issuance and sale of the Unsubscribed Shares and the
Investor
- 14 -
Offered Shares to the Investor, or the consummation of the transactions contemplated by this
Agreement 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, the issuance and sale of the Unsubscribed Shares and the Investor Offered Shares to the
Investor, or the consummation of the transactions contemplated by this Agreement.
(iii) Representations and Warranties. The representations and warranties of the
Investor 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 Investor’s 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 the Investor’s representations in all Sections other than Sections 4(b) and
4(c) where the failure to be so true and correct, individually or in the aggregate, has not
prohibited, materially delayed, or materially and adversely affected, and would not reasonably be
expected to prohibit, materially delay, or materially and adversely affect, the Investor’s
performance of their obligations under this Agreement.
(iv) Covenants. The Investor 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,
including, without limitation, entering into the Registration Rights Agreement (to the extent
requested by Investor pursuant to Section 5(e)(iii)).
(v) Liquidity Improvement Initiatives. The Company shall have completed in all
material respects the liquidity improvement initiatives set forth on Schedule I hereto.
(vi) Rights Offering. The Rights Offering shall have been consummated in all material
respects in accordance with this Agreement.
(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 Investor):
(i) Consents. All material governmental and third-party notifications, filings,
consents, waivers and approvals required for the consummation of the Rights Offering shall have
been made or received.
(ii) No Legal Impediment to Issuance. No action shall have been taken, no statute,
rule, regulation, or order shall have been enacted, adopted, or issued by any federal, state, or
foreign governmental or regulatory authority, and no judgment, injunction, decree or order of any
federal, state or foreign court shall have been issued that, in each case, prohibits the
implementation of the Rights Offering and the issuance and sale of the Offered Shares or materially
impairs the benefit of implementation thereof, and no action or proceeding by or before any
federal, state, or foreign governmental or regulatory authority shall be pending or threatened
wherein an adverse judgment, decree, or order would be reasonably likely to result in the
prohibition of or material impairment of the benefits of the implementation of the Rights Offering
and the issuance and sale of the Offered Shares.
(iii) Registration Statement Effectiveness. The Rights Offering Registration Statement
shall each have been declared effective by the Commission and shall continue to be effective and no
stop order shall have been entered by the Commission with respect thereto.
(iv) Conditions under this Agreement. All conditions set forth in Sections
7(a) and 7(b) (other than the conditions set forth in Sections 7(a)(ii) and
7(b)(vi)) shall have been satisfied (or waived, to the extent permitted thereby).
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8. Indemnification and Contribution.
(a) Whether or not the Rights Offering 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 Investor, its 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, suits, proceedings, damages,
liabilities, costs, and reasonable expenses (including fees of counsel), joint or several, arising
out of, or related to circumstances existing on or prior to the Closing Date (“Losses”) to which
any the Indemnified Person may become subject arising out of or in connection with any claim,
challenge, litigation, investigation or proceeding instituted by a third party (“Proceedings”) with
respect to the Rights Offering, 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, any amendment or
supplement thereto, or the transactions contemplated by any of the foregoing and shall reimburse
the 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 (i) any breach by the Indemnified Person of this Agreement, (ii) gross
negligence or willful misconduct on the part of the Indemnified Person, or (iii) statements or
omissions in the Rights Offering Registration Statement, any Preliminary Rights Offering
Prospectus, the Rights Offering Prospectus, any Issuer Free Writing Prospectus, or any amendment or
supplement thereto made in reliance upon or in conformity with written information relating to the
Indemnified Person furnished to the Company in writing by or on behalf of the 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, 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 the 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 the Indemnified Person on the other hand but also the relative fault of the Indemnifying
Party on the one hand and the 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 8 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 8. 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 (including one or more local counsels), 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
- 16 -
have employed separate counsel (including one or more local counsels) in connection with the
assertion of legal defenses in accordance with the proviso to the preceding sentence, (ii) the
Indemnifying Party shall not have employed counsel reasonably satisfactory to such Indemnified
Person to represent such Indemnified Person within a reasonable time after notice of commencement
of the Proceedings, or (iii) the Indemnifying Party shall have authorized in writing the employment
of counsel for such Indemnified Person.
(c) The Indemnifying Party shall not be liable for any settlement of any Proceedings effected
without its written consent (which consent shall not be unreasonably withheld). If any settlement
of any Proceeding is consummated with the written consent of the Indemnifying Party or if there is
a final judgment for the plaintiff in any such Proceedings, the Indemnifying Party agrees to
indemnify and hold harmless each Indemnified Person from and against any and all Losses by reason
of such settlement or judgment in accordance with, and subject to the limitations of, the
provisions of this Section 8. 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.
9. Survival of Representations and Warranties. The representations and warranties made in
Sections 3(i), (j) and (l) of this Agreement will survive the execution and delivery of this
Agreement for a period of eighteen months following the Closing Date, all other representations and
warranties made in this agreement will survive the execution and delivery of this Agreement
indefinitely and the covenants shall survive in accordance with their specific terms.
10. 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 the Investor;
(ii) by either the Company or the Investor if the Closing Date shall not have occurred by the
earlier of (A) July 31, 2011 and (B) the date that is thirty (30) Business Days after the Rights
Offering Registration Statement has been declared effective by the Commission (the “Outside Date”);
provided, however, that the right to terminate this Agreement under this Section 10(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 7(b), provided that any such breach of a covenant or representation or warranty is
not capable of cure on or prior to the Outside Date;
(B) upon the occurrence of any event that results in a failure to satisfy any of the
conditions set forth in Section 7(b), which failure is not capable of cure on or prior to
the Outside Date; provided that all determinations made for the Company prior to the Closing Date
with respect to Section 10(a)(iii)(A) and this Section 10(a)(iii)(B) shall be made
by the Disinterested Directors; or
(C) the Disinterested Directors, in the exercise of their fiduciary duties, recommend to the
Board of Directors of the Company, that the Company consummate an Alternative Transaction that
would result in more favorable economic terms for the Company than the Rights Offering. As used
herein, an “Alternative Transaction” shall mean a transaction or series of transactions, other than
the Rights Offering, that would provide the Company with
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additional liquidity in an amount equal to, or in excess of, that expected as a result of the
Rights Offering (assuming completion of the liquidity improvement initiatives in connection
therewith), including, without limitation, a rights offering with respect to the Company’s
securities that is backstopped by a party other than the Investor.
(iv) by the 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 7(a), provided that any such breach of a covenant or representation or warranty is
not capable of cure on or prior to the Outside Date; or
(B) upon the occurrence of any event that results in a failure to satisfy any of the
conditions set forth in Section 7(a), which failure is not capable of cure on or prior to
the Outside Date.
(b) If this Agreement is terminated, other than pursuant to Section 10(a)(iii)(A), the Company
shall pay to the Investor any reasonable, documented out-of-pocket costs and expenses incurred by
the Investor and its Affiliated Purchasers, if any, in connection with the Rights Offering. Payment
of the amounts due under this Section 10(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 Investor to the Company.
(c) Upon termination under this Section 10, 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 Sections 8 through 16 will survive indefinitely in
accordance with their terms.
11. 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: |
BlueLinx Holdings Inc.
0000 Xxxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Legal Department
0000 Xxxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Legal Department
with copies to:
Xxxxxxxx Xxxxxxx LLP
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
Electronic mail: xxxxx.xxxxxx@xxxxxxxxxxxxxxx.xxx
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
Electronic mail: xxxxx.xxxxxx@xxxxxxxxxxxxxxx.xxx
and:
| (b) | If to the Investor: |
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Cerberus ABP Investor LLC
x/x Xxxxxxxx Xxxxxxx Xxxxxxxxxx, X.X.
000 Xxxx Xxxxxx,
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxx X. Neporent
x/x Xxxxxxxx Xxxxxxx Xxxxxxxxxx, X.X.
000 Xxxx Xxxxxx,
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxx X. Neporent
Xxxx X. Xxxx
with copies to:
Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxx Xxxxxxxx
Xxxx X. Xxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxx Xxxxxxxx
Xxxx X. Xxxxxxx
12. 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 the Investor’s obligations
hereunder, may be assigned, delegated or transferred, in whole or in part, by the Investor to one
or more of Cerberus Capital Management, L.P.’s affiliated funds or managed accounts, Affiliates
and/or direct or indirect investors of Investor whether or not affiliated with Cerberus Capital
Management, L.P., in each case, without the prior written consent of the Company, provided that any
such assignee assumes the obligations of the Investor hereunder and agrees in writing to be bound
by the terms of this Agreement in the same manner as the 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
8 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 and nothing set forth in
this Agreement shall confer upon or give to, or be construed to confer upon or give to, any other
Person (including, without limitation, any affiliates of the Company or any of its respective
members, shareholders, partners, directors, employees, officers or creditors or any successor
thereto or assign thereof, or any third party claiming by or through any of the foregoing) any
benefits, rights or remedies under or by reason of, or any rights to enforce or cause the Company
to enforce, the obligations of Investor or its permitted assignees hereunder or any other
provisions of 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.
13. 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 Rights Offering and supersedes all prior agreements, arrangements or
understandings, whether written or oral, between the parties with respect to the transactions
contemplated hereby.
14. GOVERNING LAW; VENUE.
(a) THIS AGREEMENT WILL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF. EACH OF THE PARTIES HERETO
CONSENTS TO SUBMIT ITSELF TO THE EXCLUSIVE THE EXCLUSIVE PERSONAL JURISDICTION OF THE COURTS OF THE
STATE OF NEW YORK LOCATED IN THE BOROUGH OF MANHATTAN AND ANY UNITED STATES FEDERAL COURTS LOCATED
IN THE BOROUGH OF MANHATTAN, 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
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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 11, 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 THE INVESTOR 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 INVESTOR 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 14 IN ANY OTHER COURT OR JURISDICTION.
(b) Notwithstanding any other term or condition of this Agreement, (i) no recourse hereunder
or under any documents or instruments delivered in connection herewith may be had against any
director, officer, manager, employee, representative or agent of Investor, any direct or indirect
holder of any equity interests or securities of Investor (whether such holder is a limited or
general partner, member, stockholder or otherwise), any Affiliate of Investor, or any direct or
indirect director, officer, manager, employee, partner, affiliate, member, controlling person or
representative of any of the foregoing (any such person or entity, a “Investor Related Person”),
whether by the enforcement of any judgment or assessment or by any legal or equitable proceeding,
or by virtue of any statute, regulation or other applicable law, and (ii) no personal liability
whatsoever will attach to, be imposed on or otherwise be incurred by Investor Related Persons under
this Agreement or any documents or instruments delivered in connection herewith or with the
transactions contemplated hereby for any claim based on, in respect of or by reason of such
obligations or by their creation; and (ii) under no circumstances shall the Company or any other
party be entitled to recover or make a claim against Investor for any amounts in respect of
punitive, consequential or other similar damages. Any Action against Investor arising under this
Agreement shall be barred if not brought in a court of competent jurisdiction on or before the date
that is 120 days following termination of this Agreement in accordance with its terms.
15. 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.
16. Waivers and Amendments. This Agreement may be amended, modified, superseded, cancelled,
renewed or extended, and the terms and conditions of this Agreement may be waived, only by a
written instrument signed by all the parties or, in the case of a waiver, by the party waiving
compliance. No delay on the part of any party in exercising any right, power or privilege pursuant
to this Agreement will operate as a waiver thereof, nor will any waiver on the part of any party of
any right, power or privilege pursuant to this Agreement, nor will any single or partial exercise
of any right, power or privilege pursuant to this Agreement, preclude any other or further exercise
thereof or the exercise of any other right, power or privilege pursuant to this Agreement. The
rights and remedies provided pursuant to this Agreement are cumulative and are not exclusive of any
rights or remedies which any party otherwise may have at law or in equity. All determinations made
for the Company prior to the Closing Date with respect to this Section 16 shall be made by
the Disinterested Directors.
17. 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.
- 20 -
18. 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.
19. Publicity. The Company and the Investor 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.
- 21 -
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.
| BLUELINX HOLDINGS INC. |
||||
| By: | /s/ H. XXXXXXX XXXXXXX | |||
| Name: | H. Xxxxxxx Xxxxxxx | |||
| Title: | Senior Vice President, Chief Financial Officer and Treasurer | |||
| CERBERUS ABP INVESTOR LLC |
||||
| By: | /s/ XXXXXX X. XXXXXXX | |||
| Name: | Xxxxxx X. Xxxxxxx | |||
| Title: | Managing Director | |||
[Investment
Agreement Signature Page]
SCHEDULE I
LIQUIDITY IMPROVEMENT INITIATIVES
1) The Company shall enter into an amendment to that certain Amended and Restated Loan and Security
Agreement, dated August 4, 2006, by and between BlueLinx Corporation, Xxxxx Fargo, as successor in
interest to Wachovia, and the other signatories listed therein, as subsequently amended (the
“Credit Agreement”), to:
| (a) | increase the percentage of Net Amount of Eligible Accounts Receivable (as defined in the Credit Agreement) included in the calculation of the Borrowing Base (as defined in the Credit Agreement) to 87.5%; | ||
| (b) | increase the applicable percentage of Net Orderly Liquidation Value (as defined in the Credit Agreement) used in the Borrowing Base calculation to 90.0% for the periods January to March 2012 and January to March 2013, subject to specified EBITDA levels; | ||
| (c) | include Qualified Cash (as defined in the Credit Agreement) in the calculation of the Cash Management Excess Availability (as defined in the Credit Agreement); | ||
| (d) | reduce the amount of Cash Management Excess Availability the Company is required to maintain to the greater of (i) $35,000,000 and (ii) the amount equal to 15% of the lesser of (A) the Borrowing Base or (B) the Revolving Limit (as defined in the Credit Agreement); and | ||
| (e) | reduce the amount of Excess Availability (as defined in the Credit Agreement) that must be maintained before a Compliance Period (as defined in the Credit Agreement) is triggered under the Credit Agreement to the greater of (i) $30,000,000 and (ii) the amount equal to 15% of the lesser of (A) the Borrowing Base or (B) the Revolving Limit (as defined in the Credit Agreement). |
2) The Company shall enter into an amendment to that certain Loan and Security Agreement, dated as
of June 9, 2006, between the entities set forth therein collectively as borrower and German
American Capital Corporation as lender, and/or the agreements related thereto (collectively, the
“Mortgage Agreement”) to:
| (a) | eliminate the need for prior written consent of the Lender or Rating Agency (as such terms are defined in the Mortgage Agreement) of a Transfer (as defined in the Mortgage Agreement) of any interest in Guarantor, Master Lessee, Maryland Loan Guarantor or Borrower (as such terms are defined in the Mortgage Agreement), if such Transfer would result in less than 51% of Borrower, Maryland Loan Guarantor and Master Lessee being owned by one or more investment funds, limited liability companies, limited partnerships or general partnerships with combined committed capital of at least $1,000,000,000 where one or more Permitted Fund Managers (as defined in the Mortgage Agreement) acts as the general partners, managing members or fund managers and at least fifty-one percent (51%) of the equity interests in each of such Permitted Fund Managers are owned, directly or indirectly, by Guarantor, Cerberus Capital Management, L.P. or a wholly owned subsidiary of Guarantor or Cerberus Capital Management, L.P.; | ||
| (b) | allow for prepayment of Debt (as defined in the Mortgage Agreement) incurred under the Mortgage Agreement without the incurrence of a Yield Maintenance Premium (as defined in the Mortgage Agreement); and | ||
| (c) | allow for the release of Account Collateral (as defined in the Mortgage Agreement) held in the LCR Deterioration Reserve Account (as defined in the Mortgage Agreement) for specified uses to be set forth in such amendment. |
