Exhibit 10.1

EXECUTION VERSION

$75,000,000

Builders FirstSource, Inc.

6.750% Senior Secured Notes due 2027

Purchase Agreement

July 11, 2019

Credit Suisse Securities (USA) LLC

As Representative of the

several Initial Purchasers listed

in Schedule 1 hereto

Eleven Madison Avenue

New York, New York 10010

Ladies and Gentlemen:

Builders FirstSource, Inc., a Delaware corporation (the “Issuer”), proposes to
issue and sell to the several initial purchasers listed in Schedule 1 hereto
(the “Initial Purchasers”), for whom Credit Suisse Securities (USA) LLC is
acting as representative (the “Representative”), $75,000,000 principal amount of
additional notes (the “Securities”) of the same class as the Issuer’s previously
issued 6.750% Senior Secured Notes due 2027 (the “Existing Securities”).

The Securities are to be issued pursuant to that certain indenture, dated
May 30, 2019 (the “Base Indenture”), among the Issuer, the guarantors listed in
Schedule 2 hereto (the “Guarantors”) and Wilmington Trust, National Association,
as trustee (the “Trustee”) and as collateral agent (the “Collateral Agent”), as
supplemented by a supplemental indenture, to be dated as of the Closing Date (as
defined below) (the “Supplemental Indenture”), to be entered into among the
Issuer, the Guarantors, the Trustee and the Collateral Agent. The Base
Indenture, as supplemented by the Supplemental Indenture, is herein referred to
as the “Indenture”. The Securities will constitute “Additional Notes” under the
Base Indenture and, except as described in the Time of Sale Information and the
Offering Circular, will have terms identical to the Existing Securities and will
be treated as a single class of debt securities for all purposes under the
Indenture.

The obligations of the Issuer in respect of the Securities will be fully,
irrevocably and unconditionally guaranteed (the “Guarantees”) on a senior
secured basis, jointly and severally, by (i) the Guarantors and (ii) any
domestic subsidiary of the Issuer formed or acquired after the Closing Date that
is required to execute a supplemental indenture to provide a Guarantee in
accordance with the terms of the Indenture, and their respective successors and
assigns. This Agreement is to confirm the agreement concerning the purchase of
the Securities from the Issuer by the Initial Purchasers. In addition, the
Issuer, the Guarantors and the Collateral Agent are parties to a collateral
agreement, dated as of May 30, 2019 (the “Notes Collateral Agreement”).

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The Securities and the Guarantees will be secured by (i) a first-priority
security interest (subject to Permitted Liens (as defined in the Base
Indenture)) in substantially all of the assets of the Issuer and the Guarantors
other than the ABL Priority Collateral (as defined below) and other Excluded
Assets (as defined in the Time of Sale Information and the Offering Circular)
(the “Notes Collateral”) and (ii) a second-priority security interest (subject
to Permitted Liens) relative to the liens securing that certain asset-based
facility (the “ABL Facility”) under the Amended and Restated Credit Agreement,
dated as of July 31, 2015 (as amended by Amendment No. 1, dated as of March 22,
2017, Amendment No. 2, dated as of April 24, 2019, and as further amended,
modified and supplemented from time to time, the “ABL Credit Agreement”), among,
inter alios, the Issuer, as borrower, the lending institutions from time to time
party thereto and SunTrust Bank, as administrative agent and collateral agent
(the “ABL Agent”), in the assets of the Issuer and the Guarantors (the “ABL
Priority Collateral” and, together with the Notes Collateral, the “Collateral”)
that secure the ABL Facility on a first-priority basis (including, subject to
certain exceptions, accounts receivable, inventory, certain other related assets
and proceeds thereof), in each case, as more particularly described in the Time
of Sale Information and the Offering Circular. The Securities will rank pari
passu in right of payment with any existing and future senior indebtedness of
the Issuer and the Guarantors, including the Existing Securities, the Issuer’s
5.625% Senior Secured Notes Due 2024 (the “Existing Secured Notes”), the ABL
Facility, that certain term loan facility (the “Term Loan Facility” and,
together with the ABL Facility, the “Senior Credit Facilities”) under the Second
Amended and Restated Term Loan Credit Agreement, dated as of February 23, 2017
(as amended, modified and supplemented from time to time, the “Term Loan Credit
Agreement” and, together with the ABL Credit Agreement, the “Senior Credit
Agreements”) among, the Issuer, as borrower, the lenders from time to time party
thereto and Deutsche Bank AG New York Branch, as administrative agent (the “Term
Administrative Agent”). The rights of holders of the Securities to the
Collateral will be documented by security agreements, pledge agreements, share
pledges, debentures and other instruments evidencing or creating or purporting
to create a security interest in favor of the Collateral Agent as described in
the Time of Sale Information and the Offering Circular (collectively, the
“Security Documents”), each in favor of the Collateral Agent for its benefit and
the benefit of the Trustee and the holders of the Securities.

The liens on the Collateral securing the Securities will be subject to (i) that
certain ABL/Bond Intercreditor Agreement, dated as of May 29, 2013, among, inter
alios, the Issuer, the other grantors party thereto, the ABL Agent and the other
parties thereto, as amended by that certain Lien Sharing and Priority
Confirmation Joinder, dated as of July 31, 2015, among the Issuer, the other
grantors party thereto, the Term Administrative Agent, the ABL Agent and the
other parties thereto, as further amended by that certain Lien Sharing and
Priority Confirmation Joinder, dated as of August 22, 2016 among the Issuer, the
other grantors party thereto, the Term Administrative Agent, the ABL Agent and
the other parties thereto, and as further amended by that certain Lien Sharing
and Priority Confirmation Joinder, dated as of May 30, 2019, among the Issuer,
the other grantors party thereto, the Collateral Agent, the Term Administrative
Agent, the ABL Agent and the other parties thereto (the “Existing ABL/Bond
Intercreditor Agreement” and, as amended by the Joinder to the Existing ABL/Bond
Intercreditor Agreement (as defined below), the “ABL/Bond Intercreditor
Agreement”) and (ii) that certain Pari Passu Intercreditor

 

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Agreement, dated as of July 31, 2015, among the Issuer, the other grantors party
thereto, the Term Administrative Agent and the other parties thereto, as amended
by that certain Additional Authorized Representative Agent Joinder Agreement
No. 1, dated as of August 22, 2016, among the Issuer, the Term Administrative
Agent and the other parties thereto, and as further amended by that certain
Additional Authorized Representative Agent Joinder Agreement No. 2, dated as of
May 30, 2019, among the Issuer, the Term Administrative Agent, the Collateral
Agent and the other parties thereto (the “Existing Pari Passu Intercreditor
Agreement” and, as amended by the Joinder to the Existing Pari Passu
Intercreditor Agreement (as defined below), the “Pari Passu Intercreditor
Agreement”; the Pari Passu Intercreditor Agreement and the ABL/Bond
Intercreditor Agreement are collectively referred to as the “Intercreditor
Agreements”). On the Closing Date, the Collateral Agent will enter into a Lien
Sharing and Priority Confirmation Joinder to the Existing ABL/Bond Intercreditor
Agreement (the “Joinder to the Existing ABL/Bond Intercreditor Agreement”) and
an Additional Authorized Representative Agent Joinder Agreement to the Existing
Pari Passu Intercreditor Agreement (the “Joinder to the Existing Pari Passu
Intercreditor Agreement” and, together with the Joinder to the Existing ABL/Bond
Intercreditor Agreement, the “Joinders”). Upon execution of the Joinders and the
execution and delivery of the Intercreditor Agreement Officer’s Certificates (as
defined on Schedule 3 hereto), the liens on the Collateral securing the
Securities and the Guarantees will be subject to the Intercreditor Agreements.

For purposes of this Agreement, the term “Transactions” means (a) the issuance
and sale of the Securities; (b) the redemption of the Existing Secured Notes as
set forth in the Time of Sale Information and the Offering Circular (the
“Redemption”); and (c) the payment of all fees and expenses related to any of
the foregoing. For purposes of this Agreement (i) the term “Transaction
Documents” means this Agreement, the Securities (including the Guarantees), the
Base Indenture, the Supplemental Indenture, the Intercreditor Agreements, the
Joinders, the Notes Collateral Agreement and the other Security Documents and
(ii) the term “New Transaction Documents” means this Agreement, the Securities
(including the Guarantees), the Supplemental Indenture and the Joinders.

The Securities will be sold to the Initial Purchasers without being registered
under the Securities Act of 1933, as amended (the “Securities Act”), in reliance
upon an exemption therefrom. The Issuer has prepared a preliminary offering
circular dated July 11, 2019 (the “Preliminary Offering Circular”) and will
prepare a final offering circular dated the date hereof (the “Offering
Circular”) setting forth information concerning the Issuer, the Guarantors, the
Securities, the Guarantees, the Collateral and the other Transaction Documents
and Transactions. Copies of the Preliminary Offering Circular have been, and
copies of the Offering Circular will be, delivered by the Issuer to the Initial
Purchasers pursuant to the terms of this Agreement. The Issuer hereby confirms
that it has authorized the use of the Preliminary Offering Circular, the other
Time of Sale Information and the Offering Circular in connection with the
offering and resale of the Securities by the Initial Purchasers in the manner
contemplated by this Agreement. Capitalized terms used but not defined herein
shall have the meanings given to such terms in the Preliminary Offering
Circular.

At the time when sales of the Securities were first made (the “Time of Sale”),
or prior thereto, the Issuer had prepared the following information
(collectively, the “Time of Sale Information”): the Preliminary Offering
Circular, as supplemented and amended by the written communications listed on
Annex A hereto.

 

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All references herein to the terms “Time of Sale Information” and “Offering
Circular” shall be deemed to mean and include all information filed under the
Exchange Act prior to the Time of Sale and incorporated by reference in the Time
of Sale Information (including the Preliminary Offering Circular) or the
Offering Circular (as the case may be), and all references herein to the terms
“amend,” “amendment” or “supplement” with respect to the Offering Circular shall
be deemed to mean and include all information filed under the Exchange Act after
the Time of Sale and incorporated by reference in the Offering Circular.

The Issuer and the Guarantors hereby confirm their agreement with the several
Initial Purchasers concerning the purchase and resale of the Securities, as
follows:

1. Purchase and Resale of the Securities.

(a) The Issuer agrees to issue and sell the Securities to the several Initial
Purchasers as provided in this Agreement, and each Initial Purchaser, on the
basis of the representations, warranties and agreements set forth herein and
subject to the conditions set forth herein, agrees, severally and not jointly,
to purchase from the Issuer the respective principal amount of Securities set
forth opposite such Initial Purchaser’s name in Schedule 1 hereto at a price
equal to 103.250% of the principal amount thereof plus accrued interest from
May 30, 2019 to the Closing Date (the “Purchase Price”). The Issuer will not be
obligated to deliver any of the Securities except upon payment for all the
Securities to be purchased as provided herein.

(b) The Issuer understands that the Initial Purchasers intend to offer the
Securities for resale on the terms set forth in the Time of Sale Information.
Each Initial Purchaser, severally and not jointly, represents, warrants and
agrees that:

(i) it is a qualified institutional buyer within the meaning of Rule 144A under
the Securities Act (a “QIB”) and an accredited investor within the meaning of
Rule 501(a) of Regulation D under the Securities Act (“Regulation D”);

(ii) it has not, directly or indirectly, solicited offers for, or offered or
sold, and will not solicit offers for, or offer or sell, the Securities by means
of any form of general solicitation or general advertising within the meaning of
Rule 502(c) of Regulation D or in any manner involving a public offering within
the meaning of Section 4(a)(2) of the Securities Act; and

(iii) it has not, directly or indirectly, solicited offers for, or offered or
sold, and will not solicit offers for, or offer or sell, the Securities as part
of the initial offering except:

 

  (A)

within the United States to persons whom it reasonably believes to be QIBs in
transactions pursuant to Rule 144A under the Securities Act (“Rule 144A”) and in
connection with each such sale, it has taken or will take reasonable steps to
ensure that the purchaser of the Securities is aware that such sale is being
made in reliance on Rule 144A;

 

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  (B)

to persons inside the United States that are accredited investors (as defined in
Rule 501(a)(1),(2), (3), (7) and (8) under the Securities Act); or

 

  (C)

in accordance with the restrictions set forth in Annex C hereto.

(c) Each Initial Purchaser acknowledges and agrees that the Issuer and, for
purposes of the “no registration” opinions to be delivered to the Initial
Purchasers pursuant to Sections 6(f) and 6(g), counsel for the Issuer and
counsel for the Initial Purchasers, respectively, may rely upon the accuracy of
the representations and warranties of the Initial Purchasers, and compliance by
the Initial Purchasers with their agreements, contained in paragraph (b) above
(including Annex C hereto), and each Initial Purchaser hereby consents to such
reliance.

(d) The Issuer acknowledges and agrees that the Initial Purchasers may offer and
sell Securities to or through any affiliate of an Initial Purchaser and that any
such affiliate may offer and sell Securities purchased by it to or through any
Initial Purchaser; provided that such offers and sales shall be made in
accordance with the provisions of this Agreement (including Annex C hereto).

(e) The Issuer and the Guarantors acknowledge and agree that each Initial
Purchaser is acting solely in the capacity of an arm’s length contractual
counterparty to the Issuer and the Guarantors with respect to the offering of
Securities contemplated hereby (including in connection with determining the
terms of the offering) and not as a financial advisor or a fiduciary to, or an
agent of, the Issuer or the Guarantors or any other person in connection
therewith. Additionally, neither the Representative nor any other Initial
Purchaser is advising the Issuer or the Guarantors or any other person as to any
legal, tax, investment, accounting or regulatory matters in any jurisdiction.
The Issuer and the Guarantors shall consult with their own advisors concerning
such matters and shall be responsible for making their own independent
investigation and appraisal of the transactions contemplated hereby, and neither
the Representative nor any other Initial Purchaser shall have any responsibility
or liability to the Issuer or the Guarantors with respect thereto. Any review by
the Representative or any Initial Purchaser of the Issuer, the Guarantors and
the transactions contemplated hereby or other matters relating to such
transactions will be performed solely for the benefit of the Representative or
such Initial Purchaser, as the case may be, and shall not be on behalf of the
Issuer, the Guarantors or any other person.

2. Payment and Delivery.

(a) Payment for and delivery of the Securities will be made at the offices of
Cahill Gordon & Reindel LLP at 10:00 A.M., New York City time, on July 25, 2019
or at such other time or place on the same or such other date, not later than
the fifth business day thereafter, as the Representative and the Issuer may
agree upon in writing. The time and date of such payment and delivery is
referred to herein as the “Closing Date” and the time of Closing on the Closing
Date is referred to herein as the “Closing.”

 

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(b) Payment for the Securities shall be made by payment of the Purchase Price to
the account or accounts specified by the Issuer by wire transfer in immediately
available funds against delivery to the nominee of The Depository Trust Company
(“DTC”), for the account of the Initial Purchasers, of one or more global notes
representing the Securities (collectively, the “Global Note”), with any transfer
taxes payable in connection with the sale of the Securities duly paid by the
Issuer. The Global Note will be made available for inspection by the
Representative not later than 1:00 P.M., New York City time, on the business day
prior to the Closing Date.

3. Representations and Warranties of the Issuer and the Guarantors. The Issuer
and the Guarantors hereby, jointly and severally, represent and warrant to each
Initial Purchaser that, as of the Time of Sale and as of the Closing Date:

(a) Preliminary Offering Circular, Time of Sale Information and Offering
Circular. The Time of Sale Information, at the Time of Sale, did not, and at the
Closing Date, will not, and the Offering Circular, as of its date and as of the
Closing Date, will not, contain any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
provided that the Issuer and the Guarantors make no representation or warranty
with respect to any statements or omissions made in reliance upon and in
conformity with information relating to any Initial Purchaser furnished to the
Issuer in writing by or on behalf of such Initial Purchaser through the
Representative expressly for use in the Time of Sale Information or the Offering
Circular (it being understood and agreed that the only such information consists
of the information described as such in Section 7(b)).

(b) Additional Written Communications. The Issuer and the Guarantors (including
their respective agents and representatives, other than the Initial Purchasers
in their capacity as such) have not prepared, made, used, authorized, approved
or referred to and will not prepare, make, use, authorize, approve or refer to
any written communication that constitutes an offer to sell or solicitation of
an offer to buy the Securities (each such communication by the Issuer and the
Guarantors or their agents and representatives (other than a communication
referred to in clauses (i), (ii) and (iii) below) an “Issuer Written
Communication”) other than (i) the Preliminary Offering Circular, (ii) the
Offering Circular, (iii) the documents listed on Annex A hereto, including the
term sheet substantially in the form of Annex B hereto, which constitute part of
the Time of Sale Information and (iv) any electronic road show or other written
communications, in each case used in accordance with Section 4(c) hereof. Each
such Issuer Written Communication, when taken together with the Time of Sale
Information at the Time of Sale, did not, and at the Closing Date will not,
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that the
Issuer and the Guarantors make no representation or warranty with respect to any
statements or omissions made in each such Issuer Written Communication in
reliance upon and in conformity with information relating to any Initial
Purchaser furnished to the Issuer in writing by or on behalf of such Initial
Purchaser through the Representative expressly for use in any Issuer Written
Communication (it being understood and agreed that the only such information
consists of the information described as such in Section 7(b)). No Issuer
Written Communication contains any information that conflicts with the Time of
Sale Information or the Offering Circular.

 

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(c) Financial Statements. The financial statements and the related notes thereto
of the Issuer and its subsidiaries, included or incorporated by reference in
each of the Time of Sale Information and the Offering Circular present fairly in
all material respects the financial position of the Issuer and its subsidiaries
as of the dates indicated and the results of their operations and the changes in
their cash flows for the periods specified; such financial statements have been
prepared in conformity with generally accepted accounting principles applied on
a consistent basis throughout the periods covered thereby; the other financial
information included or incorporated by reference in each of the Time of Sale
Information and the Offering Circular has been derived from the accounting
records of the Issuer and its subsidiaries and presents fairly in all material
respects the information shown thereby.

(d) No Material Adverse Change. Since the date of the most recent financial
statements of the Issuer included or incorporated by reference in each of the
Time of Sale Information and the Offering Circular, there has not been any
Material Adverse Effect (as defined below) or any change or development that is
reasonably likely to result in any Material Adverse Effect, the Issuer and the
Guarantors have not incurred or become subject to any material liabilities that
have not been disclosed in the Time of Sale Information and the Offering
Circular and no dividend or distribution of any kind has been declared, paid or
made by the Issuer, the Guarantors or their subsidiaries on any class of stock.

(e) Organization and Good Standing. Each of the Issuer and its subsidiaries
(A) has been duly incorporated or formed and is validly existing as a
corporation or other entity in good standing under the laws of its jurisdiction
of incorporation or formation, (B) has all requisite corporate or other power
and authority to carry on its business as it is currently being conducted and as
described in the Time of Sale Information and the Offering Circular and to own,
lease and operate its properties and (C) is duly qualified and is in good
standing as a foreign corporation or other entity authorized to do business in
each jurisdiction in which the nature of its business or its ownership or
leasing of property requires such qualification, except, in the case of each of
clauses (B) and (C), where the failure to be so qualified, in good standing or
have such power of authority would not reasonably be expected to result,
individually or in the aggregate, in a material adverse effect on the business,
results of operations or condition (financial or otherwise) of the Issuer or any
of its subsidiaries, taken as a whole, or materially and adversely affect the
ability of the Issuer and the Guarantors to perform their obligations under the
Transaction Documents (a “Material Adverse Effect”). The only material
subsidiaries the Issuer owns or controls, directly or indirectly, are listed in
Schedule 3 to this Agreement.

(f) Capitalization. All of the outstanding shares of capital stock of each
subsidiary of the Issuer are owned, directly or indirectly, by the Issuer free
and clear of any security interest, claim, lien, limitation on voting rights or
encumbrance (collectively, “Liens”) (other than pursuant to the Senior Credit
Agreements (as described in each of the Time of Sale Information and the
Offering Circular), the Indenture (as described in each of the Time of Sale
Information and the Offering Circular), the Security Documents and pursuant to
the indenture and the security documents governing the Existing Secured Notes);
and all such securities have been duly authorized, validly issued and are fully
paid and nonassessable and were not issued in violation of any preemptive or
similar rights.

 

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The Issuer has the capitalization as set forth in each of the Time of Sale
Information and the Offering Circular under the heading “Capitalization.”

(g) Due Authorization. The Issuer and the Guarantors have all requisite
corporate or other power and authority to execute and deliver the New
Transaction Documents and perform their obligations under the Transaction
Documents, in each case to the extent a party thereto, including granting the
Liens and security interests to be granted by it pursuant to the Indenture and
the Security Documents, and to perform their respective obligations hereunder
and thereunder and all action required to be taken for the due and proper
authorization, execution and delivery of each of the New Transaction Documents
and the consummation of the transactions contemplated by the Transaction
Documents has been, or will be by the Closing, duly and validly taken.

(h) The Indenture. The Base Indenture has been duly authorized, executed and
delivered by the Issuer and the Guarantors and, assuming the due authorization,
execution and delivery thereof by the Trustee and the Collateral Agent,
constitutes the valid and binding agreement of the Issuer and the Guarantors,
enforceable against each of them in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting the rights of creditors generally and
subject to general principles of equity (regardless of whether enforceability is
considered in a proceeding in equity or at law) (collectively, the
“Enforceability Exceptions”). The Supplemental Indenture will, as of the Closing
Date, be duly authorized by the Issuer and the Guarantors and, assuming the due
authorization, execution and delivery thereof by the Trustee and the Collateral
Agent, when executed and delivered by the Issuer and the Guarantors, will be the
valid and binding agreement of the Issuer and the Guarantors, enforceable
against each of them in accordance with its terms, subject to the Enforceability
Exceptions.

(i) The Securities and the Guarantees. (i) The Securities will, as of the
Closing Date, be duly authorized by the Issuer and, when duly executed,
authenticated, issued and delivered as provided in the Indenture and paid for as
provided herein (assuming the due execution, authentication and delivery of the
Indenture and the Securities by the Trustee in accordance with the terms of the
Indenture), will be validly issued and delivered and will constitute valid and
legally binding obligations of the Issuer enforceable against the Issuer in
accordance with their terms, subject to the Enforceability Exceptions, and will
be entitled to the benefits of the Indenture; and (ii) the Guarantees will, as
of the Closing Date, be duly authorized by the Guarantors and, when the
Indenture is duly executed and delivered by the Guarantors in accordance with
its terms and upon execution, authentication and delivery of the Securities in
accordance with the Indenture (assuming due execution, authentication and
delivery of the Indenture and the Securities by the Trustee in accordance with
the terms of the Indenture) and the issuance of the Securities in connection
with the sale of the Securities to the Initial Purchasers pursuant to this
Agreement, will be validly issued and will constitute legally binding
instruments of the Guarantors and will be entitled to the benefits provided by
the Indenture.

(j) Purchase Agreement. This Agreement has been duly and validly authorized,
executed and delivered by the Issuer and the Guarantors.

 

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(k) Descriptions of the Transaction Documents; Collateral. Each Transaction
Document conforms in all material respects to the description thereof contained
in each of the Time of Sale Information and the Offering Circular (to the extent
described therein). The Collateral conforms in all material respects to the
description thereof contained in each of the Time of Sale Information and the
Offering Circular.

(l) No Violation or Default. Neither the Issuer nor any of its subsidiaries is
(i) in violation of its charter or by-laws or similar organizational documents;
(ii) in default, and no event has occurred that, with notice or lapse of time or
both, would constitute such a default, in the due performance or observance of
any term, covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Issuer or
any of its subsidiaries is a party or by which the Issuer or any of its
subsidiaries is bound or to which any property or asset of the Issuer or any of
its subsidiaries is subject (including, without limitation, the Base Indenture
and the Existing Securities); or (iii) in violation of any law or statute or any
judgment, order, rule or regulation of any court or arbitrator or governmental
or regulatory authority, except, in the case of clauses (ii) and (iii) above,
for any such default or violation that would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.

(m) No Conflicts. The execution and delivery of the New Transaction Documents
and performance by the Issuer and each of the Guarantors of each of the
Transaction Documents to which each is a party (including, but not limited to,
the filing of any applicable financing statements or intellectual property
filings pursuant to the Security Documents), the issuance and sale of the
Securities and the issuance of the Guarantees, the grant and perfection of liens
and security interests in the Collateral pursuant to the Security Documents and
compliance by the Issuer and each of the Guarantors with the terms thereof and
the consummation of the transactions contemplated by the Transaction Documents
will not (i) conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, or result in the creation
or imposition of any lien, charge or encumbrance upon any property or asset of
the Issuer or any of its subsidiaries pursuant to, any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to which the Issuer or
any of its subsidiaries is a party or by which the Issuer or any of its
subsidiaries is bound or to which any property or asset of the Issuer or any of
its subsidiaries is subject (other than any lien or encumbrance created or
imposed pursuant to the indenture and the security documents governing the
Existing Secured Notes, the Indenture, the Security Documents and the Senior
Credit Agreements), (ii) result in any violation of the provisions of the
charter or by-laws or similar organizational documents of the Issuer or any of
its subsidiaries or (iii) result in the violation of any applicable law or
statute or any judgment, order, rule or regulation of any court or arbitrator or
governmental or regulatory authority, except, in the case of clauses (i) and
(iii) above, for any such conflict, breach, violation, default, lien, charge or
encumbrance that would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

(n) No Consents Required. No consent, approval, authorization, order,
registration or qualification of or with any court or arbitrator or governmental
or regulatory authority is required for the execution and delivery of the New
Transaction Documents or the performance by the Issuer and each of the
Guarantors of each of the Transaction Documents to which each is a party
(including, but not limited to, the filing of any applicable financing
statements or intellectual property filings pursuant to the Security Documents),
the issuance and sale of the Securities and the issuance of the Guarantees, the
grant and perfection of liens and security interests in the Collateral

 

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pursuant to the Security Documents and compliance by the Issuer and each of the
Guarantors with the terms thereof and the consummation of the transactions
contemplated by the Transaction Documents, except for such consents, approvals,
authorizations, orders and registrations or qualifications as may be required
under applicable state securities laws in connection with the purchase and
resale of the Securities by the Initial Purchasers, except where the failure to
obtain such authorization, approval, consent, order, registration, qualification
or license or to make any such filing would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect on the
consummation of the transactions contemplated by, or the fulfilment of the terms
of, the Transaction Documents.

(o) Legal Proceedings. There are no legal, governmental or regulatory
investigations, actions, suits or proceedings pending or, to the knowledge of
the Issuer, threatened or contemplated, to which the Issuer or any of its
subsidiaries is or may be a party or to which any property of the Issuer or any
of its subsidiaries is or may be subject that, individually or in the aggregate,
if determined adversely to the Issuer or any of its subsidiaries, would
reasonably be expected to have a Material Adverse Effect.

(p) Independent Accountants. PricewaterhouseCoopers LLP, who have certified
certain financial statements of the Issuer and its subsidiaries, are independent
public accountants with respect to the Issuer and its subsidiaries, within the
applicable rules and regulations adopted by the U.S. Securities and Exchange
Commission (the “Commission”) and the Public Company Accounting Oversight Board
(United States) and as required by the Securities Act.

(q) Title to Property. Each of the Issuer, the Guarantors and their respective
subsidiaries have good and marketable title in fee simple to, or have valid
leasehold interests in or have valid rights to lease or otherwise use, all items
of real and personal property that are material to the respective businesses of
the Issuer, the Guarantors and their respective subsidiaries, in each case free
and clear of all liens, encumbrances, claims and defects and imperfections of
title except those that (i) do not materially interfere with the use made and
proposed to be made of such property by the Issuer, the Guarantors and their
respective subsidiaries, (ii) would not reasonably be expected, individually or
in the aggregate, to have a Material Adverse Effect, (iii) are created pursuant
to the Senior Credit Agreements and the documentation governing the Existing
Secured Notes or (iv) are created pursuant to the Indenture, the Notes
Collateral Agreement and the Security Documents.

(r) Intellectual Property. Each of the Issuer, the Guarantors and their
respective subsidiaries owns, possesses or has the right to employ all patents,
patent rights, licenses, inventions, copyrights, know-how (including trade
secrets and other unpatented and/or unpatentable proprietary or confidential
information, software, systems or procedures), trademarks, service marks and
trade names, computer programs, technical data and information (collectively,
the “Intellectual Property”) necessary to conduct the business now operated by
them except where the failure to own or possess such intellectual property
rights would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect. The use of the Intellectual Property in
connection with the business and operations of the Issuer, the Guarantors and
their respective subsidiaries does not infringe on the rights of any person,
except such infringements as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

 

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(s) No Undisclosed Relationships. No relationship, direct or indirect, exists
between or among the Issuer, the Guarantors or their respective subsidiaries and
direct and indirect parent companies and other affiliates, on the one hand, and
the directors, officers, stockholders, customers or suppliers of the Issuer, the
Guarantors or their respective subsidiaries, on the other hand, that would be
required by the Securities Act to be described in a registration statement to be
filed with the Commission relating to the offering of the Securities and that is
not so described in each of the Time of Sale Information and the Offering
Circular.

(t) Investment Company Act. Neither the Issuer nor any of the Guarantors is, and
at Closing after giving effect to the offering and sale of the Securities and
the application of the proceeds thereof as described in each of the Time of Sale
Information and the Offering Circular, none of the Issuer or the Guarantors will
be, an “investment company” or an entity “controlled” by an “investment company”
within the meaning of the Investment Company Act of 1940, as amended, and the
rules and regulations of the Commission thereunder.

(u) Taxes. All federal, state and foreign income and franchise tax returns
required to be filed by the Issuer, the Guarantors or their respective
subsidiaries in all jurisdictions have been so filed through the date hereof,
subject to permitted extensions, except where the failure to make such filings
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. All taxes, including withholding taxes, penalties and
interest, assessments, fees and other charges due or claimed to be due from such
entities or that are due and payable have been paid, other than those being
contested in good faith or those currently payable without penalty or interest
and except where the failure to make such required filings or payments would
not, individually or in the aggregate, reasonably be expected to result in a
Material Adverse Effect.

(v) Licenses and Permits. Each of the Issuer, the Guarantors and their
respective subsidiaries has such permits, licenses, sub-licenses, certificates,
franchises and authorizations of governmental or regulatory authorities
(“permits”), as are necessary to lease and operate its respective properties and
to conduct its businesses as described in the Time of Sale Information and the
Offering Circular, except where the failure to have such permits would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect; and have not received any notice of proceedings relating to the
revocation or modification of any permits that, if determined adversely, would,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

(w) Absence of Labor Dispute. No labor dispute with the employees of the Issuer
or any of its subsidiaries exists or, to the knowledge of the Issuer or the
Guarantors, is imminent or threatened that would, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. Neither the
Issuer nor any of its subsidiaries has received any notice of cancellation or
termination with respect to any collective bargaining agreement to which it is a
party that would, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect. Neither the Issuer nor any of its subsidiaries
has received any notice of cancellation or termination with respect to any
collective bargaining agreement to which it is a party.

 

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(x) Compliance with Environmental Laws. None of the Issuer, the Guarantors or
any of their respective subsidiaries (i) is party to any proceedings that are
pending or, to the knowledge of the Issuer, the Guarantors or any of their
respective Subsidiaries, threatened, under any foreign, federal, state or local
law, rule, regulation, requirement, decision or order relating to the protection
of human health or safety, the environment, natural resources, hazardous or
toxic substances or wastes, pollutants or contaminants (collectively,
“Environmental Laws”) in which a governmental authority is also a party, other
than such proceedings that would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect, (ii) has failed to
comply with any Environmental Law or to obtain, maintain or comply with any
permits, licenses, certificates or other authorizations or approvals required
under applicable Environmental Laws to conduct its respective business, other
than such failure to comply, or failure to obtain, maintain and comply with
required permits, licenses, certificates or other authorizations or approvals
that would not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect, and (iii) is aware of any other proceedings, claims
or any other issues regarding compliance with, or liabilities or obligations
under, Environmental Laws, or concerning hazardous or toxic substances or
wastes, pollutants or contaminants, other than such proceedings, claims or
issues that would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.

(y) Compliance with ERISA. (i) Each employee benefit plan, within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), for which the Issuer has any liability, direct or indirect,
contingent or otherwise, including any liability on account of any member of
their respective “Controlled Group” (defined as any organization which is a
member of a controlled group of corporations within the meaning of Section 414
of the Internal Revenue Code of 1986, as amended (the “Code”)) (each, a “Plan”)
has been maintained in compliance with its terms and the requirements of any
applicable statutes, orders, rules and regulations, including but not limited to
ERISA and the Code; (ii) no prohibited transaction, within the meaning of
Section 406 of ERISA or Section 4975 of the Code, has occurred with respect to
any Plan excluding transactions effected pursuant to a statutory or
administrative exemption; (iii) for each Plan that is subject to the funding
rules of Section 412 of the Code or Section 302 of ERISA, no Plan has failed
(whether or not waived), or is reasonably expected to fail, to satisfy the
minimum funding standards (within the meaning of Section 302 of ERISA or
Section 412 of the Code) applicable to such Plan; (iv) no Plan is, or is
reasonably expected to be, in “at risk status” (within the meaning of
Section 303(i) of ERISA) or “endangered status” or “critical status” (within the
meaning of Section 305 of ERISA); (v) except as otherwise disclosed in the Time
of Sale Information and the Offering Circular, the fair market value of the
assets of each Plan exceeds the present value of all benefits accrued under such
Plan (determined based on those assumptions used to fund such Plan); (vi) no
“reportable event” (within the meaning of Section 4043(c) of ERISA) has occurred
or is reasonably expected to occur; (vii) each Plan that is intended to be
qualified under Section 401(a) of the Code is so qualified and, to the knowledge
of the Issuer and the Guarantors, nothing has occurred, whether by action or by
failure to act, which would reasonably be expected to cause the loss of such
qualification; and (viii) neither the Issuer nor any member of its Controlled
Group has incurred, nor reasonably expects to incur, any liability under Title
IV of ERISA (other than contributions to the Plan or premiums to the Pension
Benefit Guaranty Corporation, in the ordinary course and without default) in
respect of a Plan (including a “multiemployer plan,” within the meaning of
Section 4001(a)(3) of ERISA), except, in each case with respect to the events or
conditions set forth in (i) through (viii) hereof, as would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect. The
Issuer is not (i) an employee benefit plan subject to Title I of ERISA, (ii) a
plan or account subject to Section 4975 of the Code or (iii) an entity deemed to
hold “plan assets” of any such employee benefit plan, plan or account.

 

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(z) Disclosure Controls. The Issuer and its subsidiaries maintain an effective
system of “disclosure controls and procedures” (as defined in Rule 13a-15(e) of
the Exchange Act) that is designed to ensure that information required to be
disclosed by the Issuer in reports that it files or submits under the Exchange
Act is recorded, processed, summarized and reported within the time periods
specified in the Commission’s rules and forms, including controls and procedures
designed to ensure that such information is accumulated and communicated to the
Issuer’s management as appropriate to allow timely decisions regarding required
disclosure. The Issuer and its subsidiaries have carried out evaluations of the
effectiveness of their disclosure controls and procedures as required by Rule
13a-15 of the Exchange Act.

(aa) Accounting Controls – Issuer and its Subsidiaries. The Issuer and its
subsidiaries maintain systems of “internal controls over financial reporting”
(as defined in Rule 13a-15(f) of the Exchange Act) that comply with the
requirements of the Exchange Act and have been designed by, or under the
supervision of, their respective principal executive and principal financial
officers, or persons performing similar functions, to provide reasonable
assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally
accepted accounting principles. The Issuer and its subsidiaries maintain
internal accounting controls sufficient to provide reasonable assurance that:
(i) transactions are executed in accordance with management’s general or
specific authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management’s general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences. There are no material weaknesses or significant
deficiencies in the Issuer’s or its subsidiaries’ internal controls. The
internal controls over financial reporting are, or upon consummation of the
offering of the Securities will be, overseen by the Audit Committee of the
Issuer’s Board of Directors in accordance with rules of the NASDAQ Stock
Exchange.

(bb) Insurance. The Issuer and its subsidiaries have insurance covering their
respective properties, operations, personnel and businesses, insuring against
such losses and risks as are consistent with industry practice, except where
failure to maintain such insurance would not reasonably be expected to have a
Material Adverse Effect.

(cc) No Unlawful Payments. None of the Issuer or any of its subsidiaries or, to
the knowledge of the Issuer and each of the Guarantors, any director, officer,
agent, affiliate or other person acting on behalf of the Issuer or any of its
subsidiaries has: (i) used any corporate funds for any unlawful contribution,
gift, entertainment or other unlawful expense relating to political activity;
(ii) made or taken an act in furtherance of an offer, promise or authorization
of any direct or indirect unlawful payment or benefit to any foreign or domestic
government official or employee (including any government-owned or controlled
entity or of a public international organization) or any person acting in an
official capacity for or on behalf of any of the foregoing, or any political
party or party official or candidate for political office; (iii) violated or is
in violation of any provision of the Foreign Corrupt Practices Act of 1977, as
amended (“FCPA”), or any other

 

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applicable anti-bribery or anti-corruption law; or (iv) made, offered, agreed,
requested or taken an act in furtherance of any unlawful bribe or other unlawful
benefit, including, without limitation, any rebate, payoff, influence payment,
kickback or other unlawful payment or benefit. The Issuer and its subsidiaries
have instituted, maintain and enforce policies and procedures designed to
promote and ensure compliance with all applicable anti-bribery and
anti-corruption laws. No part of the proceeds of the offering will be used,
directly or indirectly, in violation of the FCPA or similar law of any other
relevant jurisdiction, or the rules or regulations thereunder.

(dd) Compliance with Money Laundering Laws. The operations of the Issuer and its
subsidiaries are and have been conducted in compliance with applicable financial
recordkeeping and reporting requirements, including those of the Currency and
Foreign Transactions Reporting Act of 1970, as amended, the applicable money
laundering statutes of all jurisdictions where the Issuer or any of its
subsidiaries conducts business, the rules and regulations thereunder and any
related or similar rules, regulations or guidelines, issued, administered or
enforced by any applicable governmental agency (collectively, the “Anti-Money
Laundering Laws”), and no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the Issuer or
any of its subsidiaries with respect to the Anti-Money Laundering Laws is
pending or, to the knowledge of the Issuer or any of the Guarantors, threatened.

(ee) No Conflicts with Sanctions Laws. None of the Issuer or any of its
subsidiaries, nor, to the knowledge of the Issuer or any of the Guarantors, any
director, officer, employee, agent, affiliate or other person acting on behalf
of the Issuer or any of its subsidiaries is currently the subject or the target
of, or is controlled or 50% or more owned by or is acting on behalf of an
individual or entity that is currently the subject of, any sanctions
administered or enforced by the U.S. government (including, without limitation,
the Office of Foreign Assets Control of the U.S. Department of the Treasury
(“OFAC”) or the U.S. Department of State and including, without limitation, the
designation as a “specially designated national” or “blocked person”) or other
relevant sanctions authority (collectively, “Sanctions”), nor is the Issuer or
any of its subsidiaries located, organized or resident in a country or territory
that is the subject or target of Sanctions, including, without limitation, Cuba,
Iran, North Korea, Syria and Crimea (each, a “Sanctioned Country”); and the
Issuer will not use, directly or indirectly, the proceeds of the offering of the
Securities hereunder, or lend, contribute or otherwise make available, directly
or indirectly, such proceeds to any subsidiary, joint venture partner or other
person or entity (i) to fund or facilitate any activities of or conduct business
with any person that, at the time of such funding or facilitation is the subject
of Sanctions, (ii) to fund, facilitate, or conduct any activities of or business
in any Sanctioned Country or (iii) in any other manner that will result in a
violation by any person (including any person participating in the transaction,
whether as initial purchaser, advisor, investor or otherwise) of Sanctions. For
the past five years, the Issuer and its subsidiaries have not knowingly engaged
in and are not now knowingly engaged in any dealings or transactions with any
person that at the time of the dealing or transaction is or was the subject or
the target of Sanctions or with any Sanctioned Country.

(ff) Solvency. On the Closing Date and immediately after the Closing, the Issuer
and its subsidiaries on a consolidated basis (after giving effect to the
issuance and sale of the Securities, the issuance of the Guarantees, the
Redemption and the other Transactions as described in each of the Time of Sale
Information and the Offering Circular) will be Solvent. As used in this
paragraph, the term “Solvent” means, with respect to a particular date, that on
such date (i) the fair value and

 

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present fair saleable value of the assets of the Issuer and its subsidiaries
taken as a whole on a going concern basis will exceed the sum of their stated
liabilities and identified contingent liabilities taken as a whole; and (ii) the
Issuer and its subsidiaries on a consolidated basis will not be (a) left with
unreasonably small capital with which to carry on their respective businesses as
they are proposed to be conducted, (b) unable to pay their debts (contingent or
otherwise) as they will mature or (c) otherwise insolvent.

(gg) No Restrictions on Subsidiaries. No subsidiary of the Issuer is currently,
and after the Closing, no subsidiary of the Issuer will be, prohibited, directly
or indirectly, under any agreement or other instrument to which it is, as of the
Closing Date, a party or will be subject, from paying any dividends to the
Issuer from making any other distribution on such subsidiary’s capital stock or
similar ownership interest, from repaying to the Issuer any loans or advances to
such subsidiary from the Issuer or from transferring any of such subsidiary’s
properties or assets to the Issuer or any of its subsidiaries, as applicable,
except for any such restrictions (a) contained in (i) the Senior Credit
Agreements and (ii) the documentation for the Existing Secured Notes or (b) that
will be permitted by the Indenture, the Senior Credit Agreements or the
indenture governing the Existing Secured Notes.

(hh) No Finder’s Fee. Except pursuant to the Transaction Documents, there are no
contracts, agreements or understandings among the Issuer, the Guarantors and any
other person that would give rise to a valid claim against the Issuer, the
Guarantors and their respective subsidiaries or any Initial Purchaser for a
brokerage commission, finder’s fee or like payment in connection with the
issuance, purchase and sale of the Securities.

(ii) Rule 144A Eligibility. On the Closing Date, the Securities will not be of
the same class (within the meaning of Rule 144A under the Securities Act) as any
securities of the Issuer or the Guarantors that are listed on a national
securities exchange registered under Section 6 of the Exchange Act or quoted in
an automated inter-dealer quotation system; and each of the Preliminary Offering
Circular and the Offering Circular, as of its respective date, contains or will
contain all the information that, if requested by a prospective purchaser of the
Securities, would be required to be provided to such prospective purchaser
pursuant to Rule 144A(d)(4) under the Securities Act.

(jj) No Integration. Neither the Issuer nor any of its affiliates (as defined in
Rule 501(b) of Regulation D) has, directly or through any agent, sold, offered
for sale, solicited offers to buy or otherwise negotiated in respect of, any
security (as defined in the Securities Act), that is or will be integrated with
the sale of the Securities in a manner that would require registration of the
Securities under the Securities Act.

(kk) No General Solicitation or Directed Selling Efforts. None of the Issuer or
any of its affiliates or any other person acting on its or their behalf (other
than the Initial Purchasers, as to which no representation is made) has
(i) solicited offers for, or offered or sold, the Securities by means of any
form of general solicitation or general advertising within the meaning of Rule
502(c) of Regulation D or in any manner involving a public offering within the
meaning of Section 4(a)(2) of the Securities Act or (ii) engaged in any directed
selling efforts within the meaning of Regulation S under the Securities Act
(“Regulation S”), and all such persons have complied with the offering
restrictions requirement of Regulation S.

 

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(ll) Securities Law Exemptions. Assuming the accuracy of the representations and
warranties of the Initial Purchasers contained in Section 1(b) (including Annex
C hereto) and their compliance with their agreements set forth therein, it is
not necessary, in connection with the issuance and sale of the Securities to the
Initial Purchasers and the offer, resale and delivery of the Securities by the
Initial Purchasers in the manner contemplated by this Agreement, the Time of
Sale Information and the Offering Circular, to register the Securities under the
Securities Act or to qualify the Indenture under the Trust Indenture Act.

(mm) No Stabilization. Neither the Issuer nor any of the Guarantors has taken,
directly or indirectly, any action designed to, or that would reasonably be
expected to, cause or result in any stabilization or manipulation of the price
of the Securities or the Existing Securities.

(nn) Margin Rules. Neither the issuance, sale and delivery of the Securities nor
the application of the proceeds thereof by the Issuer as described in each of
the Time of Sale Information and the Offering Circular will violate Regulation
T, U or X of the Board of Governors of the Federal Reserve System or any other
regulation of such Board of Governors.

(oo) Forward-Looking Statements. No forward-looking statement (within the
meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act) included in any of the Time of Sale Information or the Offering Circular
has been made or reaffirmed without a reasonable basis or has been disclosed
other than in good faith.

(pp) Industry Statistical and Market Data. The statistical, industry and
market-related data included in the Time of Sale Information and the Offering
Circular are based on or derived from management estimates and third-party
sources, and the Issuer and the Guarantors believe such estimates and sources
are reasonable, reliable and accurate in all material respects.

(qq) Sarbanes-Oxley Act. To the extent applicable, there is and has been no
failure on the part of the Issuer or any of its directors or officers, in their
capacities as such, to comply with any provision of the Sarbanes-Oxley Act of
2002, as amended, and the rules and regulations promulgated in connection
therewith, including Section 402 related to loans and Sections 302 and 906
related to certifications.

(rr) Incorporated Documents. The documents incorporated by reference in each of
the Time of Sale Information and the Offering Circular, when they were filed
with the Commission, conformed or will conform, as the case may be, in all
material respects to the requirements of the Exchange Act, and the rules and
regulations of the Commission thereunder, and did not and will not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.

(ss) Security Documents. Each of the Security Documents has been duly and
validly authorized, executed and delivered by the Issuer and each of the
Guarantors party thereto and, assuming due execution and delivery by each of the
other parties thereto, constitutes the legal, valid and binding agreement of the
Issuer and each of the Guarantors party thereto, enforceable against each of
them in accordance with their terms and entitled to the benefits of the
Indenture, subject to the Enforceability Exceptions.

 

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(tt) Joinders. Each of the Joinders and the Intercreditor Agreements will, as of
the Closing Date, be duly and validly authorized by the Issuer and each of the
Guarantors party thereto and, when executed and delivered by the Issuer and each
of the other parties thereto, will be the legal, valid and binding agreement of
the Issuer and each of the Guarantors party thereto, enforceable against each of
them in accordance with their terms, subject to the Enforceability Exceptions.

(uu) Creation and Enforceability of Security Interests. The Security Documents
represent all of the collateral agreements, security agreements, guarantee
agreements, pledge agreements and other similar agreements necessary to grant a
legal, valid and enforceable security interest, in favor of the Collateral Agent
for the benefit of the Trustee and the holders of the Securities, in each
grantor’s right, title and interest in the Collateral, subject to the
Enforceability Exceptions.

(vv) Perfection of Security Interests. As a result of all filings and other
actions necessary or desirable to perfect and protect the first-priority
security interest in the Notes Collateral and the second-priority security
interest in the ABL Priority Collateral to be created under the Security
Documents that are required under the Security Documents having been duly made
or taken and in full force and effect, the security interests granted thereby
constitute valid, perfected first-priority liens and security interests in the
Notes Collateral and valid, perfected second-priority liens and security
interests in the ABL Priority Collateral, for the benefit of the Collateral
Agent, the Trustee and the holders of the Securities, enforceable in accordance
with the terms contained therein, to the extent such security interests can be
perfected by such filing or other action, subject only to the encumbrances
expressly permitted in the Security Documents or Indenture (including those
liens expressly permitted to be incurred or exist on the Collateral pursuant to
the Indenture, the Security Documents, the Senior Credit Agreements and the
Existing Secured Notes) (such encumbrances and exceptions, the “Permitted
Exceptions”), and to the Enforceability Exceptions.

4. Further Agreements of the Issuer and the Guarantors. The Issuer and each of
the Guarantors, jointly and severally, covenant and agree, with each Initial
Purchaser that:

(a) Delivery of Copies. The Issuer will deliver, without charge, to the Initial
Purchasers as many copies of the Preliminary Offering Circular, any other Time
of Sale Information, any Issuer Written Communication and the Offering Circular
(including all amendments and supplements thereto) as the Representative may
reasonably request.

(b) Offering Circular, Amendments or Supplements. Before finalizing the Offering
Circular or making or distributing any amendment or supplement to any of the
Time of Sale Information or the Offering Circular, the Issuer will furnish to
the Representative and counsel for the Initial Purchasers a copy of the proposed
Offering Circular or such amendment or supplement for review, and will not
distribute any such proposed Offering Circular, amendment or supplement to which
the Representative reasonably objects in a timely manner.

(c) Additional Written Communications. Before using, authorizing, approving or
referring to any Issuer Written Communication (other than those listed on Annex
A), the Issuer and the Guarantors will furnish to the Representative and counsel
for the Initial Purchasers a copy of such written communication for review and
will not use, authorize, approve or refer to any such written communication to
which the Representative reasonably objects.

 

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(d) Notice to the Representative. The Issuer will advise the Representative
promptly, and confirm such advice in writing, (i) of the issuance by any
governmental or regulatory authority of any order preventing or suspending the
use of any of the Time of Sale Information, any Issuer Written Communication or
the Offering Circular or the initiation or threatening of any proceeding for
that purpose; (ii) of the occurrence of any event at any time prior to the
completion of the initial offering of the Securities as a result of which any of
the Time of Sale Information, any Issuer Written Communication or the Offering
Circular as then amended or supplemented would include any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances existing when such Time of
Sale Information, Issuer Written Communication or the Offering Circular is
delivered to a purchaser, not misleading; and (iii) of the receipt by the Issuer
of any notice with respect to any suspension of the qualification of the
Securities for offer and sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and the Issuer will use its
reasonable best efforts to prevent the issuance of any such order preventing or
suspending the use of any of the Time of Sale Information, any Issuer Written
Communication or the Offering Circular or suspending any such qualification of
the Securities and, if any such order is issued, will use its reasonable best
efforts to obtain as soon as possible the withdrawal thereof.

(e) Time of Sale Information. If at any time prior to the Closing Date (i) any
event shall occur or condition shall exist as a result of which any of the Time
of Sale Information as then amended or supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading or (ii) it is necessary to amend or
supplement the Time of Sale Information to comply with law, the Issuer will
promptly notify the Initial Purchasers thereof and forthwith prepare and,
subject to paragraph (b) above, furnish to the Initial Purchasers such
amendments or supplements to the Time of Sale Information as may be necessary so
that the statements in any of the Time of Sale Information as so amended or
supplemented will not, in light of the circumstances under which they were made,
be misleading or so that any of the Time of Sale Information will comply with
law.

(f) Ongoing Compliance of the Offering Circular. If at any time prior to the
completion of the initial offering of the Securities (i) any event shall occur
or condition shall exist as a result of which the Offering Circular as then
amended or supplemented would include any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances existing when the Offering Circular
is delivered to a purchaser, not misleading or (ii) it is necessary to amend or
supplement the Offering Circular to comply with law, the Issuer will promptly
notify the Initial Purchasers thereof and forthwith prepare and, subject to
paragraph (b) above, furnish to the Initial Purchasers such amendments or
supplements to the Offering Circular as may be necessary so that the statements
in the Offering Circular as so amended or supplemented will not, in the light of
the circumstances existing when the Offering Circular is delivered to a
purchaser, be misleading or so that the Offering Circular will comply with law.

 

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(g) Blue Sky Compliance. The Issuer will qualify the Securities for offer and
sale under the securities or Blue Sky laws of such jurisdictions in the United
States or Canada as the Initial Purchasers shall reasonably request and will
continue such qualifications in effect so long as required for the offering and
resale of the Securities; provided that neither the Issuer nor any of the
Guarantors shall be required to (i) qualify as a foreign corporation or other
entity or as a dealer in securities in any such jurisdiction where it would not
otherwise be required to so qualify, (ii) file any general consent to service of
process in any such jurisdiction or (iii) subject itself to taxation in any such
jurisdiction if it is not otherwise so subject.

(h) Clear Market. During the period from the date hereof through and including
the date that is 60 days after the date hereof, the Issuer and each of the
Guarantors will not, without the prior written consent of the Representative,
offer, sell, contract to sell or otherwise dispose of any debt securities issued
or guaranteed by the Issuer or any of the Guarantors and having a tenor of more
than one year.

(i) Use of Proceeds. The Issuer will apply the net proceeds from the sale of the
Securities as described in each of the Time of Sale Information and the Offering
Circular under the heading “Use of proceeds.”

(j) Supplying Information. While the Securities remain outstanding and are
“restricted securities” within the meaning of Rule 144(a)(3) under the
Securities Act, the Issuer and each of the Guarantors will, during any period in
which the Issuer is not subject to and in compliance with Section 13 or 15(d) of
the Exchange Act, furnish to holders of the Securities and prospective
purchasers of the Securities designated by such holders, upon the request of
such holders or such prospective purchasers, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.

(k) DTC. The Issuer will assist the Initial Purchasers in arranging for the
Securities to be eligible for clearance and settlement through DTC.

(l) No Resales by the Issuer. Until the first anniversary of the Closing Date,
the Issuer will not, and will not permit any of its controlled affiliates (as
defined in Rule 144 under the Securities Act) to, resell any of the Securities
that have been acquired by any of them, except for Securities purchased by the
Issuer or any of its affiliates and resold in a transaction registered under the
Securities Act.

(m) No Integration. Neither the Issuer nor any of its affiliates (as defined in
Rule 501(b) of Regulation D) will, directly or through any agent, sell, offer
for sale, solicit offers to buy or otherwise negotiate in respect of, any
security (as defined in the Securities Act), that is or will be integrated with
the sale of the Securities in a manner that would require registration of the
Securities under the Securities Act.

(n) No General Solicitation or Directed Selling Efforts. Neither the Issuer nor
any of its affiliates or any other person acting on its or their behalf (other
than the Initial Purchasers, as to which no covenant is given) will (i) solicit
offers for, or offer or sell, the Securities by means of any form of general
solicitation or general advertising within the meaning of Rule 502(c) of
Regulation D or in any manner involving a public offering within the meaning of
Section 4(a)(2) of the Securities Act or (ii) engage in any directed selling
efforts within the meaning of Regulation S, and all such persons will comply
with the offering restrictions requirement of Regulation S.

 

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(o) No Stabilization. Neither the Issuer nor any of the Guarantors will take,
directly or indirectly, any action designed to or that could reasonably be
expected to cause or result in any stabilization or manipulation of the price of
the Securities or the Existing Securities.

5. Certain Agreements of the Initial Purchasers. Each Initial Purchaser hereby
represents and agrees that it has not and will not use, authorize the use of,
refer to, or participate in the planning for use of, any written communication
that constitutes an offer to sell or the solicitation of an offer to buy the
Securities other than (i) the Preliminary Offering Circular and the Offering
Circular, (ii) any written communication that contains either (a) no “issuer
information” (as defined in Rule 433(h)(2) under the Securities Act) or (b)
“issuer information” that was included in the Time of Sale Information or the
Offering Circular, (iii) any written communication listed on Annex A or prepared
by the Issuer pursuant to Section 4(c) (including any electronic road show)
above, (iv) any written communication prepared by such Initial Purchaser and
approved by the Issuer and the Representative in advance in writing or (v) any
written communication that contains the terms of the Securities and/or other
information that was included in the Time of Sale Information or the Offering
Circular.

6. Conditions of Initial Purchasers’ Obligations. The obligation of each Initial
Purchaser to purchase Securities on the Closing Date as provided herein is
subject to the performance by the Issuer and each of the Guarantors of their
respective covenants and other obligations hereunder and to the following
additional conditions:

(a) Representations and Warranties. The representations and warranties of the
Issuer and the Guarantors contained herein shall be true and correct on the date
hereof and on and as of the Closing Date (except, in each case, to the extent
that such representations and warranties relate to an earlier date, such
representations and warranties shall be true and correct as of such date); and
the statements of the Issuer, the Guarantors and their respective officers made
in any certificates delivered pursuant to this Agreement shall be true and
correct on and as of the Closing Date.

(b) No Downgrade. Subsequent to the earlier of (A) the Time of Sale and (B) the
execution and delivery of this Agreement, (i) no downgrading shall have occurred
in the rating accorded the Securities or any other debt securities or preferred
stock issued or guaranteed by the Issuer or any of its subsidiaries by any
“nationally recognized statistical rating organization,” as such term is defined
under Section 3(a)(62) under the Exchange Act, and (ii) no such organization
shall have publicly announced that it has under surveillance or review, or has
changed its outlook with respect to, its rating of the Existing Securities, the
Securities or of any other debt securities or preferred stock issued or
guaranteed by the Issuer or any of its subsidiaries (other than an announcement
with positive implications of a possible upgrading).

 

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(c) No Material Adverse Change. No event or condition described in Section 3(d)
hereof shall have occurred or shall exist, which event or condition is not
described in each of the Time of Sale Information (excluding any amendment or
supplement thereto) and the Offering Circular (excluding any amendment or
supplement thereto) the effect of which in the judgment of the Representative
make it impracticable or inadvisable to proceed with the offering, sale or
delivery of the Securities on the terms and in the manner contemplated by this
Agreement, the Time of Sale Information and the Offering Circular.

(d) Officer’s Certificate. The Representative shall have received on and as of
the Closing Date a certificate of an executive officer of the Issuer and each of
the Guarantors who has specific knowledge of the Issuer’s or the Guarantors’
matters and is reasonably satisfactory to the Representative (i) confirming that
such officer has carefully reviewed the Time of Sale Information and the
Offering Circular and the representations set forth in Sections 3(a) and 3(b)
hereof are true and correct, (ii) confirming that the other representations and
warranties of the Issuer and the Guarantors in this Agreement are true and
correct and that the Issuer and the Guarantors have complied in all material
respects with all agreements and satisfied all conditions on their part to be
performed or satisfied hereunder at or prior to the Closing Date and (iii) to
the effect set forth in paragraphs (b) and (c) above.

(e) Comfort Letters. On the date of this Agreement and on the Closing Date,
PricewaterhouseCoopers LLP shall have furnished to the Representative, at the
request of the Issuer, a letter with respect to the Issuer and its subsidiaries,
dated the date of delivery thereof and addressed to the Initial Purchasers, in
form and substance reasonably satisfactory to the Representative, containing
statements and information of the type customarily included in accountants’
“comfort letters” to initial purchasers with respect to the financial statements
and certain financial information contained or incorporated by reference in each
of the Time of Sale Information and the Offering Circular; provided that the
letters delivered on the Closing Date shall use a “cut-off” date no more than
three business days prior to the Closing Date.

(f) Opinions and 10b-5 Statement of Counsel for the Issuer. (i) Kirkland & Ellis
LLP, counsel for the Issuer, shall have furnished to the Representative, at the
request of the Issuer, their written opinion and 10b-5 statement, dated the
Closing Date and addressed to the Initial Purchasers, in form reasonably
acceptable to the Representative and its counsel and (ii) Stoel Rives LLP,
external Alaska counsel for the Issuer, shall have furnished to the
Representative, at the request of the Issuer, its written opinion, dated the
Closing Date and addressed to the Initial Purchasers, in form and substance
reasonably acceptable to the Representative and its counsel.

(g) Opinion and 10b-5 Statement of Counsel for the Initial Purchasers. The
Representative shall have received on and as of the Closing Date an opinion and
10b-5 statement, addressed to the Initial Purchasers, of Cahill Gordon & Reindel
LLP, counsel for the Initial Purchasers, with respect to such matters as the
Representative may reasonably request, and such counsel shall have received such
documents and information as they may reasonably request to enable them to pass
upon such matters.

(h) No Legal Impediment to Issuance. No action shall have been taken and no
statute, rule, regulation or order shall have been enacted, adopted or issued by
any federal, state or foreign governmental or regulatory authority that would,
as of the Closing Date, prevent the issuance or sale of the Securities or the
issuance of the Guarantees; and no injunction or order of any federal, state or
foreign court shall have been issued that would, as of the Closing Date, prevent
the issuance or sale of the Securities or the issuance of the Guarantees.

 

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(i) Good Standing. The Representative shall have received on and as of the
Closing Date satisfactory evidence of the good standing of the Issuer and the
Guarantors in their respective jurisdictions of organization.

(j) DTC. The Securities shall be eligible for clearance and settlement through
DTC.

(k) Supplemental Indenture and Securities. The Supplemental Indenture shall have
been duly executed and delivered by a duly authorized officer of each of the
Issuer, the Guarantors, the Trustee and the Collateral Agent, and the Securities
shall have been duly executed and delivered by a duly authorized officer of the
Issuer and duly authenticated by the Trustee.

(l) Redemption of the Existing Secured Notes. On or before the Closing Date, the
Issuer shall have given an officer’s certificate to the trustee (the “Existing
Notes Trustee”) under the indenture governing the Existing Secured Notes with
respect to the Issuer’s election to redeem outstanding Existing Secured Notes
and the Issuer shall have arranged for a notice of conditional redemption to be
delivered to the holders of the Existing Secured Notes in the Issuer’s name.

(m) Transactions. Concurrently with or prior to the Closing Date, each of the
other Transactions, shall have been consummated in a manner consistent in all
material respects with the descriptions thereof in the Time of Sale Information
and the Offering Circular.

(n) Security Documents. To the extent required to be delivered on the Closing
Date under the applicable Security Documents, the Representative shall have
received executed copies of the Security Documents and the Joinders, duly
executed and/or acknowledged, as applicable, and delivered by the Issuer and the
Guarantors, as applicable, and the other parties thereto, in each case in form
and substance reasonably satisfactory to the Initial Purchasers. The Initial
Purchaser shall have received the items listed on Schedule 4 hereto.

All opinions, letters, certificates and evidence mentioned above or elsewhere in
this Agreement shall be deemed to be in compliance with the provisions hereof
only if they are in form and substance reasonably satisfactory to counsel for
the Initial Purchasers.

7. Indemnification and Contribution.

(a) Indemnification of the Initial Purchasers. The Issuer and each of the
Guarantors jointly and severally agree to indemnify and hold harmless each
Initial Purchaser, its affiliates, directors, officers and employees and each
person, if any, who controls the Initial Purchaser within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act (each, an
“Indemnified Party”), from and against any and all losses, claims, damages and
liabilities (including, without limitation, reasonable legal fees and other
expenses incurred in connection with investigating, preparing for or defending
against any loss, damage, liability, litigation, investigation, suit, action or
proceeding or any claim asserted (whether or not such Indemnified Party is a
party thereto) whether threatened or commenced and in connection with the
enforcement of this provision with respect to any of the above, as such fees and
expenses are incurred), joint or several, that arise out of, or are based upon,
any untrue statement or alleged

 

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untrue statement of any material fact contained in the Time of Sale Information,
any Issuer Written Communication or the Offering Circular (or any amendment or
supplement thereto) or any omission or alleged omission to state therein a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, in each case
except insofar as such losses, claims, damages or liabilities arise out of or
are based upon, any untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with any information relating
to any Initial Purchaser furnished to the Issuer in writing by such Initial
Purchaser through the Representative expressly for use therein, it being
understood and agreed that the only such information consists of the information
described as such in subsection (b) below.

(b) Indemnification of the Issuer and the Guarantors. Each Initial Purchaser,
severally and not jointly, agrees to indemnify and hold harmless the Issuer and
each of the Guarantors, their respective directors and officers and each person,
if any, who controls the Issuer or any such Guarantor within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act to the same
extent as the indemnity set forth in paragraph (a) above (each such person, an
“Initial Purchaser Indemnified Party”), but in each case only with respect to
any losses, claims, damages or liabilities to which such Initial Purchaser
Indemnified Party may become subject, under the Securities Act, the Exchange
Act, other Federal or state statutory law or regulation or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in the Time of Sale Information or the Offering
Circular, in each case as amended or supplemented, or any Issuer Written
Communication or arise out of or are based upon the omission or the alleged
omission of a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Issuer by the
Initial Purchasers specifically for use therein, and will reimburse any legal or
other expenses reasonably incurred by such Initial Purchaser Indemnified Party
in connection with investigating, preparing or defending against any such loss,
claim, damage, liability, action, litigation, investigation or proceeding
whatsoever (whether or not such Initial Purchaser Indemnified Party is a party
thereto) whether threatened or commenced based upon any such untrue statement or
omission, or any such alleged untrue statement or omission as such expenses are
incurred, it being understood and agreed that the only such information
furnished by the Initial Purchasers consists of the following information in the
Preliminary Offering Circular and the Offering Circular: the third and fourth
sentences of the seventh paragraph, the eighth paragraph and the ninth
paragraph, in each case found under the heading “Plan of Distribution.”

(c) Notice and Procedures. Promptly after receipt by an indemnified party under
this Section of notice of the commencement of any action, such indemnified party
(the “Indemnified Person”) will, if a claim in respect thereof is to be made
against the indemnifying party (the “Indemnifying Person”) under subsection
(a) or (b) above, notify the Indemnifying Person of the commencement thereof;
but the failure to notify the Indemnifying Person shall not relieve it from any
liability that it may have under subsection (a) or (b) above, except to the
extent that it has been materially prejudiced (through the forfeiture of
substantive rights or defenses) by such failure; and provided further that the
failure to notify the Indemnifying Person shall not relieve it

 

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from any liability that it may have to an Indemnifying Person otherwise than
under subsection (a) or (b) above. In any such proceeding, any Indemnified
Person shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Person unless:
(i) the Indemnifying Person and the Indemnified Person shall have mutually
agreed to the contrary; (ii) the Indemnifying Person has failed within a
reasonable time to retain counsel reasonably satisfactory to the Indemnified
Person; (iii) the Indemnified Person shall have reasonably concluded, based on
the advice of counsel, that there may be legal defenses available to it that are
materially different from or in addition to those available to the Indemnifying
Person; or (iv) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be
inappropriate due to actual or potential materially differing interests between
them. It is understood and agreed that the Indemnifying Person shall not, in
connection with any proceeding or related proceeding in the same jurisdiction,
be liable for the reasonable fees and expenses of more than one separate firm
(in addition to any local counsel) for all Indemnified Persons, and that all
such reasonable fees and expenses shall be reimbursed as they are incurred. Any
such separate firm for any Initial Purchaser, its affiliates, directors and
officers and any control persons of such Initial Purchaser shall be designated
in writing by the Representative and any such separate firm for the Issuer and
the Guarantors and their respective directors and officers and any control
persons of the Issuer and the Guarantors shall be designated in writing by the
Issuer. The Indemnifying Person shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the Indemnifying
Person agrees to indemnify each Indemnified Person from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an Indemnified Person shall have requested
that an Indemnifying Person reimburse the Indemnified Person for fees and
expenses of counsel as contemplated by this paragraph, the Indemnifying Person
agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more than 45
days after receipt by such Indemnifying Person of the aforesaid request;
(ii) such Indemnifying Person shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into and
(iii) such Indemnifying Person shall not have reimbursed the Indemnified Person
in accordance with such request prior to the date of such settlement. No
Indemnifying Person shall, without the prior written consent of the Indemnified
Person, which consent, in respect of clause (i) below, will not be unreasonably
withheld, effect any settlement of any pending or threatened action in respect
of which any Indemnified Person is or could have been a party and
indemnification could have been sought hereunder by such Indemnified Person
unless such settlement includes (i) an unconditional release of such Indemnified
Person in form and substance reasonably satisfactory to such Indemnified Person,
from all liability on any claims that are the subject matter of such action and
(ii) does not include a statement as to or an admission of fault, culpability or
failure to act by or on behalf of any Indemnified Person.

(d) Contribution. If the indemnification provided for in paragraph (a) or (b)
above is unavailable to an Indemnified Person or insufficient in respect of any
losses, claims, damages or liabilities referred to therein, then each
Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Issuer and the

 

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Guarantors on the one hand and the Initial Purchasers on the other from the
offering of the Securities or (ii) if the allocation provided by clause (i) is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) but also the relative
fault of the Issuer and the Guarantors on the one hand and the Initial
Purchasers on the other in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative benefits received by the Issuer
and the Guarantors on the one hand and the Initial Purchasers on the other shall
be deemed to be in the same respective proportions as the net proceeds (before
deducting expenses) received by the Issuer from the sale of the Securities and
the total discounts and commissions received by the Initial Purchasers in
connection therewith, as provided in this Agreement, bear to the aggregate
offering price of the Securities. The relative fault of the Issuer and the
Guarantors on the one hand and the Initial Purchasers on the other shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Issuer or any Guarantor
or by the Initial Purchasers and the parties’ relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.

(e) Limitation on Liability. The Issuer and the Guarantors and the Initial
Purchasers agree that it would not be just and equitable if contribution
pursuant to this Section 7 were determined by pro rata allocation (even if the
Initial Purchasers were treated as one entity for such purpose) or by any other
method of allocation that does not take account of the equitable considerations
referred to in paragraph (d) above. The amount paid or payable by an Indemnified
Person as a result of the losses, claims, damages and liabilities referred to in
paragraph (d) above shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such Indemnified
Person in connection with any such action or claim. Notwithstanding the
provisions of this Section 7, in no event shall an Initial Purchaser be required
to contribute any amount in excess of the amount by which the total discounts
and commissions received by such Initial Purchaser with respect to the offering
of the Securities exceeds the amount of any damages that such Initial Purchaser
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Initial Purchasers’ obligations to contribute
pursuant to this Section 7 are several in proportion to their respective
purchase obligations hereunder and not joint.

(f) Non-Exclusive Remedies. The remedies provided for in this Section 7 are not
exclusive and shall not limit any rights or remedies that may otherwise be
available to any Indemnified Person at law or in equity.

8. Termination. This Agreement may be terminated in the absolute discretion of
the Representative, by notice to the Issuer, if after the execution and delivery
of this Agreement and on or prior to the Closing Date: (i) trading generally
shall have been suspended or materially limited on the New York Stock Exchange
or the over-the-counter market; (ii) trading of any securities issued or
guaranteed by the Issuer or any of the Guarantors shall have been suspended on
any exchange or in any over-the-counter market; (iii) a general moratorium on
commercial

 

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banking activities shall have been declared by federal or New York State
authorities; or (iv) there shall have occurred any outbreak or escalation of
hostilities or any change in financial markets or any calamity or crisis, either
within or outside the United States, that, in the reasonable judgment of the
Representative, is material and adverse and makes it impracticable or
inadvisable to proceed with the offering, sale or delivery of the Securities on
the terms and in the manner contemplated by this Agreement, the Time of Sale
Information and the Offering Circular.

9. Defaulting Initial Purchaser.

(a) If, on the Closing Date, any Initial Purchaser defaults on its obligation to
purchase the Securities that it has agreed to purchase hereunder, the
non-defaulting Initial Purchasers may in their discretion arrange for the
purchase of such Securities by other persons satisfactory to the Issuer on the
terms contained in this Agreement. If, within 36 hours after any such default by
any Initial Purchaser, the non-defaulting Initial Purchasers do not arrange for
the purchase of such Securities, then the Issuer shall be entitled to a further
period of 36 hours within which to procure other persons satisfactory to the
non-defaulting Initial Purchasers to purchase such Securities on such terms. If
other persons become obligated or agree to purchase the Securities of a
defaulting Initial Purchaser, either the non-defaulting Initial Purchasers or
the Issuer may postpone the Closing Date for up to five full business days in
order to effect any changes that in the opinion of counsel for the Issuer or
counsel for the Initial Purchasers may be necessary in the Time of Sale
Information, the Offering Circular or in any other document or arrangement, and
the Issuer agrees to promptly prepare any amendment or supplement to the Time of
Sale Information or the Offering Circular that effects any such changes. As used
in this Agreement, the term “Initial Purchaser” includes, for all purposes of
this Agreement unless the context otherwise requires, any person not listed in
Schedule 1 hereto that, pursuant to this Section 9, purchases Securities that a
defaulting Initial Purchaser agreed but failed to purchase.

(b) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Initial Purchaser or Initial Purchasers by the
non-defaulting Initial Purchasers and the Issuer as provided in paragraph
(a) above, the aggregate principal amount of such Securities that remains
unpurchased does not exceed one-eleventh of the aggregate principal amount of
all the Securities, then the Issuer shall have the right to require each
non-defaulting Initial Purchaser to purchase the principal amount of Securities
that such Initial Purchaser agreed to purchase hereunder plus such Initial
Purchaser’s pro rata share (based on the principal amount of Securities that
such Initial Purchaser agreed to purchase hereunder) of the Securities of such
defaulting Initial Purchaser or Initial Purchasers for which such arrangements
have not been made.

(c) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Initial Purchaser or Initial Purchasers by the
non-defaulting Initial Purchasers and the Issuer as provided in paragraph
(a) above, the aggregate principal amount of such Securities that remains
unpurchased exceeds one-eleventh of the aggregate principal amount of all the
Securities, or if the Issuer shall not exercise the right described in paragraph
(b) above, then this Agreement shall terminate without liability on the part of
the non-defaulting Initial Purchasers. Any termination of this Agreement
pursuant to this Section 9 shall be without liability on the part of the Issuer
or the Guarantors, except that the Issuer and each of the Guarantors will
continue to be liable for the payment of expenses as set forth in Section 10
hereof and except that the provisions of Section 7 hereof shall not terminate
and shall remain in effect.

 

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(d) Nothing contained herein shall relieve a defaulting Initial Purchaser of any
liability it may have to the Issuer, the Guarantors or any non-defaulting
Initial Purchaser for damages caused by its default.

10. Payment of Expenses.

(a) Whether or not the transactions contemplated by this Agreement are
consummated or this Agreement is terminated, the Issuer and the Guarantors
jointly and severally agree to pay or cause to be paid all costs and expenses
incident to the performance of their respective obligations hereunder, including
without limitation, (i) the costs incident to the authorization, issuance, sale,
preparation and delivery of the Securities and any documentary, stamp or similar
taxes payable in that connection; (ii) the costs incident to the preparation and
printing of the Preliminary Offering Circular, any other Time of Sale
Information, any Issuer Written Communication and the Offering Circular
(including any amendment or supplement thereto) and the distribution thereof;
(iii) the costs of reproducing and distributing each of the Transaction
Documents; (iv) the fees and expenses of the Issuer’s and the Guarantors’
counsel and independent accountants; (v) the fees and expenses incurred in
connection with the registration or qualification and determination of
eligibility for investment of the Securities under the laws of such
jurisdictions as the Representative may designate and the preparation, printing
and distribution of a Blue Sky Memorandum (including the related fees and
expenses of counsel for the Initial Purchasers); (vi) any fees charged by rating
agencies for rating the Securities; (vii) the fees and expenses of the Trustee,
the Collateral Agent and any paying agent (including related fees and reasonable
expenses of any counsel to such parties); (viii) all expenses and application
fees incurred in connection with the approval of the Securities for book-entry
transfer by DTC; (ix) all expenses associated with the creation and perfection
of security interests, including, without limitation, the drafting and
negotiation of the Security Documents, the Joinders and any other documents,
supplements, joinders, mortgages, deeds of trust and other security documents
and the creation, preparation and filing of UCC financing statements, including
filing fees and fees incurred in connection with lien searches, and the
reasonable and documented fees and expenses of legal counsel to the Initial
Purchasers incurred in connection with any of the foregoing; and (x) all
expenses incurred by the Issuer in connection with any “road show” presentation
to potential investors (it being understood that the Initial Purchasers,
collectively, shall bear half of the costs associated with any chartered
aircraft). It is understood, however, that except as provided in this Section 10
and Section 7 hereof, the Initial Purchasers will pay all of their own costs and
expenses, including the fees of their counsel, transfer taxes on resale of any
of the Securities by them, and any advertising expenses connected with any
offers they may make.

(b) If (i) this Agreement is terminated pursuant to Section 8, (ii) the Issuer
for any reason fails to tender the Securities for delivery to the Initial
Purchasers or (iii) the Initial Purchasers decline to purchase the Securities
for any reason permitted under this Agreement, the Issuer and each of the
Guarantors jointly and severally agree to reimburse the Initial Purchasers for
all out-of-pocket costs and expenses (including the reasonable fees and expenses
of their counsel) reasonably incurred by the Initial Purchasers in connection
with this Agreement and the offering contemplated hereby.

 

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11. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and the officers and directors and any controlling persons referred
to herein, and the affiliates of each Initial Purchaser referred to in Section 7
hereof. Nothing in this Agreement is intended or shall be construed to give any
other person any legal or equitable right, remedy or claim under or in respect
of this Agreement or any provision contained herein. No purchaser of Securities
from any Initial Purchaser shall be deemed to be a successor merely by reason of
such purchase.

12. Survival. The respective indemnities, rights of contribution,
representations, warranties and agreements of the Issuer, the Guarantors and the
Initial Purchasers contained in this Agreement or made by or on behalf of the
Issuer, the Guarantors or the Initial Purchasers pursuant to this Agreement or
any certificate delivered pursuant hereto shall survive the delivery of and
payment for the Securities and shall remain in full force and effect, regardless
of any termination of this Agreement or any investigation made by or on behalf
of the Issuer, the Guarantors or the Initial Purchasers.

13. Certain Defined Terms. For purposes of this Agreement, (a) except where
otherwise expressly provided, the term “affiliate” has the meaning set forth in
Rule 405 under the Securities Act; (b) the term “business day” means any day
other than a day on which banks are permitted or required to be closed in New
York City; (c) the term “subsidiary” has the meaning set forth in Rule 405 under
the Securities Act; (d) the term “Exchange Act” means the Securities Exchange
Act of 1934, as amended, including the rules and regulations of the Commission
promulgated thereunder; and (e) the term “written communication” has the meaning
set forth in Rule 405 under the Securities Act.

14. Recognition of the U.S. Special Resolution Regimes.

(a) In the event that any Initial Purchaser is a Covered Entity and becomes
subject to a proceeding under a U.S. Special Resolution Regime, the transfer
from such Initial Purchaser of this Agreement, and any interest and obligation
in or under this Agreement, will be effective to the same extent as the transfer
would be effective under the U.S. Special Resolution Regime if this Agreement,
and any such interest and obligation, were governed by the laws of the United
States or a state of the United States.

(b) In the event that any Initial Purchaser is a Covered Entity or a BHC Act
Affiliate of such Initial Purchaser becomes subject to a proceeding under a U.S.
Special Resolution Regime, Default Rights under this Agreement that may be
exercised against such Initial Purchaser are permitted to be exercised to no
greater extent than such Default Rights could be exercised under the U.S.
Special Resolution Regime if this Agreement were governed by the laws of the
United States or a state of the United States.

“BHC Act Affiliate” has the meaning assigned to the term “affiliate” in, and
shall be interpreted in accordance with, 12 U.S.C. § 1841(k).

“Covered Entity” means any of the following:

(i) a “covered entity” as that term is defined in, and interpreted in accordance
with, 12 C.F.R. § 252.82(b);

 

28

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(ii) a “covered bank” as that term is defined in, and interpreted in accordance
with, 12 C.F.R. § 47.3(b); or

(iii) a “covered FSI” as that term is defined in, and interpreted in accordance
with, 12 C.F.R. § 382.2(b).

“Default Right” has the meaning assigned to that term in, and shall be
interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as
applicable.

“U.S. Special Resolution Regime” means each of (i) the Federal Deposit Insurance
Act and the regulations promulgated thereunder and (ii) Title II of the
Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations
promulgated thereunder.

15. Compliance with USA Patriot Act. In accordance with the requirements of the
USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)), the Initial Purchaser is required to obtain, verify and record
information that identifies its clients, including the Issuer, which information
may include the name and address of its clients, as well as other information
that will allow the Initial Purchaser to properly identify its clients.

16. Miscellaneous.

(a) Authority of the Representative. Any action by the Initial Purchasers
hereunder may be taken by the Representative on behalf of the Initial
Purchasers, and any such action taken by the Representative shall be binding
upon the Initial Purchasers.

(b) Notices. All notices and other communications hereunder shall be in writing
and shall be deemed to have been duly given if mailed or transmitted and
confirmed by any standard form of telecommunication. Notices to the Initial
Purchaser shall be given to:

c/o Credit Suisse Securities (USA) LLC

Eleven Madison Avenue

New York, New York 10010

Telecopy No.: 212-325-4296

Attention: IBCM-Legal

with a copy to

Cahill Gordon & Reindel LLP

80 Pine Street

New York, New York 10005

Fax: 212-378-2521

Attention: Brian Kelleher, Esq.

Notices to the Issuer and the Guarantors shall be given to them at:

Builders FirstSource, Inc.

2001 Bryan Street, Suite 1600

Dallas, Texas 75201

Telecopy No.: (214) 231-7544

Attention: Donald F. McAleenan, Esq.

 

29

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with a copy to

Kirkland & Ellis LLP

601 Lexington Avenue

New York, New York 10022

Fax: 212-446-4900

Attention: Joshua N. Korff

(c) Governing Law. This Agreement and any claim, controversy or dispute arising
under or related to this Agreement shall be governed by and construed in
accordance with the laws of the State of New York.

(d) Submission to Jurisdiction. The Issuer and each of the Guarantors hereby
submit to the exclusive jurisdiction of the U.S. federal and New York state
courts in the Borough of Manhattan in The City of New York in any suit or
proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby. The Issuer and each of the Guarantors waive any objection
which it may now or hereafter have to the laying of venue of any such suit or
proceeding in such courts. The Issuer and each of the Guarantors agrees that
final judgment in any such suit, action or proceeding brought in such court
shall be conclusive and binding upon the Issuer and each Guarantor, as
applicable, and may be enforced in any court to the jurisdiction of which the
Issuer and each Guarantor, as applicable, is subject by a suit upon such
judgment.

(e) Waiver of Jury Trial. Each of the parties hereto hereby waives any right to
trial by jury in any suit or proceeding arising out of or relating to this
Agreement.

(f) Counterparts. This Agreement may be signed in counterparts (which may
include counterparts delivered by any standard form of telecommunication), each
of which shall be an original and all of which together shall constitute one and
the same instrument.

(g) Amendments or Waivers. No amendment or waiver of any provision of this
Agreement, nor any consent or approval to any departure therefrom, shall in any
event be effective unless the same shall be in writing and signed by the parties
hereto.

(h) Headings. The headings herein are included for convenience of reference only
and are not intended to be part of, or to affect the meaning or interpretation
of, this Agreement.

 

30

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If the foregoing is in accordance with your understanding, please indicate your
acceptance of this Agreement by signing in the space provided below.

 

Very truly yours, Builders FirstSource, Inc. By:  

/s/ Donald F. McAleenan

Name: Donald F. McAleenan Title: Senior Vice President, General Counsel and
Secretary GUARANTORS BFS IP, LLC BFS Texas, LLC BFS, LLC Builders FirstSource -
Atlantic Group, LLC Builders FirstSource - Colorado Group, LLC Builders
FirstSource - Dallas, LLC Builders FirstSource - Florida Design Center, LLC
Builders FirstSource - Florida, LLC Builders FirstSource - MBS, LLC Builders
FirstSource - Northeast Group, LLC Builders FirstSource - Ohio Valley, LLC
Builders FirstSource - Raleigh, LLC Builders FirstSource - Southeast Group, LLC
Builders FirstSource - Texas GenPar, LLC Builders FirstSource Holdings, LLC
Builders FirstSource-Colorado, LLC ProBuild Holdings LLC ProBuild Company LLC
Pro-Build Real Estate Holdings, LLC Builder’s Capital, LLC ProBuild North
Transportation LLC Timber Roots, LLC Spenard Builders Supply LLC By:  

/s/ Donald F. McAleenan

Name:   Donald F. McAleenan Title:  

Senior Vice President, General

Counsel and Secretary

 

[Signature Page to Purchase Agreement]

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Builders FirstSource - Intellectual Property, L.P. By:   BFS IP, LLC Its:  
General Partner By:  

/s/ Donald F. McAleenan

Name:   Donald F. McAleenan Title:   Senior Vice President, General   Counsel
and Secretary Builders FirstSource - Texas Group, L.P. By:   Builders
FirstSource - Texas GenPar, LLC Its:   General Partner By:  

/s/ Donald F. McAleenan

Name:   Donald F. McAleenan Title:   Senior Vice President, General   Counsel
and Secretary Builders FirstSource - South Texas, L.P. Builders FirstSource -
Texas Installed Sales, L.P. By:   BFS Texas, LLC Its:   General Partner By:  

/s/ Donald F. McAleenan

Name:   Donald F. McAleenan Title:   Senior Vice President, General   Counsel
and Secretary

 

 

[Signature Page to Purchase Agreement]

--------------------------------------------------------------------------------

Accepted as of the date first written above:   Acting severally on behalf of
themselves and the several Initial Purchasers listed in Schedule 1 hereto.

CREDIT SUISSE SECURITIES (USA) LLC By:  

/s/ Joseph Palombini

Name:   Joseph Palombini Title:   Managing Director

 

 

[Signature Page to Purchase Agreement]

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Schedule 1

 

Initial Purchaser

   Principal Amount  

Credit Suisse Securities (USA) LLC

   $ 37,500,000  

Citigroup Global Markets Inc.

     18,750,000  

Wells Fargo Securities, LLC

     18,750,000     

 

 

 

Total

   $ 75,000,000  

--------------------------------------------------------------------------------

Schedule 2

Guarantors

 

1.   Builders FirstSource Holdings, LLC, a Delaware limited liability company 2.
  Builders FirstSource - Northeast Group, LLC, a Delaware limited liability
company 3.   Builders FirstSource - Texas GenPar, LLC, a Delaware limited
liability company 4.   Builders FirstSource - MBS, LLC, a Delaware limited
liability company 5.   BFS Texas, LLC a Delaware limited liability company 6.  
BFS IP, LLC a Delaware limited liability company 7.   Builders FirstSource -
Dallas, LLC, a Delaware limited liability company 8.   Builders FirstSource -
Florida, LLC, a Delaware limited liability company 9.   Builders FirstSource -
Florida Design Center, LLC, a Delaware limited liability company 10.   Builders
FirstSource - Ohio Valley, LLC, a Delaware limited liability company 11.   BFS,
LLC, a Delaware limited liability company 12.   Builders FirstSource - Atlantic
Group, LLC, a Delaware limited liability company 13.   Builders FirstSource -
Southeast Group, LLC, a Delaware limited liability company 14.   Builders
FirstSource - Raleigh, LLC, a Delaware limited liability company 15.   Builders
FirstSource - Colorado Group, LLC, a Delaware limited liability company 16.  
Builders FirstSource - Colorado , LLC, a Delaware limited liability company 17.
  Builders FirstSource - Texas Group, L.P., a Texas limited partnership 18.  
Builders FirstSource - South Texas, L.P., a Texas limited partnership 19.  
Builders FirstSource - Intellectual Property, L.P. , a Texas limited partnership
20.   Builders FirstSource - Texas Installed Sales, L.P. , a Texas limited
partnership 21.   ProBuild Holdings LLC, a Delaware limited liability company
22.   ProBuild Company LLC, a Delaware limited liability company 23.   Pro-Build
Real Estate Holdings, LLC, a Delaware limited liability company 24.   Builder’s
Capital, LLC, a New York limited liability company 25.   ProBuild North
Transportation LLC, a Washington limited liability company 26.   Timber Roots,
LLC, a Washington limited liability company 27.   Spenard Builders Supply LLC,
an Alaska limited liability company

 

[Signature Page to Purchase Agreement]

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Schedule 3

Subsidiaries

 

Name of Legal Entity

  

Jurisdiction of Incorporation

Builders FirstSource Holdings, LLC    Delaware Builders FirstSource – Northeast
Group, LC    Delaware Builders FirstSource – Texas GenPar, LLC    Delaware
Builders FirstSource – MBS , LLC    Delaware BFS Texas, LLC    Delaware BFS IP,
LLC    Delaware Builders FirstSource – Dallas, LLC    Delaware Builders
FirstSource – Florida, LLC    Delaware Builders FirstSource – Florida Design
Center, LLC    Delaware Builders FirstSource – Ohio Valley, LLC    Delaware BFS,
LLC    Delaware Builders FirstSource – Atlantic Group, LLC    Delaware Builders
FirstSource – Southeast Group, LLC    Delaware Builders FirstSource – Raleigh,
LLC    Delaware

--------------------------------------------------------------------------------

Builders FirstSource – Colorado Group, LLC    Delaware Builders FirstSource –
Colorado, LLC    Delaware Builders FirstSource – Texas Group, L.P.    Texas
Builders FirstSource – South Texas, L.P.    Texas Builders FirstSource –
Intellectual Property, L.P.    Texas Builders FirstSource – Texas Installed
Sales, L.P.    Texas ProBuild Holdings LLC    Delaware ProBuild Company LLC   
Delaware Pro-Build Real Estate Holdings, LLC    Delaware Pro-Build Real Estate
Holdings, LLC    Delaware Builder’s Capital, LLC    New York ProBuild North
Transportation LLC    Washington Timber Roots, LLC    Washington Spenard
Builders Supply LLC    Alaska Dixieline Builders Fund Control, Inc.   
California CCWP Inc.    South Carolina

--------------------------------------------------------------------------------

Schedule 4

Closing Documents

 

1.

an Officer’s Certificate delivered pursuant to Section 2.10 of the Existing
ABL/Bond Intercreditor Agreement by a responsible officer of the Issuer and the
other guarantors party to the Existing ABL/Bond Intercreditor Agreement (the
“Existing ABL/Bond Intercreditor Agreement Officer’s Certificate”); and

 

2.

an Officer’s Certificate delivered pursuant to Article VI of the Existing Pari
Passu Intercreditor Agreement signed by a responsible officer of the Issuer (the
“Existing Pari Passu Intercreditor Agreement Officer’s Certificate” and,
together with the Existing ABL/Bond Intercreditor Agreement Officer’s
Certificate, the “Intercreditor Agreement Officer’s Certificates”).

--------------------------------------------------------------------------------

ANNEX A

Additional Time of Sale Information

 

1.

Term sheet containing the terms of the Securities, substantially in the form of
Annex B.

 

A-1

--------------------------------------------------------------------------------

ANNEX B

Pricing Term Sheet

[See attached]

 

B-1

--------------------------------------------------------------------------------

PRICING SUPPLEMENT, DATED JULY 11, 2019       TO PRELIMINARY OFFERING CIRCULAR
DATED JULY 11, 2019       STRICTLY CONFIDENTIAL

 

LOGO [g772644dsp41.jpg]

Builders FirstSource, Inc.

$75,000,000 6.750% Senior Secured Notes due 2027

 

 

This pricing supplement (this “Pricing Supplement”) is qualified in its entirety
by reference to the preliminary offering circular dated July 11, 2019 (the
“Preliminary Offering Circular”). The information in this Pricing Supplement
supplements the Preliminary Offering Circular and supersedes the information in
the Preliminary Offering Circular to the extent inconsistent with the
information in the Preliminary Offering Circular. Capitalized terms used in this
Pricing Supplement but not defined have the meanings given them in the
Preliminary Offering Circular.

Other information (including financial information) presented in the Preliminary
Offering Circular is deemed to have changed to the extent affected by the
changes described herein.

 

Issuer:

  

Builders FirstSource, Inc.

Title of Securities:   

6.750% Senior Secured Notes due 2027 (the “Notes”)

 

On May 30, 2019, the Issuer issued $400,000,000 aggregate principal amount of
6.750% senior secured notes due 2027 (the “Existing 2027 Notes”). The Notes
offered hereby will be issued as additional notes under the indenture governing
the Existing 2027 Notes, fully fungible with the Existing 2027 Notes, treated as
a single class for all purposes under the indenture governing the Existing 2027
Notes with the same terms as those of the Existing 2027 Notes (other than issue
date and issue price) and issued under the same CUSIP numbers as the Existing
2027 Notes (except that the Notes offered hereby issued pursuant to Regulation S
under the Securities Act, will trade separately under a different CUSIP number
until 40 days after the issue date of the Notes offered hereby, but thereafter,
any such holder may transfer their Notes offered hereby issued pursuant to
Regulation S into the same CUSIP number as the Existing 2027 Notes issued
pursuant to Regulation S).

Principal Amount:

   $75,000,000

Maturity Date:

  

June 1, 2027

Issue Price:

  

104.500% plus accrued interest from May 30, 2019

Coupon:

   6.750%

Yield to Maturity:

   5.679%

Gross Proceeds:

   $78,375,000.00

Spread to Benchmark:

  

+382.7 basis points

Benchmark:

  

2.00% UST due May 31, 2024

 

B-2

--------------------------------------------------------------------------------

Ratings*    B2 / BB- Interest Payment Dates:    June 1 and December 1 of each
year, with the first interest payment date on December 1, 2019 Record Dates:   
May 15 and November 15 of each year Make-Whole Redemption:    Treasury plus 50
basis points prior to June 1, 2022 Optional Redemption:    At any time and from
time to time on or after June 1, 2022, the Issuer may redeem the Notes in whole
or in part at a redemption price equal to the percentage of principal amount set
forth below plus accrued and unpaid interest, if any, on the Notes redeemed, to,
but excluding, the applicable date of redemption, if redeemed during the
twelve-month period beginning on June 1 of the year indicated below:

 

    

Year

  

Price

   2022    103.375%    2023    101.688%    2024 and thereafter    100.000%

   At any time and from time to time prior to May 30, 2022, the Issuer may
redeem up to 10% of the aggregate principal amount of the Notes issued under the
Indenture (including any Additional Notes) during each 12 month period beginning
on May 30, 2019 at a redemption price of 103% of the aggregate principal amount
thereof, plus accrued and unpaid interest, if any, on the Notes redeemed, to,
but excluding, the applicable date of redemption. Equity Clawback:    Up to 40%
at 106.750% prior to June 1, 2022 CUSIP/ISIN:   

144A: 12008R AM9 / US12008RAM97

Regulation S: U08985 AG5 / USU08985AG56

Temporary Regulation S: U08985 AH3 / USU08985AH30

Trade Date:    July 11, 2019 Settlement Date:   

July 25, 2019 (T+10)

 

The Issuer expects delivery of the Notes offered hereby will be made against
payment therefor on July 25, 2019, which is the tenth business day following the
date of pricing of the Notes offered hereby (such settlement being referred to
as “T+10”). Under Rule 15c6-1 of the Exchange Act, trades in the secondary
market generally are required to settle in two business days unless the parties
to any such trade expressly agree otherwise. Accordingly, purchasers who wish to
trade Notes offered hereby prior to the date that is two business days preceding
the settlement date will be required, by virtue of the fact that the Notes
offered hereby initially settle in T+10, to specify an alternative settlement
arrangement at the time of any such trade to prevent a failed settlement.
Purchasers of the Notes offered hereby who wish to trade the Notes offered
hereby during such period should consult their advisors.

Distribution:    144A and Regulation S with no registration rights Minimum
Denominations:    $2,000 and $1,000 increments in excess thereof Use of
Proceeds:    We intend to use the net proceeds from this offering to redeem
$75 million aggregate principal amount of the Existing Notes and to pay related
transaction fees and expenses. Change of Control:    If we experience certain
kinds of changes of control, we must offer to purchase the Notes at 101% of
their principal amount, plus accrued and unpaid interest, if any, to, but
excluding, the purchase date. Joint Book-Running Managers:   

Credit Suisse Securities (USA) LLC

Citigroup Global Markets Inc.

Wells Fargo Securities, LLC

 

*

A securities rating is not a recommendation to buy, sell or hold securities and
may be subject to revision or withdrawal at any time.

 

 

B-3

--------------------------------------------------------------------------------

This material is confidential and is for your information only and is not
intended to be used by anyone other than you. This information does not purport
to be a complete description of these Notes or the offering. Please refer to
this information together with the information presented in the Preliminary
Offering Circular for a complete description.

The Notes have not been and will not be registered under the Securities Act of
1933, as amended (the “Securities Act”), or the securities laws of any other
jurisdiction, and are being offered and sold only to (1) persons reasonably
believed to be “qualified institutional buyers” in accordance with Rule 144A
under the Securities Act and (2) outside the United States to non-U.S. persons
in accordance with Regulation S under the Securities Act.

This communication does not constitute an offer to sell or the solicitation of
an offer to buy any securities in any jurisdiction to any person to whom it is
unlawful to make such offer or solicitation in such jurisdiction.

No PRIIPS KID: Not for retail investors in the EEA. No PRIIPS key information
document (KID) has been prepared as not available to retail in EEA.

Any disclaimer(s) or other notice(s) that may appear below are not applicable to
this communication and should be disregarded. Such disclaimer(s) and/or
notice(s) were automatically generated as a result of this communication being
sent via Bloomberg or another communication system.

 

B-4

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ANNEX C

Restrictions on Offers and Sales Outside the United States

In connection with offers and sales of Securities outside the United States:

(a) Each Initial Purchaser acknowledges that the Securities have not been
registered under the Securities Act and may not be offered or sold within the
United States or to, or for the account or benefit of, U.S. persons except
pursuant to an exemption from, or in transactions not subject to, the
registration requirements of the Securities Act.

(b) Each Initial Purchaser, severally and not jointly, represents, warrants and
agrees that:

(i) Such Initial Purchaser has offered and sold the Securities, and will offer
and sell the Securities, (A) as part of their distribution at any time and
(B) otherwise until 40 days after the later of the commencement of the offering
of the Securities and the Closing Date, only in accordance with Regulation S
under the Securities Act (“Regulation S”) or Rule 144A or any other available
exemption from registration under the Securities Act.

(ii) None of such Initial Purchaser or any of its affiliates or any other person
acting on its or their behalf has engaged or will engage in any directed selling
efforts with respect to the Securities, and all such persons have complied and
will comply with the offering restrictions requirement of Regulation S.

(iii) At or prior to the confirmation of sale of any Securities sold in reliance
on Regulation S, such Initial Purchaser will have sent to each distributor,
dealer or other person receiving a selling concession, fee or other remuneration
that purchases Securities from it during the distribution compliance period a
confirmation or notice to substantially the following effect:

The Securities covered hereby have not been registered under the U.S. Securities
Act of 1933, as amended (the “Securities Act”), and may not be offered or sold
within the United States or to, or for the account or benefit of, U.S. persons
(i) as part of their distribution at any time or (ii) otherwise until 40 days
after the later of the commencement of the offering of the Securities and the
date of original issuance of the Securities, except in accordance with
Regulation S or Rule 144A or any other available exemption from registration
under the Securities Act. Terms used above have the meanings given to them by
Regulation S.

(iv) The Initial Purchaser has not and will not enter into any contractual
arrangement with any distributor with respect to the distribution of the
Securities, except with its affiliates or with the prior written consent of the
Issuer.

 

C-1

--------------------------------------------------------------------------------

Terms used in paragraph (a) and this paragraph (b) and not otherwise defined in
this Agreement have the meanings given to them by Regulation S.

(c) Each Initial Purchaser acknowledges that no action has been or will be taken
by the Issuer that would permit a public offering of the Securities, or
possession or distribution of any of the Time of Sale Information, the Offering
Circular, any Issuer Written Communication or any other offering or publicity
material relating to the Securities, in any country or jurisdiction where action
for that purpose is required.

 

C-2