Exhibit 10.5

 

 

GUARANTY

dated as of

May 29, 2013

among

BUILDERS FIRSTSOURCE, INC.,

as the Parent Borrower,

THE OTHER GUARANTORS PARTY HERETO FROM TIME TO TIME,

and

SUNTRUST BANK,

as Administrative Agent and Collateral Agent

 

 

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TABLE OF CONTENTS

 

          Page  

 

ARTICLE I

 

Definitions

  

  

Section 1.01

  

Credit Agreement Definitions

     1   

Section 1.02

  

Other Defined Terms

     1   

 

ARTICLE II

 

Guarantee

  

  

Section 2.01

  

Guarantee

     2    Section 2.02   

Guarantee of Payment

     2   

Section 2.03

  

No Limitations

     3   

Section 2.04

  

Reinstatement

     4   

Section 2.05

  

Agreement To Pay; Subrogation

     4   

Section 2.06

  

Information

     4   

 

ARTICLE III

 

Indemnity, Subrogation and Subordination

  

  

 

ARTICLE IV

  

 

Miscellaneous

  

Section 4.01

  

Notices

     5   

Section 4.02

  

Waivers; Amendment

     5   

Section 4.03

  

Administrative Agent’s and Collateral Agent’s Fees and Expenses; Indemnification

     6   

Section 4.04

  

Successors and Assigns

     7   

Section 4.05

  

Survival of Agreement

     7   

Section 4.06

  

Counterparts; Effectiveness; Several Agreement

     7   

Section 4.07

  

Severability

     8   

Section 4.08

  

GOVERNING LAW, ETC.

     8   

Section 4.09

  

WAIVER OF RIGHT TO TRIAL BY JURY

     9   

Section 4.10

  

Headings

     8   

Section 4.11

  

Obligations Absolute

     8   

Section 4.12

  

Termination or Release

     8   

Section 4.13

  

Additional Restricted Subsidiaries

     9   

Section 4.14

  

Recourse; Limited Obligations

     9   

Section 4.15

  

Intercreditor Agreement

     10   

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SCHEDULES    Schedule I    Guarantors EXHIBITS    Exhibit I    Form of Guaranty
Supplement

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This GUARANTY, dated as of May 29, 2013, is among Builders FirstSource, Inc., a
Delaware corporation (the “Parent Borrower”), and the other Guarantors set forth
on Schedule I hereto and SunTrust Bank, as Administrative Agent and Collateral
Agent for the Secured Creditors (as defined below).

Reference is made to the Credit Agreement, dated as of May 29, 2013 (as amended,
restated, amended and restated, supplemented and/or otherwise modified from time
to time, the “Credit Agreement”), among the Parent Borrower, certain
Subsidiaries of the Parent Borrower from time to time party thereto (together
with the Parent Borrower, each, a “Borrower” and collectively, the “Borrowers”),
the Lenders party thereto from time to time and SunTrust Bank, as Administrative
Agent (in such capacity, including any successor thereto, the “Administrative
Agent”) and Collateral Agent (in such capacity, including any successor thereto,
the “Collateral Agent”) for the Lenders.

The Lenders have agreed to extend credit to the Borrowers subject to the terms
and conditions set forth in the Credit Agreement. The obligations of the Lenders
to extend such credit are conditioned upon, among other things, the execution
and delivery of this Agreement by each Guarantor (as defined below). The
Guarantors are affiliates of one another and will derive substantial, direct and
indirect benefits from the extensions of credit to the Borrowers pursuant to the
Credit Agreement and are willing to execute and deliver this Agreement in order
to induce the Lenders to extend such credit. The ABL/Bond Intercreditor
Agreement governs the relative rights and priorities of the Pari Notes Debt
Secured Parties and the ABL Secured Parties (each as defined in the ABL/Bond
Intercreditor Agreement) in respect of the Notes First Lien Collateral and the
ABL First Lien Collateral (and with respect to certain other matters as
described therein). Accordingly, the parties hereto agree as follows:

ARTICLE I

Definitions

Section 1.01 Credit Agreement Definitions.

(a) Capitalized terms used in this Agreement, including the preamble and
introductory paragraphs hereto, and not otherwise defined herein have the
meanings specified in the Credit Agreement.

(b) The rules of construction specified in Article I of the Credit Agreement
also apply to this Agreement.

Section 1.02 Other Defined Terms.

As used in this Agreement, the following terms have the meanings specified
below:

“Accommodation Payment” has the meaning assigned to such term in Article III.

“Agreement” means this Guaranty.

“Allocable Amount” has the meaning assigned to such term in Article III.

“Credit Agreement” has the meaning assigned to such term in the preliminary
statement of this Agreement.

“Guaranteed Obligations” mean the “Obligations” as defined in the Credit
Agreement.

 

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“Guarantors” means, collectively, the Parent Borrower and each other Guarantor
listed on Schedule I hereto and any other Person that becomes a party to this
Agreement after the Acquisition Date pursuant to Section 4.13 of this Agreement;
provided that if any such Guarantor is released from its obligations hereunder
as provided in Section 4.12(b) of this Agreement, such Person shall cease to be
a Guarantor hereunder effective upon such release.

“Guaranty Supplement” means an instrument substantially in the form of Exhibit I
hereto.

“Secured Creditors” has the meaning provided in the Credit Agreement.

“UFCA” has the meaning assigned to such term in Article III of this Agreement.

“UFTA” has the meaning assigned to such term in Article III of this Agreement.

ARTICLE II

Guarantee

Section 2.01 Guarantee.

Each Guarantor irrevocably, absolutely and unconditionally guarantees, jointly
with the other Guarantors and severally, as a primary obligor and not merely as
a surety, the due and punctual payment and performance of the Guaranteed
Obligations, in each case, whether such Guaranteed Obligations are now existing
or hereafter incurred, and whether at maturity, by acceleration or otherwise.
Each of the Guarantors further agrees that the Guaranteed Obligations may be
extended, increased or renewed, amended or modified, in whole or in part,
without notice to, or further assent from, such Guarantor and that such
Guarantor will remain bound upon its guarantee hereunder notwithstanding any
such extension, increase, renewal, amendment or modification of any Guaranteed
Obligation. Each of the Guarantors waives promptness, presentment to, demand of
payment from, and protest to, any Guarantor or any other Credit Party of any of
the Guaranteed Obligations, and also waives notice of acceptance of its
guarantee and notice of protest for nonpayment.

Section 2.02 Guarantee of Payment.

Each of the Guarantors further agrees that its guarantee hereunder constitutes a
guarantee of payment when due (whether or not any bankruptcy or similar
proceeding shall have stayed the accrual of collection of any of the Guaranteed
Obligations or operated as a discharge thereof) and not of collection, and
waives any right to require that any resort be had by the Administrative Agent
or any other Secured Creditor to any security held for the payment of any of the
Guaranteed Obligations, or to any balance of any deposit account or credit on
the books of the Administrative Agent or any other Secured Creditor in favor of
any other Guarantor or any other Person. The obligations of each Guarantor
hereunder are independent of the obligations of any other Guarantor or Borrower,
and a separate action or actions may be brought and prosecuted against each
Guarantor whether or not action is brought against any other Guarantor or
Borrower and whether or not any other Guarantor or Borrower be joined in any
such action or actions. Any payment required to be made by a Guarantor hereunder
may be required by the Administrative Agent or any other Secured Creditor on any
number of occasions.

 

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Section 2.03 No Limitations.

(a) Except for termination or release of a Guarantor’s obligations hereunder as
expressly provided in Section 4.12 of this Agreement, to the fullest extent
permitted by applicable Law, the obligations of each Guarantor hereunder shall
not be subject to any reduction, limitation, impairment or termination for any
reason, including any claim of waiver, release, surrender, alteration or
compromise, and shall not be subject to any defense or set-off, counterclaim,
recoupment or termination whatsoever by reason of the invalidity, illegality or
unenforceability of any of the Guaranteed Obligations, any impossibility in the
performance of any of the Guaranteed Obligations, or otherwise. Without limiting
the generality of the foregoing, to the fullest extent permitted by applicable
Law and except for termination or release of a Guarantor’s obligations hereunder
in accordance with the terms of Section 4.12 (but without prejudice to
Section 2.04) of this Agreement, the obligations of each Guarantor hereunder
shall not be discharged impaired or otherwise affected by (i) the failure of the
Administrative Agent, any other Secured Creditor or any other Person to assert
any claim or demand or to enforce any right or remedy under the provisions of
any Loan Document or otherwise; (ii) any rescission, waiver, amendment or
modification of, or any release from any of the terms or provisions of, any Loan
Document or any other agreement, including with respect to any other Guarantor
under this Agreement; (iii) the release of, or any impairment of any security
held by the Collateral Agent or any other Secured Creditor for the Guaranteed
Obligations; (iv) any default, failure or delay, willful or otherwise, in the
performance of the Guaranteed Obligations; (v) the failure to perfect any
security interest in, or the release of, any of the Collateral held by or on
behalf of the Collateral Agent or any other Secured Creditor; (vi) any change in
the corporate existence, structure or ownership of any Credit Party, the lack of
legal existence of any Borrower or any other Guarantor or legal obligation to
discharge any of the Guaranteed Obligations by any Borrower or any other
Guarantor for any reason whatsoever, including, without limitation, in any
insolvency, bankruptcy or reorganization of any Credit Party; (vii) the
existence of any claim, set-off or other rights that any Guarantor may have at
any time against any Borrower, the Administrative Agent, any other Secured
Creditor or any other Person, whether in connection with the Credit Agreement,
the other Loan Documents or any unrelated transaction; (viii) this Agreement
having been determined (on whatsoever grounds) to be invalid, non-binding or
unenforceable against any other Guarantor ab initio or at any time after the
Closing Date; or (ix) any other circumstance (including statute of limitations),
any act or omission that may or might in any manner or to any extent vary the
risk of any Guarantor or otherwise operate as a defense to, or discharge of, any
Borrower, any Guarantor or any other guarantor or surety as a matter of law or
equity (in each case, other than the payment in full in cash of all the
Guaranteed Obligations (excluding contingent obligations as to which no claim
has been made)). Each Guarantor expressly authorizes the applicable Secured
Creditors, to the extent permitted by the Security Agreement, to take and hold
security for the payment and performance of the Guaranteed Obligations, to
exchange, waive or release any or all such security (with or without
consideration), to enforce or apply such security and direct the order and
manner of any sale thereof in their sole discretion or to release or substitute
any one or more other guarantors or obligors upon or in respect of the
Guaranteed Obligations all without affecting the obligations of any Guarantor
hereunder. Anything contained in this Agreement to the contrary notwithstanding,
the obligations of each Guarantor under this Agreement shall be limited to an
aggregate amount equal to the largest amount that would not render its
obligations under this Agreement subject to avoidance as a fraudulent transfer
or conveyance under Section 548 of the Bankruptcy Code of the United States or
any comparable provisions of any similar federal or state law.

(b) To the fullest extent permitted by applicable Law and except for termination
or release of a Guarantor’s obligations hereunder in accordance with the terms
of Section 4.12 (but without prejudice to Section 2.04) of this Agreement, each
Guarantor waives any defense based on or arising out of any defense of any
Borrower or any other Guarantor or the unenforceability of the Guaranteed
Obligations or any part thereof from any cause, or the cessation from any cause
of the liability of the Borrower or any other Guarantor, other than the payment
in full in cash of all the Guaranteed Obligations

 

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(excluding contingent obligations as to which no claim has been made). The
Administrative Agent and the other Secured Creditors may in accordance with the
terms of the Security Documents, at their election, foreclose on any security
held by one or more of them by one or more judicial or nonjudicial sales, accept
an assignment of any such security in lieu of foreclosure, compromise or adjust
any part of the Guaranteed Obligations, make any other accommodation with any
Borrower or any other Guarantor or exercise any other right or remedy available
to them against any Guarantor, without affecting or impairing in any way the
liability of any Guarantor hereunder except to the extent the Guaranteed
Obligations have been paid in full in cash (excluding contingent obligations as
to which no claim has been made). To the fullest extent permitted by applicable
Law, each Guarantor waives any defense arising out of any such election even
though such election operates, pursuant to applicable Law, to impair or to
extinguish any right of reimbursement or subrogation or other right or remedy of
such Guarantor against any Borrower or any other Guarantor, as the case may be,
or any security. To the fullest extent permitted by applicable Law, each Credit
Party waives any and all suretyship defenses.

Section 2.04 Reinstatement.

Notwithstanding anything to contrary contained in this Agreement, each of the
Guarantors agrees that (a) its guarantee hereunder shall continue to be
effective or be reinstated, as the case may be, if at any time payment, or any
part thereof, of any Guaranteed Obligation is rescinded or must otherwise be
restored by the Administrative Agent or any other Secured Creditor upon the
bankruptcy or reorganization (or any analogous proceeding in any jurisdiction)
of any Borrower or any other Guarantor or otherwise and (b) the provisions of
this Section 2.04 shall survive the termination of this Agreement.

Section 2.05 Agreement To Pay; Subrogation.

In furtherance of the foregoing and not in limitation of any other right that
the Administrative Agent or any other Secured Creditor has at law or in equity
against any Guarantor by virtue hereof, upon the failure of any Borrower or any
other Guarantor to pay any Guaranteed Obligation when and as the same shall
become due, whether at maturity, by acceleration, after notice of prepayment or
otherwise, each Guarantor hereby promises to and will forthwith pay, or cause to
be paid, to the Administrative Agent for distribution to the applicable Secured
Creditors in cash the amount of such unpaid Guaranteed Obligation. Upon payment
by any Guarantor of any sums to the Administrative Agent as provided above, all
rights of such Guarantor against any Borrower or any other Guarantor arising as
a result thereof by way of right of subrogation, contribution, reimbursement,
indemnity or otherwise shall in all respects be subject to Article III of this
Agreement.

Section 2.06 Information.

Each Guarantor assumes all responsibility for being and keeping itself informed
of the Borrowers’ and each other Guarantor’s financial condition and assets, and
of all other circumstances bearing upon the risk of nonpayment of the Guaranteed
Obligations and the nature, scope and extent of the risks that such Guarantor
assumes and incurs hereunder, and agrees that none of the Administrative Agent
or the other Secured Creditors will have any duty to advise such Guarantor of
information known to it or any of them regarding such circumstances or risks.

 

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ARTICLE III

Indemnity, Subrogation and Subordination

Upon payment by any Guarantor of any Guaranteed Obligations, all rights of such
Guarantor against any Borrower or any other Guarantor arising as a result
thereof by way of right of subrogation, contribution, reimbursement, indemnity
or otherwise shall in all respects be subordinate and junior in right of payment
to the prior payment in full in cash of all the Guaranteed Obligations
(excluding contingent obligations as to which no claim has been made) and the
termination of all Commitments to any Credit Party under any Loan Document. If
any amount shall erroneously be paid to any Borrower or any other Guarantor on
account of (i) such subrogation, contribution, reimbursement, indemnity or
similar right or (ii) any such indebtedness of such Borrower or any other
Guarantor, such amount shall be held in trust for the benefit of the Secured
Creditors and shall forthwith be paid to the Administrative Agent to be credited
against the payment of the Guaranteed Obligations, whether matured or unmatured,
in accordance with the terms of the Credit Agreement and the other Loan
Documents. Subject to the foregoing, to the extent that any Guarantor shall,
under this Agreement or the Credit Agreement as a joint and several obligor,
repay any of the Guaranteed Obligations constituting Loans made to another
Credit Party under the Credit Agreement (an “Accommodation Payment”), then the
Guarantor making such Accommodation Payment shall be entitled to contribution
and indemnification from, and be reimbursed by, each of the other Guarantors in
an amount equal to a fraction of such Accommodation Payment, the numerator of
which fraction is such other Guarantor’s Allocable Amount and the denominator of
which is the sum of the Allocable Amounts of all of the Guarantors; provided
that such rights of contribution and indemnification shall be subordinated to
the prior payment in full, in cash, of all of the Guaranteed Obligations
(excluding contingent obligations as to which no claim has been made). As of any
date of determination, the “Allocable Amount” of each Guarantor shall be equal
to the maximum amount of liability for Accommodation Payments which could be
asserted against such Guarantor hereunder and under the Credit Agreement without
(a) rendering such Guarantor “insolvent” within the meaning of Section 101
(31) of the Bankruptcy Code of the United States, Section 2 of the Uniform
Fraudulent Transfer Act (“UFTA”) or Section 2 of the Uniform Fraudulent
Conveyance Act (“UFCA”), (b) leaving such Guarantor with unreasonably small
capital or assets, within the meaning of Section 548 of the Bankruptcy Code of
the United States, Section 4 of the UFTA, or Section 5 of the UFCA, or
(c) leaving such Guarantor unable to pay its debts as they become due within the
meaning of Section 548 of the Bankruptcy Code of the United States or Section 4
of the UFTA, or Section 5 of the UFCA.

ARTICLE IV

Miscellaneous

Section 4.01 Notices.

All communications and notices hereunder shall (except as otherwise expressly
permitted herein) be in writing and given as provided in Section 11.05 of the
Credit Agreement. All communications and notice hereunder to a Guarantor other
than the Parent Borrower shall be given in care of the Parent Borrower.

Section 4.02 Waivers; Amendment.

(a) No failure by any Secured Creditor to exercise, and no delay by any such
Person in exercising, any right, remedy, power or privilege hereunder or under
any other Loan Document shall operate as a waiver thereof; nor shall any single
or partial exercise of any right, remedy, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right,

 

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remedy, power or privilege. The rights, remedies, powers and privileges herein
provided, and provided under each other Loan Document, are cumulative and not
exclusive of any rights, remedies, powers and privileges provided by Law. No
waiver of any provision of any Loan Document or consent to any departure by any
Credit Party therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) of this Section 4.02, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given.

(b) Subject to the ABL/Bond Intercreditor Agreement, neither this Agreement nor
any provision hereof may be waived, amended or modified except pursuant to an
agreement or agreements in writing entered into by the Administrative Agent and
the Credit Party or Credit Parties with respect to which such waiver, amendment
or modification is to apply, subject to any consent required in accordance with
Section 11.12 of the Credit Agreement.

Section 4.03 Administrative Agent’s and Collateral Agent’s Fees and Expenses;
Indemnification.

(a) Each Guarantor, jointly with the other Guarantors and severally, agrees to
reimburse the Administrative Agent and the Collateral Agent for its fees and
expenses incurred hereunder as provided in Section 11.01 of the Credit
Agreement; provided that each reference therein to “each Borrower” and the “the
Borrowers” shall be deemed to be a reference to “each Guarantor” and “the
Guarantors”, as applicable.

(b) Without limitation of its indemnification obligations under the other Loan
Documents, each Guarantor jointly and severally agrees to indemnify the
Administrative Agent, the Collateral Agent and the other Indemnitees (as defined
in Section 11.02 of the Credit Agreement) against, and hold each Indemnitee
harmless from, any and all losses, claims, damages, liabilities or expenses to
which any such Indemnitee may become subject arising out of, resulting from or
in connection with (but limited, in the case of legal fees and expenses, to the
reasonable and documented out-of-pocket fees, disbursements and other charges of
one counsel to all Indemnitees taken as a whole and, if reasonably necessary, a
single local counsel for all Indemnitees taken as a whole in each relevant
jurisdiction, and solely in the case of a conflict of interest, one additional
counsel in each relevant jurisdiction to each group of affected Indemnitees
similarly situated taken as a whole) any actual or threatened claim, litigation,
investigation or proceeding relating to the Transactions or to the execution,
delivery, enforcement, performance and administration of this Agreement, the
other Loan Documents, the Loans or the use, or proposed use of the proceeds
therefrom, whether based on contract, tort or any other theory (including any
investigation of, preparation for, or defense of any pending or threatened
claim, litigation, investigation or proceeding), and regardless of whether any
Indemnitee is a party thereto; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or expenses resulted from (x) the gross negligence, bad faith or
willful misconduct of such Indemnitee, (y) a material breach of any obligations
under any Loan Document by such Indemnitee as determined by a final,
non-appealable judgment of a court of competent jurisdiction or (z) any dispute
solely among Indemnitees other than any claims against an Indemnitee in its
capacity or in fulfilling its role as an administrative agent or arranger or any
similar role under any Loan Document and other than any claims arising out of
any act or omission of the Borrower or any of its Affiliates. This
Section 4.03(b) shall not apply to Taxes, except any Taxes that represent losses
or damages arising from any non-Tax claim. No Indemnitee nor any Guarantor shall
have any liability and each party hereby waives, any claim against any other
party to this Agreement or any Indemnitee, for any special, punitive, indirect
or consequential damages relating to this Agreement or arising out of its
activities in connection herewith or therewith (whether before or after the
Closing Date) (other than, in the case of any Guarantor, in respect of any such
damages incurred or paid by an Indemnitee to a third party).

 

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(c) Any such amounts payable as provided hereunder shall be additional
Guaranteed Obligations guaranteed hereby and secured by the Collateral
Documents. The provisions of this Section 4.03 shall remain operative and in
full force and effect regardless of the termination of this Agreement, any other
Loan Document, any Designated Hedge Agreement or any Cash Management Agreement,
the consummation of the transactions contemplated hereby, the repayment of any
of the Guaranteed Obligations, the invalidity or unenforceability of any term or
provision of this Agreement or any other Loan Document, any resignation of the
Administrative Agent or Collateral Agent or any document governing any of the
obligations arising under any Designated Hedge Agreement or Cash Management
Agreement, or any investigation made by or on behalf of the Administrative Agent
or any other Secured Creditor. All amounts due under this Section 4.03 shall be
payable within twenty (20) Business Days of written demand therefor.

Section 4.04 Successors and Assigns.

Whenever in this Agreement any of the parties hereto is referred to, such
reference shall be deemed to include the permitted successors and assigns of
such party; and all covenants, promises and agreements by or on behalf of any
Guarantor or any Secured Creditor that are contained in this Agreement shall
bind and inure to the benefit of their respective permitted successors and
assigns. Except as provided in Section 11.06 of the Credit Agreement, no
Guarantor may assign any of its rights or obligations hereunder without the
written consent of the Administrative Agent.

Section 4.05 Survival of Agreement.

All covenants, agreements, indemnities, representations and warranties made by
the Guarantors in the Loan Documents and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement or any
other Loan Document shall be considered to have been relied upon by the Secured
Creditors and shall survive the execution and delivery of the Loan Documents and
the making of any Loans, regardless of any investigation made by any Secured
Creditor or on its behalf and notwithstanding that any Secured Creditor may have
had notice or knowledge of any Default or Event of Default or incorrect
representation or warranty at the time any credit is extended under the Credit
Agreement or any other Loan Document, and shall continue in full force and
effect until this Agreement is terminated as provided in Section 4.12 hereof, or
with respect to any individual Guarantor until such Guarantor is otherwise
released from its obligations under this Agreement in accordance with the terms
hereof.

Section 4.06 Counterparts; Effectiveness; Several Agreement; Integration.

This Agreement may be executed in counterparts (and by different parties hereto
in different counterparts), each of which shall constitute an original, but all
of which when taken together shall constitute a single contract. This Agreement
shall become effective when it shall have been executed by the Guarantors, the
Administrative Agent and the Collateral Agent and thereafter shall be binding
upon and inure to the benefit of each Guarantor, the Administrative Agent, the
Collateral Agent, the other Secured Creditors and their respective permitted
successors and assigns, subject to Section 4.04 hereof. Delivery of an executed
counterpart of a signature page of this Agreement by telecopy or other
electronic imaging means shall be effective as delivery of a manually executed
counterpart of this Agreement. This Agreement shall be construed as a separate
agreement with respect to each Guarantor and may be amended, restated, modified,
supplemented, waived or released with respect to any Guarantor without the
approval of any other Guarantor and without affecting the obligations of any
other Guarantor hereunder. This Agreement constitutes the entire agreement among
the parties hereto regarding the subject matter hereof and supersedes all prior
agreements and understandings, oral or written, regarding such subject matter.

 

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Section 4.07 Severability.

If any provision of this Agreement is held to be illegal, invalid or
unenforceable, (a) the legality, validity and enforceability of the remaining
provisions of this Agreement shall not be affected or impaired thereby and
(b) the parties shall endeavor in good faith negotiations to replace the
illegal, invalid or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

Section 4.08 Choice of Law; Consent to Jurisdiction; Venue; Waiver of Jury
Trial.

The parties hereto agree that the provisions of Section 11.08 of the Credit
Agreement shall apply to this agreement, mutatis mutandis as if fully set forth
herein.

Section 4.10 Headings.

Article and Section headings and the Table of Contents used herein are for
convenience of reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Agreement.

Section 4.11 Obligations Absolute.

All rights of the Collateral Agent, the Administrative Agent and the other
Secured Creditors hereunder and all obligations of each Guarantor hereunder
shall be absolute and unconditional irrespective of (a) any lack of validity or
enforceability of the Credit Agreement, any other Loan Document, any agreement
with respect to any of the Guaranteed Obligations or any other agreement or
instrument relating to any of the foregoing, (b) any change in the time, manner
or place of payment of, or in any other term of, all or any of the Guaranteed
Obligations, or any other amendment or waiver of or any consent to any departure
from the Credit Agreement, any other Loan Document, or any other agreement or
instrument, (c) any release or amendment or waiver of or consent under or
departure from any guarantee guaranteeing all or any of the Guaranteed
Obligations or (d) subject only to termination or release of a Guarantor’s
obligations hereunder in accordance with the terms of Section 4.12 hereof, but
without prejudice to reinstatement rights under Section 2.04 hereof, any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, any Guarantor in respect of the Guaranteed Obligations or this
Agreement.

Section 4.12 Termination or Release.

(a) This Agreement and the Guarantees made herein shall terminate with respect
to all Guaranteed Obligations when (i) the Commitments have been terminated and
the Loans, together with interest, Fees and all other Obligations (other than
those relating to any Designated Hedge Agreement, cash management obligations
constituting Obligations and indemnification and other contingent obligations
for which no demand has been made and obligations in respect of Letters of
Credit that have been Cash Collateralized) incurred hereunder and under the
other Loan Documents, have been paid in full and (ii) all principal and interest
in respect of each Loan and all other Guaranteed Obligations (other than
(A) contingent indemnification obligations with respect to then unasserted
claims and (B) Guaranteed Obligations in respect of obligations that may
thereafter arise with respect to any Designated Hedge Agreement or any secured
Cash Management Agreement, in each case, not yet due and payable, unless the
Collateral Agent has received written notice, at least two (2) Business Days
prior to the proposed date of any such termination, stating that arrangements
reasonably satisfactory to each applicable Designated Hedge Creditor or Cash
Management Bank in respect thereof have not been made) shall have been paid in

 

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full in cash, provided, however, that in connection with the termination of this
Agreement, the Administrative Agent may require such indemnities as it shall
reasonably deem necessary or appropriate to protect the Secured Creditors
against (x) loss on account of credits previously applied to the Guaranteed
Obligations that may subsequently be reversed or revoked, and (y) any
obligations that may thereafter arise with respect to Designated Hedge
Agreements or secured Cash Management Agreements to the extent not provided for
thereunder.

(b) A Guarantor that is a Restricted Subsidiary shall automatically be released
in the circumstances set forth in Sections 9.01(b) and 11.27 of the Credit
Agreement.

(c) In connection with any termination or release pursuant to clauses (a) or
(b) above, the Administrative Agent and the Collateral Agent shall promptly
execute and deliver to any Guarantor, at such Guarantor’s expense, all documents
that such Guarantor shall reasonably request to evidence such termination or
release. Any execution and delivery of documents pursuant to this Section 4.12
shall be without recourse to or warranty by the Administrative Agent or the
Collateral Agent.

(d) At any time that the respective Guarantor desires that the Administrative
Agent or the Collateral Agent take any of the actions described in immediately
preceding clause (c), it shall, upon request of the Administrative Agent or the
Collateral Agent, deliver to the Administrative Agent an officer’s certificate
certifying that the release of the respective Guarantor is permitted pursuant to
clause (a) or (b) above. The Administrative Agent and the Collateral Agent shall
have no liability whatsoever to any Secured Creditor as a result of any release
of any Guarantor by it as permitted (or which the Administrative Agent in good
faith believes to be permitted) by this Section 4.12.

Section 4.13 Additional Restricted Subsidiaries.

Each Restricted Subsidiary that is required to become a Guarantor pursuant to
Section 6.09 of the Credit Agreement shall enter in this Agreement as Guarantor
(for avoidance of doubt, the Company and each other Borrower may cause any
Restricted Subsidiary that is not a Guarantor to Guarantee the Obligations by
causing such Restricted Subsidiary to execute a Guaranty Supplement in
accordance with the provisions of this Section 4.13 and any such Restricted
Subsidiary shall be a Guarantor hereunder with the same force and effect as if
originally named as a Guarantor herein). Upon execution and delivery by the
Administrative Agent and a Restricted Subsidiary of a Guaranty Supplement, such
Restricted Subsidiary shall become a Guarantor hereunder with the same force and
effect as if originally named as a Guarantor herein. The execution and delivery
of any such instrument shall not require the consent of any other Guarantor
hereunder. The rights and obligations of each Guarantor hereunder shall remain
in full force and effect notwithstanding the addition of any new Guarantor as a
party to this Agreement.

Section 4.14 Recourse; Limited Obligations.

This Agreement is made with full recourse to each Guarantor and pursuant to and
upon all the warranties, representations, covenants and agreements on the part
of such Guarantor contained herein, in the Credit Agreement and the other Loan
Documents and otherwise in writing in connection herewith or therewith. It is
the desire and intent of each Guarantor and each applicable Secured Creditor
that this Agreement shall be enforced against each Guarantor to the fullest
extent permissible under applicable Law applied in each jurisdiction in which
enforcement is sought.

 

9

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Section 4.15 Intercreditor Agreements.

The Guarantors, the Collateral Agent and the Administrative Agent acknowledge
that the exercise of certain of the Collateral Agent’s and the Administrative
Agent’s rights and remedies hereunder may be subject to, and restricted by, the
provisions of the ABL/Bond Intercreditor Agreement. Except as specified herein,
nothing contained in the ABL/Bond Intercreditor Agreement or any other
Intercreditor Agreement shall be deemed to modify any of the provisions of this
Agreement, which, as among the Guarantors, the Collateral Agent and the
Administrative Agent shall remain in full force and effect.

Section 4.16 Savings Clause.

(a) It is the intent of each Guarantor and the Administrative Agent that each
Guarantor’s maximum obligations hereunder shall be, but not in excess of:

(i) in a case or proceeding commenced by or against any Guarantor under the
provisions of Title 11 of the United States Code, 11 U.S.C. §§101 et seq. (the
“Bankruptcy Code”) on or within two years from the date on which any of the
Guaranteed Obligations are incurred, the maximum amount which would not
otherwise cause the Guaranteed Obligations (or any other obligations of such
Guarantor owed to the Administrative Agent or the Secured Creditors) to be
avoidable or unenforceable against such Guarantor under (i) Section 548 of the
Bankruptcy Code or (ii) any state fraudulent transfer or fraudulent conveyance
act or statute applied in such case or proceeding by virtue of Section 544 of
the Bankruptcy Code; or

(ii) in a case or proceeding commenced by or against any Guarantor under the
Bankruptcy Code subsequent to two years from the date on which any of the
Guaranteed Obligations are incurred, the maximum amount which would not
otherwise cause the Guaranteed Obligations (or any other obligations of such
Guarantor to the Administrative Agent or the Secured Creditors) to be avoidable
or unenforceable against such Guarantor under any state fraudulent transfer or
fraudulent conveyance act or statute applied in any such case or proceeding by
virtue of Section 544 of the Bankruptcy Code; or

(iii) in a case or proceeding commenced by or against any Guarantor under any
law, statute or regulation other than the Bankruptcy Code (including, without
limitation, any other bankruptcy, reorganization, arrangement, moratorium,
readjustment of debt, dissolution, liquidation or similar debtor relief laws),
the maximum amount which would not otherwise cause the Guaranteed Obligations
(or any other obligations of such Guarantor to the Administrative Agent or the
Secured Creditors) to be avoidable or unenforceable against such Guarantor under
such law, statute or regulation including, without limitation, any state
fraudulent transfer or fraudulent conveyance act or statute applied in any such
case or proceeding.

(b) The substantive laws under which the possible avoidance or unenforceability
of the Guaranteed Obligations (or any other obligations of such Guarantor to the
Administrative Agent or the Secured Creditors) as may be determined in any case
or proceeding shall hereinafter be referred to as the “Avoidance Provisions”. To
the extent set forth in these Sections 4.18(a)(i), (ii), and (iii), but only to
the extent that the Guaranteed Obligations would otherwise be subject to
avoidance or found unenforceable under the Avoidance Provisions, if any
Guarantor is not deemed to have received valuable consideration, fair value or
reasonably equivalent value for the Guaranteed Obligations, or if the

 

10

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Guaranteed Obligations would render such Guarantor insolvent, or leave such
Guarantor with an unreasonably small capital to conduct its business, or cause
such Guarantor to have incurred debts (or to have intended to have incurred
debts) beyond its ability to pay such debts as they mature, in each case as of
the time any of the Guaranteed Obligations are deemed to have been incurred
under the Avoidance Provisions and after giving effect to the contribution by
such Guarantor, the maximum Guaranteed Obligations for which such Guarantor
shall be liable hereunder shall be reduced to that amount which, after giving
effect thereto, would not cause the Guaranteed Obligations (or any other
obligations of such Guarantor to the Administrative Agent or the Secured
Creditors), as so reduced, to be subject to avoidance or unenforceability under
the Avoidance Provisions.

(c) This Section 4.18 is intended solely to preserve the rights of the
Administrative Agent and the Secured Creditors hereunder to the maximum extent
that would not cause the Guaranteed Obligations of such Guarantor to be subject
to avoidance or unenforceability under the Avoidance Provisions, and neither the
Guarantors nor any other Person shall have any right or claim under this
Section 4.18 as against the Administrative Agent or Secured Creditors that would
not otherwise be available to such Person under the Avoidance Provisions.

[Signature Pages Follow]

 

11

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.

 

GUARANTORS: BUILDERS FIRSTSOURCE, INC.

By:  

/s/ Donald F. McAleenan

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

BUILDERS FIRSTSOURCE HOLDINGS, INC. BUILDERS FIRSTSOURCE – DALLAS, LLC BUILDERS
FIRSTSOURCE – FLORIDA, LLC BUILDERS FIRSTSOURCE – RALEIGH, LLC BUILDERS
FIRSTSOURCE – ATLANTIC GROUP, LLC BUILDERS FIRSTSOURCE – TEXAS GENPAR, LLC
BUILDERS FIRSTSOURCE – MBS, LLC BUILDERS FIRSTSOURCE – FLORIDA DESIGN CENTER,
LLC BUILDERS FIRSTSOURCE – SOUTHEAST GROUP, LLC BFS TEXAS, LLC BFS IP, LLC
BUILDERS FIRSTSOURCE – TEXAS GROUP, L.P. BUILDERS FIRSTSOURCE – SOUTH TEXAS,
L.P. BUILDERS FIRSTSOURCE – INTELLECTUAL PROPERTY, L.P. BUILDERS FIRSTSOURCE –
TEXAS INSTALLED SALES, L.P.

By:  

/s/ Donald F. McAleenan

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

BUILDERS FIRSTSOURCE, INC.

GUARANTY

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ADMINISTRATIVE AGENT AND COLLATERAL AGENT:

SUNTRUST BANK,

as Administrative Agent and as Collateral Agent

By:  

/s/ C. Graham Sones

  Name:   C. Graham Sones   Title:   Senior Vice President

BUILDERS FIRSTSOURCE, INC.

GUARANTY

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SCHEDULE I TO GUARANTY

GUARANTORS

 

Builders FirstSource Holdings, Inc.    Delaware Builders FirstSource – Dallas,
LLC    Delaware Builders FirstSource – Florida, LLC    Delaware Builders
FirstSource – Atlantic Group, LLC    Delaware Builders FirstSource – Raleigh,
LLC    Delaware Builders FirstSource – Texas Genpar, LLC    Delaware Builders
FirstSource – MBS, LLC    Delaware Builders FirstSource – Florida Design Center,
LLC    Delaware Builders FirstSource – Southeast Group, LLC    Delaware BFS
Texas, LLC    Delaware BFS IP, 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

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EXHIBIT I TO GUARANTY

FORM OF GUARANTY SUPPLEMENT

SUPPLEMENT NO.      dated as of             , 20    , to the Guaranty dated as
of May 29, 2013, among BUILDERS FIRSTSOURCE, INC., a Delaware corporation (the
“Parent Borrower”), the other Guarantors party thereto from time to time and
SUNTRUST BANK, as Administrative Agent and Collateral Agent for the Secured
Creditors (as amended, restated, amended and restated, supplemented and/or
otherwise modified from time to time, the “Guaranty”).

A. Reference is made to the Credit Agreement, dated as of May 29, 2013 (as
amended, restated, amended and restated, supplemented and/or otherwise modified
from time to time, the “Credit Agreement”), among the Parent Borrower, certain
Subsidiaries of the Parent Borrower from time to time party thereto (together
with the Parent Borrower, each, a “Borrower” and collectively, the “Borrowers”),
the Lenders party thereto from time to time and SunTrust Bank, as Administrative
Agent and Collateral Agent for the Lenders.

B. Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Credit Agreement and the Guaranty, as
applicable.

C. The Guarantors have entered into the Guaranty in order to induce the Lenders
to make Loans to the Borrowers. Section 4.13 of the Guaranty provides that
additional Restricted Subsidiaries of the Guarantors may become Guarantors under
the Guaranty by execution and delivery of an instrument in the form of this
Supplement. The undersigned Restricted Subsidiary (the “New Subsidiary”) is
executing this Supplement in accordance with the requirements of the Credit
Agreement to become a Guarantor under the Guaranty as consideration for Loans
previously made.

Accordingly, the Administrative Agent and the New Subsidiary agree as follows:

Section 1. In accordance with Section 4.13 of the Guaranty, the New Subsidiary
by its signature below becomes a Guarantor under the Guaranty with the same
force and effect as if originally named therein as a Guarantor and the New
Subsidiary hereby (a) agrees to all the terms and provisions of the Guaranty
applicable to it as a Guarantor thereunder and (b) represents and warrants that
the representations and warranties made by it as a Guarantor thereunder are true
and correct on and as of the date hereof, provided that, to the extent that such
representations and warranties specifically refer to an earlier date, they shall
be true and correct in all respects as of such earlier date. Each reference to a
“Guarantor” in the Guaranty shall be deemed to include the New Subsidiary as if
originally named therein as a Guarantor. The Guaranty is hereby incorporated
herein by reference.

Section 2. The New Subsidiary represents and warrants to the Administrative
Agent and the other Secured Creditors that this Supplement has been duly
authorized, executed and delivered by it and constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms, except
as such enforceability may be limited by Debtor Relief Laws and by general
principles of equity.

Section 3. This Supplement may be executed in counterparts (and by different
parties hereto on different counterparts), each of which shall constitute an
original, but all of which when taken together shall constitute a single
contract. This Supplement shall become effective when the Administrative Agent
shall have received a counterpart of this Supplement that bears the signature of
the New Subsidiary and the Administrative Agent has executed a counterpart
hereof. Delivery of an executed counterpart of a signature page of this
Supplement by telecopy or other electronic imaging means shall be effective as
delivery of a manually executed counterpart of this Supplement.

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Section 4. Except as expressly supplemented hereby, the Guaranty shall remain in
full force and effect.

Section 5. The parties hereto agree that the provisions of Section 11.08 of the
Credit Agreement shall apply to this agreement, mutatis mutandis as if fully set
forth herein.

Section 6. If any provision of this Supplement is held to be illegal, invalid or
unenforceable, (a) the legality, validity and enforceability of the remaining
provisions of this Supplement shall not be affected or impaired thereby and
(b) the parties shall endeavor in good faith negotiations to replace the
illegal, invalid or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

Section 7. All communications and notices hereunder shall be in writing and
given as provided in Section 4.01 of the Guaranty.

Section 8. The New Subsidiary agrees to reimburse the Administrative Agent for
its reasonable out-of-pocket expenses in connection with this Supplement as
provided in Section 4.03(a) of the Guaranty.

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IN WITNESS WHEREOF, the New Subsidiary and the Administrative Agent have duly
executed this Supplement to the Guaranty as of the day and year first above
written.

 

[NAME OF NEW SUBSIDIARY] By:  

 

  Name:   Title: SUNTRUST BANK, as Administrative Agent By:  

 

  Name:   Title: