UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
BUILDERS FIRSTSOURCE, INC.
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(Name of Issuer)
Common stock, par value $0.01 per share
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(Title of Class of Securities)
12008R-10-7
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(CUSIP Number)
Building Products, LLC
450 Lexington Avenue, Suite 3350
New York, New York 10017
(212) 286-8600
Attention: Paul S. Levy
With copies to:
Robert B. Pincus, Esq. Steven J. Gartner, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP Willkie Farr & Gallagher LLP
One Rodney Square, P.O. Box 636 787 Seventh Avenue
Wilmington, Delaware 19899-0636 New York, NY 10019-6099
(302) 651-3000 (212) 728-8222
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
February 27, 2006
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(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is filing
this schedule because of ss.ss. 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g),
check the following box. [__]
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SCHEDULE 13D
CUSIP No. 12008R-10-7
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1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Building Products, LLC
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [_]
(b) [X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e)
[_]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY None
OWNED BY ------------------------------------------------
EACH
REPORTING 8 SHARED VOTING POWER
PERSON
WITH None
------------------ -----------------------------
9 SOLE DISPOSITIVE POWER
None
------------------------------------------------
10 SHARED DISPOSITIVE POWER
None
-------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
None
-------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES (See Instructions)
[_]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0%
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14 TYPE OF REPORTING PERSON
OO
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SCHEDULE 13D
CUSIP No. 12008R-10-7
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1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
JLL Partners Fund V, L.P.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [_]
(b) [X]
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3 SEC USE ONLY
-------------------------------------------------------------------------------
4 SOURCE OF FUNDS
OO
-------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e)
|_|
-------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
-------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY None
OWNED BY ------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON 8,652,551.5
WITH ------------------------------------------------
9 SOLE DISPOSITIVE POWER
None
------------------------------------------------
10 SHARED DISPOSITIVE POWER
8,652,551.5
-------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
8,652,551.5
-------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instructions)
[__]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
26.4%
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14 TYPE OF REPORTING PERSON
PN
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SCHEDULE 13D
CUSIP No. 12008R-10-7
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1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
JLL Partners Associates V, L.P.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [_]
(b) [X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
OO
-------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e)
[__]
-------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
-------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY None
OWNED BY ------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON 8,652,551.5
WITH ------------------------------------------------
9 SOLE DISPOSITIVE POWER
None
------------------------------------------------
10 SHARED DISPOSITIVE POWER
8,652,551.5
-------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
8,652,551.5
-------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instructions)
[__]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
26.4%
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14 TYPE OF REPORTING PERSON
PN
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SCHEDULE 13D
CUSIP No. 12008R-10-7
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1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
JLL Associates G.P. V, L.L.C.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [_]
(b) [X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
OO
-------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e)
|_|
-------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
-------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY None
OWNED BY ------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON 8,652,551.5
WITH ------------------------------------------------
9 SOLE DISPOSITIVE POWER
None
------------------------------------------------
10 SHARED DISPOSITIVE POWER
8,652,551.5
-------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
8,652,551.5
-------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instructions)
[__]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
26.4%
-------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
OO
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SCHEDULE 13D
CUSIP No. 12008R-10-7
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1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Paul S. Levy
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) |_|
(b) |X|
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
OO
-------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e)
|_|
-------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
-------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY None
OWNED BY -----------------------------------------------
EACH
REPORTING 8 SHARED VOTING POWER
PERSON
WITH 8,652,551.5
-----------------------------------------------
9 SOLE DISPOSITIVE POWER
None
-----------------------------------------------
10 SHARED DISPOSITIVE POWER
8,652,551.5
-------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
8,652,551.5
-------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instructions)
[__]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
26.4%
-------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IN
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SCHEDULE 13D
CUSIP No. 12008R-10-7
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1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Warburg Pincus Private Equity IX, L.P.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) |_|
(b) [X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
OO
-------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e)
|___|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
-------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 0
OWNED BY ------------------------------------------------
EACH
REPORTING 8 SHARED VOTING POWER
PERSON
WITH 8,652,551.5
------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
------------------------------------------------
10 SHARED DISPOSITIVE POWER
8,652,551.5
-------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
8,652,551.5
-------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instructions)
|__|
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
26.4%
-------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
PN
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SCHEDULE 13D
CUSIP No. 12008R-10-7
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1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Warburg Pincus IX, LLC
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) |_|
(b) |X|
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3 SEC USE ONLY
-------------------------------------------------------------------------------
4 SOURCE OF FUNDS
N/A
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e)
|__|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
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NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 0
OWNED BY ------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON 8,652,551.5
WITH ------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
------------------------------------------------
10 SHARED DISPOSITIVE POWER
8,652,551.5
-------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
8,652,551.5
-------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instructions)
|__|
-------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
26.4%
-------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
OO
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SCHEDULE 13D
CUSIP No. 12008R-10-7
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1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Warburg Pincus Partners LLC
-------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) |_|
(b) |X|
-------------------------------------------------------------------------------
3 SEC USE ONLY
-------------------------------------------------------------------------------
4 SOURCE OF FUNDS
N/A
-------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e)
|_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
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NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 0
OWNED BY ------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON 8,652,551.5
WITH ------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
------------------------------------------------
10 SHARED DISPOSITIVE POWER
8,652,551.5
-------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
8,652,551.5
-------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instructions)
|__|
-------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
26.4%
-------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
OO
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SCHEDULE 13D
CUSIP No. 12008R-10-7
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1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Warburg Pincus LLC
-------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) |_|
(b) |X|
-------------------------------------------------------------------------------
3 SEC USE ONLY
-------------------------------------------------------------------------------
4 SOURCE OF FUNDS
N/A
-------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e)
|_|
-------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
-------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 0
OWNED BY ------------------------------------------------
EACH
REPORTING 8 SHARED VOTING POWER
PERSON 8,652,551.5
WITH ------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
------------------------------------------------
10 SHARED DISPOSITIVE POWER
8,652,551.5
-------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
8,652,551.5
-------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instructions)
|__|
-------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
26.4%
-------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
OO
-------------------------------------------------------------------------------
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SCHEDULE 13D
CUSIP No. 12008R-10-7
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1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Warburg Pincus & Co.
-------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) |_|
(b) |X|
-------------------------------------------------------------------------------
3 SEC USE ONLY
-------------------------------------------------------------------------------
4 SOURCE OF FUNDS
N/A
-------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e)
|__|
-------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
-------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 0
OWNED BY ------------------------------------------------
EACH
REPORTING 8 SHARED VOTING POWER
PERSON
WITH 8,652,551.5
------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
------------------------------------------------
10 SHARED DISPOSITIVE POWER
8,652,551.5
-------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
8,652,551.5
-------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instructions)
|__|
-------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
26.4%
-------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
PN
-------------------------------------------------------------------------------
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SCHEDULE 13D
CUSIP No. 12008R-10-7
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1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Charles R. Kaye
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) |_|
(b) |X|
-------------------------------------------------------------------------------
3 SEC USE ONLY
-------------------------------------------------------------------------------
4 SOURCE OF FUNDS
N/A
-------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e)
|__|
-------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
-------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 0
OWNED BY ------------------------------------------------
EACH
REPORTING 8 SHARED VOTING POWER
PERSON
WITH 8,652,551.5
------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
------------------------------------------------
10 SHARED DISPOSITIVE POWER
8,652,551.5
-------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
8,652,551.5
-------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SH
|_|
-------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
26.4%
-------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IN
-------------------------------------------------------------------------------
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SCHEDULE 13D
CUSIP No. 12008R-10-7
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1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Joseph P. Landy
-------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) |_|
(b) |X|
-------------------------------------------------------------------------------
3 SEC USE ONLY
-------------------------------------------------------------------------------
4 SOURCE OF FUNDS
N/A
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e)
|__|
-------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
-------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 0
OWNED BY ------------------------------------------------
EACH
REPORTING 8 SHARED VOTING POWER
PERSON
WITH 8,652,551.5
------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
------------------------------------------------
10 SHARED DISPOSITIVE POWER
8,652,551.5
-------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
8,652,551.5
-------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES (See Instructions)
|__|
-------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
26.4%
-------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IN
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Item 1. Security and Issuer
The class of securities to which this statement on Schedule 13D (the
"Schedule 13D") relates is the common stock, par value $0.01 per share (the
"Common Stock"), of Builders FirstSource, Inc., a Delaware corporation (the
"Company"), whose principal executive offices are located at 2001 Bryan
Street, Suite 1600, Dallas, Texas 75201.
Item 2. Identity and Background
(a) This Schedule 13D is filed by Building Products, LLC, a Delaware limited
liability company ("Building Products LLC"); JLL Partners Fund V, L.P., a
Delaware limited partnership ("JLL Fund V"); JLL Associates V, L.P., a
Delaware limited partnership ("JLL Associates V") and the general partner of
JLL Fund V; JLL Associates G.P. V, L.L.C., a Delaware limited liability
company ("JLL Associates G.P.") and the general partner of JLL Associates V;
Paul S. Levy, the sole member of JLL Associates G.P. (JLL Fund V, JLL
Associates V, JLL Associates G.P., and Mr. Levy collectively being the "JLL
Reporting Persons"); and Warburg Pincus Private Equity IX, L.P., a Delaware
limited partnership ("Warburg Pincus Fund IX"); Warburg Pincus IX, LLC, a New
York limited liability company and sole general partner of Warburg Pincus Fund
IX ("WP IX LLC"); Warburg Pincus Partners LLC, a New York limited liability
company and sole member of WP IX LLC ("WPP LLC"); Warburg Pincus LLC, a New
York limited liability company that manages Warburg Pincus Fund IX ("WP LLC");
Warburg Pincus & Co., a New York general partnership and the managing member
of WPP LLC ("WP"); and Messrs. Charles R. Kaye and Joseph P. Landy, each a
Managing General Partner of WP and Co-President and Managing Member of WP LLC
(Warburg Pincus Fund IX, WP IX LLC, WPP LLC, WP LLC, WP, Mr. Kaye and Mr.
Landy collectively being the "Warburg Pincus Reporting Persons," and Building
Products LLC, the JLL Reporting Persons, and the Warburg Pincus Reporting
Persons collectively being the "Reporting Persons"). The general partners of
WP and the members of WP LLC, and their respective business addresses and
principal occupations, are set forth on Schedule I hereto. The agreement among
the Reporting Persons to file this Schedule 13D jointly in accordance with
rule 13d-1(k)(1) of the Securities Exchange Act of 1934, as amended, is
attached hereto as Exhibit 1. Information in this Schedule 13D with respect to
each of the Reporting Persons is given solely by that particular Reporting
Person, and none of the other Reporting Persons has any responsibility for the
accuracy or completeness of information with respect to any other Reporting
Person.
(b) The business address of each of Building Products LLC and the JLL
Reporting Persons is c/o JLL Partners, 450 Lexington Avenue, Suite 3350, New
York, New York 10017. The business address of each of the Warburg Pincus
Reporting Persons and each person listed on Schedule I is c/o Warburg Pincus
LLC, 466 Lexington Avenue, New York, New York 10017.
(c) The principal business of Building Products LLC is to acquire, hold, and
dispose of securities issued by the Company, to receive dividends, interest,
or other passive income and gains, and to engage in such other activities as
the board of managers deems necessary and advisable. The principal business of
JLL Fund V is to seek long-term capital appreciation by acquiring, holding,
and disposing of controlling and non-controlling positions in securities,
independently or with others, primarily through leveraged acquisitions,
build-ups, recapitalizations, restructurings, management buyouts and similar
transactions, and to engage in such other activities as the general partner
deems necessary and advisable. The principal business of JLL Associates V and
of JLL Associates G.P. is to act as the general partner, and be responsible
for the business and affairs, of JLL Fund V and JLL Associates V,
respectively. The principal business of Mr. Levy is acting as the sole member
of JLL Associates G.P. and serving in similar capacities with certain
affiliates of JLL Fund V. The principal business of Warburg Pincus Fund IX is
that of making private equity and related investments. The principal business
of WP is acting as the Managing Member of WPP LLC. The principal business of
WPP LLC is acting as general partner to certain private equity funds and as
the sole member of WP IX LLC. The principal business of WP IX LLC is acting as
general partner of Warburg Pincus Fund IX. The principal business of WP LLC is
managing certain private equity funds, including Warburg Pincus Fund IX. The
principal business of each Mr. Kaye and Mr. Landy is acting as a Managing
General Partner of WP and Co-President and Managing Member of WP LLC.
(d) During the last five years, none of the Reporting Persons, nor, to the
best of their knowledge, any of the directors, executive officers, control
persons, general partners or members referred to in paragraph (a) above has
been convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors).
(e) During the last five years, none of the Reporting Persons, nor, to the
best of their knowledge, any of the directors, executive officers, control
persons, general partners or members referred to in paragraphs (a) and (d)
above has been a party to a civil proceeding of a judicial or administrative
body of competent jurisdiction and as a result of such proceedings was or is
subject to a judgment, decree, or final order enjoining future violations of,
or prohibiting or mandating activity subject to, federal or state securities
laws or finding any violations with respect to such laws.
(f) JLL Fund V, JLL Associates V, and Warburg Pincus Fund IX are each limited
partnerships organized under the laws of the State of Delaware. Building
Products LLC and JLL Associates G.P. are each limited liability companies
organized under the laws of the State of Delaware. WP IX LLC, WPP LLC and WP
LLC are each limited liability companies organized under the laws of the State
of New York. WP is a general partnership organized under the laws of the State
of New York. Messrs. Levy, Kaye and Landy are citizens of the United States of
America.
Item 3. Source and Amount of Funds or Other Consideration
JLL Partners Fund II, L.P. ("JLL Fund II"), and JLL Partners Fund III,
L.P. ("JLL Fund III"), through Building Products LLC, formed the Company on
March 4, 1998, as BSL Holdings, Inc. Before the Company's initial public
offering of shares of its Common Stock on June 22, 2005, Building Products LLC
owned of record 94.6% of the Company's outstanding Common Stock. Building
Products LLC, through JLL Fund II and JLL Fund III, obtained the funds used to
acquire these shares from capital contributions from the partners of JLL Fund
II and JLL Fund III. As of the date of this Schedule 13D, Building Products
LLC is the record owner of 17,305,103 shares of the Company's Common Stock.
On February 27, 2006, JLL Fund V and Warburg Pincus Fund IX acquired
Building Products LLC for an aggregate purchase price of $398,017,369 from the
members thereof by means of the purchase by each of JLL Fund V and Warburg
Pincus Fund IX of 50% of the outstanding Building Products LLC membership
interests (the "Transaction") pursuant to that certain Securities Purchase
Agreement by and among JLL Fund V, Warburg Pincus Fund IX, Building Products
LLC, and the members of Building Products LLC, dated February 2, 2006 (the
"Securities Purchase Agreement"). A copy of the Securities Purchase Agreement
is attached as Exhibit 2 to this Schedule 13D and is incorporated herein by
reference. JLL Fund V and Warburg Pincus Fund IX each obtained the funds used
to acquire these membership interests from capital contributions from their
respective partners.
Item 4. Purpose of Transaction
The purchases by JLL Fund V and Warburg Pincus Fund IX of the membership
interests pursuant to the Securities Purchase Agreement were effected because
of the belief the Company represents an attractive investment based on the
Company's business prospects and strategy. Building Products LLC holds, and
the JLL Reporting Persons and the Warburg Pincus Reporting Persons
beneficially own, the shares of the Company's Common Stock as an investment.
The Reporting Persons may from time to time purchase additional shares of the
Company's Common Stock in the open market or in private transactions. The
timing and amount of any such purchases will depend on market conditions,
business conditions affecting the Company, and other factors. The Reporting
Persons also reserve the right to reduce their interest in the Company from
time to time by open market or private sales of the Company's Common Stock.
(a) As of the date of this Schedule 13D, there are no current plans or
proposals of the Reporting Persons that relate to or would result in the
acquisition by any person of additional securities of the Company, or the
disposition of securities of the Company, provided, however, that each of the
Reporting Persons reserves the right to (i) acquire or dispose of securities
of the Company in the future and (ii) develop such plans or proposals in the
future, in each case, to the extent that such Reporting Person deems any such
acquisition, disposition, plan, or proposal to be appropriate.
(b) As of the date of this Schedule 13D, there are no current plans or
proposals of the Reporting Persons that relate to or would result in an
extraordinary corporate transaction, such as a merger, reorganization, or
liquidation, involving the Company or any of its subsidiaries.
(c) As of the date of this Schedule 13D, there are no current plans or
proposals of the Reporting Persons that relate to or would result in a sale or
transfer of a material amount of assets of the Company or any of its
subsidiaries.
(d) As of the date of this Schedule 13D, there are no current plans or
proposals of the Reporting Persons that relate to or would result in any
change in the present board of directors or management of the Company,
including any plans or proposals to change the number of term of directors or
to fill any existing vacancies on the Board of Directors of the Company,
except that, effective upon the consummation of the Transaction, (i) Alexander
R. Castaldi resigned from the Board of Directors of the Company and as
Chairman of the Audit Committee, (ii) Floyd Sherman resigned as a Class III
director and was elected to serve as a Class II director, (iii) the size of
the Board of Directors of the Company was increased to nine members, (iv)
David Barr, Kevin Kruse, and Michael Graff were appointed to fill the
vacancies created thereby and (v) Brett N. Milgrim was appointed to the Audit
Committee and Robert C. Griffin was appointed Chairman of the Audit Committee.
(e) As of the date of this Schedule 13D, there are no current plans or
proposals of the Reporting Persons that relate to or would result in any
material change in the present capitalization or dividend policy of the
Company.
(f) As of the date of this Schedule 13D, there are no current plans or
proposals of the Reporting Persons that relate to or would result in any other
material change in the Company's business or corporate structure.
(g) As of the date of this Schedule 13D, there are no current plans or
proposals of the Reporting Persons that relate to or would result in changes
in the Company's charter, by-laws, or instruments corresponding thereto, or
other actions that may impede the acquisition of control of the Company by any
person.
(h) As of the date of this Schedule 13D, there are no current plans or
proposals of the Reporting Persons that relate to or would result in causing a
class of securities of the Company to be delisted from a national securities
exchange or to cease to be authorized to be quoted in an inter-dealer
quotation system of a registered national securities association.
(i) As of the date of this Schedule 13D, there are no current plans or
proposals of the Reporting Persons that relate to or would result in a class
of equity securities of the Company becoming eligible for termination of
registration pursuant to Section 12(g)(4) of the Securities Exchange Act.
(j) As of the date of this Schedule 13D, there are no current plans or
proposals of the Reporting Persons that relate to or would result in any
action similar to any of those enumerated above.
Item 5. Interest in Securities of the Issuer(1)
(a) (i) Building Products LLC is the direct record owner of 17,305,103
shares of the Company's Common Stock, which represents 52.8% of the
outstanding shares of the Company's Common Stock, although Building Products
LLC may no longer be deemed to be the beneficial owner of these shares by
virtue of the terms of the Amended and Restated Limited Liability Company
Agreement of Building Products LLC (the "Amended and Restated LLC Agreement")
adopted in connection with the Transaction.
________________________________
(1) Calculation of beneficial ownership is based on 32,759,581
outstanding shares of the Company's Common Stock as of October 31,
2005 as reported in the Company's Form 10-Q for the quarter ended
September 30, 2005, filed on November 2, 2005.
(ii) By virtue of its position as a member of Building Products LLC
and pursuant to the Amended and Restated LLC Agreement, JLL Fund V may be
deemed to be the beneficial owner of 8,652,551.5 shares of the Company's
Common Stock, which represents 26.4% of the outstanding shares of the
Company's Common Stock.
(iii) By virtue of its position as the general partner of JLL Fund
V, JLL Associates V may be deemed to be the beneficial owner of 8,652,551.5
shares of the Company's Common Stock, which represents 26.4% of the
outstanding shares of the Company's Common Stock.
(iv) By virtue of its position as the general partner of JLL
Associates V, JLL Associates G.P. may be deemed to be the beneficial owner of
8,652,551.5 shares of the Company's Common Stock, which represents 26.4% of
the outstanding shares of the Company's Common Stock.
(v) By virtue of his position as the sole managing member of JLL
Associates G.P., Mr. Levy may be deemed to be the beneficial owner of
8,652,551.5 shares of the Company's Common Stock, which represents 26.4% of
the outstanding shares of the Company's Common Stock.
(vi) By virtue of its position as a member of Building Products LLC
and pursuant to the Amended and Restated LLC Agreement, Warburg Pincus Fund IX
may be deemed to be the beneficial owner of 8,652,551.5 shares of the
Company's Common Stock, which represents 26.4% of the outstanding shares of
the Company's Common Stock.
(vii) Due to their respective relationships with Warburg Pincus Fund
IX and each other, the Warburg Pincus Reporting Persons may be deemed to
beneficially own, in aggregate, 8,652,551.5 shares of the Company's Common
Stock, which represents 26.4% of the outstanding shares of the Company's
Common Stock.
Each of WP, WPP LLC, WP LLC, Mr. Kaye and Mr. Landy disclaim beneficial
ownership of the Common Stock. Each of the JLL Reporting Persons disclaims
beneficial ownership of shares of the Company's Common Stock reported herein
as beneficially owned by the Warburg Pincus Reporting Persons and each of the
Warburg Pincus Reporting Persons disclaims beneficial ownership of shares of
the Company's Common Stock reported herein as beneficially owned by the JLL
Reporting Persons.
(b) Building Products LLC has no power to vote or dispose of shares of
the Company's Common Stock. Each of the JLL Reporting Persons shares with JLL
Fund V the power to vote or direct the vote and to dispose or direct the
disposition of 8,652,551.5 shares of the Company's Common Stock. Each of the
Warburg Pincus Reporting Persons shares with Warburg Pincus Fund IX the power
to vote or to direct the vote and to dispose or to direct the disposition of
8,652,551.5 shares of the Company's Common Stock.
(c) Other than the Transaction described in Items 3 and 4, no other
transactions in shares of the Company's Common Stock were effected by the
Reporting Persons during the sixty days before the date of this Schedule 13D.
(d) Not applicable.
(e) On February 27, 2006, as a result of the Transaction, Building
Products LLC ceased to be the beneficial owner of more than 5% of the
Company's Common Stock.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer
The responses to Item 2, Item 3, and Item 4 are incorporated herein by
reference. Pursuant to the Securities Purchase Agreement, JLL Fund V and
Warburg Pincus Fund IX each acquired 50% of the outstanding limited liability
company interests of Building Products LLC from the members thereof. In
connection with the Transaction, Building Products LLC has adopted the Amended
and Restated LLC Agreement.
The Amended and Restated LLC Agreement provides, among other things, that
50% of the securities of the Company held of record by Building Products LLC
are deemed to be owned by each of JLL Fund V and Warburg Pincus Fund IX. Each
of JLL Fund V and Warburg Pincus Fund IX will direct the voting of the
securities of the Company beneficially owned by it as it sees fit, without any
agreement, arrangement, or understanding between them regarding the voting of
the subject securities of the Company. In furtherance thereof, Building
Products LLC agreed to deliver to each of JLL Fund V and Warburg Pincus Fund
IX an irrevocable proxy, coupled with an interest, to vote on all matters
submitted to stockholders of the Company, such number of shares of Company
Common Stock as is equal to the total number of shares of Company Common Stock
held by Building Products LLC, multiplied by each of the members' respective
percentage ownership interest in Building Products LLC. Building Products LLC
may not transfer shares of the Company's Common Stock that are beneficially
owned by either JLL Fund V and Warburg Pincus Fund IX for a period of two
years after the date of the Amended and Restated LLC Agreement, unless
otherwise agreed by the members of Building Products LLC. Neither JLL Fund V
nor Warburg Pincus Fund IX, however, may direct the disposition of the shares
of the other party. Once the two-year restricted period has elapsed, each
party may transfer and cause Building Products LLC to transfer the shares of
the Company's Common Stock that it beneficially owns, subject to certain
volume limitations and other provisions.
Furthermore, under the terms of the Amended and Restated LLC Agreement,
Building Products LLC will use its commercially reasonable efforts to cause
the Board of Directors of the Company to include designees of each of JLL Fund
V and Warburg Pincus Fund IX, and each of JLL Fund V and Warburg Pincus Fund
IX will select such designees as it deems appropriate, without any agreement,
arrangement, or understanding between them to work collectively to achieve the
appointment of the parties' designees to the Company's Board of Directors. A
copy of the Amended and Restated LLC Agreement is attached as Exhibit 3 to
this Schedule 13D and is incorporated herein by reference.
In addition, Building Products LLC is a party to that certain Second
Amended and Restated Stockholders Agreement among JLL Building Products, LLC,
Builders FirstSource, Inc., Floyd F. Sherman, Charles L. Horn, Kevin P.
O'Meara, and Donald F. McAleenan, dated as of June 2, 2005 (the "Stockholders
Agreement"), which grants Building Products LLC certain registration rights,
among other matters. The registration rights afforded to Building Products LLC
can be exercised indirectly by JLL Fund V and Warburg Pincus Fund IX. While
other members of Building Products LLC have the right to participate in any
demand registration, subject to the two-year restriction on transfers of the
Company's Common Stock described above, no member has the right to cause
another to register its shares for resale, and no other member can prevent a
party from causing a registration of its shares at the time, and in the
manner, selected by the selling member. The Stockholders Agreement was filed
as Exhibit 4.1 to the Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 2005, filed with the Securities and Exchange Commission on
August 4, 2005 (File Number 0-51357) and is incorporated herein by reference.
Except as otherwise set forth in this Schedule 13D, none of the Reporting
Persons has any contracts, arrangements, understandings, or relationships
(legal or otherwise) with each other or with any person with respect to any
securities of the Company, including, but not limited to, the transfer of any
of the shares of the Company's Common Stock owned by Building Products LLC,
finder's fees, joint ventures, loan or option arrangements, puts or calls,
guarantees of profits, divisions of profits or loss, or the giving or
withholding of proxies.
Item 7. Material to Be Filed as Exhibits
Exhibit 1 Joint Filing Agreement
Exhibit 2 Securities Purchase Agreement by and among JLL Partners Fund V,
L.P., Warburg Pincus Private Equity IX, L.P., JLL Building Products,
LLC, and the members of JLL Building Products, LLC, dated February
2, 2006
Exhibit 3 Amended and Restated Limited Liability Agreement of Building
Products, LLC, dated February 27, 2006
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: February 28, 2006
BUILDING PRODUCTS, LLC
/s/ Paul S. Levy
-----------------------------------
Paul S. Levy, Manager
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: February 28, 2006
JLL PARTNERS FUND V, L.P.
By its General Partner, JLL Associates V, L.P.
By its General Partner, JLL Associates G.P. V,
L.L.C.
/s/ Paul S. Levy
--------------------------------------------
Paul S. Levy, as Managing Member of JLL
Associates G.P. V, L.L.C.
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: February 28, 2006
JLL ASSOCIATES V, L.P.
By its General Partner, JLL Associates G.P. V,
L.L.C.
/s/ Paul S. Levy
-----------------------------------------------
Paul S. Levy, as Managing Member of JLL
Associates G.P. V, L.L.C.
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: February 28, 2006
JLL ASSOCIATES G.P. V, L.L.C.
/s/ Paul S. Levy
-----------------------------------
Paul S. Levy, as Managing Member
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: February 28, 2006
/s/ Paul S. Levy
----------------------------
Paul S. Levy
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: February 28, 2006
WARBURG PINCUS PRIVATE EQUITY IX, L.P.
By its General Partner, Warburg Pincus IX, LLC
By its Sole Member, Warburg Pincus Partners, LLC
By its Managing Member, Warburg Pincus & Co.
/s/ Scott A. Arenare
---------------------------------------------
Scott A. Arenare
Partner
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: February 28, 2006
WARBURG PINCUS IX, LLC
By its Sole Member, Warburg Pincus Partners, LLC
By its Managing Member, Warburg Pincus & Co.
/s/ Scott A. Arenare
------------------------------------------
Scott A. Arenare
Partner
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
Dated: February 28, 2006
WARBURG PINCUS PARTNERS, LLC
By its Managing Member, Warburg Pincus & Co.
/s/ Scott A. Arenare
-------------------------------------
Scott A. Arenare
Partner
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
Dated: February 28, 2006
WARBURG PINCUS LLC
/s/ Scott A. Arenare
------------------------------
Scott A. Arenare
Managing Director
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
Dated: February 28, 2006
WARBURG PINCUS & CO.
/s/ Scott A. Arenare
---------------------------
Scott A. Arenare
Partner
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
Dated: February 28, 2006
/s/ Scott A. Arenare
-----------------------------
Charles R. Kaye
By: Scott A. Arenare
Attorney-in-Fact
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
Dated: February 28, 2006
/s/ Scott A. Arenare
----------------------------
Joseph P. Landy
By: Scott A. Arenare
Attorney-in-Fact
EXHIBIT 1
---------
JOINT FILING AGREEMENT
In accordance with rule 13d-1(k)(1) of the Securities Exchange Act of
1934, as amended, each of the undersigned hereby agrees to the joint filing of
the Schedule 13D to which this agreement is attached and to the joint filing
of all amendments thereto. Notwithstanding the foregoing, each of the JLL
Reporting Persons and the Warburg Pincus Reporting Persons disclaims
beneficial ownership of shares of the Company's Common Stock beneficially
owned by the other Reporting Persons.
This agreement may be executed in one or more counterparts, each of
which shall be considered an original counterpart, and shall become a binding
agreement when each of the parties designated as signatories has executed one
counterpart.
Dated: February 28, 2006
BUILDING PRODUCTS, LLC
/s/ Paul S. Levy
-------------------------------
Paul S. Levy, Manager
JLL PARTNERS FUND V, L.P.
By its General Partner, JLL Associates V, L.P.
By its General Partner,
JLL Associates G.P. V, L.L.C.
/s/ Paul S. Levy
-------------------------------------------
Paul S. Levy, as Managing Member of JLL
Associates G.P. V, L.L.C.
JLL ASSOCIATES V, L.P.
By its General Partner,
JLL Associates G.P. V, L.L.C.
/s/ Paul S. Levy
-----------------------------------------
Paul S. Levy, as Managing Member of JLL
Associates G.P. V, L.L.C.
JLL ASSOCIATES G.P. V, L.L.C.
/s/ Paul S. Levy
---------------------------------
Paul S. Levy, as Managing Member
/s/ Paul S. Levy
-----------------------------------
Paul S. Levy
WARBURG PINCUS PRIVATE EQUITY IX, L.P.
By its General Partner, Warburg Pincus IX, LLC
By its Sole Member, Warburg Pincus Partners, LLC
By its Managing Member, Warburg Pincus & Co.
/s/ Scott A. Arenare
------------------------------------------
Scott A. Arenare
Partner
WARBURG PINCUS IX, LLC
By its Sole Member, Warburg Pincus Partners, LLC
By its Managing Member, Warburg Pincus & Co.
/s/ Scott A. Arenare
--------------------------------------------
Scott A. Arenare
Partner
WARBURG PINCUS PARTNERS, LLC
By its Managing Member, Warburg Pincus & Co.
/s/ Scott A. Arenare
--------------------------------------
Scott A. Arenare
Partner
WARBURG PINCUS LLC
/s/ Scott A. Arenare
----------------------------------------
Scott A. Arenare
Managing Director
WARBURG PINCUS & CO.
/s/ Scott A. Arenare
---------------------------------
Scott A. Arenare
Partner
/s/ Scott A. Arenare
---------------------------------
Charles R. Kaye
By: Scott A. Arenare
Attorney-in-Fact
/s/ Scott A. Arenare
---------------------------------
Joseph P. Landy
By: Scott A. Arenare
Attorney-in-Fact
EXHIBIT 2
---------
-------------------------------------------------------------------------------
SECURITIES PURCHASE AGREEMENT
BY AND AMONG
JLL PARTNERS FUND V, L.P.,
WARBURG PINCUS PRIVATE EQUITY IX, L.P,
JLL BUILDING PRODUCTS, LLC
and
THE MEMBERS OF JLL BUILDING PRODUCTS, LLC
Dated as of
February 2, 2006
-------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS AND TERMS................................................1
Section 1.1 Certain Definitions.................................1
Section 1.2 Other Terms.........................................5
Section 1.3 Other Definitional Provisions.......................5
ARTICLE II PURCHASE AND SALE OF INTERESTS......................................6
Section 2.1 Purchase and Sale of the Interests..................6
Section 2.2 Conveyance..........................................6
Section 2.3 Consideration.......................................6
ARTICLE III CLOSING............................................................6
Section 3.1 Closing.............................................6
Section 3.2 Deliveries by the Sellers and the Company...........6
Section 3.3 Deliveries by the Purchasers........................7
Section 3.4 Simultaneous Transactions...........................7
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE SELLERS AND THE COMPANY.......7
Section 4.1 Authority; Binding Effect...........................8
Section 4.2 Title to Interests..................................8
Section 4.3 No Violation; Consents and Approvals................8
Section 4.4 Absence of Litigation...............................9
Section 4.5 Operations of the Company...........................9
Section 4.6 Brokers.............................................9
Section 4.7 Title to BFS Shares.................................9
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE COMPANY REGARDING BFS..........9
Section 5.1 Organization........................................9
Section 5.2 Capitalization......................................9
Section 5.3 Subsidiaries.......................................10
Section 5.4 Consent and Approvals; No Violation................10
Section 5.5 SEC Documents and Financial Statements.............11
Section 5.6 No Undisclosed Liabilities.........................11
Section 5.7 Absence of Changes.................................12
Section 5.8 Absence of Litigation..............................12
Section 5.9 Taxes..............................................12
Section 5.10 Employee Benefit Plans.............................12
Section 5.11 Compliance with Applicable Laws....................13
Section 5.12 Material Contracts.................................13
Section 5.13 Environmental Laws.................................14
Section 5.14 Brokers............................................14
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF PURCHASERS.......................14
Section 6.1 Organization.......................................14
Section 6.2 Authority; Binding Effect..........................14
Section 6.3 No Violation; Consents and Approvals...............15
Section 6.4 Acquisition of Interests for Investment............15
Section 6.5 Absence of Litigation................................
Section 6.6 Brokers............................................15
ARTICLE VII COVENANTS.........................................................16
Section 7.1 Conduct of Business................................16
Section 7.2 Reasonable Best Efforts............................17
Section 7.3 Consents...........................................17
Section 7.4 Antitrust Notification.............................17
Section 7.5 Further Assurances.................................18
Section 7.6 Access to Information; Confidentiality...............
Section 7.7 Notification of Certain Matters....................18
Section 7.8 Supplements to Disclosure Schedule.................18
Section 7.9 Access to Books and Records Following the Closing....
Section 7.10 Resignations.......................................19
Section 7.11 Section 754 Election...............................19
Section 7.12 Amended and Restated Company LLC Agreement.........19
Section 7.13 Confidentiality Agreement..........................19
ARTICLE VIII CONDITIONS TO CLOSING............................................20
Section 8.1 Mutual Conditions to the Obligations of the
Parties................................... ........20
Section 8.2 Conditions to the Obligations of the Purchasers....20
Section 8.3 Conditions to the Obligations of the Sellers
and the Company....................................21
ARTICLE IX TERMINATION; SURVIVAL..............................................22
Section 9.1 Termination; Survival..............................22
Section 9.2 Effect of Termination..............................22
Section 9.3 Survival...........................................23
ARTICLE X MISCELLANEOUS.......................................................23
Section 10.1 Notices............................................23
Section 10.2 Amendment; Waiver..................................24
Section 10.3 Assignment.........................................24
Section 10.4 Entire Agreement...................................24
Section 10.5 Fulfillment of Obligations.........................24
Section 10.6 Parties in Interest................................24
Section 10.7 Expenses...........................................25
Section 10.8 Brokers............................................25
Section 10.9 Governing Law; Jurisdiction........................25
Section 10.10 Counterparts.......................................25
Section 10.11 Headings...........................................25
Section 10.12 Further Assurances.................................25
Section 10.13 Specific Performance...............................25
Section 10.14 Knowledge..........................................26
SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated as of February 2,
2006, by and among JLL Partners Fund V, L.P., a Delaware limited partnership
("JLL Fund V"), Warburg Pincus Private Equity IX, L.P., a Delaware limited
partnership ("Warburg Fund" and, together with JLL Fund V, the "Purchasers"),
JLL Building Products, LLC, a Delaware limited liability company (the
"Company"), and each of the Members of the Company set forth on Schedule I to
this Agreement (collectively, the "Sellers").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Sellers are the record and beneficial owners of all of the
issued and outstanding limited liability company interests of the Company (the
"Interests"), and the Company is the record and beneficial owner of an
aggregate of 17,305,103 shares (the "BFS Shares") of common stock, par value
$.01 per share, of Builders FirstSource, Inc., a Delaware corporation ("BFS");
WHEREAS, the Purchasers desire to acquire from the Sellers, and the
Sellers desire to sell to the Purchasers, all of their right, title and
interest in and to the Interests (the "Securities Purchase"), on the terms and
subject to the conditions contained herein; and
WHEREAS, this Agreement and the transactions contemplated hereby have
been approved by all requisite action on the part of the Company, the Sellers
and the Purchasers.
NOW, THEREFORE, in consideration of the mutual covenants and undertakings
contained herein and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, and subject to and on the
terms and conditions herein set forth, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND TERMS
---------------------
Section 1.1 Certain Definitions. As used in this Agreement, the
following terms shall have the meanings set forth or as referenced below:
"Affiliate" shall mean, as to any Person, any other Person
which, directly or indirectly, is in control of, is controlled by, or is under
common control with, such Person. The term "control" (including, with
correlative meanings, the terms "controlled by" and "under common control
with"), as applied to any Person, means the possession, direct or indirect, of
the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities or other
ownership interest, by contract or otherwise.
"Agreement" shall mean this Agreement, as the same may be
amended or supplemented from time to time in accordance with the terms hereof.
"Amended and Restated LLC Agreement" shall have the meaning set forth in
Section 7.12 hereof.
"BFS" shall have the meaning set forth in the recitals hereto.
"BFS Common Stock" shall have the meaning set forth in Section 5.2(a)
hereof.
"BFS Material Contracts" shall mean each "material contract" (as such
term is defined in item 601(b)(10) of Regulation S-K of the SEC) to which BFS
or any its Subsidiaries is a party or by which the properties or assets of BFS
or such BFS Subsidiary are bound or subject as of the date hereof.
"BFS Preferred Stock" shall have the meaning set forth in Section 5.2(a)
hereof.
"BFS Shares" shall have the meaning set forth in the recitals hereto.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
day on which banks in the City of New York are authorized or obligated by Law
or executive order to close.
"Closing" shall mean the closing of the transactions contemplated by this
Agreement, as provided for in Section 3.1 hereof.
"Closing Date" shall have the meaning set forth in Section 3.1 hereof.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Company" shall have the meaning set forth in the recitals hereto.
"Confidentiality Agreement" shall mean the Confidentiality Agreement,
dated November 2005, between BFS and Warburg Pincus LLC, as amended from time
to time.
"Consents" shall have the meaning set forth in Section 5.4(a) hereof.
"Contract" shall mean any bond, note, mortgage, indenture, other evidence
of indebtedness, guarantee, license, agreement or other contract or
instrument.
"Environmental Claim" means any claim, action, cause of action,
investigation or written notice by any person or entity alleging potential
liability (including, without limitation, potential liability for
investigatory costs, cleanup costs, governmental response costs, natural
resources damages, property damages, personal injuries, or penalties) arising
out of, based on or resulting from the presence or Release of any Hazardous
Materials at any location owned or operated by BFS or any of its Subsidiaries.
"Environmental Laws" shall mean all federal, state, local and foreign
laws and regulations relating to pollution or protection of the environment,
including laws relating to Releases or threatened Releases of Hazardous
Materials or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous
Materials.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"ERISA Affiliate" shall mean any Person that, together with BFS, would be
deemed a "single employer" within the meaning of Section 4001(b) of ERISA.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
"Financial Statements" shall have the meaning set forth in Section
5.5(b).
"GAAP" shall mean United States generally accepted accounting principles
and practices in effect from time to time as consistently applied.
"Governmental Authority" shall have the meaning set forth in Section
5.4(a) hereof.
"Hazardous Materials" shall mean all substances defined as Hazardous
Substances, Oils, Pollutants or Contaminants in the National Oil and Hazardous
Substances Pollution Contingency Plan, 40 C.F.R. ss. 300.5, or defined as such
by, or regulated as such under, any Environmental Law.
"HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.
"Interests" shall have the meaning set forth in the recitals hereto.
"IRS" shall mean the Internal Revenue Service of the United States.
"Laws" shall mean any federal, state, local or foreign Law, statute,
ordinance, rule, regulation, order, judgment or decree, administrative order
or decree, administrative or judicial decision, and any other executive or
legislative proclamation.
"Liens" shall mean any lien, security interest, mortgage, pledge, charge
or similar encumbrance.
"Litigation" shall have the meaning set forth in Section 5.8 hereof.
"Material Adverse Effect" shall mean any change, event, effect or
occurrence materially adverse to the business, assets, properties, liabilities
or financial condition of BFS and its Subsidiaries, taken as a whole, but
shall not include changes, events, effects or occurrences (i) (A) generally
affecting the building products industry in the United States or (B) generally
affecting the economy or financial markets in the United States or in other
countries in which BFS or its Subsidiaries conduct business, including
regulatory and political developments and changes in Law or GAAP, or (ii)
resulting from any natural disaster, storm or other weather event, or any
engagement by the United States in hostilities, whether or not pursuant to the
declaration of a national emergency or war, or the occurrence of any act or
acts of terrorism; and provided that any reduction in the market price or
trading volume of the publicly traded common stock of BFS, in itself, shall
not be deemed to constitute a Material Adverse Effect hereunder.
"Multiemployer Plan" shall mean each Plan that is a "multiemployer plan"
within the meaning of Section 4001(a)(3) of ERISA.
"Options" shall have the meaning set forth in Section 5.2(a) hereof.
"Ownership Percentage" shall mean, with respect to each Seller, a
fraction, as set forth on Schedule I attached hereto, the numerator of which
is equal to the number Interests held by such Seller as of the Closing and the
denominator of which is equal to the total number of Interests issued and
outstanding as of the Closing.
"Permits" shall mean all licenses, franchises, ordinances,
authorizations, permits, certificates, variances, exemptions, concessions,
leases, rights of way, easements, instruments, orders and approvals, domestic
or foreign.
"Person" shall mean an individual, a corporation, a partnership, an
association, a trust or other entity or organization.
"Plan" or "Plans" shall mean, singularly or collectively, each material
employee benefit plan, program, arrangement or agreement, including each
"employee benefit plan" within the meaning of Section 3(3) of ERISA, in each
case, maintained by BFS or any of its Subsidiaries, or to which BFS or any of
its Subsidiaries contributes or is required to contribute.
"Purchasers" shall have the meaning set forth in the recitals hereto.
"Release" shall mean any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the indoor or outdoor environment (including ambient air, surface water,
groundwater and surface or subsurface strata), or into or out of any property,
including the movement of Hazardous Materials through or in the air, soil,
surface water, groundwater or property.
"Schedule" shall mean the disclosure schedule being delivered by the
Sellers and the Company to the Purchasers concurrently with the execution of
this Agreement.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Securities Purchase" shall have the meaning set forth in the recitals
hereto.
"Sellers" shall have the meaning set forth in the recitals hereto.
"Subsidiary" when used with respect to any party, means any corporation
or other entity, whether incorporated or unincorporated, of which such party
directly or indirectly owns or controls at least a majority of the securities
or other interests having by their terms ordinary voting power to elect a
majority of the board of directors or others performing similar functions with
respect to such corporation, limited partnership, limited liability company or
other entity, or any entity of which such party is a general partner or
managing member.
"Tax Return" shall mean any return, report, information return or other
document (including any related or supporting information) with respect to
Taxes.
"Taxes" shall mean all taxes, charges, fees, duties, levies, penalties or
other assessments imposed by any federal, state, local or foreign Governmental
Authority, including, but not limited to, income, gross receipts, excise,
property, sales, gain, use, license, capital stock, transfer, franchise,
payroll, withholding, social security, value added or other taxes, including
any interest, penalties or additions attributable thereto.
"Termination Date" shall have the meaning set forth in Section 9.1(b)
hereof.
"Updated Information" shall have the meaning set forth in Section 7.8
hereof.
Section 1.2. Other Terms. Other terms may be defined elsewhere in
the text of this Agreement and, unless otherwise indicated, shall have such
meaning throughout this Agreement.
Section 1.3. Other Definitional Provisions.
(a) The words "hereof", "herein", "hereto", "hereunder" and
"hereinafter" and words of similar import, when used in this Agreement, shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement.
(b) The terms defined in the singular shall have a comparable
meaning when used in the plural, and vice versa.
(c) The term "dollars" and character "$" shall mean United States
dollars.
(d) The word "including" shall mean including, without limitation,
and the words "include" and "includes" shall have corresponding meanings.
ARTICLE II
PURCHASE AND SALE OF INTERESTS
Section 2.1 Purchase and Sale of the Interests. Upon the terms and
subject to the conditions of this Agreement, at the Closing, the Sellers shall
sell, convey, assign, transfer and deliver to the Purchasers, and the
Purchasers shall purchase, acquire and accept from the Sellers, all right,
title and interest in and to the Interests, free and clear of any and all
Liens.
Section 2.2 Conveyance. Such sale, conveyance, assignment, transfer and
delivery shall be effected by delivery by each Seller to each Purchaser of
duly executed instruments of assignment with respect to 50% of the Interests
held by such Seller, free and clear of any and all Liens.
Section 2.3 Consideration. Upon the terms and subject to the conditions
of this Agreement, in consideration of such sale, conveyance, assignment,
transfer and delivery of the Interests by the Sellers, each Purchaser shall
pay or cause to be paid to the Sellers, an aggregate amount equal to 50% of
the Aggregate Purchase Price (as defined below), with each Seller being
entitled to receive an aggregate amount of consideration for the sale of such
Seller's Interests equal to (x) the Aggregate Purchase Price multiplied by (y)
such Seller's Ownership Percentage. The aggregate purchase price to be paid by
Purchasers in respect of the Securities Purchase shall be an amount in cash
equal to $398,017,369 (the "Aggregate Purchase Price").
ARTICLE III
CLOSING
Section 3.1 Closing. The closing of the Securities Purchase (the
"Closing") shall take place at the offices of Skadden, Arps, Slate, Meagher &
Flom LLP, Four Times Square, New York, NY, at 10:00 a.m. (local time), on the
second Business Day following the satisfaction or, to the extent permitted by
applicable Law, waiver of the conditions precedent specified in Article VIII,
or at such other time and place as the parties hereto may mutually agree. The
date on which the Closing occurs is referred to herein as the "Closing Date."
Section 3.2 Deliveries by the Sellers and the Company. At the Closing,
the Sellers and the Company, as applicable, shall deliver or cause to be
delivered to Purchasers the following:
(a) each Seller shall deliver to each Purchaser a duly executed
instrument of assignment with respect to 50% of the Interests held by such
Seller; and
(b) the letter of resignation of each manager of the Company listed
on Schedule 7.10 hereto, duly executed by such manager; and
(c) the officer's certificate contemplated by Section 8.2(c) hereof,
executed by a duly authorized officer of the Company and each of the Sellers;
and
(d) each Seller or the Company, as applicable, shall deliver to
Purchasers all other documents, certificates, instruments or writings required
to be delivered by such Seller or the Company at or prior to the Closing
pursuant to this Agreement or otherwise reasonably required in connection
herewith.
Section 3.3 Deliveries by the Purchasers. At the Closing, the Purchasers
shall deliver or cause to be delivered to the Sellers the following:
(a) each Purchaser shall deliver to each Seller by wire transfer of
federal or other immediately available funds to the account designated by such
Seller at least two (2) Business Days prior to the Closing Date an amount
equal to (x) 50% of the Aggregate Purchase Price multiplied by (y) such
Seller's Ownership Percentage; and
(b) the Amended and Restated LLC Agreement, executed by a duly
authorized officer of each of the Purchasers; and
(c) the officer's certificate contemplated by Section 8.3(c) hereof,
executed by a duly authorized officer of each of the Purchasers; and
(d) each Purchaser shall deliver to the Sellers all other documents,
certificates, instruments or writings reasonably required to be delivered by
such Purchaser at or prior to the Closing pursuant to this Agreement or
otherwise required in connection herewith.
Section 3.4 Simultaneous Transactions. All of the transactions
contemplated by this Agreement shall be deemed to occur simultaneously, and no
such transaction shall be deemed to have been consummated until all such
transactions have been consummated.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
THE SELLERS AND THE COMPANY
Each of the Sellers and the Company, severally and not jointly, hereby
represents and warrants to the Purchasers, solely to the extent that any of
the following representations and warranties is applicable to such Seller or
the Company, as follows:
Section 4.1 Authority; Binding Effect. Such Seller or the Company, as the
case may be, has the requisite power, capacity and authority to execute and
deliver this Agreement, to perform its obligations hereunder and to consummate
the transactions contemplated hereby. The execution, delivery and performance
of this Agreement, and the consummation of the transactions contemplated
hereby, have been duly authorized by all necessary limited partnership or
other action on the part of such Seller and all necessary limited liability
company action on the part of the Company, as applicable, and no other action
on the part of such Seller or the Company is required to authorize the
execution, delivery and performance hereof, and the consummation of the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by such Seller or the Company, as the case may be, and constitutes
the valid and binding obligation of such Seller or the Company, enforceable
against such Seller or the Company in accordance with its terms, except that
such enforcement may be subject to any bankruptcy, insolvency, reorganization,
moratorium or other laws now or hereafter in effect relating to or limiting
creditors' rights generally and the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceedings
therefor may be brought.
Section 4.2 Title to Interests. Such Seller has good and valid title to
all of the Interests reflected as owned by it on Schedule I hereto, free and
clear of all Liens.
Section 4.3 No Violation; Consents and Approvals.
(a) The execution and delivery of this Agreement by such Seller or
the Company, as the case may be, and the consummation by such Seller or the
Company of the transactions contemplated hereby will not (i) conflict with or
violate the Certificate of Limited Partnership or the limited partnership
agreement or similar organizational documents of such Seller if such Seller is
not an individual or the Certificate of Formation or limited liability company
agreement of the Company, in each case, as currently in effect, (ii) conflict
with or violate any Laws applicable to such Seller or the Company or by which
its properties or assets are bound or are subject, or (iii) result in any
material breach of, or constitute a material default (or an event that with
notice or lapse of time, or both, would constitute a material default) under,
or give to others any right of termination, amendment, acceleration or
cancellation of, or require payments under, or result in the creation of a
Lien on any of the properties or assets of such Seller or the Company under,
any material Contract to which such Seller or the Company, as applicable, is a
party or by which its properties or assets are bound or subject.
(b) The execution and delivery of this Agreement by such Seller or
the Company, as the case may be, do not, and the performance by such Seller or
the Company of this Agreement and the consummation of the transactions
contemplated hereby will not, require such Seller or the Company, as
applicable, to obtain any Consents from any Governmental Authority, or any
third party, except for applicable requirements of the HSR Act.
Section 4.4 Absence of Litigation. No Litigation pending or, to the
knowledge of such Seller or the Company, as applicable, threatened against
such Seller or the Company, if adversely determined, nor any judgment, order
or decree of any Governmental Authority to which such Seller or the Company is
a party or subject to, would materially impair such Seller's or the Company's
ability to perform its obligations hereunder or to consummate the transactions
contemplated hereby.
Section 4.5 Operations of the Company. The Company was formed for the
purpose of holding the Sellers' investment in BFS, has not engaged in any
trade or business and has no assets other than the BFS Shares and no
liabilities other than those specifically relating to the Company's ownership
of the BFS Shares, if any.
Section 4.6 Brokers. Neither the Company nor any of the Sellers nor any
of their respective Affiliates has entered into any agreement or arrangement
entitling any agent, broker, investment banker, financial advisor or other
firm or Person to any brokers' or finders' fee or any other commission or
similar fee in connection with any of the transactions contemplated by this
Agreement.
Section 4.7 Title to BFS Shares. The Sellers, severally and not jointly,
represent and warrant to the Purchasers that the Company has good and valid
title to the BFS Shares, free and clear of all Liens.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY REGARDING BFS
The Company hereby represents and warrants to the Purchasers as follows
except as set forth in the BFS SEC Reports:
Section 5.1 Organization. BFS and each of its Subsidiaries is a
corporation or other entity duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
organization and has all requisite corporate or other power and authority to
own, lease and operate its properties and to carry on its business as it is
now being conducted. BFS and each of its Subsidiaries is duly qualified or
licensed and in good standing to do business in each jurisdiction in which the
property owned, leased or operated by it or the nature of the business
conducted by it makes such qualification or licensing necessary where the
failure to be so duly qualified or licensed or in good standing would,
individually or in the aggregate, result in a Material Adverse Effect.
Section 5.2 Capitalization.
(a) The authorized capital stock of BFS consists of 200,000,000
shares of common stock, par value $.01 per share, of BFS ("BFS Common Stock")
and 10,000,000 shares of preferred stock, par value $.01 per share, of BFS
("BFS Preferred Stock"). As of January 31, 2006, there were (i) 33,023,062
shares of BFS Common Stock issued and outstanding, (ii) no shares of BFS
Common Stock held in BFS's treasury, (iii) 4,224,347 shares of BFS Common
Stock reserved for issuance upon the exercise of outstanding Options to
acquire shares of BFS Common Stock ("Options"), and (iv) no shares of BFS
Preferred Stock issued. All issued and outstanding shares of BFS Common Stock
are, and all shares of BFS Common Stock issuable upon exercise of Options
shall be, when issued in accordance with the respective terms thereof, duly
authorized and validly issued, fully paid and nonassessable.
(b) Except as set forth in subsection (a) above, BFS does not have
any shares of its capital stock issued or outstanding and there are no
outstanding subscriptions, options, warrants, calls, convertible securities,
rights or other agreements or commitments (i) to which BFS or any of its
Subsidiaries is a party of any character relating to the issued or unissued
capital stock or other equity interests of BFS or any of its Subsidiaries, or
(ii) obligating BFS or any Subsidiary of BFS to (A) issue, transfer or sell
any shares of capital stock or other equity interests of BFS or any Subsidiary
of BFS or securities convertible into or exchangeable for such shares or
equity interests, (B) grant, extend or enter into any such subscription,
option, warrant, call, convertible securities or other right, agreement,
arrangement or commitment to repurchase, (C) redeem or otherwise acquire any
such shares of capital stock or other equity interests or (D) provide a
material amount of funds to, or make any material investment (in the form of a
loan, capital contribution or otherwise) in, any Person.
(c) Neither BFS nor any of its Subsidiaries has outstanding bonds,
debentures, notes or other obligations, the holders of which have the right to
vote (or which are convertible into or exercisable for securities having the
right to vote) with the stockholders of BFS or such Subsidiary on any matter.
Section 5.3 Subsidiaries.
(a) All outstanding equity securities or other equity interests in
each Subsidiary of BFS (i) are owned of record and beneficially by BFS or
another of BFS's wholly owned Subsidiaries, free of all liens, claims, charges
or encumbrances, and (ii) have been duly authorized, and are validly issued,
fully paid and nonassessable.
(b) Neither BFS nor any Subsidiary of BFS owns, directly or
indirectly, a material amount of any capital stock, interest or equity
investment or debt security in any corporation, partnership, limited liability
company, joint venture, business, trust or other entity other than interests
in another Subsidiary of BFS.
Section 5.4 Consent and Approvals; No Violation.
(a) Except for applicable requirements of (i) the Exchange Act and
(ii) the HSR Act, neither the execution and delivery of this Agreement by the
Company and the Sellers nor the consummation by the Sellers of the
transactions contemplated hereby will require BFS or any Subsidiary of BFS to
make any filing with, obtain any permit, authorization, consent or approval
of, or give any notice to ("Consents"), any court, tribunal, legislative,
executive or regulatory authority or agency (a "Governmental Authority"),
where the failure to so file or obtain would result in a Material Adverse
Effect.
(b) Neither the execution and delivery of this Agreement by the
Sellers nor the consummation by the Company and the Sellers of the
transactions contemplated hereby will (i) conflict with or violate the Amended
and Restated Certificate of Incorporation of BFS or the Amended and Restated
By-laws of BFS or the equivalent organizational documents of any Subsidiary of
BFS, (ii) conflict with or violate any Laws applicable to BFS or any
Subsidiary of BFS or by which the properties or assets of BFS or such BFS
Subsidiary are bound or are subject, or (iii) result in any breach of, or
constitute a default (or an event that with notice or lapse of time, or both,
would constitute a default) under, or give to others any right of termination,
amendment, acceleration or cancellation of, or require payments under, or
result in the creation of a Lien on any of the properties or assets of BFS or
any Subsidiary of BFS under, any Contract to which BFS or such Subsidiary of
BFS is a party or by which the properties or assets of BFS or such BFS
Subsidiary are bound or subject, where such conflicts, violations, breaches,
defaults or rights, in the case of clause (ii) or (iii), would result in a
Material Adverse Effect.
Section 5.5 SEC Documents and Financial Statements.
(a) BFS has filed all forms, reports and documents required to be
filed with the SEC pursuant to the Exchange Act since June 22, 2005
(collectively, the "BFS SEC Reports"). The BFS SEC Reports, as of their
respective filing dates, (i) did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, and (ii) complied in
all material respects with the then applicable requirements of the Exchange
Act and the Securities Act.
(b) The consolidated financial statements included in the BFS SEC
Reports (the "Financial Statements") fairly present, in all material respects,
the consolidated financial position of BFS and its consolidated Subsidiaries
as of the respective dates thereof, and the results of operations and the
changes in cash flows of BFS and its consolidated Subsidiaries for the
respective periods set forth therein. Each of the Financial Statements has
been prepared in all material respects in accordance with GAAP, except as
otherwise noted therein, and subject, in the case of interim financial
statements, to normal and recurring year-end audit adjustments.
Section 5.6 No Undisclosed Liabilities. Except as and to the extent
disclosed in Schedule 5.6 or reflected or reserved against in the Financial
Statements, and except for liabilities and obligations incurred in the
ordinary course of business, consistent with past practice since September 30,
2005, neither BFS nor any Subsidiary of BFS has any material liabilities or
obligations of any nature, whether or not accrued, contingent or otherwise,
that would be required by GAAP to be reflected on a consolidated balance sheet
of BFS and its Subsidiaries (or in the notes thereto).
Section 5.7 Absence of Changes. Except as contemplated by this Agreement
or set forth in Schedule 5.7, since September 30, 2005, (i) neither BFS nor
any Subsidiary of BFS has taken any action which, if taken after the date
hereof, would violate Section 7.1 hereof if taken without the approval of
Purchasers, and (ii) there has not occurred any change, event, effect or
occurrence which has resulted in, or would reasonably be expected to result
in, a Material Adverse Effect.
Section 5.8 Absence of Litigation. There is no action, suit, proceeding,
inquiry or investigation, at law or in equity, by or before any Governmental
Authority ("Litigation") pending or, to the knowledge of the Company,
threatened in writing against BFS or any of its Subsidiaries (i) which, as of
the date hereof, questions or challenges the validity of this Agreement or
seeks to restrain or prohibit consummation of the transactions contemplated
hereby or (ii) which, if adversely determined, would result in a Material
Adverse Effect.
Section 5.9 Taxes. Except as set forth in Schedule 5.9 or except as would
not result in a Material Adverse Effect:
(a) Each of BFS and its Subsidiaries has (i) duly and timely filed
(or there has been filed on their behalf) with the appropriate Governmental
Authorities all material Tax Returns required to be filed by it and all such
material Tax Returns are true, correct and complete; (ii) duly paid in full
(or there has been duly paid on its behalf) all Taxes shown on such Tax
Returns that are due and payable; and (iii) made adequate provision, in
accordance with GAAP (or adequate provision has been made on its behalf), for
the payment of all current Taxes not yet due.
(b) Each of BFS and its Subsidiaries has complied with all
applicable Laws relating to the payment and withholding of Taxes and has
withheld and paid over to the proper Governmental Authorities all amounts
required to be so withheld and paid over.
(c) No federal, state, local or foreign audits, examinations or
other administrative court proceedings have been commenced and are pending
with regard to any Taxes or Tax Returns of BFS or any of its Subsidiaries.
(d) Neither BFS nor any of its Subsidiaries is a party to any tax
sharing, tax indemnity or other agreement or arrangement.
(e) There are no Liens for Taxes upon the assets of BFS or any of
its Subsidiaries except Liens for Taxes not yet due and payable.
Section 5.10 Employee Benefit Plans.
(a) Except as disclosed in Schedule 5.10(a) or except as would not
result in a Material Adverse Effect: (i) each Plan is in compliance with
applicable Law and has been administered and operated in accordance with its
terms; (ii) each Plan which is intended to be "qualified" within the meaning
of Section 401(a) of the Code, has received a favorable determination letter
regarding its tax-qualified status from the IRS; (iii) the actuarial present
value of the accumulated plan benefits (whether or not vested) under each Plan
covered by Title IV of ERISA as of the close of its most recent plan year did
not exceed the fair value of the assets allocable thereto; (iv) no "reportable
event" (as defined in Section 4043 of ERISA) has occurred with respect to any
Plan covered by Title IV of ERISA; (v) no Plan subject to Section 412 of the
Code or Section 302 of ERISA nor any such employee benefit plan sponsored or
maintained by any ERISA Affiliate has incurred any accumulated funding
deficiency within the meaning of Section 412 of the Code or Section 302 of
ERISA, or obtained a waiver of any minimum funding standard or an extension of
any amortization period under Section 412 of the Code or Section 303 or 304 of
ERISA; (vi) neither BFS nor any Subsidiary of BFS has incurred any unsatisfied
withdrawal liability under Part 1 of Subtitle E of Title IV of ERISA to any
Multiemployer Plan; (vii) neither BFS nor any of its Subsidiaries nor, to the
knowledge of the Company, any other "disqualified person" or "party in
interest" (as defined in Section 4975(e)(2) of the Code and Section 3(14) of
ERISA, respectively) has engaged in any transactions in connection with any
Plan that would result in the imposition of a penalty pursuant to Section
502(i) of ERISA or a tax pursuant to Section 4975 of the Code; and (viii) no
liability under Title IV or Section 302 of ERISA has been incurred by BFS or
any ERISA Affiliate that has not been satisfied in full.
(b) Except as set forth in Schedule 5.10(b), the consummation of the
transactions contemplated hereby will not, either alone or in combination with
another event, (i) entitle any current or former employee or officer of BFS or
any of its Subsidiaries to severance pay, unemployment compensation or any
other payment or benefit, except as expressly provided in this Agreement, or
(ii) accelerate the time of payment or vesting, or increase the amount of
compensation due any such employee or officer.
Section 5.11 Compliance with Applicable Laws. Except as set forth in
Schedule 5.11, each of BFS and its Subsidiaries, and their respective
properties, assets and operations, are being operated in compliance with all
applicable Laws, except where the failure to be in such compliance would not
result in a Material Adverse Effect. Except as set forth in Schedule 5.11, BFS
and its Subsidiaries hold all Permits required for the ownership of the assets
and operation of the businesses of BFS and its Subsidiaries, the failure of
which to hold would result in a Material Adverse Effect.
Section 5.12 Material Contracts. Neither BFS nor any of its Subsidiaries
is in breach of or default under the terms of any BFS Material Contract, where
such breach or default would result in a Material Adverse Effect. Except as
would not result in a Material Adverse Effect, each BFS Material Contract is a
valid and binding obligation of BFS or the Subsidiary of BFS which is a party
thereto and, to the knowledge of the Company, of each other party thereto, and
is in full force and effect, except that such enforcement may be subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
Laws, now or hereafter in effect, relating to creditors' rights generally, and
equitable remedies of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
Section 5.13 Environmental Laws. Except as set forth on Schedule 5.13 or
as would not result in a Material Adverse Effect:
(a) BFS and each of its Subsidiaries is in compliance with all
applicable Environmental Laws, and BFS and its Subsidiaries possess all
Permits that are required under applicable Environmental Laws, and are in
compliance with the terms and conditions thereof;
(b) neither BFS nor any of its Subsidiaries has received written
notice of, or is the subject of, any pending Environmental Claims;
(c) there is no condition on, at or under any property (including
any release of a Hazardous Material into the air, soil, surface water,
sediment or ground water on, at or under such property), owned or leased by
BFS or any of its Subsidiaries that would give rise to liability for BFS or
any of its Subsidiaries under applicable Environmental Laws.
Section 5.14 Brokers. None of BFS or any of its Subsidiaries or
Affiliates has entered into any agreement or arrangement entitling any agent,
broker, investment banker, financial advisor or other firm or Person to any
brokers' or finders' fee or any other commission or similar fee in connection
with any of the transactions contemplated by this Agreement.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PURCHASERS
Each of the Purchasers, severally and not jointly, hereby represents and
warrants to the Sellers and the Company as follows:
Section 6.1 Organization. Such Purchaser is a limited partnership duly
formed, validly existing and in good standing under the laws of the State of
Delaware and has all requisite power and authority to own, lease and operate
all of its properties and assets and to conduct its business as it is now
being conducted.
Section 6.2 Authority; Binding Effect. Such Purchaser has all requisite
limited partnership power and authority to execute and deliver this Agreement,
to perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution, delivery and performance of this
Agreement, and the consummation of the transactions contemplated hereby have
been duly authorized by all necessary limited partnership action on the part
of such Purchaser, and no other limited partnership action on the part of such
Purchaser is required to authorize the execution, delivery and performance
hereof, or the consummation of the transactions contemplated hereby. This
Agreement has been duly executed and delivered by such Purchaser and
constitutes the valid and binding obligation of such Purchaser, enforceable
against such Purchaser in accordance with its terms, except that such
enforcement may be subject to any bankruptcy, insolvency, reorganization,
moratorium or other laws now or hereafter in effect relating to or limiting
creditors' rights generally and the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceedings
therefor may be brought.
Section 6.3 No Violation; Consents and Approvals.
(a) The execution and delivery of this Agreement by such Purchaser
do not, and the performance of this Agreement by such Purchaser and the
consummation of the transactions contemplated hereby will not, (i) conflict
with or violate the Certificate of Limited Partnership or limited partnership
agreement or similar organizational documents, in each case as currently in
effect, of such Purchaser, (ii) conflict with or violate any Laws applicable
to such Purchaser or by or to which any of its properties or assets is bound
or subject, or (iii) result in any material breach of, or constitute a
material default (or an event that with notice or lapse of time or both would
constitute a material default) under, or give to others any right of
termination, amendment, acceleration or cancellation of, or require payment
under, or result in the creation of a Lien on any of the properties or assets
of such Purchaser under, any material Contract to which such Purchaser is a
party or by or to which such Purchaser or any of its properties or assets is
bound or subject.
(b) The execution and delivery of this Agreement by such Purchaser
do not, and the performance by such Purchaser of this Agreement and the
consummation of the transactions contemplated hereby will not, require such
Purchaser to obtain any Consents from any Governmental Authority, or any third
party, except for applicable requirements of the HSR Act.
Section 6.4 Acquisition of Interests for Investment. Such Purchaser is
not acquiring the Interests with any present intention of distributing or
selling such Interests in violation of federal, state or other securities
laws. Such Purchaser agrees that it will not sell or otherwise dispose of the
Interests in violation of any federal, state or other securities laws.
Section 6.5 Absence of Litigation. There is no Litigation pending or, to
the knowledge of such Purchaser, threatened in writing against such Purchaser
that, if adversely determined, nor any judgment, order or decree of any
Governmental Authority to which such Purchaser is a party or subject to, would
materially impair such Purchaser's ability to perform its obligations
hereunder or to consummate the transactions contemplated hereby.
Section 6.6 Brokers. Neither of the Purchasers nor any of their
respective Affiliates has entered into any agreement or arrangement entitling
any agent, broker, investment banker, financial advisor or other firm or
Person to any brokers' or finders' fee or any other commission or similar fee
in connection with any of the transactions contemplated by this Agreement.
ARTICLE VII
COVENANTS
Section 7.1 Conduct of Business. Except as contemplated by this
Agreement, as set forth on Schedule 7.1 or as required by applicable Law,
unless Purchasers shall otherwise agree in writing (such agreement not to be
unreasonably withheld, conditioned or delayed), during the period from the
date of this Agreement and continuing until the earlier to occur of the
termination of this Agreement or the Closing:
(a) the Company shall, and shall use its reasonable best effort to
cause BFS and its Subsidiaries to, conduct its business only in the ordinary
course of business, consistent with past practice; and the Company shall, and
shall use its reasonable best effort to cause BFS and its Subsidiaries to, use
its reasonable best efforts to preserve intact its business organizations; and
(b) without limiting the generality of the foregoing, the Company
shall not take any of the following actions:
(i) amend its certificate of formation, limited liability
company agreement, certificate of incorporation, by-laws or similar
organizational documents;
(ii) issue, sell, pledge, dispose of or encumber, or authorize
the issuance, sale, pledge, disposition or encumbrance of, any membership
interests of any class or any other equity interest, or any options,
warrants, convertible securities or other rights of any kind to acquire
any membership interests or any other equity interest in the Company;
(iii) declare, set aside, make or pay any dividend or other
distribution (whether in cash, stock or property or any combination
thereof) in respect of any of its membership interests or any other
equity interest, including any constructive or deemed distributions, or
make any other payments to members in their capacity as such;
(iv) split, combine or reclassify any of its membership
interests or any other equity interest or issue or authorize or propose
the issuance of any other securities in respect of, in lieu of or in
substitution for shares of its membership interests or any other equity
interest;
(v) redeem, purchase or otherwise acquire, directly or
indirectly, any of its membership interests or any other equity
interests;
(vi) make or change any material election with respect to
Taxes, agree or settle any material claim or assessment in respect of
Taxes, or agree to an extension or waiver of the limitation period to any
material claim or assessment in respect of Taxes;
(vii) agree, authorize or announce to take any of the actions
described in subsections (i) through (vi) above.
Section 7.2 Reasonable Best Efforts. Upon the terms and subject to the
conditions of this Agreement, each of the Purchasers, the Sellers and the
Company agree to use reasonable best efforts to take, or cause to be taken,
all actions, and to do, or cause to be done, all things necessary, proper or
advisable under applicable Laws to consummate and make effective the
transactions contemplated by this Agreement as promptly as practicable
(including satisfaction, but not waiver, of the conditions to Closing set
forth in Article VIII hereof).
Section 7.3 Consents.
(a) Without limiting the generality of Section 7.2 hereof, each of
the parties hereto shall use reasonable best efforts to obtain all Consents,
if any, of Governmental Authorities and third parties necessary in connection
with the consummation of the transactions contemplated by this Agreement prior
to the Closing. Notwithstanding the foregoing, neither the Purchasers, the
Sellers nor the Company shall have any obligation to pay any fee to any third
party (other than filing or other fees payable to Governmental Authorities)
for the purpose of obtaining any Consent or any costs and expenses of any
third party resulting from the process of obtaining such Consents. Each of the
parties hereto shall make or cause to be made all filings and submissions
under laws and regulations applicable to it as may be required for the
consummation of the transactions contemplated by this Agreement.
(b) Notwithstanding the foregoing, nothing in this Agreement shall
be deemed to require any party hereto to enter into any agreement with any
Governmental Authority or to consent to any order, decree or judgment
requiring such party to hold, separate or divest, or to restrict the dominion
or control of such party or any of its Affiliates over, any of the assets,
properties or businesses of such party or its Affiliates in existence on the
date hereof.
Section 7.4 Antitrust Notification. The Sellers, the Company and the
Purchasers shall use their respective reasonable best efforts to file, as soon
as practicable after the date hereof but in any event within five (5) Business
Days thereafter, the notification and report forms required for the
transactions contemplated by this Agreement with the United States Federal
Trade Commission and the United States Department of Justice, and shall
provide any supplemental information requested in connection with such
notification and report forms pursuant to the HSR Act. The Sellers, the
Company and the Purchasers shall furnish to each other's counsel such
necessary information and reasonable assistance as the other party or parties
may reasonably request in connection with its preparation of any filing or
submission that is necessary under the HSR Act.
Section 7.5 Further Assurances. From and after the Closing Date, the
Sellers shall take all such action as may be necessary or appropriate in order
to carry out the purposes of this Agreement or to vest the Purchasers with
full title to all Interests.
Section 7.6 Access to Information; Confidentiality.
(a) During the period from the date of this Agreement through the
Closing Date, the Sellers and the Company shall permit, and shall use their
reasonable best efforts to cause BFS and its Subsidiaries to permit,
Purchasers and their respective advisors, accountants, attorneys and
representatives to have access, during regular business hours and upon
reasonable notice, to the offices, facilities, assets, properties, employees,
books and records of the Company, BFS and its Subsidiaries, and shall furnish,
or cause to be furnished, to Purchasers, such financial, tax and operating
data and other information with respect to such entities and their respective
offices, facilities, assets, properties, employees, businesses and operations
as are reasonably requested by the Purchasers. Purchasers shall each hold, and
shall each cause their respective Affiliates, advisors, accountants, attorneys
and representatives to hold, any non-public information so provided to such
Purchaser by or on behalf of Sellers or the Company in connection with the
transactions contemplated by this Agreement in confidence in accordance with
the confidentiality provisions of the Confidentiality Agreement as if such
Purchasers were parties thereto.
(b) From and after the Closing Date, each of the Sellers shall hold,
and shall cause its Affiliates (other than BFS), advisors, accountants,
attorneys and representatives to hold, any material non-public information
concerning or relating to the Company, BFS or any of its Subsidiaries in
confidence, except for such disclosures as may be (i) consented to by
Purchasers in writing or (ii) required by Law.
Section 7.7 Notification of Certain Matters. The Sellers and the Company
shall give prompt notice to Purchasers and Purchasers shall give prompt notice
to the Sellers and the Company of the occurrence, or non-occurrence, of any
event the occurrence or non-occurrence of which would be reasonably likely to
cause (i) any representation or warranty of any of the Sellers, the Company or
either of the Purchasers, as the case may be, contained in this Agreement to
be untrue or inaccurate in any material respect at or prior to the Closing or
(ii) any of the Sellers, the Company or either of the Purchasers, as the case
may be, to fail to comply with or satisfy in any material respect any
covenant, condition or agreement to be complied with or satisfied by it
hereunder; provided, however, that the delivery of any notice pursuant to this
Section 7.7 shall not limit or otherwise affect the remedies available
hereunder to the party receiving such notice.
Section 7.8 Supplements to Disclosure Schedule. The Sellers and the
Company shall promptly supplement or amend the Schedules hereto prior to the
Closing with respect to any matter known to them hereafter arising or
discovered which, if existing or known at the date of this Agreement, would
have been required to be set forth or otherwise disclosed in the Schedules
(the "Updated Information"). No such supplement or amendment of the Schedules
to include the Updated Information shall (i) affect the ability of Purchasers
to rely on the conditions to Closing set forth in Article VIII hereof, or (ii)
be deemed to have been set forth or otherwise disclosed as of the date of this
Agreement unless Purchasers specifically agree thereto in writing.
Section 7.9 Access to Books and Records Following the Closing. Following
the Closing, Purchasers shall permit the Sellers and their authorized
representatives, during normal business hours and upon reasonable notice, to
have reasonable access to, and examine and make copies of, all books and
records which relate to transactions or events occurring prior to the Closing
or transactions or events occurring subsequent to the Closing which are
related to or arise out of transactions or events occurring prior to the
Closing.
Section 7.10 Resignations. At or prior to the Closing, the Company shall
use its reasonable best efforts to cause (i) the size of the BFS Board of
Directors to be increased to nine (9) directors, (ii) Mr. Alexander Castaldi
to resign from the BFS Board of Directors and (iii) the appointment of Messrs.
David Barr and Kevin Kruse and either Kewsong Lee, Daniel Zilberman or another
individual reasonably acceptable to BFS (such individual, the "Third
Designee") to fill the vacancies created thereby, in each case, effective as
of the Closing.
Section 7.11 Section 754 Election. The Company shall duly and timely make
an election under Section 754 of the Code (and any correlative election under
applicable state and local Law) on a written statement filed with the
Company's federal income Tax Return (or correlative state or local income Tax
Return) for the taxable year during which the Closing occurs.
Section 7.12 Amended and Restated Company LLC Agreement. At the Closing,
immediately following the consummation of the Securities Purchase, the
Purchasers shall enter into an Amended and Restated Limited Liability Company
Agreement for the Company having substantially the terms set forth in Exhibit
A attached hereto (the "Amended and Restated LLC Agreement"). In the event
that only one of the Purchasers consummates the transactions contemplated as
being consummated by such Purchaser hereunder, then at the Closing,
immediately following the consummation of the Securities Purchase, each of the
Sellers shall enter into the Amended and Restated LLC Agreement with such
Purchaser, with such changes therein or modifications thereto as are
reasonably necessary to reflect the addition of the Sellers as parties thereto
in lieu of the non-consummating Purchaser.
Section 7.13 Confidentiality Agreement. The Company shall use its
reasonable best efforts to cause BFS to terminate the Confidentiality
Agreement or waive any and all obligations of Warburg Pincus LLC and its
Representatives (as defined in the Confidentiality Agreement) thereunder,
including without limitation Section 3 thereof, in each case, effective as of
the Closing.
ARTICLE VIII
CONDITIONS TO CLOSING
Section 8.1 Mutual Conditions to the Obligations of the Parties. The
respective obligations of each party hereto to consummate the transactions
contemplated by this Agreement are subject to the satisfaction or, to the
extent permitted by applicable Law, waiver at or prior to the Closing of each
of the following conditions:
(a) No Injunctions or Legal Prohibitions. No temporary restraining
order, preliminary or permanent injunction or other judgment, order or decree
issued by a court of competent jurisdiction which prevents the consummation of
the transactions contemplated hereby shall have been issued and remain in
effect, and no statute, rule or regulation shall have been enacted,
promulgated or enforced by any Governmental Authority which makes the
consummation of the transactions contemplated hereby illegal; provided, that
the parties shall use their reasonable best efforts to have any temporary or
preliminary order or injunction lifted.
(b) HSR Act. The applicable waiting period under the HSR Act shall
have expired or been terminated.
Section 8.2 Conditions to the Obligations of the Purchasers. The
obligation of each of the Purchasers to consummate the transactions
contemplated by this Agreement is subject to the satisfaction at or prior to
the Closing of the following conditions (unless waived, to the extent
permitted by applicable Law, by such Purchaser):
(a) Representations and Warranties. (i) The representations and
warranties of the Sellers and the Company contained in Article IV hereof that
are qualified as to materiality or Material Adverse Effect shall be true,
correct and complete in all respects, and such representations and warranties
of the Sellers and the Company contained in Article IV hereof as are not so
qualified shall be true, correct and complete in all material respects, in
each case, as of the date when made and at and as of the Closing Date, as
though such representations and warranties were made at and as of such date;
and (ii) the representations and warranties of the Company contained in
Article V hereof shall be true, correct and complete in all respects without
regard to any materiality or Material Adverse Effect qualification set forth
therein as of the date when made and at and as of the Closing Date, as though
such representations and warranties were made at and as of such date, except
in the case of clause (ii) for such breaches of representations and warranties
as, individually or in the aggregate, would not result in a Material Adverse
Effect.
(b) Performance. The Sellers and the Company shall have performed
and complied with, in all material respects, all agreements, conditions,
covenants and obligations required by this Agreement to be performed or
complied with by the Sellers or the Company on or prior to the Closing Date.
(c) Officer's Certificate. The Company and the Sellers shall have
delivered to the Purchasers a certificate, dated as of the Closing Date,
executed by a duly authorized officer of the Company and each of the Sellers,
certifying the satisfaction of the conditions set forth in subsections 8.2(a)
and (b) hereof.
(d) BFS Board of Directors Composition. At or prior to the Closing,
(i) the size of the BFS Board of Directors shall have been increased to nine
(9) directors, (ii) Mr. Alexander Castaldi shall have resigned from the BFS
Board of Directors and (iii) Messrs. Barr and Kruse and the Third Designee
shall have been appointed to fill the vacancies created thereby, in each case,
effective as of the Closing.
(e) Confidentiality Agreement. At or prior to the Closing, the
Confidentiality Agreement shall have been terminated or any and all
obligations of Warburg Pincus LLC and its Representatives (as defined in the
Confidentiality Agreement) thereunder, including without limitation Section 3
thereof, shall have been waived in each case, effective as of the Closing.
(f) Performance by Each Purchaser. With respect to each Purchaser,
the other Purchaser shall have performed and complied with, in all material
respects, all agreements, conditions, covenants and obligations required to be
performed or complied with by such Purchaser on or prior to the Closing Date;
provided, however, that neither Purchaser shall be relieved of liability for
breach of its obligations under this Agreement by virtue of the fact that the
other Purchaser has failed to perform or comply with its agreements,
conditions, covenants and obligations under this Agreement; provided further,
that notwithstanding (i) the failure of either Purchaser to perform and comply
with, in all material respects, all agreements, conditions, covenants and
obligations required to be complied with by such Purchaser on or prior to the
Closing Date, or (ii) the failure of either Purchaser to consummate the
transactions contemplated as being consummated by it hereunder, the other
Purchaser may elect to consummate the transactions contemplated as being
consummated by it hereunder.
Section 8.3 Conditions to the Obligations of the Sellers and the Company.
The obligation of each of the Sellers and the Company to consummate the
transactions contemplated by this Agreement is subject to the satisfaction at
or prior to the Closing of the following conditions (unless waived, to the
extent permitted by applicable Law, by the Sellers and the Company):
(a) Representations and Warranties. The representations and
warranties of Purchasers contained herein which are qualified as to
materiality shall be true, correct and complete in all respects, and such
representations and warranties as are not so qualified shall be true, correct
and complete in all material respects, as of the date when made and at and as
of the Closing Date, as though such representations and warranties were made
at and as of such date.
(b) Performance. Purchasers shall have performed and complied with,
in all material respects, all agreements, conditions, covenants and
obligations required by this Agreement to be performed or complied with by
Purchasers on or prior to the Closing Date.
(c) Officer's Certificate. Purchasers shall have delivered to the
Sellers and the Company a certificate, dated as of the Closing Date, executed
by a duly authorized officer of each Purchaser, certifying to the satisfaction
of the conditions set forth in subsections 8.3(a) and (b) hereof.
ARTICLE IX
TERMINATION; SURVIVAL
Section 9.1 Termination; Survival. This Agreement may be terminated and
the transactions contemplated hereby may be abandoned at any time prior to the
Closing:
(a) by mutual written agreement of the Purchasers and the Sellers;
(b) at any time after sixty days from the date hereof (the
"Termination Date"), by either the Purchasers or the Sellers, by giving
written notice of such termination to the other parties, if the Closing shall
not have occurred on or prior to such date (unless the failure to consummate
the Closing by such date shall be due to or have resulted from any breach of
the representations or warranties made by, or the failure to perform or comply
with any of the agreements or covenants hereof to be performed or complied
with prior to the Closing by, the party seeking to terminate this Agreement);
or
(c) by either the Purchasers or the Sellers by written notice of
such termination to the other parties if any event, fact or condition shall
occur or exist that makes it impossible to satisfy a condition to such party's
obligations to consummate the transactions contemplated by this Agreement,
unless the occurrence or existence of such event, fact or condition shall be
due to the failure of such party to perform or comply with any of the
agreements or covenants hereof to be performed or complied with by such party
prior to the Closing.
Section 9.2 Effect of Termination. In the event of the termination of
this Agreement in accordance with Section 9.1 hereof, this Agreement shall
thereafter become void and have no effect and the transactions contemplated
hereby shall be abandoned, and no party hereto shall have any liability to the
other party hereto or their respective Affiliates, directors, officers or
employees, except for the obligations of the parties hereto contained in this
Section 9.2 and in Sections 10.1, 10.6, 10.7 and 10.8 hereof, and except that
nothing herein will relieve any party from liability for an intentional breach
of any provision of this Agreement or limit or restrict the rights or remedies
of any party hereto against the other parties for any breach of this
Agreement. If this Agreement is terminated pursuant to Section 9.1 hereof:
(a) all confidential information received by the parties shall be
treated in accordance with Section 7.6 hereof and the Confidentiality
Agreement referred to in such Section; and
(b) all filings, applications and other submissions made pursuant to
Sections 7.2, 7.3 and 7.4 hereof shall, to the extent practicable, be
withdrawn from the agency or other person to which made.
Section 9.3 Survival. The representations and warranties contained in
Articles IV and VI hereof shall survive the Closing indefinitely. The
representations and warranties in Article V of this Agreement and in any
certificate delivered pursuant hereto shall terminate as of the Closing and
shall not survive the Closing for any purpose. The covenants and agreements
contained in this Agreement shall terminate as of the Closing and shall not
survive the Closing for any purpose, except as specifically set forth herein.
ARTICLE X
MISCELLANEOUS
Section 10.1 Notices. All notices or other communications hereunder shall
be deemed to have been duly given and made if in writing and if served by
personal delivery upon the party for whom it is intended, if delivered by
registered or certified mail, return receipt requested, or by a national
courier service, or if sent by telecopier, provided that the telecopy is
promptly confirmed by telephone confirmation thereof, to the person at the
address set forth below, or such other address as may be designated in writing
hereafter, in the same manner, by such person:
To the Sellers:
To such Seller's address set forth on Schedule I attached hereto.
To Purchasers:
JLL Partners Fund V, L.P.
450 Lexington Avenue
New York, NY 10017
Attention: Ramsey A. Frank
Fax: (212) 286-8026
With a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
One Rodney Square
Wilmington, DE 19801
Attention: Robert B. Pincus, Esq.
Allison Land Amorison, Esq.
Fax: (302) 651-3001
Warburg Pincus Private Equity IX, L.P.
c/o Warburg Pincus LLC
466 Lexington Avenue
New York, NY 10017-3147
Attention: David Barr
Kevin Kruse
Fax: (212) 878-9100
With a copy to:
Willkie Farr & Gallagher LLP
787 Seventh Avenue
New York, N.Y. 10019-6099
Attention: Steven J. Gartner, Esq.
Fax: (212) 728-8111
Any such notification shall be deemed delivered (i) upon receipt, if
delivered personally, (ii) on the next business day, if sent by national
courier service for next business day delivery or (iii) the business day
received, if sent by telecopier.
Section 10.2 Amendment; Waiver. Any provision of this Agreement may be
amended or waived if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by Purchasers, the Company and the
Sellers, or in the case of a waiver, by the party against whom the waiver is
to be effective. No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.
Section 10.3 Assignment. No party to this Agreement may assign any of its
rights or obligations under this Agreement without the prior written consent
of the other party hereto.
Section 10.4 Entire Agreement. This Agreement (including all Schedules
and Exhibits hereto) contains the entire agreement among the parties hereto
with respect to the subject matter hereof and supersedes all prior agreements
and understandings, oral or written, with respect to such matters, except for
the Confidentiality Agreement which will remain in full force and effect until
the Closing.
Section 10.5 Fulfillment of Obligations. Any obligation of any party to
any other party under this Agreement, which obligation is performed, satisfied
or fulfilled by an Affiliate of such party, shall be deemed to have been
performed, satisfied or fulfilled by such party.
Section 10.6 Parties in Interest. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. Nothing in this Agreement, express or
implied, is intended to confer upon any Person other than the Purchasers, the
Sellers or the Company, or their successors or permitted assigns, any rights
or remedies under or by reason of this Agreement.
Section 10.7 Expenses. Whether or not the transactions contemplated by
this Agreement are consummated, all costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby shall be borne by
the party incurring such expenses; provided, however, except as set forth in
Section 10.8, all expenses of the Sellers shall be borne by the Sellers in
accordance with their respective Ownership Percentages.
Section 10.8 Brokers. The fees of any broker, finder or investment banker
hired by either Purchaser shall be borne solely by such Purchaser. The fees of
any broker, finder or investment banker hired by any of the Sellers shall be
borne solely by such Seller.
Section 10.9 Governing Law; Jurisdiction. This Agreement shall be
governed by the laws of the State of Delaware, its rules of conflict of laws
notwithstanding. Each of the Sellers, the Company and each of the Purchasers
hereby agrees and consents to be subject to the jurisdiction of the Court of
Chancery of the State of Delaware in any suit, action or proceeding seeking to
enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated hereby. Each
party hereby irrevocably consents to the service of any and all process in any
such suit, action or proceeding by the delivery of such process to such party
at the address and in the manner provided in Section 10.1.
Section 10.10 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which
shall constitute one and the same agreement.
Section 10.11 Headings. The heading references herein and in the table of
contents hereto are for convenience purposes only, do not constitute a part of
this Agreement and shall not be deemed to limit or affect any of the
provisions hereof.
Section 10.12 Further Assurances. From time to time after the Closing
Date, at the request of the other parties hereto and at the expense of the
party so requesting, Sellers, the Company and Purchasers shall execute and
deliver to such requesting party such documents and take such other action as
such requesting party may reasonably request in order to consummate the
transactions contemplated hereby.
Section 10.13 Specific Performance. Each party hereto acknowledges that
money damages would be both incalculable and an insufficient remedy for any
breach of this Agreement by such party and that any such breach would cause
the other party hereto irreparable harm. Accordingly, each party hereto also
agrees that, in the event of any breach or threatened breach of the provisions
of this Agreement by such party, the other party hereto shall be entitled to
equitable relief without the requirement of posting a bond or other security,
including in the form of injunctions and orders for specific performance.
Section 10.14 Knowledge. For purpose of this Agreement, "knowledge" of
the Company or the Sellers means the actual knowledge of the Company's
designees to the BFS Board of Directors.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties have executed or caused this Agreement to
be executed as of the date first written above.
JLL PARTNERS FUND II, L.P. JLL PARTNERS FUND V, L.P
By: JLL Associates, II, L.P. By: JLL Associates V, L.P.
its general partner its general partner
By: JLL Associates, G.P. V, LLC
its general partner
By: /s/ Paul S. Levy
------------------------------- By: /s/ Paul S. Levy
Name: Paul S. Levy -----------------------------
Title: General Partner Name: Paul S. Levy
Title: Managing Member
JLL PARTNERS FUND III, L.P.
By: JLL Associates III, L.L.C.,
its general partner WARBURG PINCUS PRIVATE EQUITY, L.P.
By: Warburg Pincus IX LLC, General
Partner
By: /s/ Paul S. Levy By: Warburg Pincus Partners, LLC,
------------------------------ Sole Member
Name: Paul S. Levy
Title: General Partner By: Warburg Pincus & Co.,
Managing Member
/s/ Marvin Schwartz By: /s/ David A. Barr
---------------------------------- -----------------------------
Marvin Schwartz Name: David A. Barr
Title:
JLL BUILDING PRODUCTS, LLC
By: /s/ Brett N. Milgrim
-----------------------------
Name: Brett N. Milgrim
Title: Authorized Person
SCHEDULE I
----------
Name and Address of Member Ownership Percentage
-------------------------- --------------------
JLL Partners Fund II, L.P.
450 Lexington Avenue, Suite 3350 53.82%
New York, NY 10017
JLL Partners Fund III, L.P.
450 Lexington Avenue, Suite 3350 41.90%
New York, NY 10017
Mr. Marvin Schwartz
605 Third Avenue 4.28%
New York, NY 10158
EXHIBIT 3
---------
---------------------------------------
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
BUILDING PRODUCTS, LLC
Dated as of February 27, 2006
---------------------------------------
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINED TERMS......................................................2
1.1 Certain Definitions........................................2
1.2 Other Interpretive Provisions..............................5
ARTICLE II THE LIMITED LIABILITY COMPANY.....................................5
2.1 Formation..................................................5
2.2 Name.......................................................6
2.3 Business Purpose...........................................6
2.4 Registered Office and Agent................................6
2.5 Term.......................................................6
2.6 Company Powers.............................................6
2.7 Limitation on Company Powers...............................7
2.8 Unrelated Business Taxable Income..........................7
2.9 United States Real Property Interests......................7
2.10 Business Transactions of a Member with the Company.........7
2.11 Principal Place of Business................................7
2.12 Title to Company Property..................................7
ARTICLE III THE MEMBERS......................................................7
3.1 The Members................................................7
3.2 Capital Structure..........................................8
3.3 Member Meetings............................................8
3.4 Liability of Members.......................................8
3.5 Power to Bind the Company..................................8
3.6 BFS Shares Held on Behalf of Members.......................8
3.7 BFS Voting.................................................9
3.8 BFS Board of Directors.....................................9
3.9 Preemptive Rights.........................................10
3.10 Management Rights.........................................12
ARTICLE IV THE BOARD........................................................13
4.1 Management by Board of Managers...........................13
4.2 Meetings of the Board.....................................14
4.3 Power to Bind Company.....................................14
4.4 Officers and Related Persons..............................14
ARTICLE V MEMBER RATIOS AND CAPITAL ACCOUNTS................................15
5.1 Member Ratio..............................................15
5.2 Capital Contributions.....................................15
5.3 Additional Members........................................15
5.4 Capital Accounts..........................................15
5.5 Return of Capital.........................................16
5.6 No Interest on Capital Contribution or Capital Account....16
ARTICLE VI ALLOCATIONS AND DISTRIBUTIONS....................................16
6.1 Allocations...............................................16
6.2 Distributions.............................................18
6.3 Limitations on Distributions..............................18
ARTICLE VII ACCOUNTS........................................................18
7.1 Books.....................................................18
7.2 Reports...................................................19
7.3 Federal Tax Matters.......................................19
7.4 Fiscal Year...............................................19
ARTICLE VIII TRANSFERS......................................................19
8.1 Restriction on Transfers of Interests.....................19
8.2 Restriction on Transfers of BFS Shares....................20
ARTICLE IX REGISTRATION RIGHTS..............................................21
9.1 Registration Rights.......................................21
9.2 Demand Registration Rights................................22
9.3 Piggyback Registration Rights.............................23
9.4 Pro-Rata Cutback..........................................24
ARTICLE X EVENTS OF DISSOLUTION.............................................24
ARTICLE XI TERMINATION......................................................24
11.1 Liquidation...............................................24
11.2 Final Accounting..........................................24
11.3 Distribution in Kind......................................25
11.4 Certificate of Cancellation...............................25
ARTICLE XII EXCULPATION AND INDEMNIFICATION.................................25
12.1 Exculpation...............................................25
12.2 Indemnification...........................................25
12.3 Corporate Opportunity.....................................26
12.4 Amendments................................................26
ARTICLE XIII AMENDMENT TO AGREEMENT.........................................26
ARTICLE XIV GENERAL PROVISIONS..............................................26
14.1 Notices...................................................26
14.2 Entire Agreement, etc.....................................27
14.3 Construction Principles...................................28
14.4 Counterparts..............................................28
14.5 Severability..............................................28
14.6 Governing Law.............................................28
14.7 Binding Effect............................................28
14.8 Additional Documents and Acts.............................28
14.9 No Third-Party Beneficiary................................28
14.10 Limited Liability Company.................................28
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
BUILDING PRODUCTS, LLC
THIS AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this
"Agreement") of Building Products, LLC (the "Company"), is made and entered
into as of this 27th day of February, 2006, by and among JLL Partners Fund V,
LP, a limited partnership organized under the laws of Delaware ("JLL Fund V"
and, collectively with any Affiliate or Affiliates (as hereinafter defined) of
JLL Fund V to which JLL Fund V Transfers Interests (as hereinafter defined)
pursuant to Section 8.1 hereof, the "JLL Members"), Warburg Pincus Private
Equity IX, L.P., a limited partnership organized under the laws of Delaware
("WP" and, collectively with any Affiliate or Affiliates of WP to which WP
Transfers Interests pursuant to Section 8.1 hereof, the "WP Members"), the
Company, and each individual or business entity subsequently admitted as a
member of the Company. JLL Fund V, WP and any Affiliates of JLL Fund V or WP to
which Interests are Transferred and who are subsequently admitted as members of
the Company and bound by this Agreement shall be known as and referred to
collectively as "Members" and individually as a "Member."
RECITALS
WHEREAS, the initial members of the Company (the "Initial Members")
formed the Company on September 24, 1997 under the name "Stonegate Resources
Holdings LLC" by filing with the Secretary of State of the State of Delaware a
Certificate of Formation (as amended to date, the "Certificate of Formation")
and, in connection therewith, entered into a limited liability company
agreement, dated as of September 24, 1997, as amended and restated as of March
20, 1998, as of August 1, 1999 and as of September 5, 2001 (the "Amended
Agreement"), in connection with which, among other things, the Company's name
was changed to "JLL Building Products, LLC"; and
WHEREAS, pursuant to that certain Securities Purchase Agreement, dated
as of February 2, 2005, by and among JLL Fund V, WP, the Company and the prior
members of the Company (such prior members, the "Selling Members"), the Selling
Members sold all of their Interests in the Company to JLL Fund V and WP
effective as of the date hereof and, in connection therewith, agreed to amend
and restate the Amended Agreement in its entirety as set forth herein to, among
other things, (i) admit JLL Fund V and WP as Members of the Company; (ii)
delete all references in the Agreement to the Selling Members; (iii) change the
Company's name to "Building Products, LLC"; and (iv) provide for certain
provisions relating to the Company's ownership of BFS Shares (as hereinafter
defined) on behalf of each of JLL Fund V and WP, and the voting and transfer of
such BFS Shares by JLL Fund V and WP.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein and for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Members and the
Company agree as follows:
ARTICLE I
DEFINED TERMS
1.1 Certain Definitions. As used in this Agreement, the following
terms have the following meanings:
"Act" has the meaning set forth in Section 2.1.
"Affiliate" means, with respect to any Person, any other Person that
directly or indirectly Controls, is Controlled by, or is under common Control
with, such Person.
"Agreement" has the meaning set forth in the preamble.
"Amended Agreement" has the meaning set forth in the recitals.
"BFS" has the meaning set forth in Section 2.3.
"BFS Shares" has the meaning set forth in Section 3.6.
"BFS Stockholders Agreement" means the Second Amended and Restated
Stockholders Agreement, dated as of June 2, 2005, among the Company, BFS, Floyd
F. Sherman, Charles L. Horn, Kevin P. O'Meara, and Donald F. McAleenan setting
forth certain registration rights granted to the Company in respect of the
equity securities of BFS, among other matters.
"Board" shall have the meaning set forth in Section 4.1(a).
"Business Day" means any day other than a Saturday, Sunday or a day on
which commercial banks located in New York, New York are required or authorized
by law to be closed.
"Capital Account" has the meaning set forth in Section 5.4(a).
"Capital Contribution" means, with respect to any Member, the total
amount of cash or value of other property contributed to the Company by such
Member pursuant to this Agreement; provided that the Board shall determine in
its reasonable discretion the value of any property other than cash contributed
by any Member.
"Certificate of Formation" has the meaning set forth in the recitals.
"Claims" has the meaning set forth in Section 12.2.
"Code" means the U.S. Internal Revenue Code of 1986, as amended, and
the regulations promulgated thereunder. Any reference to a section of the Code
shall include a reference to any successor provision thereto.
"Company" has the meaning set forth in the preamble.
"Control" means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise,
and "Controlled" has a correlative meaning.
"Corporate Opportunity" has the meaning set forth in Section 12.3(b).
"Covered Person" and "Covered Persons" shall have the meaning set
forth in Section 12.1.
"Demand Notice" has the meaning set forth in Section 9.2(b).
"Demand Participation Notice" has the meaning set forth in Section
9.2(b).
"Demand Registration" has the meaning set forth in Section 9.2(a).
"Demand Right" has the meaning set forth in Section 9.2(a).
"Demanding Member" has the meaning set forth in Section 9.2(a).
"Distribution" has the meaning set forth in Section 6.2(a).
"ERISA" means the U.S. Employee Retirement Income Security Act of
1974, as amended, and the regulations promulgated thereunder. Any reference to
a section of ERISA shall include a reference to any successor provision
thereto.
"Event of Dissolution" has the meaning set forth in Article X.
"Excess Shares" has the meaning set forth in Section 8.2(b)(ii).
"Exchange Act" means the U.S. Securities Exchange Act of 1934, as
amended from time to time.
"Fiscal Year" has the meaning set forth in Section 7.4.
"Fund Member" means each Member of the Company that is intended to
qualify as a "venture capital operating company" under the Regulation and is
listed on Annex B hereto.
"GAAP" means U.S. generally accepted accounting principles in effect
from time to time.
"Initial Members" shall have the meaning set forth in the recitals.
"Interests" shall have the meaning set forth in Section 3.2.
"Investment Company Act" means the U.S. Investment Company Act of
1940, as amended from time to time.
"Investment Opportunity" has the meaning set forth in Section 3.9(a).
"Investment Opportunity Notice" has the meaning set forth in Section
3.9(a).
"JLL Fund V" has the meaning set forth in the preamble.
"JLL Member" has the meaning set forth in the preamble.
"Limited Transfer Period" shall have the meaning set forth in Section
8.2(b).
"Managers" has the meaning set forth in Section 4.1(a).
"Member" or "Members" has the meaning set forth in the preamble.
"Member Ratio" shall mean, with respect to each Member, its
proportionate ownership of Interests, as reflected on Schedule A hereto, as
amended from time to time pursuant to the terms of this Agreement.
"Participating Member" has the meaning set forth in Section 9.2(b).
"Person" means any individual, partnership, corporation, limited
liability company, unincorporated organization, trust or joint venture, or a
governmental agency or political subdivision thereof.
"Piggyback Participating Member" has the meaning set forth in Section
9.3(a).
"Piggyback Participation Notice" has the meaning set forth in Section
9.3(a).
"Piggyback Registration" has the meaning set forth in Section 9.3(a).
"Piggyback Right" has the meaning set forth in Section 9.3(a).
"Registrable Shares" has the meaning set forth in Section 9.1(a).
"Regulation" has the meaning set forth in Section 3.10(d).
"Securities Act" means the U.S. Securities Act of 1933, as amended
from time to time.
"Selling Members" has the meaning set forth in the recitals.
"Transfer" means, with respect to any Interests, a transfer, sale,
exchange, assignment, pledge, hypothecation or other encumbrance or
disposition, including the grant of an option or other right, whether directly
or indirectly, whether voluntarily, involuntarily or by operation of law, of
such Interests, and any dividend, distribution or other conveyance of such
Interests by a Member to the limited partners, members, stockholders or other
direct or indirect equity holders of such Member, and "Transferred" and
"Transferee" each have a correlative meaning.
"Treasury Regulations" shall mean the income tax regulations
promulgated under the Code, as amended from time to time (including any
successor regulations).
"Unsubscribed Shares" has the meaning set forth in Section 3.9(b).
"WP" shall have the meaning set forth in the preamble.
"WP Members" has the meaning set forth in the preamble.
1.2 Other Interpretive Provisions.
(a) The meanings of defined terms are equally applicable to the
singular and plural forms thereof.
(b) The words "hereof", "herein", "hereunder" and similar words refer
to this Agreement as a whole and not to any particular provision of this
Agreement; and any subsection, Section, Exhibit, Schedule and Annex references
are to this Agreement unless otherwise specified.
(c) The term "including" is not limiting and means "including without
limitation."
(d) The captions and headings of this Agreement are for convenience of
reference only and shall not affect the interpretation of this Agreement.
(e) Whenever the context requires, any pronouns used herein shall
include the corresponding masculine, feminine or neuter forms.
ARTICLE II
THE LIMITED LIABILITY COMPANY
2.1 Formation. The Initial Members previously formed the Company as a
limited liability company pursuant to the provisions of the Delaware Limited
Liability Company Act and any successor statute, as amended from time to time
(the "Act"). A Certificate of Formation for the Company has been filed in the
Office of the Secretary of State of the State of Delaware in conformity with
the Act. Each of the Members shall execute or cause to be executed from time to
time all other instruments, certificates, notices and documents and shall do or
cause to be done all such acts and things (including keeping books and records
and making publications or periodic filings) as may now or hereafter be
required for the formation, valid existence and, when appropriate, termination
of the Company as a limited liability company under the laws of the State of
Delaware and as may be necessary in order to protect the liability of the
Members as members under the laws of the State of Delaware.
2.2 Name. The name of the Company shall be "Building Products, LLC,"
and its business shall be carried on in such name with such variations and
changes as the Board shall determine or deem necessary to comply with
requirements of the jurisdictions in which the Company's operations are
conducted.
2.3 Business Purpose. The Company was formed for the purposes of (i)
acquiring, holding and disposing of securities issued by Builders FirstSource,
Inc., a Delaware corporation ("BFS"), (ii) receiving dividends, interest or
other passive type of income and gains in connection therewith and (iii)
engaging in such activities in connection with the foregoing as the Board deems
necessary, advisable or incidental to the foregoing.
2.4 Registered Office and Agent. The location of the registered office
of the Company shall be Corporation Trust Center, 1209 Orange Street,
Wilmington, Delaware 19801. The Company's Registered Agent at such address
shall be The Corporation Trust Company.
2.5 Term. The term of the Company commenced on the date of filing of
the Certificate of Formation in the Office of the Secretary of State of the
State of Delaware and shall continue until the Company is dissolved pursuant to
Article X below.
2.6 Company Powers. In furtherance of the business purpose specified
in Section 2.3 and without limiting the generality of Section 4.1(a), the
Company and the Board, acting on behalf of the Company, shall be empowered to
do or cause to be done any and all acts, subject to the provisions of Section
2.7, deemed by the Board to be necessary or advisable in furtherance of the
business purpose of the Company, including, without limitation, the power and
authority:
(a) to acquire, hold, manage, own, sell, transfer, convey, assign,
exchange, pledge or otherwise dispose of the Company's interest in securities
or any other investments made or other property held by the Company, including
without limitation investments in capital stock, bonds, notes, debentures and
other obligations, investment contracts, partnership interests, limited
liability company interests, options, warrants and other securities;
(b) to establish, have, maintain or close one or more offices within
or without the State of Delaware and in connection therewith to rent or acquire
office space and to engage personnel;
(c) to open, maintain and close bank and brokerage accounts, including
the power to draw checks or other orders for the payment of moneys, and to
invest such funds as are temporarily not otherwise required for Company
purposes;
(d) to bring and defend actions and proceedings at law or in equity or
before any governmental, administrative or other regulatory agency, body or
commission;
(e) to hire consultants, custodians, attorneys, accountants and such
other agents, officers and employees of the Company as it may deem necessary or
advisable, and to authorize each such agent and employee to act for and on
behalf of the Company;
(f) to make all elections, investigations, evaluations and decisions,
binding the Company thereby, that may, in the sole judgment of the Board, be
necessary or appropriate for the acquisition, holding or disposition of
securities by the Company;
(g) to enter into, perform and carry out contracts and agreements of
every kind necessary or incidental to the accomplishment of the Company's
business purpose, and to take or omit to take such other action in connection
with the business of the Company as may be necessary or desirable to further
the business purpose of the Company; and
(h) to carry on any other activities necessary to, in connection with,
or incidental to any of the foregoing or the Company's business.
2.7 Limitation on Company Powers. Notwithstanding any provision of
this Agreement, the Company shall not be permitted to incur any indebtedness
for borrowed money.
2.8 Unrelated Business Taxable Income. The Company shall use its best
efforts to conduct the business of the Company at all times in a manner that
will not result in realization of unrelated business taxable income under
Section 512(a) of the Internal Revenue Code of 1986, as amended.
2.9 United States Real Property Interests. The Company shall not make
any investment in an interest classified as a United States real property
interest within the meaning of Section 897(c)(1) of the Internal Revenue Code
of 1986, as amended.
2.10 Business Transactions of a Member with the Company. In accordance
with Section 18-107 of the Act, a Member may transact business with the Company
and, subject to applicable law, shall have the same rights and obligations with
respect to any such matter as a Person who is not a Member.
2.11 Principal Place of Business. The principal place of business of
the Company shall be at such location as the Board may, from time to time,
select.
2.12 Title to Company Property. Legal title to all property of the
Company shall be held and vested and conveyed in the name of the Company. Other
than with respect to the BFS Shares, no real or other property of the Company
shall be deemed to be owned by any Member individually. The Interests (as
hereinafter defined) of the Members in the Company shall constitute personal
property.
ARTICLE III
THE MEMBERS
3.1 The Members. The name and address of each Member are set forth on
Schedule A hereto, as such Schedule may be amended from time to time to reflect
the admission of new Members and the Transfer of Interests, each as permitted
by the terms of this Agreement.
3.2 Capital Structure. The capital structure of the Company shall
consist solely of common interests (the "Interests"). The rights, powers,
preferences, duties, liabilities and obligations of holders of the Interests
shall be as set forth herein.
3.3 Member Meetings.
(a) Actions by the Members; Meetings. The Members may vote, approve a
matter or take any action by the vote of Members at a meeting, in person or by
proxy, or without a meeting by the written consent of Members pursuant to
subparagraph (b) below. Meetings of the Members shall be held upon at least two
(2) days' prior written notice of the time and place of such meeting delivered
to each holder of Interests. Notice of any meeting may be waived by any Member
before or after any meeting. Meetings of the Members may be conducted in person
or by conference telephone facilities.
(b) Action by Written Consent. Any action may be taken by the Members
without a meeting if authorized by the written consent of the Members holding
Interests sufficient to approve such action pursuant to the terms of this
Agreement, provided that a copy of the action taken by written consent must be
promptly sent to all Members not executing such written consent and filed with
the records of the Company.
(c) Quorum; Voting. For any meeting of Members, the presence in person
or by proxy of Members owning greater than 80% of the Member Ratio shall
constitute a quorum for the transaction of any business. Members shall have
voting rights in the Company based upon their Member Ratio; provided, however,
that , subject to Article XIII and Section 5.3 hereof, the approval of any
matter submitted to a vote of the Members, including a vote on the dissolution
of the Company as contemplated by Article X, shall require the affirmative vote
of Members owning greater than 80% of the Member Ratio.
3.4 Liability of Members. All debts, obligations and liabilities of
the Company, whether arising in contract, tort or otherwise, shall be solely
the debts, obligations and liabilities of the Company, and no Member shall be
obligated personally for any such debt, obligation or liability of the Company
solely by reason of being a Member.
3.5 Power to Bind the Company. Except as contemplated by Section 3.6
and Section 3.7, no Member (acting in its capacity as such) shall have any
authority to bind the Company to any third party with respect to any matter
except pursuant to a resolution expressly authorizing such action which
resolution is duly adopted by the Board by the affirmative vote required for
such matter pursuant to this Agreement.
3.6 BFS Shares Held on Behalf of Members. For purposes of this
Agreement, each Member shall be deemed to own a number of shares of BFS capital
stock of each class or series of such capital stock held by the Company ("BFS
Shares") equal to (x) such Member's Member Ratio multiplied by the (y) total
number of BFS Shares of each class or series of such capital stock held by the
Company; provided, however, that with respect to such BFS Shares, Members shall
have only those rights set forth in this Agreement. To the extent that BFS
Shares deemed to be owned by any Member are Transferred by the Company in
accordance with this Agreement, the net proceeds of such Transfer shall be
distributed to the Member on whose behalf such BFS Shares are Transferred and
each Member's Member Ratio shall be adjusted based upon the number of BFS
Shares deemed to be owned by each Member after giving effect to such Transfer.
In furtherance of the foregoing, for all purposes under this Agreement, a
Member's Membership Ratio shall be adjusted to take into account any BFS Shares
Transferred by the Company on such Member's behalf, whether pursuant to the
registration rights provided for in Article IX hereof or otherwise such that,
from and after any such Transfer, such Member's Membership Ratio shall be equal
to the ratio of (i) the aggregate number of BFS Shares held by the Company and
deemed to be owned by such Member after giving effect to such Transfer to (ii)
the aggregate number of BFS Shares held by the Company after giving effect to
such Transfer.
3.7 BFS Voting. The Company shall vote the BFS Shares held by it as
directed by each Member in proportion to (i) such Member's Member Ratio
multiplied by (ii) the total number of BFS Shares of the applicable class or
series held by the Company. The Company shall not vote any BFS Shares held by
the Company as to which it has not received instructions from the Member deemed
to own such BFS Shares. In furtherance of the foregoing, promptly following the
date hereof, the Company shall deliver to each Member an irrevocable proxy,
which shall be deemed to be coupled with an interest, to vote on all matters
submitted to a vote of the holders of BFS Shares, a number of BFS Shares equal
to the total number of BFS Shares held by the Company on the record date for
such vote multiplied by such Member's Member Ratio on such date. The Company
shall also execute and deliver any such additional documents and instruments
and perform such additional acts as may be necessary or appropriate to permit
each Member to vote such BFS Shares, express consent or dissent in respect
thereof or otherwise effectuate and carry out the provisions of this Section
3.7 on behalf of the Company.
3.8 BFS Board of Directors. The Company shall use its commercially
reasonable efforts to cause the BFS Board of Directors to include at least six
(6) directors selected by the Company and to include an equal number of such
directors selected by JLL Fund V and WP; provided, however, that (i) in the
event that the Member Ratio of JLL Fund V (together with any other JLL Members)
or the Member Ratio of WP (together with any other WP Members) shall at any
time exceed 65%, then the Company shall use its commercially reasonable efforts
to cause the BFS Board of Directors to include four (4) directors selected by
the Member which has exceeded a 65% Member Ratio, and (ii) in the event that
the Member Ratio of JLL Fund V (together with any other JLL Members) or the
Member Ratio of WP (together with any other WP Members) shall at any time
exceed 80%, then the Company shall use its commercially reasonable efforts to
cause the BFS Board of Directors to include five (5) directors selected by the
Member which has exceeded an 80% Member Ratio, in each case with a
corresponding reduction in the number of BFS directors to be selected by the
other Member which the Company shall be required to use its commercially
reasonable efforts to include in the BFS Board of Directors; provided further,
that for so long as they are Members, the Company shall use its commercially
reasonable efforts to cause at least one (1) director selected by each of BFS
and WP to be included on the BFS Board of Directors. To the extent that the
number of directors comprising the BFS Board of Directors shall be increased or
decreased, or the number of designees of the Company on the BFS Board of
Directors is reduced or increased, the provisions of this Section 3.8 shall be
adjusted accordingly so that the number of directors selected by each Member
which the Company must use its commercially reasonable efforts to include in
the BFS Board of Directors shall be increased or decreased proportionately.
3.9 Preemptive Rights.
(a) In the event the Company receives notice of any opportunity to
invest in additional securities of BFS (an "Investment Opportunity"), the
Company shall use its best efforts to assign such Investment Opportunity to the
Members such that each Member shall have the right to subscribe for and
purchase a number of BFS securities equal to such Member's Member Ratio
multiplied by the total number of BFS securities made available to the Company
for purchase pursuant to such Investment Opportunity. In the event that such
Investment Opportunity may not be assigned to the Members, each Member shall be
entitled to participate in such Investment Opportunity to the extent, and in
the manner, provided in this Section 3.9. As soon as practicable after
receiving notice of any such Investment Opportunity, but in any event within
five (5) days thereafter, the Company shall give written notice (an "Investment
Opportunity Notice") to each Member in the manner specified in Section 14.1
hereof: (i) specifying the nature of the Investment Opportunity, including the
material terms thereof; (ii) including copies of any prospectus, offering
memorandum or similar materials received by the Company in connection with such
Investment Opportunity; (iii) instructing each Member as to the maximum number
of BFS securities that such Member can cause the Company to subscribe for and
purchase on such Member's behalf in connection with such Investment Opportunity
(determined as set forth below); and (iv) instructing the Member as to the
deadline by which notice of its election to participate in such Investment
Opportunity must be received by the Company (to the extent such deadline is
inconsistent with the provisions of this Section 3.9), the method of responding
to such Investment Opportunity and the information, if any, required by the
Company from such Member in order to respond to such Investment Opportunity.
(b) Each Member shall have ten (10) days from and after the date of
any Investment Opportunity Notice to inform the Company: (i) as to whether or
not such Member has elected to participate in such Investment Opportunity; (ii)
the number of BFS securities such Member has elected to cause the Company to
purchase on such Member's behalf; and (iii) whether such Member has elected to
cause the Company to subscribe for such Member's pro rata share of any
Unsubscribed Shares. With respect to each Investment Opportunity, each Member
shall have the right to cause the Company to subscribe for and purchase a
number of BFS securities equal to (1) such Member's Member Ratio multiplied by
(2) the total number of BFS securities made available to the Company for
purchase pursuant to such Investment Opportunity. To the extent that any Member
elects to cause the Company to acquire less than the maximum number of BFS
securities such Member would be entitled to cause the Company to acquire in
connection with such Investment Opportunity (all such BFS securities which the
Company has the right to acquire pursuant to an Investment Opportunity and as
to which the applicable Member has elected not to cause the Company to purchase
such BFS securities being referred to herein as "Unsubscribed Shares"), the
other Members shall have the right to cause the Company to acquire such
Unsubscribed Shares. Any Unsubscribed Shares shall be allocated among the
Members electing to cause the Company to purchase such Unsubscribed Shares pro
rata based upon such Members' relative Membership Ratios. As soon as
practicable after receiving the elections of each of the Members with respect
to any Investment Opportunity, the Company shall notify each of the Members of
the aggregate number of BFS securities that the Company will purchase on such
Member's behalf, the aggregate amount of funds required by the Company to
consummate such purchase, the account to which such funds should be transferred
and the projected date upon which the closing of the transaction is expected to
occur.
(c) In connection with any Investment Opportunity, each Member
electing to participate in such Investment Opportunity shall use all reasonable
best efforts to comply with the terms and condition's applicable to such
Investment Opportunity, including supplying any information the Company may
reasonably request, executing any and all documents and other instruments
reasonably required in connection therewith and otherwise using its reasonable
best efforts to cooperate with the Company in connection therewith. At or prior
to the closing of the transactions contemplated by any Investment Opportunity,
each Member electing to participate in such Investment Opportunity shall pay to
the Company, by wire transfer of immediately available funds, an amount equal
to the purchase price for the BFS securities to be acquired by the Company on
such Member's behalf.
(d) As soon as practicable after consummating the acquisition of any
BFS securities on behalf of a Member pursuant to any Investment Opportunity,
the Company shall cause such BFS securities to be Transferred to the Member on
behalf of which such BFS securities were acquired. The Company shall take all
actions required, and do all things necessary, appropriate or advisable, to
make effective the Transfer to the applicable Member of any BFS securities
acquired on such Member's behalf pursuant to an Investment Opportunity.
3.10 General Provisions Regarding Management Rights. For so long as a
Fund Member directly or through one or more conduit subsidiaries owns any
Interests in the Company, each Fund Member will be entitled to the contractual
management rights set forth in this Section 3.10.
(a) Inspection and Access. The Company shall (i) provide to each Fund
Member, true and correct copies of all documents, reports, financial data and
other information as such Fund Member may reasonably request and (ii) permit
any authorized representatives designated by each Fund Member to visit and
inspect, during normal business hours, any of the properties of the Company,
including its and their books of account, and to discuss its and their affairs,
finances and accounts with its and their officers, all at such times as such
Fund Member may reasonably request.
(b) Right of Consultation. Representatives of each Fund Member shall
have the right to consult with and advise the management of the Company upon
reasonable notice at reasonable times from time to time, on all matters
relating to the operation of the Company.
(c) Adjustment to Rights.
(i) The aforementioned rights are intended to satisfy the
requirement of management rights for purposes of qualifying each Fund
Member's direct or indirect investment in the Company as a "venture
capital investment" for purposes of United States Department of Labor
Regulation ss. 2510.3-101 (the "Regulation"). In the event that a Fund
Member's counsel determines that the rights set forth herein are not
satisfactory for such purpose, the Company and such Fund Member shall
reasonably cooperate in good faith to agree upon mutually satisfactory
management rights that satisfy the Regulations.
(ii) All rights granted pursuant to this Section 3.10 to a
Fund Member are in addition to the rights provided to such Fund Member in
its capacity as a holder of Interests and nothing set forth in this
Section 3.10 shall be construed to limit, restrict or impair any claim,
right or privilege available, or granted, to a Fund Member pursuant to any
other contractual arrangements with the Company or otherwise.
(iii) In the event a Fund Member Transfers all or any portion
of its direct or indirect investment in the Company to an Affiliate that
is intended to qualify as a "venture capital operating company" under the
Regulation, such Affiliate shall be afforded the same rights with respect
to the Company afforded to such Fund Member hereunder.
(d) Each Fund Member shall notify the Company in writing at such time
as such Fund Member ceases to own any Interests in the Company.
ARTICLE IV
THE BOARD
4.1 Management by Board of Managers.
(a) Subject to such matters which are expressly reserved hereunder or
under the Act to the Members for decision, the business and affairs of the
Company shall be managed by a board of managers (the "Board"), which shall be
responsible for policy setting, approving the overall direction of the Company,
and making all decisions affecting the business and affairs of the Company,
subject to the limitations set forth herein. Notwithstanding anything to the
contrary contained herein, in no event shall the Board have the authority to
cause the voting of any BFS Shares held by the Company or cause the Transfer of
any BFS Shares held by the Company other than, in each such case, as directed
by the Member deemed to own such BFS Shares and otherwise in compliance with
the terms of this Agreement. The Board shall consist of six (6) individuals
(the "Managers"), three (3) of whom initially shall be selected by JLL Fund V
and three (3) of whom initially shall be selected by WP; provided, however,
that (if in the event that the Member Ratio of JLL Fund V (together with any
other JLL Members) or WP (together with any other WP Members) shall at any time
exceed 65%, then the Member which has exceeded a 65% Member Ratio shall be
entitled to select four (4) Managers and (ii) in the event that the Member
Ratio of JLL Fund V (together with all other JLL Members) or WP (together with
all other WP Members) exceeds 80%, then the Member which exceeded an 80% Member
Ratio shall be entitled to select five (5) Managers, in each case with a
corresponding reduction in the number of Managers to be selected by the other
Member; provided however, that for so long as they are Members, JLL and WP
shall each be entitled to select at least one (1) Manager.
(b) Each Manager shall remain in office until his or her successor
shall be duly appointed by the applicable Member, or until such Manager's
earlier death, resignation or removal. In the event that the number of Managers
entitled to be designated by any Member shall be reduced in accordance with
Section 4.1(a) hereof, then such Member shall promptly remove one or more of
the Managers designated by such Member, as and to the extent required by
Section 4.1(a).
(c) Any vacancy occurring on the Board as a result of the resignation,
removal, death or disability of a Manager shall be filled by the Member
designating the Manager whose seat has become vacant. A Manager chosen to fill
such a vacancy shall serve the unexpired term of his predecessor in office.
4.2 Meetings of the Board.
(a) The Board shall meet at such times as may be necessary for the
Company's business on at least twenty-four hours prior written notice of the
time and place of such meeting. The presence of at least five (5) Managers
shall constitute a quorum for the transaction of business by the Board at any
meeting.
(b) Notice of any Board meeting may be waived by any Manager before or
after such meeting.
(c) All actions of the Board shall require the affirmative vote of at
least five (5) of the Managers.
(d) Meetings of the Board may be conducted in person or by conference
telephone facilities and each Manager shall be entitled to participate in any
meeting of the Board by telephone. Any action required or permitted to be taken
at any meeting of the Board may be taken without a meeting if such number of
Managers sufficient to approve such action pursuant to the terms of this
Agreement consent thereto in writing, and the writing or writings are filed
with the minutes of proceedings of the Board.
4.3 Power to Bind Company. No Manager (acting in his capacity as such)
shall have any authority to bind the Company to any third party with respect to
any matter except pursuant to a resolution expressly authorizing such action
which resolution is duly adopted by the Board by the affirmative vote required
for such matter pursuant to this Agreement.
4.4 Officers and Related Persons. The Board shall have the authority
to appoint and terminate officers of the Company and retain and terminate
employees, agents and consultants of the Company and to delegate such duties to
any such officers, employees, agents and consultants as the Board deems
appropriate, including the power, acting individually or jointly, to represent
and bind the Company in all matters, in accordance with the scope of their
respective duties.
ARTICLE V
MEMBER RATIOS AND CAPITAL ACCOUNTS
5.1 Member Ratio. Each Member shall have the Member Ratio set forth on
Schedule A hereto, as adjusted from time to time pursuant to the terms of this
Agreement.
5.2 Capital Contributions. No Member shall be obligated to make
Capital Contributions to the Company without the consent of such Member, nor
shall any Member be entitled to make any Capital Contribution; provided that
this sentence shall not limit the ability of Members to make payments pursuant
to Section 3.9. The Company shall amend Schedule A to reflect the making of any
additional Capital Contributions and the issuance of any additional Interests.
5.3 Additional Members. The Company shall not admit additional Members
without the approval of each Member, provided, however, that, subject to the
provisions of this Article V, the Company may admit one or more additional
Members to the Company that have acquired Interests pursuant to a Transfer
permitted by Section 8.1. An additional Member shall execute a counterpart to
this Agreement. The Company shall amend Schedule A to reflect the admission of
any additional Members.
5.4 Capital Accounts.
(a) The Company shall maintain separate capital accounts (a "Capital
Account") for each Member. Each Member's Initial Capital Account shall be equal
to the amount set forth opposite such Member's name on Schedule A. Capital
Accounts shall be maintained in accordance with the following provisions:
(i) Each Member's Capital Account shall be increased by the
amount of such Member's Capital Contributions, any Company income or gain
allocated to such Member pursuant to Section 6.1(b), and the amount of any
Company liabilities assumed by such Member or secured by any Company
assets distributed to such Member.
(ii) Each Member's Capital Account shall be decreased by the
amount of cash and the gross fair market value (as determined by the
Board) of any other Company property distributed to such Member pursuant
to any provision of this Agreement, any expenses or losses allocated to
such Member pursuant to Section 6.1(b) (including the Member's share of
expenditures described in Treasury Regulation Section
1.704-1(b)(2)(iv)(i)) and the amount of any liabilities of such Member
assumed by the Company.
(iii) In the event all or any portion of a Member's Interests
are Transferred in accordance with the terms of this Agreement, the
Transferee shall succeed to the Capital Account of such Member to the
extent such Capital Account relates to the Transferred Interests.
(iv) The foregoing provisions and the other provisions of
this Agreement relating to the maintenance of Capital Accounts are
intended to comply with Treasury Regulations issued under Section 704(b)
of the Code and shall be interpreted and applied in a manner consistent
with such Treasury Regulations. The Board shall be authorized to make
appropriate amendments to the allocations of items pursuant to this
Section 5.4 if necessary in order to comply with Section 704 of the Code
or applicable Treasury Regulations thereunder; provided that no such
change shall have an adverse effect upon the amount distributable to any
Member pursuant to this Agreement.
5.5 Return of Capital. Except upon the dissolution of the Company or
as otherwise provided herein, no Member shall have the right to withdraw from
the Company or to demand or to receive the return of all or any part of its
Capital Account or its Capital Contributions.
5.6 No Interest on Capital Contribution or Capital Account. No Member
shall be paid interest on any of its Capital Contributions or on its Capital
Account.
ARTICLE VI
ALLOCATIONS AND DISTRIBUTIONS
6.1 Allocations.
(a) Calculation of Profits and Losses. The profits and losses of the
Company shall be determined for each Fiscal Year in accordance with GAAP.
(b) Allocation of Profits and Losses.
(i) Except as otherwise set forth in this Section 6.1(b), for
Capital Account purposes, all items of income, gain, loss and deduction
shall be allocated among the Members in a manner such that if the Company
were dissolved, its affairs wound up and its assets distributed to the
Members in accordance with their respective Capital Account balances
immediately after making such allocation, such distributions would, as
nearly as possible, be equal to the distributions that would be made
pursuant to Section 6.2.
(ii) For federal, state and local income tax purposes, items
of income, gain, loss, deduction and credit shall be allocated to the
Members in accordance with the allocations of the corresponding items for
Capital Account purposes under this Section 6.1(b), except that items with
respect to which there is a difference between tax and book basis will be
allocated in accordance with Section 704(c) of the Code, the Treasury
Regulations thereunder, and Treasury Regulations Section 1.704-1(b)(4)(i).
(iii) Notwithstanding any provision of this Section 6.1(b),
no item of deduction or loss shall be allocated to a Member to the extent
the allocation would cause a negative balance in such Member's Capital
Account (after taking into account the adjustments, allocations and
distributions described in Treasury Regulations Sections
1.704-1(b)(2)(ii)(d)(4), (5) and (6)) that exceeds the amount that such
Member would be required to reimburse the Company pursuant to this
Agreement or under applicable law. In the event some but not all of the
Members would have such excess Capital Account deficits as a consequence
of such allocation of loss or deduction, the limitation set forth in this
Section 6.1(b)(iii) shall be applied on a Member-by-Member basis so as to
allocate the maximum permissible deduction or loss to each Member under
Section 1.704-1(b)(2)(ii)(d) of the Treasury Regulations. In the event any
loss or deduction shall be specially allocated to a Member pursuant to the
preceding sentence, an equal amount of income of the Company shall be
specially allocated to such Member prior to any allocation pursuant to
Section 6.1(b)(i).
(iv) In the event any Member unexpectedly receives any
adjustments, allocations, or distributions described in Treasury
Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6), items of
Company income and gain shall be specially allocated to such Member in an
amount and manner sufficient to eliminate as quickly as possible any
deficit balance in its Capital Account in excess of that permitted under
Section 6.1(b)(iii) created by such adjustments, allocations or
distributions. Any special allocations of items of income or gain pursuant
to this Section 6.1(b)(iv) shall be taken into account in computing
subsequent allocations pursuant to this Section 6.1(b) so that the net
amount of any items so allocated and all other items allocated to each
Member pursuant to this Section 6.1(b) shall, to the extent possible, be
equal to the net amount that would have been allocated to each such Member
pursuant to the provisions of this Section 6.1(b) if such unexpected
adjustments, allocations or distributions had not occurred.
(v) In the event the Company incurs any nonrecourse
liabilities, income and gain shall be allocated in accordance with the
"minimum gain chargeback" provisions of Section 1.704-1(b)(4)(iv) and
1.704-2 of the Treasury Regulations.
(vi) The Capital Accounts of the Members shall be adjusted in
accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(f) to
reflect the fair market value (as determined by the Board in its good
faith judgment) of Company property whenever Interests are relinquished to
the Company, whenever an additional Member is admitted to the Company in
accordance with Section 5.3, upon any termination of the Company within
the meaning of Section 708 of the Code, and when the Company is liquidated
pursuant to Article X, and shall be adjusted in accordance with Treasury
Regulations Section 1.704-1(b)(2)(iv)(e) in the case of a distribution of
any property (other than cash).
(vii) All elections, decisions and other matters concerning
the allocation of income, gains and losses among the Members, and
accounting procedures, not specifically and expressly provided for by the
terms of this Agreement, shall be determined by the Board in good faith.
6.2 Distributions.
(a) Except as otherwise expressly provided for herein (including
pursuant to a Transfer contemplated by Section 8.2), distributions to the
Members (each, a "Distribution") shall be made at such times and in such
amounts as the Members shall agree and, except as expressly set forth below,
any such Distributions shall be made pro rata in accordance with the Members'
respective Member Ratios. The Board shall make Distributions to the Members as
follows: (i) all cash dividends received by the Company in respect of the BFS
Shares shall be distributed by the Company to the Members in accordance with
their respective Member Ratios as soon as practicable after receipt thereof by
the Company; and (ii) the net proceeds received by the Company from the
Transfer of any BFS Shares held by the Company shall be distributed by the
Company to the Member deemed to own such BFS Shares as soon as practicable
after receipt thereof by the Company.
(b) All non-cash distributions received by the Company in respect of
the BFS Shares, including any securities, evidences of indebtedness or other
property received by the Company in respect of such BFS Shares, shall be
retained by the Company, unless the Board determines otherwise.
(c) All Distributions shall be made in the form received by the
Company, unless the Members shall otherwise agree. Distributions may be
comprised of both cash and property, as applicable; provided that any such
Distributions to the Members shall consist of the same relative composition of
cash and/or property to each Member, except as otherwise expressly permitted
herein.
6.3 Limitations on Distributions. Notwithstanding any provision to the
contrary contained in this Agreement, the Company shall not make a Distribution
to any Member on account of its Interests if such Distribution would violate
Section 18-607 of the Act or other applicable law.
ARTICLE VII
ACCOUNTS
7.1 Books. The Board shall cause to be maintained complete and
accurate books of account of the Company's affairs at the Company's principal
place of business. Such books shall be kept on such method of accounting as the
Board shall select. For purposes of the Company's financial statements, the
Company's assets and liabilities and statements of operations and cash flows
shall be prepared in conformity with generally accepted accounting principles.
The Company's accounting period shall be as determined by the Board.
7.2 Reports. The books of account of the Company shall be closed after
the close of each calendar year, and there shall be prepared and sent to each
Member a statement of the profits and losses of the Company for that period and
a statement of such Member's distributive share of income and expense for
income tax reporting purposes.
7.3 Federal Tax Matters.
(a) The Tax Matters Member, which shall be considered the tax matters
partner for purposes of Section 6231 of the Code, shall be designated from time
to time by the Members owning greater than 80% of the Member Ratio. The initial
Tax Matters Member shall be JLL Fund V. The Tax Matters Member shall cause to
be prepared and shall sign all tax returns of the Company, which returns shall
be reviewed in advance of filing by an independent certified public accountant
and the other Members. The Tax Matters Member may make any election which is
available to the Company with the consent of the Members owning greater than
80% of the Member Ratio, and shall monitor any governmental tax authority in
any audit that such authority may conduct of the Company's books and records or
other documents and promptly provide the other Members notices of each material
development and event in respect of each such audit.
(b) In connection with the acquisition of Interests by the Members
pursuant to the Securities Purchase Agreement dated as of February 2, 2005, the
Company shall duly and timely make an election under Section 754 of the Code
and the regulations thereunder (and any correlative election under applicable
state and local law).
7.4 Fiscal Year. The fiscal year of the Company (the "Fiscal Year")
for financial statement and U.S. federal income tax purposes shall be
determined by the Board.
ARTICLE VIII
TRANSFERS
8.1 Restriction on Transfers of Interests.
(a) No Member may Transfer any or all of its Interests other than to
an Affiliate of such Member in compliance with the terms of this Section 8.1.
Any Affiliate to which Interests are Transferred pursuant to this Article VIII
shall remain an Affiliate of the Transferring Member at all times during which
such Transferee holds the Transferred Interests. In the event that an Affiliate
to which Interests are Transferred pursuant to this Article VIII shall cease to
be an Affiliate of the Member that Transferred the Interests to such
Transferee, then the Transferee shall promptly arrange for the Transfer of the
Interests held by such Transferee to a JLL Member or a WP Member, as
applicable. In the event of the Transfer of less than all of a Member's
Interest, each Transferee of an Interest pursuant to this Section 8.1, together
with its transferor, shall be deemed to be a single Member for purposes of
Section 5.3 and Article XIII of this Agreement.
(b) Any Transferee of Interests shall be required, at the time of and
as a condition to such Transfer, to become a party to this Agreement by
executing and delivering such documents as may be necessary, in the reasonable
opinion of the Board, to make such Person a party thereto, whereupon such
Transferee will be treated as a Member for all purposes of this Agreement. Such
Transferee shall, among other things, provide to the Secretary of the Company
the address of such Transferee to which notices hereunder shall be sent. In
addition, no Member shall be entitled to Transfer any Interests or any other
rights under this Agreement (including to an Affiliate) at any time unless the
Board is reasonably satisfied that such Transfer would not:
(i) violate the Securities Act or any state (or other
jurisdiction) securities or "Blue Sky" laws applicable to the Company or
the Interests;
(ii) cause the Company to become subject to the registration
requirements of the Investment Company Act;
(iii) be a "prohibited transaction" under ERISA or the Code
or cause all or any portion of the assets of the Company to constitute
"plan assets" under ERISA or Section 4975 of the Code; and
(iv) cause the Company to become a "publicly-traded
partnership", as such term is defined in Sections 469(k)(2) or 7704 of the
Code.
(c) Any purported Transfer of Interests other than in accordance with
this Agreement shall be null and void ab initio, and the Company shall refuse
to recognize any such Transfer for any purpose and shall not reflect in its
records any change in record ownership of Interests pursuant to any such
Transfer.
(d) Any Member that proposes to Transfer Interests in accordance with
the terms and conditions hereof shall be responsible for any expenses incurred
by the Company in connection with such Transfer, other than pursuant to the
exercise of registration rights under the BFS Stockholders Agreement, in which
case the expenses thereof are treated in accordance with the provisions of the
BFS Stockholders Agreement.
8.2 Restriction on Transfers of BFS Shares.
(a) Initial Period. Prior to the second (2nd) anniversary of the date
hereof, the Company shall not Transfer any or all of the BFS Shares held by the
Company without the written consent of the Members in accordance with Section
3.3 hereof.
(b) Limited Transfer Period.
(i) During the period commencing on the second (2nd)
anniversary of the date hereof and ending on the fourth (4th) anniversary
of the date hereof (the "Limited Transfer Period"), a Member may cause the
Company to Transfer BFS Shares deemed to be owned by such Member (the
number of BFS Shares held by the Company and deemed to be owned by a
Member being determined in accordance with Section 3.6 hereof); provided
that (i) such Transfer complies with the volume and other limitations set
forth in this Section 8.2(b); and (ii) such Transfer complies with all
applicable laws, including federal and state securities laws.
(ii) During the Limited Transfer Period, no Member may cause
the Company to Transfer during any ninety-consecutive-day period more than
twelve and one-half percent (12 1/2%) of the BFS Shares held by the
Company and deemed to be owned by such Member (calculated in accordance
with Section 8.2(b)(iv)); provided, however, that in the event that a
Member causes the Company to Transfer less than twelve and one-half
percent (12 1/2%) of the BFS Shares held by the Company and deemed to be
owned by such Member during any ninety-consecutive-day period (the excess
of (x) 12 1/2% of the BFS Shares held by the Company and deemed to be
owned by such Member (calculated in accordance with Section 8.2(b)(iv))
over (y) the number of BFS Shares actually Transferred by the Company on
behalf of such Member during such ninety-consecutive-day period being
referred to herein as "Excess Shares"), such Member may Transfer, in any
subsequent ninety-consecutive-day period up to the sum of (i) twelve and
one-half percent (12 1/2%) of the BFS Shares held by the Company and
deemed to be owned by such Member (calculated in accordance with Section
8.2(b)(iv)) plus (ii) all Excess Shares held by the Company and deemed to
be owned by such Member with respect to all prior ninety-consecutive-day
periods; provided further, that, in no event may any Member Transfer more
than 25% of the BFS Shares held by the Company on behalf of such Member in
any ninety-consecutive-day period.
(iii) All Transfers of BFS Shares held by the Company on
behalf of a Member made during the Limited Transfer Period must be
preceded by at least ten (10) days prior written notice to the
non-Transferring Member.
(iv) For purposes of this Section 8.2(b), all percentages of
BFS Shares shall be computed based on (i) the number of BFS Shares held by
the Company on behalf of a Member as of the first day of the Limited
Transfer Period, minus (ii) any BFS Shares Transferred on behalf of such
Member upon the exercise of registration rights pursuant to Article IX
hereof during the Limited Transfer Period, in each case, subject to
adjustment for any stock split, reverse stock split, stock dividend,
recapitalization or similar transaction effected during the Limited
Transfer Period.
(c) Post Limited Transfer Period. Following the expiration of the
Limited Transfer Period, any Member may cause the Company to Transfer any or
all of the BFS Shares held by the Company on behalf of such Member, in one
transaction or a series of transactions, provided any such Transfer(s) complies
with all applicable laws, including federal and state securities laws.
(d) Effect of Restrictions on Certain Transfers. Any purported
Transfer of BFS Shares other than in accordance with this Agreement shall be
null and void ab initio, and the Company shall refuse to recognize any such
Transfer for any purpose.
ARTICLE IX
REGISTRATION RIGHTS
9.1 Registration Rights. The Members hereby acknowledge that the
Company has entered into the BFS Stockholders Agreement pursuant to which the
Company has been granted certain demand and "piggyback" registration rights in
respect of Registrable Securities (as defined in the BFS Stockholders
Agreement) of BFS that it may hold (the "Registrable Shares"), and that such
rights (and the rights described in this Article IX) are subject to, qualified
by, and exercisable solely in accordance with, the terms and conditions of the
BFS Stockholders Agreement. The Company and the Members acknowledge and agree
that the Company shall not amend the BFS Stockholders Agreement in any manner
that adversely affects any Member's rights set forth in this Article IX without
the prior written consent of such Member.
9.2 Demand Registration Rights.
(a) Subject to restrictions on Transfer of the BFS Shares held by the
Company set forth in Section 8.2, from and after the second (2nd) anniversary
of the date hereof, JLL Fund V and WP shall each have the right to cause the
Company to exercise up to (2) of the Company's demand registration rights
(each, a "Demand Right") pursuant to, and in accordance with the terms of, the
BFS Stockholders Agreement. Upon exercise of any such Demand Right in
compliance with this Article IX, the Member exercising such right (the
"Demanding Member") shall have the right to require the registration by BFS (a
"Demand Registration") of up to the total number of Registrable Shares then
held by the Company and deemed to be owned by such Demanding Member.
(b) The Demanding Member shall be entitled to select a nationally
recognized managing underwriter or underwriters to manage and administer any
offerings of Registrable Shares in connection with the exercise of a Demand
Right (and the Company shall notify BFS of any such selection), such
underwriter or underwriters, as the case may be, to be subject to the approval
of BFS in accordance with the BFS Stockholders Agreement. Any Member seeking to
exercise a Demand Right shall give written notice (a "Demand Notice") to the
Company and each of the other Members in accordance with Section 14.1,
notifying the Company and such other Members of: (i) the Demanding Member's
intent to exercise a Demand Right; (ii) the number of BFS Shares the Demanding
Member intends to cause BFS to register; (iii) the intended method of
distribution of the Registrable Shares; and (iv) the name and address of the
managing underwriter or underwriters, if any, selected by the Demanding Member
for the offering. Within ten (10) Business Days after receipt of a Demand
Notice, each Member desiring to participate in the Demand Registration shall
give written notice (a "Demand Participation Notice") to the Company and the
Demanding Member specifying the number of Registrable Shares held by the
Company and deemed to be owned by such Member (each, a "Participating Member")
which such Participating Member has elected to include in such Demand
Registration. Subject to Section 9.4, the Company shall include in the Demand
Registration all Registrable Shares then held by the Company and requested to
be included in such Demand Registration by the Participating Members deemed to
own such Registrable Shares and from whom the Company has received a Demand
Participation Notice within ten (10) Business Days after the date that the
Demand Notice was delivered.
(c) Each of the Members acknowledges and agrees that the exercise of
Demand Rights by the Company pursuant to this Article IX is subject to all of
the terms and conditions of the BFS Stockholders Agreement, including any
limitations on minimum offering size and the provisions relating to holdbacks
and blackout periods, and agrees to be subject to all of the terms and
conditions thereof as if it was a party thereto.
(d) The Company shall distribute the proceeds of the sale of any
Registrable Shares that are the subject of a Demand Registration to the
Demanding Member and any Participating Members in accordance with the number of
BFS Shares that are included in such Demand Registration by such Demanding
Member and such Participating Members, and shall cancel on its books the
corresponding Interests held by the Demanding Member and any Participating
Members, and thereupon all of the Demanding Member's and any Participating
Members' rights in and to such Interests shall terminate.
9.3 Piggyback Registration Rights.
(a) Subject to the restrictions on Transfer of the BFS Shares held by
the Company set forth in Section 8.2, from and after the second (2nd)
anniversary of the date hereof, each of the Members shall have the right to
cause the Company to exercise piggyback registration rights (each, a "Piggyback
Right") pursuant to, and in accordance with the terms of, the BFS Stockholders
Agreement. Upon receipt of any Piggyback Notice (as defined in the BFS
Stockholders Agreement), the Company shall promptly forward such Piggyback
Notice to each of the Members. Within five (5) Business Days after receipt of a
Piggyback Notice, each Member desiring to participate in the registration
subject to such Piggyback Notice (a "Piggyback Registration") shall give
written notice (a "Piggyback Participation Notice") to the Company specifying
the number of Registrable Shares held by the Company and deemed to be owned by
such Member (each, a "Piggyback Participating Member") which such Piggyback
Participating Member has elected to include in such Piggyback Registration.
Subject to Section 9.4, the Company shall include in the Piggyback Registration
all Registrable Shares then held by the Company and requested to be included in
such Piggyback Registration by the Piggyback Participating Members deemed to
own such Registrable Shares and from whom the Company has received a Piggyback
Participation Notice within five (5) Business Days after the date that the
Piggyback Notice was delivered.
(b) Any Piggyback Participating Member may cause the Company to
withdraw any of its Piggyback Rights at any time after delivery of the
Piggyback Participation Notice therefor. Upon receipt of a notice of withdrawal
from a Piggyback Participating Member, the Company shall, and shall cause BFS
to, cease all efforts to secure the registration of the BFS Shares subject to
the applicable Piggyback Participation Notice.
(c) Each of the Members acknowledges and agrees that the exercise of
Piggyback Rights by the Company pursuant to this Article IX is subject to all
of the terms and conditions of the BFS Stockholders Agreement, and agrees to be
subject to all of the terms and conditions thereof as if it was a party
thereto.
(d) The Company shall distribute the proceeds of the sale of any
Registrable Shares that are the subject of a Piggyback Registration to the
Piggyback Participating Members in accordance with the number of BFS Shares
that are included in such Piggyback Registration by such Piggyback
Participating Members, and shall cancel on its books the corresponding
Interests held by the Piggyback Participating Members, and thereupon all of the
Piggyback Participating Members' rights in and to such Interests shall
terminate.
9.4 Pro-Rata Cutback. If the aggregate number of BFS Shares held by
the Company which the Members seek to have the Company include in any Demand
Registration or Piggyback Registration shall exceed the number of BFS Shares
which the Company is entitled to include in such Demand Registration or
Piggyback Registration pursuant to the terms of the BFS Stockholders Agreement,
then the Company shall cause to be included in such Demand Registration or
Piggyback Registration with respect to each Demanding Member, Participating
Member or Piggyback Participating Member, as the case may be, a number of BFS
Shares equal to (i) the maximum number of BFS Shares which the Company is
permitted to include in such Demand Registration or Piggyback Registration
pursuant to the terms of the BFS Stockholders Agreement multiplied by (ii) the
quotient of (A) the number of BFS Shares held by the Company initially sought
to be included in such registration statement by such Member divided by (B) the
number of BFS Shares held by the Company initially sought to be included in
such registration statement by all Members.
ARTICLE X
EVENTS OF DISSOLUTION
The Company shall be dissolved upon the occurrence of any of the
following events (each, an "Event of Dissolution"):
(a) The Members vote for dissolution at any time;
(b) Any Member requests dissolution after June 22, 2012; or
(c) A judicial dissolution of the Company under Section 18-802 of the
Act.
No other event, including the retirement, withdrawal, insolvency,
liquidation, dissolution, insanity, resignation, expulsion, bankruptcy, death,
incapacity or adjudication of incompetency of a Member, shall cause the
existence of the Company to terminate.
ARTICLE XI
TERMINATION
11.1 Liquidation. In the event that an Event of Dissolution shall
occur, then the Company shall be liquidated and its affairs shall be wound up.
All proceeds from such liquidation shall be distributed in accordance with the
provisions of Section 18-804 of the Act, and distributions to the Members shall
be made in accordance with the positive balances in their respective Capital
Accounts, after taking into account all adjustments for all periods. All
Interests in the Company shall be cancelled.
11.2 Final Accounting. In the event of the dissolution of the Company,
prior to any liquidation, a proper accounting shall be made to the Members from
the date of the last previous accounting to the date of dissolution.
11.3 Distribution in Kind. In the event the Board determines in
connection with the liquidation of the Company that a portion of the Company's
assets are best distributed in kind to the Members, then such assets shall be
so distributed in kind to the Members on a pro rata basis in accordance with
their relative Member Ratios.
11.4 Certificate of Cancellation. Upon the completion of the winding
up of the Company's affairs and distribution of the Company's assets, the
Company shall be terminated and the Members shall cause the Company to execute
and file a Certificate of Cancellation in accordance with Section 18-203 of the
Act.
ARTICLE XII
EXCULPATION AND INDEMNIFICATION
12.1 Exculpation. Notwithstanding any other provisions of this
Agreement, whether express or implied, or obligation or duty at law or in
equity, none of the Members, Managers, or any officers, directors,
stockholders, partners, employees, representatives or agents of any of the
foregoing, nor any officer, employee, representative or agent of the Company or
any of its Affiliates (individually, a "Covered Person" and, collectively, the
"Covered Persons") nor any former Covered Person shall be liable to the Company
or any other Person for any act or omission (in relation to the Company, this
Agreement, any related document or any transaction or investment contemplated
hereby or thereby) taken or omitted in good faith by a Covered Person and in
the reasonable belief that such act or omission is in or is not contrary to the
best interests of the Company and is within the scope of authority granted to
such Covered Person by this Agreement, provided a majority of disinterested
Managers shall not have determined that such act or omission constitutes fraud,
willful misconduct, bad faith, or gross negligence.
12.2 Indemnification. To the fullest extent permitted by law, the
Company shall indemnify and hold harmless each Covered Person and each former
Covered Person from and against any and all losses, claims, demands,
liabilities, expenses, judgments, fines, settlements and other amounts arising
from any and all claims, demands, actions, suits or proceedings, civil,
criminal, administrative or investigative ("Claims"), in which the Covered
Person may be involved, or threatened to be involved, as a party or otherwise,
by reason of its management of the affairs of the Company or which relates to
or arises out of the Company or its property, business or affairs. A Covered
Person or former Covered Person shall not be entitled to indemnification under
this Section 12.2 with respect to (i) any Claim with respect to which a
majority of disinterested Managers has determined that such Covered Person has
engaged in fraud, willful misconduct, bad faith or gross negligence or (ii) any
Claim initiated by such Covered Person unless such Claim (or part thereof) (A)
was brought to enforce such Covered Person's rights to indemnification
hereunder or (B) was authorized or consented to by the Board. Expenses incurred
by a Covered Person in defending any Claim shall be paid by the Company in
advance of the final disposition of such Claim upon receipt by the Company of
an undertaking by or on behalf of such Covered Person to repay such amount if
it shall be ultimately determined that such Covered Person is not entitled to
be indemnified by the Company as authorized by this Section 12.2.
Notwithstanding the foregoing, no Covered Person shall be indemnified by the
Company in respect of any Claim by a Member of the Company.
12.3 Corporate Opportunity.
(a) If a Member (or any of its officers, directors, agents,
stockholders, members, partners, Affiliates or subsidiaries) or a Manager
acquires knowledge of a potential transaction or matter which may be a
Corporate Opportunity or otherwise is then exploiting any Corporate
Opportunity, the Company shall have no interest in such Corporate Opportunity
and no expectancy that such Corporate Opportunity be offered to it, any such
interest or expectancy being hereby renounced, so that such Person shall have
no duty to present such Corporate Opportunity to the Company and shall have the
right to hold any such Corporate Opportunity for its (and its officers',
directors', agents', stockholders', members', partners', Affiliates' or
subsidiaries') own account or to direct, sell, assign or transfer such
Corporate Opportunity to Persons other than the Company. Such Person shall not
breach any fiduciary duty by reason of the fact that such Person does not
present such Corporate Opportunity to the Company or pursues or acquires such
Corporate Opportunity for itself or directs, sells, assigns or transfers such
Corporate Opportunity to another Person.
(b) For purposes of this Section 12.3, (i) the term the "Company"
shall mean the Company and all corporations, partnerships, joint ventures,
associations and other entities in which the Company beneficially owns
(directly or indirectly) 50% or more of the outstanding voting stock, voting
power, partnership interests or similar voting interests (other than BFS); and
(ii) the term "Corporate Opportunity" shall mean an investment or business
opportunity or prospective economic advantage in which the Company could, but
for the provisions of this Section 12.3 have an interest or expectancy.
12.4 Amendments. Any repeal or modification of this Article XII shall
not adversely affect any rights of such Covered Person or any other person
entitled to the protections of Section 12.3 pursuant to this Article XII,
including the right to indemnification and to the advancement of expenses of a
Covered Person existing at the time of such repeal or modification with respect
to any acts or omissions occurring prior to such repeal or modification.
ARTICLE XIII
AMENDMENT TO AGREEMENT
This Agreement and the Certificate of Formation may only be amended,
and the observance of any term hereof may be waived, with (and only with) the
written consent of each Member.
ARTICLE XIV
GENERAL PROVISIONS
14.1 Notices. Unless otherwise specifically provided in this
Agreement, all notices and other communications required or permitted to be
given hereunder shall be in writing and shall be (i) delivered by hand, (ii)
delivered by a nationally recognized commercial overnight delivery service,
(iii) mailed postage prepaid by first class mail in any such case directed or
addressed to the respective addresses set forth on Schedule A hereto or (iv)
transmitted by facsimile transmitted to:
If to JLL Fund V, to: JLL Partners Fund V, LP
450 Lexington Avenue
Suite 3350
New York, New York 10017
Attention: Ramsey A. Frank
Fax: (212) 286-8626
with a copy to: (which shall not constitute notice)
Skadden, Arps, Slate, Meagher & Flom LLP
One Rodney Square
P.O. Box 636
Wilmington, Delaware 19899-0636
Attention: Robert B. Pincus, Esq.
Fax: (302) 651-3001
If to WP, to: Warburg Pincus Private Equity IX, L.P.
c/o Warburg Pincus LLC
466 Lexington Avenue
New York, NY 10017-3147
Attention: David Barr
Kevin Kruse
Fax: (212) 878-9100
with a copy to: (which shall not constitute notice)
Willkie Farr & Gallagher LLP
787 Seventh Avenue
New York, N.Y. 10019-6099
Attention: Steven J. Gartner, Esq.
Fax: (212) 728-8111
If to the Company, to: Building Products LLC
c/o JLL Partners
450 Lexington Avenue
Suite 3350
New York, New York 10017
Attention: Ramsey A. Frank
Fax: (212) 286-8626
with a copy to: (which shall not constitute notice)
Warburg Pincus Private Equity IX, L.P.
c/o Warburg Pincus LLC
466 Lexington Avenue
New York, NY 10017-3147
Attention: David Barr
Kevin Kruse
Fax: (212) 878-9100
Such notices shall be effective: (a) in the case of hand deliveries when
received; (b) in the case of an overnight delivery service, on the next
Business Day after being placed in the possession of such delivery service,
with delivery charges prepaid; (c) in the case of mail, five (5) days after
deposit in the postal system, first class mail, postage prepaid; and (d) in the
case of facsimile notices, when electronic indication of receipt is received.
Any party may change its address and telecopy number by written notice to the
other parties given in accordance with this Section 14.1.
14.2 Entire Agreement, etc. This Agreement constitutes the entire
agreement between the parties hereto relating to the subject matter hereof and
supersedes all prior contracts, agreements and understandings between them. No
course of prior dealings between the parties shall be relevant to supplement or
explain any term used in this Agreement. Acceptance or acquiescence in a course
of performance rendered under this Agreement shall not be relevant to determine
the meaning of this Agreement even though the accepting or the acquiescing
party has knowledge of the nature of the performance and an opportunity for
objection. No provisions of this Agreement may be waived, amended or modified
orally, but only by an instrument in writing executed by a duly authorized
officer. No waiver of any terms or conditions of this Agreement in one instance
shall operate as a waiver of any other term or condition or as a waiver in any
other instance.
14.3 Construction Principles. As used in this Agreement words in any
gender shall be deemed to include all other genders. The singular shall be
deemed to include the plural and vice versa. The captions and article and
section headings in this Agreement are inserted for convenience of reference
only and are not intended to have significance for the interpretation of or
construction of the provisions of this Agreement.
14.4 Counterparts. This Agreement may be executed in two or more
counterparts by the parties hereto, each of which when so executed will be an
original, but all of which together will constitute one and the same
instrument.
14.5 Severability. If any provision of this Agreement is held to be
invalid or unenforceable for any reason, such provision shall be ineffective to
the extent of such invalidity or unenforceability; provided, however, that the
remaining provisions will continue in full force without being impaired or
invalidated in any way unless such invalid or unenforceable provision or clause
shall be so significant as to materially affect the Members' expectations
regarding this Agreement. Otherwise, the Members agree to replace any invalid
or unenforceable provision with a valid provision which most closely
approximates the intent and economic effect of the invalid or unenforceable
provision.
14.6 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware without regard to the
principles of conflicts of laws thereof.
14.7 Binding Effect. This Agreement shall be binding upon, and inure
to the benefit of the Members.
14.8 Additional Documents and Acts. Each Member agrees to execute and
deliver such additional documents and instruments and to perform such
additional acts as may be necessary or appropriate to effectuate, carry out and
perform all of the terms, provisions, and conditions of this Agreement and of
the transactions contemplated hereby.
14.9 No Third-Party Beneficiary. This Agreement is made solely for the
benefit of the parties hereto and no other Person shall have any rights,
interest, or claims hereunder or otherwise be entitled to any benefits under or
on account of this Agreement as a third-party beneficiary or otherwise.
14.10 Limited Liability Company. The parties to this Agreement agree
to form a Limited Liability Company and do not intend to form a partnership
under the laws of the State of Delaware or any other laws; provided, however,
that, to the extent permitted by U.S. law, the Company will be treated as a
partnership for U.S. federal, state and local income tax purposes and as an
"investment partnership" as defined in Section 731(c) of the Code. The Members
agree not to take, and cause the Company not to take, any action inconsistent
with the Company's classification as a partnership for U.S. federal income tax
purposes and as an "investment partnership" as defined in Section 731(c) of the
Code.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, each Member has duly executed this Agreement as of
the day first above written.
JLL PARTNERS FUND V, L.P.
By: JLL Associates V, L.P.,
its general partner
By: JLL Associates, G.P. V, LLC,
its general partner
By: /s/ Paul S. Levy
------------------------------------
Name: Paul S. Levy
Title: Managing Member
WARBURG PINCUS PRIVATE EQUITY IX, L.P.
By: Warburg Pincus IX LLC, General
Partner
By: Warburg Pincus Partners, LLC, Sole
Member
By: Warburg Pincus & Co., Managing
Member
By: /s/ Kevin Kruse
------------------------------------
Name: Kevin Kruse
Title:
BUILDING PRODUCTS, LLC
By: /s/ Brett N. Milgrim
------------------------------------
Name: Brett N. Milgrim
Title: Authorized Person
Schedule A
----------
MEMBER INFORMATION TABLE
------------------------
Name and Address Capital Member
of Member Account Ratio
--------- ------- -----
Holders of Interests
JLL Partners Fund V, LP $199,008,684.50 50.0%
450 Lexington Avenue
Suite 3350
New York, New York 10017
Warburg Pincus Private Equity IX, L.P. $199,008,684.50 50.0%
466 Lexington Avenue
New York, NY 10017-3147
SCHEDULE I
----------
Set forth below is the name, position and present principal
occupation of each of the general partners of Warburg Pincus & Co. ("WP") and
members of Warburg Pincus LLC ("WP LLC"). The sole general partner of Warburg
Pincus Private Equity IX, L.P. ("WP IX") is Warburg Pincus IX, LLC ("WP IX
LLC"), an indirect subsidiary of WP. WP IX, WP IX LLC, WP and WP LLC are
hereinafter collectively referred to as the "Reporting Entities". Except as
otherwise indicated, the business address of each of such persons is 466
Lexington Avenue, New York, New York 10017, and each of such persons is a
citizen of the United States.
GENERAL PARTNERS OF WP
----------------------
PRESENT PRINCIPAL OCCUPATION IN ADDITION
TO POSITION WITH WP, AND POSITIONS
NAME WITH THE REPORTING ENTITIES
Joel Ackerman Partner of WP; Member and Managing Director of WP LLC
Scott A. Arenare Partner of WP; Member and Managing Director of WP LLC
Gregory Back Partner of WP; Member and Managing Director of WP LLC
David Barr Partner of WP; Member and Managing Director of WP LLC
Harold Brown Partner of WP; Member and Managing Director of WP LLC
Sean D. Carney Partner of WP; Member and Managing Director of WP LLC
Mark Colodny Partner of WP; Member and Managing Director of WP LLC
David A. Coulter Partner of WP; Member and Managing Director of WP LLC
Timothy J. Curt Partner of WP; Member and Managing Director of WP LLC
W. Bowman Cutter Partner of WP; Member and Managing Director of WP LLC
Cary J. Davis Partner of WP; Member and Managing Director of WP LLC
Michael Graff Partner of WP; Member and Managing Director of WP LLC
Patrick T. Hackett Partner of WP; Member and Managing Director of WP LLC
Jeffrey A. Harris Partner of WP; Member and Managing Director of WP LLC
Stewart J. Hen Partner of WP; Member and Managing Director of WP LLC
William H. Janeway Partner of WP; Member and Vice Chairman of WP LLC
Julie A. Johnson Staples Partner of WP; Member and Managing Director of WP LLC
Chansoo Joung Partner of WP; Member and Managing Director of WP LLC
Peter R. Kagan Partner of WP; Member and Managing Director of WP LLC
Charles R. Kaye Managing General Partner of WP; Managing Member and Co-President of WP LLC
Henry Kressel Partner of WP; Member and Managing Director of WP LLC
Kevin Kruse Partner of WP; Member and Managing Director of WP LLC
Joseph P. Landy Managing General Partner of WP; Managing Member and Co-President of WP LLC
Sidney Lapidus Partner of WP; Member and Managing Director of WP LLC
Kewsong Lee Partner of WP; Member and Managing Director of WP LLC
Jonathan S. Leff Partner of WP; Member and Managing Director of WP LLC
Philip Mintz Partner of WP; Member and Managing Director of WP LLC
Rodman W. Moorhead III Partner of WP; Member and Managing Director of WP LLC
James Neary Partner of WP; Member and Managing Director of WP LLC
Bilge Ogut Partner of WP; Member and Managing Director of WP LLC
Dalip Pathak Partner of WP; Member and Managing Director of WP LLC
Lionel I. Pincus Partner of WP; Member and Chairman of WP LLC
Michael F. Profenius Partner of WP; Member and Managing Director of WP LLC
Stan Raatz Partner of WP; Member and Managing Director of WP LLC
Henry B. Schacht Partner of WP; Member and Managing Director of WP LLC
Steven G. Schneider Partner of WP; Member and Managing Director of WP LLC
Mimi Strouse Partner of WP; Member and Managing Director of WP LLC
Patrick Sullivan Partner of WP; Member and Managing Director of WP LLC
Barry Taylor Partner of WP; Member and Managing Director of WP LLC
Christopher H. Turner Partner of WP; Member and Managing Director of WP LLC
John L. Vogelstein Partner of WP; Member and Vice Chairman of WP LLC
John R. Vrolyk Partner of WP; Member and Managing Director of WP LLC
Elizabeth H. Weatherman Partner of WP; Member and Managing Director of WP LLC
David J. Wenstrup Partner of WP; Member and Managing Director of WP LLC
Rosanne Zimmerman Partner of WP; Member and Managing Director of WP LLC
Pincus & Company LLC*
NL & Co.**
Warburg Pincus VP
Partnership, L.P.***
---------------------
* New York limited liability company; primary activity is ownership interest
in WP and WP LLC
** New York limited partnership; primary activity is ownership interest in WP
*** Delaware limited partnership; primary activity is ownership interest in WP
MEMBERS OF WP LLC
-----------------
PRESENT PRINCIPAL OCCUPATION IN ADDITION
TO POSITION WITH WP LLC, AND POSITIONS
NAME WITH THE REPORTING ENTITIES
Joel Ackerman Member and Managing Director of WP LLC; Partner of WP
Scott A. Arenare Member and Managing Director of WP LLC; Partner of WP
Gregory Back Member and Managing Director of WP LLC; Partner of WP
David Barr Member and Managing Director of WP LLC; Partner of WP
Harold Brown Member and Managing Director of WP LLC; Partner of WP
Sean D. Carney Member and Managing Director of WP LLC; Partner of WP
Stephen John Coates (1) Member and Managing Director of WP LLC
Mark Colodny Member and Managing Director of WP LLC; Partner of WP
David A. Coulter Member and Managing Director of WP LLC; Partner of WP
Timothy J. Curt Member and Managing Director of WP LLC; Partner of WP
W. Bowman Cutter Member and Managing Director of WP LLC; Partner of WP
Cary J. Davis Member and Managing Director of WP LLC; Partner of WP
Rajiv Ghatalia (2) Member and Managing Director of WP LLC
Michael Graff Member and Managing Director of WP LLC; Partner of WP
Patrick T. Hackett Member and Managing Director of WP LLC; Partner of WP
Jeffrey A. Harris Member and Managing Director of WP LLC; Partner of WP
Stewart J. Hen Member and Managing Director of WP LLC; Partner of WP
William H. Janeway Member and Vice Chairman of WP LLC; Partner of WP
Julie A. Johnson Staples Member and Managing Director of WP LLC; Partner of WP
Chansoo Joung Member and Managing Director of WP LLC; Partner of WP
Peter R. Kagan Member and Managing Director of WP LLC; Partner of WP
Charles R. Kaye Managing Member and Co-President of WP LLC; Managing General Partner of WP
Rajesh Khanna (2) Member and Managing Director of WP LLC
Henry Kressel Member and Managing Director of WP LLC; Partner of WP
Kevin Kruse Member and Managing Director of WP LLC; Partner of WP
Joseph P. Landy Managing Member and Co-President of WP LLC; Managing General Partner of WP
Sidney Lapidus Member and Managing Director of WP LLC; Partner of WP
Kewsong Lee Member and Managing Director of WP LLC; Partner of WP
Jonathan S. Leff Member and Managing Director of WP LLC; Partner of WP
Jeff Leng (3) Member and Managing Director of WP LLC
David Li (4) Member and Managing Director of WP LLC
Nicholas J. Lowcock (1) Member and Managing Director of WP LLC
Philip Mintz Member and Managing Director of WP LLC; Partner of WP
Rodman W. Moorhead III Member and Managing Director of WP LLC; Partner of WP
James Neary Member and Managing Director of WP LLC; Partner of WP
Bilge Ogut Member and Managing Director of WP LLC; Partner of WP
Dalip Pathak Member and Managing Director of WP LLC; Partner of WP
Lionel I. Pincus Member and Chairman of WP LLC; Partner of WP
Pulak Chandan Prasad (2) Member and Managing Director of WP LLC
Michael F. Profenius Member and Managing Director of WP LLC; Partner of WP
Stan Raatz Member and Managing Director of WP LLC; Partner of WP
Henry B. Schacht Member and Managing Director of WP LLC; Partner of WP
Steven G. Schneider Member and Managing Director of WP LLC; Partner of WP
Joseph C. Schull (5) Member and Managing Director of WP LLC
Mimi Strouse Member and Managing Director of WP LLC; Partner of WP
Patrick Sullivan Member and Managing Director of WP LLC; Partner of WP
Chang Q. Sun (4) Member and Managing Director of WP LLC
Barry Taylor Member and Managing Director of WP LLC; Partner of WP
Christopher H. Turner Member and Managing Director of WP LLC; Partner of WP
Simon Turton (1) Member and Managing Director of WP LLC
John L. Vogelstein Member and Vice Chairman of WP LLC; Partner of WP
John R. Vrolyk Member and Managing Director of WP LLC; Partner of WP
Elizabeth H. Weatherman Member and Managing Director of WP LLC; Partner of WP
David J. Wenstrup Member and Managing Director of WP LLC; Partner of WP
Peter Wilson (1) Member and Managing Director of WP LLC
Jeremy S. Young (1) Member and Managing Director of WP LLC
Rosanne Zimmerman Member and Managing Director of WP LLC; Partner of WP
Pincus & Company LLC*
(1) Citizen of United Kingdom
(2) Citizen of India
(3) Citizen of China
(4) Citizen of Hong Kong
(5) Citizen of Canada
* New York limited liability company; primary activity is ownership interest
in WP and WP LLC
As of February 15, 2006
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints each of Scott A. Arenare,
Timothy J. Curt and Steven G. Schneider, acting together or individually,
his/her true and lawful attorney-in fact to:
1. execute for and on behalf of the undersigned any statement or
report, including any amendment to any statement or report, required
to be filed with respect to the undersigned under Section 13 or
Section 16 of the United States Securities Exchange Act of 1934, as
amended, and any rules, regulations and requirements thereunder,
including without limitation any Form 3, 4 or 5 or any Schedule 13D
or 13G, or any statement or report, including any amendment to any
statement or report, required to be filed with respect to the
undersigned under any comparable laws, rules, regulations and
requirements of any foreign jurisdiction, and to file any of the
same with the Securities and Exchange Commission and any other
appropriate U.S. and foreign regulatory authorities;
2. do and perform any and all acts for and on behalf of the undersigned
which may be necessary or desirable to complete the execution of any
such Forms and the filing thereof with the United States Securities
and Exchange Commission and any other person as may be required by
law; and
3. take any other action of any type whatsoever in connection with the
foregoing which, in the opinion of such attorney-in-fact, may be of
benefit to, in the best interest of, or legally required by, the
undersigned, it being understood that the documents executed by such
attorney-in-fact on behalf of the undersigned pursuant to this power
of attorney shall be in such form and shall contain such terms and
conditions as such attorney-in-fact may approve may approve in his
discretion.
The undersigned hereby grants to each such attorney-in-fact full power
and authority to do and perform any and every act and thing whatsoever
requisite, necessary or proper to be done in the exercise of any of the rights
and powers herein granted, with full power of substitution or revocation,
hereby ratifying and confirming all that such attorney-in-fact, or his
substitute or substitutes, shall lawfully do or cause to be done by virtue of
this power of attorney and the rights and powers herein granted. The
undersigned acknowledges that the foregoing attorneys-in-fact, in serving in
such capacity at the request of the undersigned, are not assuming any of the
undersigned's responsibilities to comply with the Securities Exchange Act of
1934, as amended.
This power of attorney shall continue in full force and effect until
revoked in writing by the undersigned or his/her attorney-in-fact.
IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to
be executed as of this 27th day of February, 2006.
/s/ Joseph P. Landy
----------------------------------------------------
Print Name: Joseph P. Landy
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints each of Scott A. Arenare,
Timothy J. Curt and Steven G. Schneider, acting together or individually,
his/her true and lawful attorney-in fact to:
1. execute for and on behalf of the undersigned any statement or
report, including any amendment to any statement or report, required
to be filed with respect to the undersigned under Section 13 or
Section 16 of the United States Securities Exchange Act of 1934, as
amended, and any rules, regulations and requirements thereunder,
including without limitation any Form 3, 4 or 5 or any Schedule 13D
or 13G, or any statement or report, including any amendment to any
statement or report, required to be filed with respect to the
undersigned under any comparable laws, rules, regulations and
requirements of any foreign jurisdiction, and to file any of the
same with the Securities and Exchange Commission and any other
appropriate U.S. and foreign regulatory authorities;
2. do and perform any and all acts for and on behalf of the undersigned
which may be necessary or desirable to complete the execution of any
such Forms and the filing thereof with the United States Securities
and Exchange Commission and any other person as may be required by
law; and
3. take any other action of any type whatsoever in connection with the
foregoing which, in the opinion of such attorney-in-fact, may be of
benefit to, in the best interest of, or legally required by, the
undersigned, it being understood that the documents executed by such
attorney-in-fact on behalf of the undersigned pursuant to this power
of attorney shall be in such form and shall contain such terms and
conditions as such attorney-in-fact may approve may approve in his
discretion.
The undersigned hereby grants to each such attorney-in-fact full power
and authority to do and perform any and every act and thing whatsoever
requisite, necessary or proper to be done in the exercise of any of the rights
and powers herein granted, with full power of substitution or revocation,
hereby ratifying and confirming all that such attorney-in-fact, or his
substitute or substitutes, shall lawfully do or cause to be done by virtue of
this power of attorney and the rights and powers herein granted. The
undersigned acknowledges that the foregoing attorneys-in-fact, in serving in
such capacity at the request of the undersigned, are not assuming any of the
undersigned's responsibilities to comply with the Securities Exchange Act of
1934, as amended.
This power of attorney shall continue in full force and effect until
revoked in writing by the undersigned or his/her attorney-in-fact.
IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to
be executed as of this 27th day of February, 2006.
/s/ Charles R. Kaye
-----------------------------------------------
Print Name: Charles R. Kaye