EXHIBIT 4.5
STOCKHOLDERS AGREEMENT
This STOCKHOLDERS AGREEMENT ("Agreement"), dated as of June 11, 1999, is
among Stonegate Resources Holdings, LLC, a Delaware limited liability company
("Stonegate"), BSL Holdings, Inc., a Delaware corporation and majority owned
subsidiary of Stonegate (the "Company"), Xxxxxx Lumber Company, a Florida
Corporation ("HLC"), and Xxxxxxxx Xxxxxx, an individual resident of the State
of Florida and the majority stockholder of HLC ("Xxxxxx").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, simultaneously with the execution of this Agreement, pursuant to the
Asset Purchase Agreement, dated as of the date hereof (the "Asset Purchase
Agreement") among HLC, Xxxxxx, the Company and Xxxxxx Lumber Company, a Delaware
corporation and a wholly owned subsidiary of the Company ("Buyer"), Buyer is,
among other things, purchasing from HLC, and HLC is selling to Buyer,
substantially all of the property and assets of the building products
manufacturing and distribution business currently conducted by HLC, other than
Excluded Assets (the "Business"), free and clear of all liabilities,
obligations, claims, liens and encumbrances (other than the Assumed Liabilities
and the Permitted Encumbrances) (capitalized terms not otherwise defined herein
shall have the respective meanings assigned to such terms in the Asset Purchase
Agreement);
WHEREAS, pursuant to the Asset Purchase Agreement, HLC shall be entitled to
receive up to 2,000,000 shares (the "Earn Out Shares") of Common Stock (as
hereinafter defined) in the event that the Business exceeds certain targets, as
set forth in Section 1.13 of the Asset Purchase Agreement;
WHEREAS, pursuant to the Asset Purchase Agreement and the Option Agreement,
the Company is herewith granting to Xxxxxx an option (the "Option") to purchase
1,000,000 shares of Common Stock (the "Option Shares"), pursuant to the terms of
Section 1.7 of the Asset Purchase Agreement and the Option Agreement; and
WHEREAS, in connection with the transactions contemplated by the Asset
Purchase Agreement and the Option Agreement, Stonegate, the Company,
HLC and Xxxxxx have agreed to enter into this Agreement to memorialize certain
agreements of the parties with respect to the Earn Out Shares and the Option
Shares, all in accordance with the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein and for good and valuable consideration, the receipt of which is
hereby acknowledged, the parties agree as follows:
ARTICLE I
Certain Definitions
For purposes of this Agreement, the following terms shall have the following
meanings:
(a) The term "Board" shall mean the Board of Directors of the Company.
(b) The term "Commission" shall mean the United States Securities and
Exchange Commission or any successor agency.
(c) The term "Common Stock" shall mean the common stock, par value $.01 per
share, of the Company.
(d) The term "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder.
(e) The term "Fair Market Value" shall mean the fair market value of the
Common Stock determined by such methods or procedures as shall be established
from time to time by the Board. Unless otherwise determined by the Board in good
faith, the per share Fair Market Value of Common Stock as of a particular date
shall mean (i) the closing sales price per share of the Common Stock on the
national securities exchange on which the Common Stock is principally traded,
for the last preceding date on which there was a sale of such Common Stock on
such exchange, or (ii) if the shares of Common Stock are then traded in an over-
the-counter market, the average of the closing bid and asked prices for the
shares of Common Stock in such over-the-counter market for the last preceding
date on which there was a sale of such Common Stock in such market, or (iii) if
the shares of Common Stock are not then listed on a national securities exchange
or traded in an
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over-the-counter market, such value as the Board, in its sole discretion, shall
determine.
(f) The term "Initial Public Offering" shall mean the first Public Offering
of shares of Common Stock.
(g) The term "Permitted Transferee" shall mean, with respect to each
Stockholder bound by the terms of this Agreement, (i) any descendant, Affiliate
or Associate (each, as defined in Rule 405 of the Securities Act) of such
Stockholder or any Permitted Transferee of such Affiliate; (ii) the Company;
(iii) in the event of the dissolution, liquidation or winding up of any such
Stockholder that is a partnership or a corporation, the partners of a
partnership that is such Stockholder, the stockholders of a corporation that is
such Stockholder or a successor partnership all of the partners of which or a
successor corporation all of the stockholders of which are the Persons who were
the partners of such partnership or the stockholders of such corporation
immediately prior to the dissolution, liquidation or winding up of such
Stockholder; (iv) a transferee by testamentary or intestate disposition; (v) a
transferee by inter vivos transfer to the transferring Person's spouse, children
and/or other lineal descendants; (vi) a trust transferee by inter vivos
transfer, the beneficiaries of which are the transferring Person, spouse,
children and/or other lineal descendants; or (vii) a successor nominee or
trustee for the beneficial owner of the Shares for which such Person acts as
nominee or trustee, as the case may be.
(h) The term "Person" shall mean any individual, firm, corporation,
partnership, limited liability company, trust or other entity, and shall include
any successor (by merger or otherwise) of such entity.
(i) The term "Public Offering" shall mean a public offering of equity
securities of the Company pursuant to an effective registration statement under
the Securities Act (other than (i) a registration statement filed under
Regulation A or on form S-4 or any successor form or (ii) a registration
statement filed on Form S-8 or any successor form).
(j) The term "Registrable Securities" shall mean (i) the Earn Out Shares, if
any, to be issued to HLC pursuant to Section 1.13 of the Asset Purchase
Agreement, (ii) the Option Shares, if any, to be issued to Xxxxxx upon exercise
of the Option in accordance with the terms of Section 1.7 of the Asset Purchase
Agreement and the Option Agreement and (iii) additional shares of Common Stock
acquired by HLC or Xxxxxx upon any stock split, dividend, recapitalization,
combination or otherwise after the date hereof. As to any particular
Registrable Securities,
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such securities shall cease to be Registrable Securities when (i) a registration
statement registering such securities under the Securities Act has been declared
effective and such securities have been sold or otherwise transferred by the
holder thereof pursuant to such effective registration statement, or (ii) such
securities are sold in accordance with Rule 144 (or any successor provision)
promulgated under the Securities Act, or (iii) such securities are transferred
under circumstances in which any legend borne by the certificates for such
securities relating to restrictions on transferability thereof, under the
Securities Act or otherwise, is removed by the Company.
(k) The term "Registration Period" shall mean the period commencing on the
first anniversary of the closing date of the Initial Public Offering and ending
on the third anniversary thereof.
(l) The term "Securities Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
(m) The term "Shares" shall mean (i) the Earn Out Shares, if any, to be
issued to HLC pursuant to Section 1.13 of the Asset Purchase Agreement, (ii) the
Option Shares, if any, to be issued to Xxxxxx upon exercise of the Option in
accordance with the terms of Section 1.7 of the Asset Purchase Agreement and the
Option Agreement and (iii) additional shares of Common Stock acquired by HLC or
Xxxxxx upon any stock split, dividend, recapitalization, contribution or
otherwise after the date hereof.
(n) The term "Stockholders" shall mean Xxxxxx and HLC, and the term
"Stockholder" shall mean Xxxxxx or HLC, as the case may be.
(o) The term "Transfer" shall mean any voluntary or involuntary attempt to,
directly or indirectly through the transfer of interests in controlled
Affiliates or otherwise, offer, sell, assign, transfer, grant a participation
in, pledge or otherwise dispose of any Shares, or the consummation of any such
transactions, or the soliciting of any offers to purchase or otherwise acquire,
or taking a pledge of, any of the Shares; provided, however, that the transfer
of an interest in any of the Stockholders shall not be deemed to be a transfer.
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ARTICLE II
Representations and Warranties of the Stockholders
Section 2.01 Acquisition of Shares for Investment. In addition to the
representations and warranties made by each Stockholder in the Asset Purchase
Agreement, each Stockholder individually represents and warrants to the Company
the following:
(a) such Stockholder will be acquiring the Shares to be acquired by such
Stockholder for investment purposes only, without any intention of distributing
or selling such Shares in violation of federal, state or other securities laws.
If such Stockholder should in the future decide to dispose of any of such
Shares, such Stockholder understands and agrees that it may do so only in
compliance with the terms of Article III hereof and the Securities Act and
applicable state securities laws, as then in effect. Such Stockholder agrees to
the imprinting, so long as required by law, of legends on certificates
representing all of the Shares to the following effect:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS
OF ANY STATE. THE SECURITIES MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF SUCH ACT AND SUCH LAWS.
THE SALE, ASSIGNMENT, HYPOTHECATION, PLEDGE, ENCUMBRANCE OR OTHER
DISPOSITION (EACH A "TRANSFER") OF ANY OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE ARE RESTRICTED BY THE TERMS OF THE STOCKHOLDERS AGREEMENT, DATED
AS OF JUNE 11, 1999, AMONG STONEGATE RESOURCES HOLDINGS, LLC, BSL HOLDINGS,
INC., XXXXXX LUMBER COMPANY AND XXXXXXXX XXXXXX. THE COMPANY WILL NOT
REGISTER THE TRANSFER OF SUCH SECURITIES ON THE BOOKS OF THE COMPANY UNLESS
AND UNTIL THE TRANSFER HAS BEEN
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MADE IN COMPLIANCE WITH THE TERMS OF THE STOCKHOLDERS AGREEMENT.
(b) such Stockholder understands that the Shares will not be registered at
the time of their issuance under the Securities Act for the reason that the
issuance provided for in the Asset Purchase Agreement and the Option Agreement
is exempt pursuant to Section 4(2) of the Securities Act and that the reliance
of the Company on such exemption is predicated in part on such Stockholder's
representations set forth herein. Such Stockholder represents that it is
experienced in evaluating companies such as the Company, has such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of its investment and has the ability to suffer the total loss
of its investment. Such Stockholder further represents that it has had the
opportunity to conduct due diligence on the Company, to ask questions of and
receive answers from the Company concerning the terms and conditions of the
offering and to obtain additional information to such Stockholder's
satisfaction.
(c) such Stockholder is an "Accredited Investor" within the meaning of
Rule 501 of Regulation D under the Securities Act, as presently in effect.
ARTICLE III
Transfer of Shares
Section 3.01 General Restrictions. Neither of the Stockholders nor any of
their Permitted Transferees may Transfer any Shares except for Transfers (i) to
any of their Permitted Transferees; provided, however, that, prior to any such
Transfer of Shares, such Permitted Transferee shall agree in writing to take
such Shares subject to, and to comply with, all of the provisions of this
Agreement, a copy of which Agreement shall be executed by such Permitted
Transferee and filed with the Secretary of the Company and shall include the
address of such Permitted Transferee to which notices hereunder shall be sent,
(ii) pursuant to the provisions of Section 3.04 or 3.05 hereof or (iii) during
the Registration Period, pursuant to a Public Offering of such Shares, on the
terms set forth in Article IV hereof.
Section 3.02 Compliance with Securities Laws. Each Stockholder agrees that
every Transfer of its Shares shall comply with all federal, state and local
securities laws applicable to such Transfer. At the request of the Company, the
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transferring Stockholder shall deliver to the Company an opinion of counsel,
which counsel and opinion shall be reasonably satisfactory to the Company, to
the effect that the Transfer satisfies this Section 3.02.
Section 3.03 Transfers Not In Compliance. In the event of any purported or
attempted Transfer of Shares by a Stockholder that does not comply with this
Agreement, the purported transferee or successor by operation of law shall not
be deemed to be a stockholder of the Company for any purpose and shall not be
entitled to any of the rights of a stockholder, including, without limitation,
the right to vote the Shares or to receive a certificate for the Shares or any
dividends or other distributions on or with respect to the Shares.
Section 3.04 Tag-Along Rights. Except as provided below, if, at any time
during the term of this Agreement, Stonegate proposes to directly or indirectly
Transfer more than twenty percent (20%) of its shares of Common Stock to a
Person (other than to a Permitted Transferee), Stonegate shall provide HLC and
Xxxxxx (each a "Notice Recipient") and the Company with not less than twenty
(20) days' prior written notice (the "Sale Notice") of such proposed Transfer,
which notice shall include all of the terms and conditions of such proposed
Transfer and which shall identify such purchaser; and the Notice Recipient shall
have the option, exercisable by written notice to Stonegate within ten (10) days
after the receipt of the Sale Notice, to require Stonegate to arrange for such
purchaser or purchasers to purchase the same percentage (the "Percentage") of
the Shares then owned by such Notice Recipient as the ratio of the total number
of shares of Common Stock which are to be Transferred by Stonegate pursuant to
the proposed Transfer to the total number of shares of Common Stock owned by
Stonegate immediately prior to such Transfer, or any lesser amount of Shares as
such Notice Recipient shall desire, together with Stonegate's shares of Common
Stock at the same time as, and upon the same terms and conditions (including all
direct or indirect consideration or compensation) at which, Stonegate sells its
shares of Common Stock. If a Notice Recipient shall so elect, Stonegate agrees
that it shall either (a) arrange for the proposed purchaser or purchasers to
purchase all or a portion (as such Notice Recipient shall specify) of the same
Percentage of the Shares then owned by such Notice Recipient at the same time as
and upon the same terms and conditions at which Stonegate sells its shares of
Common Stock, and provided that if such purchaser or purchasers shall elect to
purchase only such aggregate number of shares of Common Stock as originally
agreed with Stonegate, then the number of shares of Common Stock to be sold by
Stonegate and the number of Shares to be sold by all Notice Recipients electing
to participate in the proposed Transfer shall be reduced pro rata to such
aggregate number, or (b) not effect the proposed Transfer to such purchaser or
purchasers. In
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the event that a Notice Recipient does not exercise its right to participate in
such Transfer or declines to so participate, Stonegate shall have 120 days from
the date of such Sale Notice to consummate the transaction on the terms set
forth therein without being required to provide an additional Sale Notice to the
remaining Stockholder and comply with the terms of this Section 3.04.
Section 3.05 Drag-Along Rights. If at any time during the term of this
Agreement, Stonegate proposes to Transfer all or substantially all of its shares
of Common Stock (other than to a Permitted Transferee), Stonegate shall have the
right, upon not less than twenty (20) business days' prior written notice of
such proposed sale (the "Purchase Notice"), which notice shall include all of
the terms and conditions of such proposed sale and which shall identify the
proposed purchaser(s) of such shares of Common Stock ("Drag Along
Purchaser(s)"), to require each of HLC and Xxxxxx to sell to the Drag Along
Purchaser(s) that number of Shares ("Call Shares") equal to the product, rounded
down to the nearest whole number, of (a) a fraction, the numerator of which is
the total number of shares of Common Stock proposed to be sold by Stonegate and
the denominator of which is the total number of shares of Common Stock then
owned by Stonegate, multiplied by (b) the number of Shares then owned by HLC and
Xxxxxx, respectively. If Stonegate shall so elect, Stonegate shall arrange for
such Drag Along Purchaser(s) to purchase the Call Shares at the same time as and
upon the same terms and conditions (including all direct or indirect
consideration or compensation) at which Stonegate sells its shares of Common
Stock. Upon receipt of the Purchase Notice, each of HLC and Xxxxxx shall
cooperate with Stonegate and otherwise take, or cause to be taken, all actions
and do, or cause to be done, all things necessary or appropriate to enter into,
consummate and make effective the sale and purchase of the Call Shares,
together with Stonegate's shares of Common Stock being so Transferred.
Section 3.06 Effect of Notices. Notwithstanding any provision hereof to the
contrary, the giving to HLC and Xxxxxx of any Sale Notice or any Purchase Notice
shall not obligate Stonegate to consummate or effect any transaction referred to
therein, and Stonegate shall be free to abandon any such transaction prior to
the effectiveness thereof. If any such transaction is so abandoned, HLC, Xxxxxx
and Stonegate shall continue to be subject to the terms of this Article III with
respect to the Shares included in such Sale Notice or Purchase Notice.
Section 3.07 Call Option Upon Termination. Upon the termination of Xxxxxx'
employment with the Company or any of its Affiliates, for any reason, the
Company shall have the right, but not the obligation, to purchase any or all of
the Shares then held by Xxxxxx and/or HLC for a payment in cash equal to the
Fair
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Market Value of such Shares as of the date of such termination. Such option may
be exercised by the Company by delivering written notice thereof to Xxxxxx and
HLC within 120 days following the date of such termination, together with a
check in the full amount of the Fair Market Value of the Shares to be purchased.
Section 3.08 Put Option Upon Termination.
(a) Upon the termination of Xxxxxx' employment with the Company or any of
its Affiliates, for any reason (other than for Cause), Xxxxxx and/or HLC may
elect to have the Company repurchase any or all the Shares then held by such
Stockholder. Written irrevocable election to have the Company repurchase such
Shares must be received by the Company within ninety (90) days after the date of
Xxxxxx' termination. Subject to the conditions described in subsection (b)
below, the Company will repurchase such Shares within sixty (60) days after
receipt of such request by delivering a check to such Stockholder in the full
amount of the Fair Market Value of the Shares to be purchased.
(b) The Company's obligation to repurchase the Shares as described in
subparagraph (a) above (i) shall terminate upon the Initial Public Offering and
(ii) will not apply to the extent that total repurchases by the Company of
Common Stock from all employees of the Company or its Affiliates during the
calendar year in which the termination of Xxxxxx' employment occurs exceed
$500,000. The Company's obligation to repurchase such Shares is also subject to
compliance with applicable law and with the provisions of the Company's then
existing loan facility.
ARTICLE IV
Registration Rights
Section 4.01 Piggyback Registrations.
(a) Right to Piggyback. During the Registration Period, whenever the
Company proposes to register any of its equity securities or securities
convertible or exchangeable into or exercisable for its equity securities under
the Securities Act (other than a registration under Regulation A or relating to
Company employee benefit plans, exchange offers by the Company or a merger or
acquisition of a business or assets by the Company including, without
limitation, a registration on Form S-4 or Form S-8 or any successor form) (a
"Piggyback Registration"), the Company shall give each of the Stockholders
prompt written notice thereof (but not
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less than ten (10) days prior to the filing by the Company with the Commission
of any registration statement with respect thereto). Such notice (a "Piggyback
Notice") shall specify, at a minimum, the number of securities proposed to be
registered, the proposed date of filing of such registration statement with the
Commission, the proposed means of distribution, the proposed managing
underwriter or underwriters (if any and if known), and a good faith estimate by
the Company of the proposed minimum offering price of such securities. Upon the
written request of a Stockholder given within ten (10) business days of such
Stockholder's receipt of the Piggyback Notice (which written request shall
specify the number of Registrable Securities intended to be disposed of by such
Stockholder and the intended method of distribution thereof), the Company shall
include in such registration all Registrable Securities with respect to which
the Company has received such written requests for inclusion.
(b) Priority on Piggyback Registrations. If, in connection with a
Piggyback Registration, any managing underwriter (or, if such Piggyback
Registration is not an underwritten offering, a nationally recognized
independent underwriter selected by the Company advises the Company and the
holders of the Registrable Securities to be included in such Piggyback
Registration, that, in its opinion, the inclusion of all the securities sought
to be included in such Piggyback Registration by the Company, any Persons who
have sought to have shares registered thereunder pursuant to rights to demand
(other than pursuant to so-called "piggyback" or other incidental or
participation registration rights) such registration (such demand rights being
"Other Demand Rights" and such Persons being "Other Demanding Sellers"), any
holders of Registrable Securities seeking to sell such securities in such
Piggyback Registration ("Piggyback Sellers") and any other proposed sellers, in
each case, if any, would adversely affect the marketability of the securities
sought to be sold pursuant thereto, then the Company shall include in the
registration statement applicable to such Piggyback Registration only such
securities as the Company, the Other Demanding Sellers, and the Piggyback
Sellers are so advised by such underwriter can be sold without such an effect
(the "Maximum Piggyback Number"), as follows and in the following order of
priority:
(i) if the Piggyback Registration is an offering on behalf of the
Company and not any Person exercising Other Demand Rights (whether or not
other Persons seek to include securities therein pursuant to so-called
"piggyback" or other incidental or participatory registration rights) (a
"Primary Offering"), then (A) first, such number of securities to be sold
by the Company as the Company, in its reasonable judgment and acting in
good faith and in
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accordance with sound financial practice, shall have determined, (B)
second, if the number of securities to be included under clause (A) above
is less than the Maximum Piggyback Number, pro rata in proportion to the
Registrable Securities sought to be registered by all the Piggyback
Sellers and all other proposed sellers, which in the aggregate, when added
to the number of securities to be registered under clause (A) above,
equals the Maximum Piggyback Number;
(ii) if the Piggyback Registration is an offering other than pursuant
to a Primary Offering, then (A) first, such number of securities sought to
be registered by each Other Demanding Seller, pro rata in proportion to
the number of securities sought to be registered by all such Other
Demanding Sellers, (B) second, if the number of securities to be included
under clause (A) above is less than the Maximum Piggyback Number, the
number of Registrable Securities sought to be registered by each Piggyback
Seller, pro rata in proportion to the Registrable Securities sought to be
registered by all the Piggyback Sellers and all other proposed sellers,
which in the aggregate, when added to the number of securities to be
registered under clause (A) above, equals the Maximum Piggyback Number.
(c) Withdrawal by the Company. If, at any time after giving written notice
of its intention to register any of its securities as set forth in this Section
3.01 and prior to the time the registration statement filed in connection with
such registration is declared effective, the Company shall determine for any
reason not to register such securities, the Company may, at its election, give
written notice of such determination to each Stockholder and thereupon shall be
relieved of its obligation to register any Registrable Securities in connection
with such particular withdrawn or abandoned registration (but not from its
obligation to pay the Registration Expenses in connection therewith as provided
herein).
Section 4.02 Withdrawal Rights. Any Stockholder having notified or directed
the Company to include any or all of its Registrable Securities in a
registration statement under the Securities Act shall have the right to withdraw
any such notice or direction with respect to any or all of the Registrable
Securities designated for registration thereby by giving written notice to such
effect to the Company prior to the effective date of such registration
statement. In the event of any such withdrawal, the Company shall not include
such Registrable Securities in the applicable registration and such Registrable
Securities shall continue to be
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Registrable Securities hereunder. No such withdrawal shall affect the
obligations of the Company with respect to the Registrable Securities not so
withdrawn.
Section 4.03 Holdback Agreements. Each Stockholder agrees not to effect any
public sale or distribution (including sales pursuant to Rule 144) of equity
securities of the Company, or any securities convertible into or exchangeable or
exercisable for such securities, during the ten (10) day period prior to the
date which the Company has notified the Stockholders that it intends to commence
a Public Offering through the ninety (90) day period immediately following the
effective date of any Piggyback Registration (except as part of such
registration), or, if later, the date of any underwriting agreement with respect
thereto.
Section 4.04 Registration Procedures.
(a) Whenever the Stockholders have requested that any Registrable
Securities be registered pursuant to this Agreement, the Company (subject to its
right to withdraw such registration as contemplated by Section 4.01(c)) shall
use commercially reasonable efforts to effect the registration and the sale of
such Registrable Securities in accordance with the intended method of
disposition thereof and, in connection therewith, the Company shall:
(i) promptly (1) notify each seller of Registrable Securities of each
of (A) the filing and effectiveness of the registration statement and
prospectus and any amendment or supplements thereto, (B) the receipt of
any comments from the Commission or any state securities law authorities
or any other governmental authorities with respect to any such
registration statement or prospectus or any amendments or supplements
thereto, and (C) any oral or written stop order with respect to such
registration, any suspension of the registration or qualification of the
sale of such Registrable Securities in any jurisdiction or any initiation
or threatening of any proceedings with respect to any of the foregoing
and (2) use commercially reasonable efforts to obtain the withdrawal of
any order suspending the registration or qualification (or the
effectiveness thereof) or suspending or preventing the use of any related
prospectus in any jurisdiction with respect thereto;
(ii) furnish to each seller of Registrable Securities, the underwriters
and the sales or placement agent, if any, and counsel for each of the
foregoing, a conformed copy of such
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registration statement and each amendment and supplement thereto (in each
case, including all exhibits thereto and documents incorporated by
reference therein) and such additional number of copies of such
registration statement, each amendment and supplement thereto (in such
case without such exhibits and documents) the prospectus (including each
preliminary prospectus) included in such registration statement and
prospectus supplements and all exhibits thereto and documents incorporated
by reference therein and such other documents as such seller,
underwriter, agent or counsel may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by such
Seller;
(iii) use commercially reasonable efforts to register or qualify such
Registrable Securities under such securities or "blue sky" laws of such
jurisdictions as the holders of a majority of Registrable Securities
sought to be registered reasonably request and do any and all other acts
and things which may be reasonably necessary or advisable to enable the
holders of a majority of Registrable Securities sought to be registered to
consummate the disposition in such jurisdictions of the Registrable
Securities owned by such holders and keep such registration or
qualification in effect for so long as the registration statement remains
effective under the Securities Act (provided that the Company shall not be
required to (x) qualify generally to do business in any jurisdiction
where it would not otherwise be required to qualify but for this
paragraph, (y) subject itself to taxation in any such jurisdiction where
it would not otherwise be subject to taxation but for this paragraph or
(z) consent to the general service of process in any jurisdiction where it
would not otherwise be subject to general service of process but for this
paragraph);
(iv) notify each seller of such Registrable Securities, at any time
when a prospectus relating thereto is required to be delivered under the
Securities Act, upon the discovery that, or of the happening of any event
as a result of which, the registration statement covering such Registrable
Securities, as then in effect, contains an untrue statement of a material
fact or omits to state any material fact required to be stated therein or
any fact necessary to make the statements therein not misleading, and
promptly prepare and furnish to each such seller a supplement or amendment
to the prospectus contained in such registration statement so that such
Registration
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Statement shall not, and such prospectus as thereafter delivered to the
purchasers of such Registrable Securities shall not, contain an untrue
statement of a material fact or omit to state any material fact required
to be stated therein or any fact necessary to make the statements therein
not misleading;
(v) cause all such Registrable Securities to be listed on any
securities exchange or established over-the-counter market on which or
through which similar securities of the Company are listed or traded and,
if not so listed or traded, to be listed on the NASD automated quotation
system ("Nasdaq") and if listed on Nasdaq, use its reasonable efforts to
secure designation of all such Registrable Securities covered by such
registration statement as a Nasdaq "national market system security"
within the meaning of Rule 11Aa2-1 under the Exchange Act; or, failing
that, to secure Nasdaq authorization for such Registrable Securities;
(vi) make available for inspection by any seller of Registrable
Securities and any attorney, accountant or other agent retained by any
such seller or underwriter all financial and other records, pertinent
corporate documents and properties of the Company, and cause the
Company's officers, directors, employees, attorneys and independent
accountants to supply all information reasonably requested by any such
sellers, attorneys, accountants or agents in connection with such
registration statement. Information which the Company determines, in good
faith, to be confidential shall not be disclosed by such persons unless
(x) the disclosure of such information is necessary to avoid or correct a
misstatement or omission in such registration statement, or (y) the
release of such information is ordered pursuant to a subpoena or other
order from a court of competent jurisdiction. Each seller of Registrable
Securities agrees, on its own behalf and on behalf of all its accountants,
attorneys and agents, that the information obtained by it as a result of
such inspections shall be deemed confidential and shall not be used by it
as the basis for any market transactions in the securities of the Company
unless and until such is made generally available to the public. Each
seller of Registrable Securities further agrees, on its own behalf and on
behalf of all its accountants, attorneys and agents, that it will, upon
learning that disclosure of such information is sought in a court of
competent jurisdiction, give notice to the Company and allow
14
the Company, at its expense, to undertake appropriate action to prevent
disclosure of the information deemed confidential;
(vii) use commercially reasonable efforts to comply with all applicable
laws related to such registration statement and offering and sale of
securities and all applicable rules and regulations of governmental
authorities in connection therewith (including, without limitation, the
Securities Act and the Exchange Act) and make generally available to its
security holders as soon as practicable (but in any event not later than
fifteen (15) months after the effectiveness of such registration
statement) an earnings statement of the Company and its subsidiaries
complying with Section 11(a) of the Securities Act;
(viii) permit any Stockholder, which Stockholder, in its sole and
exclusive judgment, might be deemed to be an underwriter or controlling
person of the Company, to participate in the preparation of such
registration statement and to require the insertion therein of material,
furnished to the Company in writing, which in the reasonable judgment of
such holder and such holder's counsel should be included; and
(ix) use commercially reasonable efforts to furnish to each seller of
Registrable Securities a signed counterpart of (x) an opinion of counsel
for the Company and (y) a "comfort" letter signed by the independent
public accountants who have certified the Company's financial statements
included or incorporated by reference in such registration statement,
covering such matters with respect to such registration statement and, in
the case of the accountants' comfort letter, with respect to events
subsequent to the date of such financial statements, as are customarily
covered in opinions of issuer's counsel and in accountants' comfort
letters delivered to the underwriters in underwritten public offerings of
securities for the account of, or on behalf of, an issuer of common stock,
such opinion and comfort letters to be dated the date of such opinions and
comfort letters are customarily dated in such transactions, and covering
in the case of such legal opinion, such other legal matters and, in the
case of such comfort letter, such other financial matters, as the holders
of a majority of the Registrable Securities being sold may reasonably
request.
15
(b) Underwriting. Without limiting any of the foregoing, in the event that
the offering of Registrable Securities is to be made by or through an
underwriter, the Company shall enter into an underwriting agreement with a
managing underwriter or underwriters containing representations, warranties,
indemnities and agreements customarily included (but not inconsistent with the
agreements contained herein) by an issuer of common stock in underwriting
agreements with respect to offerings of common stock for the account of, or on
behalf of, such issuers. In connection with the sale of Registrable Securities
hereunder, any seller of such Registrable Securities may, at its option, require
that any and all representations and warranties by, and indemnities and
agreements of, the Company to or for the benefit of such underwriter or
underwriters (or which would be made to or for the benefit of such an
underwriter or underwriter if such sale of Registrable Securities were pursuant
to a customary underwritten offering) be made to and for the benefit of such
seller and that any or all of the conditions precedent to the obligations of
such underwriter or underwriters (or which would be so for the benefit of such
underwriter or underwriters under a customary underwriting agreement) be
conditions precedent to the obligations of such seller in connection with the
disposition of its securities pursuant to the terms hereof. In connection with
any offering of Registrable Securities registered pursuant to this Agreement,
the Company shall (x) furnish to the underwriter, if any (or, if no underwriter,
the sellers of such Registrable Securities), unlegended certificates
representing ownership of the Registrable Securities being sold, in such
denominations as requested and (y) instruct any transfer agent and registrar of
the Registrable Securities to release any stop transfer order with respect
thereto.
(c) Return of Prospectuses. Each seller of Registrable Securities
hereunder agrees that upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 4.04(a)(iv), such seller
shall forthwith discontinue such seller's disposition of Registrable Securities
pursuant to the applicable registration statement and prospectus relating
thereto until such seller's receipt of the copies of the supplemented or amended
prospectus contemplated by Section 4.04(a)(iv) and, if so directed by the
Company, deliver to the Company all copies, other than permanent file copies,
then in such seller's possession of the prospectus current at the time of
receipt of such notice relating to such Registrable Securities. In the event the
Company shall give such notice, the ninety (90) day period during which such
registration statement must remain effective pursuant to this Agreement shall be
extended by the number of days during the period from the date of giving of a
notice regarding the happening of an event of the kind described in Section
4.04(a)(iv) to the date when all such sellers shall receive such a
16
supplemented or amended prospectus and such prospectus shall have been filed
with the Commission.
Section 4.05 Registration Expenses. All expenses incident to the Company's
performance of, or compliance with, its obligations under this Agreement
including, without limitation, all registration and filing fees, all fees and
expenses of compliance with securities and "blue sky" laws (including, without
limitation, the fees and expenses of counsel for underwriters or placement or
sales agents in connection therewith), all printing and copying expenses, all
messenger and delivery expenses, all fees and expenses of underwriters and sales
and placement agents in connection therewith (excluding discounts and
commissions and the fees and expenses of counsel therefor), all fees and
expenses of the Company's independent certified public accountants and counsel
(including, without limitation, with respect to "comfort" letters and opinions)
(collectively, the "Registration Expenses") shall be borne by the Company;
notwithstanding the foregoing, all applicable federal and blue sky registration
and filing fees, National Association of Securities Dealers filing fees, the
expenses and fees for listing the securities to be registered on each securities
exchange and included in each established over-the-counter market on which
similar securities issued by the Company are then listed or traded or for
listing on Nasdaq and underwriting discounts and commissions allocable to each
Stockholder selling Registrable Securities shall be borne by such Stockholder.
The Company shall not be responsible for the fees and expenses of any additional
counsel, or any of the accountants, agents or experts retained by the
Stockholders in connection with the sale of Registrable Securities. The Company
will pay its internal expenses (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties,
the expense of any annual audit and the expense of any liability insurance) and
the expenses and fees for listing the securities to be registered on each
securities exchange and included in each established over-the-counter market on
which similar securities issued by the Company are then listed or traded or for
listing on Nasdaq.
Section 4.06 Indemnification.
(a) By the Company. The Company agrees to indemnify, to the fullest extent
permitted by law, each holder of Registrable Securities being sold, its
officers, directors, employees and agents and each Person who controls (within
the meaning of the Securities Act) such holder or such an other indemnified
Person against all losses, claims, damages, liabilities and expenses
(collectively, the "Losses") caused by, resulting from or relating to any untrue
or alleged untrue statement of material fact contained in any registration
statement, prospectus or
17
preliminary prospectus or any amendment thereof or supplement thereto or any
omission or alleged omission of a material fact required to be stated therein or
a fact necessary to make the statements therein not misleading, except insofar
as the same are caused by or contained in any information furnished to the
Company by or on behalf of such holder expressly for use therein or by such
holder's failure to deliver a copy of the registration statement or prospectus
or any amendments or supplements thereto after the Company has furnished such
holder with a sufficient number of copies of the same. In connection with an
underwritten offering and without limiting any of the Company's other
obligations under this Agreement, the Company shall indemnify such underwriters,
their officers, directors, employees and agents and each Person who controls
(within the meaning of the Securities Act) such underwriters or such an other
indemnified Person to the same extent as provided above with respect to the
indemnification of the holders of Registrable Securities being sold.
(b) By Stockholders. In connection with any registration statement in
which a holder of Registrable Securities is participating, each such holder will
furnish to the Company in writing information regarding such holder's ownership
of Registrable Securities and, to the extent permitted by law, shall indemnify
the Company, its directors, officers, employees and agents and each Person who
controls (within the meaning of the Securities Act) the Company or such an other
indemnified Person against all Losses caused by, resulting from or relating to
any untrue or alleged untrue statement of material fact contained in the
registration statement, prospectus or preliminary prospectus or any amendment
thereof or supplement thereto or any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements therein
not misleading, but only to the extent that such untrue statement or omission is
caused by and contained in such information so furnished in writing by or on
behalf of such holder; provided, however, that each holder's obligation to
indemnify the Company hereunder shall be apportioned between each holder based
upon the net amount received by each holder from the sale of Registrable
Securities, as compared to the total net amount received by all of the holders
of Registrable Securities sold pursuant to such registration statement, no such
holder being liable to the Company in excess of such apportionment.
(c) Notice. Any Person entitled to indemnification hereunder shall give
prompt written notice to the indemnifying party of any claim with respect to
which its seeks indemnification; provided, however, the failure to give such
notice shall not release the indemnifying party from its obligation, except to
the extent that the indemnifying party has been materially prejudiced by such
failure to provide such notice.
18
(d) Defense of Actions. In any case in which any such action is brought
against any indemnified party, and it notifies an indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein, and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party, and after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof the indemnifying party will not (so long as it shall
continue to have the right to defend, contest, litigate and settle the matter in
question in accordance with this paragraph) be liable to such indemnified party
hereunder for any legal or other expense subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation, supervision and monitoring (unless such indemnified
party reasonably objects to such assumption on the grounds that there may be
defenses available to it which are different from or in addition to the defenses
available to such indemnifying party, in which event the indemnified party shall
be reimbursed by the indemnifying party for the expenses incurred in connection
with retaining separate legal counsel). An indemnifying party shall not be
liable for any settlement of an action or claim effected without its consent.
The indemnifying party shall lose its right to defend, contest, litigate and
settle a matter if it shall fail to diligently contest such matter (except to
the extent settled in accordance with the next following sentence). No matter
shall be settled by an indemnifying party without the consent of the indemnified
party (which consent shall not be unreasonably withheld).
(e) Survival. The indemnification provided for under this Agreement shall
remain in full force and effect regardless of any investigation made by or on
behalf of the indemnified Person and will survive the transfer of the
Registrable Securities and the termination of this Agreement.
(f) Contribution. If recovery is not available under the foregoing
indemnification provisions for any reason or reasons other than as specified
therein, any Person who would otherwise be entitled to indemnification by the
terms thereof shall nevertheless be entitled to contribution with respect to any
Losses with respect to which such Person would be entitled to such
indemnification but for such reason or reasons. In determining the amount of
contribution to which the respective Persons are entitled, there shall be
considered the Persons' relative knowledge and access to information concerning
the matter with respect to which the claim was asserted, the opportunity to
correct and prevent any statement or omission, and other equitable
considerations appropriate under the circumstances. It is hereby agreed that it
would not necessarily be equitable if the amount of such contribution
19
were determined by pro rata or per capita allocation. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
found guilty of such fraudulent misrepresentation. Notwithstanding the
foregoing, no Stockholder shall be required to make a contribution in excess of
the net amount received by such holder from the sale of Registrable Securities.
ARTICLE V
Miscellaneous
Section 5.01 Legends. Each of the Stockholders agrees that substantially the
following legend shall be placed on the certificates representing any Shares
owned by them:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") AND MAY NOT BE
TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF
("TRANSFERRED") EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE ACT OR AN EXEMPTION FROM REGISTRATION THEREUNDER. THE SECURITIES
REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS OF THE STOCKHOLDERS
AGREEMENT DATED AS OF JUNE 11, 1999 AND MAY NOT BE TRANSFERRED UNLESS SUCH
TRANSFER COMPLIES WITH THE PROVISIONS OF SUCH STOCKHOLDERS AGREEMENT, A COPY
OF SUCH STOCKHOLDERS AGREEMENT IS ON FILE WITH THE SECRETARY OF BSL
HOLDINGS, INC. AND IS AVAILABLE WITH OUT CHARGE UPON WRITTEN REQUEST
THEREFOR. THE HOLDER OF THIS CERTIFICATE, BY ACCEPTANCE OF THIS CERTIFICATE,
AGREES TO BE BOUND BY ALL OF THE PROVISIONS OF THE AFORESAID AGREEMENT.
From and after the date of this Agreement, any reference in any legend on any
certificate representing any Shares to the Stockholders Agreement shall be
deemed for all purposes to refer to this Agreement.
20
Section 5.02 Specific Performance. Each of the Stockholders acknowledges and
agrees that in the event of any breach of this Agreement, the non-breaching
party or parties would be irreparably harmed and could not be made whole by
monetary damages. The Stockholders hereby agree that in addition to any other
remedy to which any party may be entitled at law or in equity, they shall be
entitled to compel specific performance of this Agreement in any action
instituted in any court of the United States or any state thereof having subject
matter jurisdiction for such action.
Section 5.03 Headings. The headings in this Agreement are for convenience of
reference only and shall not control or affect the meaning or construction of
any provisions hereof.
Section 5.04 Entire Agreement. This Agreement constitutes the entire
agreement and understanding of the parties hereto in respect of the subject
matter contained herein, and there are no restrictions, promises,
representations, warranties, covenants, conditions or undertakings with respect
to the subject matter hereof, other than those expressly set forth or referred
to herein. This Agreement supersedes all prior agreements and understandings
between the parties hereto with respect to the subject matter hereof.
Section 5.05 Notices. All notices and other communications hereunder shall be
in writing and shall be delivered personally or by next-day courier or
telecopied with confirmation of receipt, to the parties at the addresses
specified below (or at such other address for a party as shall be specified by
like notice; provided that notices of change of address shall be effective only
upon receipt thereof). Any such notice shall be effective upon receipt, if
personally delivered or telecopied, or one day after delivery to a courier for
next-day delivery.
If to the Stonegate or the Company, to:
BSL Holdings, Inc.
0000 Xxxx Xxxxxx, Xxxxx 0000 Xxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. XxXxxxxxx, Esq.
Fax: (000) 000-0000
21
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
If to HLC or Xxxxxx, to:
Xxxxxx Lumber Company
0000 Xxxxxxxxx Xxxxxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxxxx Xxxxxx
Fax: (000) 000-0000
with a copy to:
Brant, Moore, XxxXxxxxx & Xxxxx
00 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxx, Esq.
Fax: (000) 000-0000
Section 5.06 Applicable Law. The substantive laws of the State of Delaware
shall govern the interpretation, validity and performance of the terms of this
Agreement, regardless of the law that might be applied under applicable
principles of conflicts of laws. THE PARTIES HERETO WAIVE THEIR RIGHT TO A JURY
TRIAL WITH RESPECT TO DISPUTES HEREUNDER; ALL SUCH DISPUTES SHALL BE SETTLED BY
BINDING ARBITRATION PURSUANT TO THE RULES OF THE AMERICAN ARBITRATION
ASSOCIATION IN DALLAS, TEXAS AND THE ORDER OF SUCH ARBITRATORS SHALL BE FINAL
AND BINDING ON ALL PARTIES HERETO AND MAY BE ENTERED AS A JUDGMENT IN A COURT
HAVING JURISDICTION OVER THE PARTIES.
Section 5.07 Severability. The invalidity, illegality or unenforceability of
one or more of the provisions of this Agreement in any
22
jurisdiction shall not affect the validity, legality or enforceability of the
remainder of this Agreement in such jurisdiction or the validity, legality or
enforceability of this Agreement, including any such provision, in any other
jurisdiction, it being intended that all rights and obligations of the parties
hereunder shall be enforceable to the fullest extent permitted by law.
Section 5.08 Successors; Assigns. The provisions of this Agreement shall be
binding upon the parties hereto and their respective heirs, successors and
permitted assigns. Neither this Agreement nor the rights or obligations of any
Stockholder hereunder may be assigned, except in connection with the transfer by
a Stockholder of shares of Common Stock to a Permitted Transferee. Any such
attempted assignment in contravention of this Agreement shall be void and of no
effect.
Section 5.09 Amendments. This Agreement may not be amended, modified or
supplemented unless such modification is in writing and signed by the Company,
Stonegate and Stockholders owning at least 662/3% of the outstanding shares of
Common Stock subject to this Agreement as of the date hereof.
Section 5.10 Waiver. Any waiver (express or implied) of any default or breach
of this Agreement shall not constitute a waiver of any other or subsequent
default or breach.
Section 5.11 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same Agreement.
Section 5.12 Termination. Unless earlier terminated, this Agreement shall
terminate upon the earlier of (i) the third anniversary of the date of the
Initial Public Offering or (ii) the tenth anniversary of the date hereof.
[SIGNATURE PAGES FOLLOW]
23
IN WITNESS WHEREOF, the undersigned hereby agree to be bound by the terms and
provisions of this Stockholders Agreement as of the date first above written.
BSL HOLDINGS, INC.
By: /s/ Xxxxxx X. XxXxxxxxx
------------------------
Name: Xxxxxx X. XxXxxxxxx
STONEGATE RESOURCES HOLDINGS, LLC
By: /s/ Xxxxxx X. XxXxxxxxx
------------------------
Name: Xxxxxx X. XxXxxxxxx
XXXXXX LUMBER COMPANY,
a Florida corporation
By: /s/ Xxxxxxxx Xxxxxx
---------------------------
Name: Xxxxxxxx Xxxxxx
/s/ Xxxxxxxx Xxxxxx
---------------------------
Xxxxxxxx Xxxxxx
