Exhibit 10.7

AMENDED AND RESTATED ABL GUARANTEE AGREEMENT

dated as of

July 31, 2015,

among

THE GUARANTORS PARTY HERETO

and

SUNTRUST BANK,

as Collateral Agent

 

 

 

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TABLE OF CONTENTS

 

         Page   ARTICLE I    Definitions    SECTION 1.01.  

Credit Agreement

     1    SECTION 1.02.  

Other Defined Terms

     1    ARTICLE II    The Guarantees    SECTION 2.01.  

Guarantee

     3    SECTION 2.02.  

Guarantee of Payment; Continuing Guarantee

     3    SECTION 2.03.  

No Limitations

     3    SECTION 2.04.  

Reinstatement

     5    SECTION 2.05.  

Agreement to Pay; Subrogation

     6    SECTION 2.06.  

Information

     6    SECTION 2.07.  

Payments Free of Taxes

     6    ARTICLE III    Indemnity, Subrogation and Subordination    SECTION
3.01.  

Indemnity and Subrogation

     6    SECTION 3.02.  

Contribution and Subrogation

     6    SECTION 3.03.  

Subordination

     7    ARTICLE IV    Representations and Warranties    ARTICLE V   
Miscellaneous    SECTION 5.01.  

Notices

     8    SECTION 5.02.  

Waivers; Amendment

     8    SECTION 5.03.  

Collateral Agent’s Fees and Expenses; Indemnification

     9    SECTION 5.04.  

Successors and Assigns

     10    SECTION 5.05.  

Survival of Agreement

     11    SECTION 5.06.  

Counterparts; Effectiveness; Several Agreement

     11    SECTION 5.07.  

Severability

     11    SECTION 5.08.  

Right of Set-Off

     11   

 

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SECTION 5.09.  

Governing Law; Jurisdiction; Consent to Service of Process; Appointment of
Service of Process Agent

     12    SECTION 5.10.  

WAIVER OF JURY TRIAL

     12    SECTION 5.11.  

Headings

     13    SECTION 5.12.  

Termination or Release

     13    SECTION 5.13.  

Additional Guarantors

     13    SECTION 5.14.  

Keepwell

     13    SECTION 5.15.  

Amendment and Restatement

     14   

Schedules

 

I   Excluded Subsidiaries II   Subsidiary Guarantors

 

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AMENDED AND RESTATED ABL GUARANTEE AGREEMENT dated as of July 31, 2015 (as
amended, restated, supplemented or otherwise modified from time to time, this
“Agreement”) among the Guarantors from time to time party hereto and SUNTRUST
BANK, as ABL Collateral Agent, on behalf of itself and the other Secured
Creditors (in such capacity, the “Collateral Agent”).

PRELIMINARY STATEMENTS

WHEREAS, (i) BUILDERS FIRSTSOURCE, INC., a Delaware corporation (the
“Borrower”), the subsidiaries of the Borrower party thereto, the Lenders party
thereto from time to time and SunTrust Bank, as Administrative Agent and as
Collateral Agent are entering into the Amended and Restated ABL Credit Agreement
dated as of the date hereof (as amended, supplemented or otherwise modified from
time to time, the “Credit Agreement”) and (ii) the Borrower, the Grantors party
thereto and the Collateral Agent are entering into the Amended and Restated ABL
Collateral Agreement dated as of the date hereof (as amended, restated,
supplemented or otherwise modified from time to time, the “Collateral
Agreement”);

WHEREAS, the Guarantors entered into to that certain Guaranty Agreement dated as
of May 29, 2013 in favor of the Secured Creditors referred to therein (as
amended, amended and restated, supplemented, or otherwise modified prior to the
date hereof, the “Existing Guaranty”) and the parties thereto have agreed to
amend and restate, without novation, the Existing Guaranty.

WHEREAS, the Lenders have agreed to extend credit to the Borrower 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. The Guarantors are affiliates of the
Borrower, will derive substantial benefits from the extension of credit to the
Borrower pursuant to the Credit Agreement and are willing to execute and deliver
this Agreement in order to induce the Lenders to extend such credit.
Accordingly, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.01. Credit Agreement. (a) Capitalized terms used in this Agreement
(including in the introductory paragraph hereto) and not otherwise defined
herein have the meanings specified in the Credit Agreement.

(b) The rules of construction specified in Section 1.03 of the Credit Agreement
also apply to this Agreement, mutatis mutandis.

SECTION 1.02. Other Defined Terms. As used in this Agreement, the following
terms have the meanings specified below:

“Agreement” has the meaning assigned to such term in the preamble to this
Agreement.

 

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“Claiming Party” has the meaning assigned to such term in Section 3.02.

“Collateral Agent” has the meaning assigned to such term in the introductory
paragraph to this Agreement.

“Contributing Party” has the meaning assigned to such term in Section 3.02.

“Credit Agreement” has the meaning assigned to such term in the introductory
paragraph to this Agreement.

“Excluded Subsidiary” means (a) any Subsidiary that is a Non-Wholly Owned
Subsidiary of the Borrower (for so long as such Subsidiary remains a Non-Wholly
Owned Subsidiary), (b) each Subsidiary listed on Schedule I, (c) any Foreign
Subsidiary, (d) any Subsidiary that is prohibited by any applicable contractual
obligation existing on the Effective Date or on the date any such Subsidiary is
acquired or organized (as long as, in the case of an acquisition of a
Subsidiary, such prohibition in respect of such contract did not arise as part
of such acquisition) or Requirement of Law from guaranteeing or granting Liens
to secure the Obligations (and for so long as such restriction or any
replacement or renewal thereof is in effect) or to the extent that a guarantee
or grant by such Subsidiary could result in material adverse tax consequences as
reasonably determined by the Borrower, (e) any Immaterial Subsidiary, (e) any
other Subsidiary with respect to which, in the reasonable judgment of the
Borrower and the Administrative Agent, the cost or other consequences of
providing a Guarantee of the Secured Obligations shall be excessive in view of
the benefits to be obtained by the Secured Creditors therefrom, (f) any
(i) Subsidiary that is a CFC or (ii) CFC Holdco and (g) each Unrestricted
Subsidiary; provided, that upon notice to the ABL Administrative Agent, the
Borrower may at any time and in its sole discretion deem that any Restricted
Subsidiary, or to the extent reasonably acceptable to the ABL Administrative
Agent, any Foreign Subsidiary, shall not be an Excluded Subsidiary for purposes
of this Agreement and the other Loan Documents.

“Guarantors” means any Subsidiary Guarantor party hereto.

“Borrower” has the meaning assigned to such term in the introductory paragraph
to this Agreement.

“Qualified ECP Loan Party” means, in respect of any Secured Swap Obligation,
each Loan Party that has total assets exceeding $10,000,000 at the time the
relevant Guarantee or grant of the relevant security interest becomes effective
with respect to such Secured Swap Obligation or such other person as constitutes
an “eligible contract participant” under the Commodity Exchange Act or any
regulations promulgated thereunder and can cause another person to qualify as an
“eligible contract participant” at such time by entering into a keepwell under
Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

“Secured Swap Obligations” means the due and punctual payment and performance of
all obligations of the Borrower and its Restricted Subsidiaries under each Swap
Agreement that (a) is with a counterparty that is the Administrative Agent or
any of its Affiliates, (b) is in effect on the Effective Date (as defined in the
Term Loan Credit Agreement) with a counterparty that is a Lender, an Agent or an
Affiliate of a Lender or an Agent as of the Effective Date or (c) is entered
into after the Effective Date with any counterparty that is a Lender, an Agent
or an Affiliate of a Lender or an Agent at the time such Swap Agreement is
entered into.

 

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“Subsidiary Guarantors” means the Subsidiaries of the Borrower identified as
such on Schedule II hereto and each other Subsidiary that becomes a party to
this Agreement as a Subsidiary Guarantor on or after the Closing Date pursuant
to Section 5.13; provided that if a Subsidiary is released from its obligations
as a Subsidiary Guarantor hereunder as provided in Section 5.12(b), such
Subsidiary shall cease to be a Subsidiary Guarantor hereunder effective upon
such release. For the avoidance of doubt, Subsidiary Guarantors are referred to
as “Subsidiary Loan Parties” in the Credit Agreement.

“Supplement” means an instrument in the form of Exhibit A hereto, or any other
form approved by the Collateral Agent, and in each case reasonably satisfactory
to the Collateral Agent.

ARTICLE II

THE GUARANTEES

SECTION 2.01. Guarantee. Each Guarantor irrevocably and unconditionally
guarantees to each of the Secured Creditors, jointly with the other Guarantors
and severally, the due and punctual payment and performance of the Obligations.
Each Guarantor further agrees that the Obligations may be extended or renewed,
in whole or in part, or amended or modified, without notice to or further assent
from it, and that it will remain bound upon its guarantee hereunder
notwithstanding any such extension or renewal, or amendment or modification, of
any of the Obligations. Each Guarantor waives presentment to, demand of payment
from and protest to the Borrower or any other Loan Party of any of the
Obligations, and also waives notice of acceptance of its guarantee and notice of
protest for nonpayment. Notwithstanding anything to the contrary contained
herein, the obligations of each Guarantor hereunder at any time shall be limited
to an aggregate amount equal to the largest amount that would not render its
obligations hereunder subject to avoidance as a fraudulent transfer or
conveyance under Section 548 of the Bankruptcy Code or any comparable provisions
of any other applicable law, in each case to the extent (if any) applicable to
such Guarantor.

SECTION 2.02. Guarantee of Payment; Continuing Guarantee. Each Guarantor 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 Obligations or operated as a discharge
thereof) and not merely of collection, and waives any right to require that any
resort be had by the Collateral Agent or any other Secured Party to any security
held for the payment of any of the Obligations or to any balance of any deposit
account or credit on the books of the Collateral Agent or any other Secured
Party in favor of the Borrower, any other Loan Party or any other Person. Each
Guarantor agrees that its guarantee hereunder is continuing in nature and
applies to all of the Obligations, whether currently existing or hereafter
incurred.

SECTION 2.03. No Limitations. (a) Except for the termination or release of a
Guarantor’s obligations hereunder as expressly provided in Section 5.12, the
obligations of

 

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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 of any of the Obligations, 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 Obligations, any impossibility in the performance
of any of the Obligations or otherwise. Without limiting the generality of the
foregoing, except for the termination or release of its obligations hereunder as
expressly provided in Section 5.12, the obligations of each Guarantor hereunder
shall not be discharged or impaired or otherwise affected by:

(i) the failure of any Secured Party 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, restatement 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 or failure to perfect any Lien on,
any security held by any Secured Party for any of the Obligations;

(iv) any default, failure or delay, willful or otherwise, in the performance of
any of the Obligations;

(v) any other 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 discharge of any
Guarantor as a matter of law or equity (other than the payment in full in cash
of all the Obligations (other than obligations in respect of Cash Management
Agreements, Designated Hedge Agreements and contingent indemnity obligations not
yet accrued and payable as to which no claim has been made));

(vi) any illegality, lack of validity or lack of enforceability of any of the
Obligations;

(vii) any change in the corporate existence, structure or ownership of any Loan
Party, or any insolvency, bankruptcy, reorganization or other similar proceeding
affecting any Loan Party or its assets or any resulting release or discharge of
any of the Obligations;

(viii) the existence of any claim, set-off or other rights that any Guarantor
may have at any time against the Borrower, the Collateral Agent, any other
Secured Party or any other Person, whether in connection with the Credit
Agreement, the other Loan Documents or any unrelated transaction;

(ix) 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 Effective Date;

 

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(x) the fact that any Person that, pursuant to the Loan Documents, was required
to become a party hereto may not have executed or is not effectually bound by
this Agreement, whether or not this fact is known to the Secured Creditors;

(xi) any action permitted or authorized hereunder; or

(xii) any other circumstance (including any statute of limitations), or any
existence of or reliance on any representation by the Collateral Agent, any
Secured Party or any other Person, that might otherwise constitute a defense to,
or a legal or equitable discharge of, the Borrower, any Guarantor or any other
guarantor or surety (other than the payment in full in cash of all the
Obligations (other than obligations in respect of Cash Management Agreements,
Designated Hedge Agreements and contingent indemnity obligations not yet accrued
and payable as to which no claim has been made)).

Each Guarantor expressly authorizes the Secured Creditors to take and hold
security in accordance with the terms of the Loan Documents for the payment and
performance of the 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 Obligations, all without affecting the obligations of any
Guarantor hereunder.

(b) To the fullest extent permitted by applicable law, each Guarantor waives any
defense based on or arising out of any defense of the Borrower or any other Loan
Party or the unenforceability of the Obligations or any part thereof from any
cause, or the cessation from any cause of the liability of the Borrower or any
other Loan Party, other than the payment in full in cash of all the Obligations
(other than obligations in respect of Cash Management Agreements, Designated
Hedge Agreements and contingent indemnity obligations not yet accrued and
payable as to which no claim has been made). The Collateral Agent and the other
Secured Creditors may, at their election and in accordance with the terms of the
Loan Documents, 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 Obligations, make any
other accommodation with the Borrower or any other Loan Party or exercise any
other right or remedy available to them against the Borrower or any other Loan
Party, without affecting or impairing in any way the liability of any Guarantor
hereunder except to the extent the Obligations (other than obligations in
respect of Cash Management Agreements, Designated Hedge Agreements and
contingent indemnity obligations not yet accrued and payable as to which no
claim has been made) have been paid in full in cash. 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 the Borrower or any other Loan
Party, as the case may be, or any security.

SECTION 2.04. Reinstatement. Each Guarantor agrees that, unless released
pursuant to Section 5.12(b), 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 Obligations is rescinded or must otherwise be restored by
any Secured Party upon the insolvency, bankruptcy or reorganization (or any
analogous proceeding in any jurisdiction) of the Borrower, any other Loan Party
or otherwise.

 

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SECTION 2.05. Agreement to Pay; Subrogation. In furtherance of the foregoing and
not in limitation of any other right that the Collateral Agent or any other
Secured Party has at applicable law or in equity against any Guarantor by virtue
hereof, upon the failure of the Borrower or any other Loan Party to pay any
Secured 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 Collateral Agent
for distribution to the applicable Secured Creditors in cash the amount of such
unpaid Secured Obligation. Upon payment by any Guarantor of any sums to the
Collateral Agent as provided above, all rights of such Guarantor against the
Borrower or any other Loan Party 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.

SECTION 2.06. Information. Each Guarantor assumes all responsibility for being
and keeping itself informed of the Borrower’s and each other Loan Party’s
financial condition and assets, and of all other circumstances bearing upon the
risk of nonpayment of the Obligations and the nature, scope and extent of the
risks that such Guarantor assumes and incurs hereunder, and agrees that none of
the Secured Creditors will have any duty to advise such Guarantor of information
known to it or any of them regarding such circumstances or risks.

SECTION 2.07. Payments Free of Taxes. Any and all payments by or on account of
any obligation of any Guarantor hereunder or under any other Loan Document shall
be made free and clear of and without deduction for any Indemnified Taxes or
Other Taxes on the same terms and to the same extent that payments by the
Borrower are required to be so made pursuant to the terms of Section 3.02 of the
Credit Agreement. The provisions of Section 3.02 of the Credit Agreement shall
apply to each Guarantor, mutatis mutandis.

ARTICLE III

INDEMNITY, SUBROGATION AND SUBORDINATION

SECTION 3.01. Indemnity and Subrogation. In addition to all such rights of
indemnity and subrogation as the Guarantors may have under applicable law (but
subject to Section 3.03) in respect of any payment hereunder, the Borrower
agrees that (a) in the event a payment in respect of any obligation of the
Borrower shall be made by any Guarantor under this Agreement, the Borrower shall
indemnify such Guarantor for the full amount of such payment and such Guarantor
shall be subrogated to the rights of the Person to whom such payment shall have
been made to the extent of such payment and (b) in the event any assets of any
Guarantor shall be sold pursuant to any ABL Security Document to satisfy in
whole or in part any Obligations owed to any Secured Party, the Borrower shall
indemnify such Guarantor in an amount equal to the greater of the book value or
the fair market value of the assets so sold.

SECTION 3.02. Contribution and Subrogation. Each Guarantor (a “Contributing
Party”) agrees (subject to Section 3.03) that, in the event a payment shall be
made by any other Guarantor hereunder in respect of any Obligations or assets of
any other Guarantor

 

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(other than the Borrower) shall be sold pursuant to any ABL Security Document to
satisfy any Secured Obligation owed to any Secured Party and such other
Guarantor (the “Claiming Party”) shall not have been fully indemnified as
provided in Section 3.01, the Contributing Party shall indemnify the Claiming
Party in an amount equal to the amount of such payment or the greater of the
book value or the fair market value of such assets, as the case may be, in each
case multiplied by a fraction of which the numerator shall be the net worth of
the Contributing Party on the date hereof (or, in the case of any Guarantor
becoming a party hereto pursuant to Section 5.13, the date of the Supplement
executed and delivered by such Guarantor) and the denominator shall be the
aggregate net worth of all the Guarantors on the date hereof (or, in the case of
any Guarantor becoming a party hereto pursuant to Section 5.13, such other
date). Any Contributing Party making any payment to a Claiming Party pursuant to
this Section 3.02 shall be subrogated to the rights of such Claiming Party under
Section 3.01 to the extent of such payment.

SECTION 3.03. Subordination. (a) Notwithstanding any provision of this Agreement
to the contrary, all rights of the Guarantors under Sections 3.01 and 3.02 and
all other rights of the Guarantors of indemnity, contribution or subrogation
under applicable law or otherwise shall be fully subordinated to the payment in
full in cash of all the Obligations (other than (x) those relating to any
Designated Hedge Agreement, cash management obligations constituting
Obligations, (y) indemnification and other contingent obligations not yet
accrued and payable as to which no claim has been made and (z) obligations in
respect of Letters of Credit that have been Cash Collateralized (or as to which
other arrangements reasonably satisfactory to the Administrative Agent and the
applicable LC Issuer have been made)). No failure on the part of the Borrower or
any Guarantor to make the payments required by Sections 3.01 and 3.02 (or any
other payments required under applicable law or otherwise) shall in any respect
limit the obligations and liabilities of any Guarantor with respect to its
obligations hereunder, and each Guarantor shall remain liable for the full
amount of the obligations of such Guarantor hereunder.

(b) Each Guarantor hereby agrees that upon the occurrence and during the
continuance of an Event of Default and after notice from the Collateral Agent
(provided that no such notice shall be required to be given in the case of any
Event of Default arising under Section 8.01(h) or 8.01(i) of the Credit
Agreement), all Indebtedness and other monetary obligations owed by it to, or to
it by, any other Guarantor or any other Subsidiary shall be fully subordinated
to the payment in full in cash of all the Obligations (other than (x) those
relating to any Designated Hedge Agreement, cash management obligations
constituting Obligations, (y) indemnification and other contingent obligations
not yet accrued and payable as to which no claim has been made and
(z) obligations in respect of Letters of Credit that have been Cash
Collateralized (or as to which other arrangements reasonably satisfactory to the
Administrative Agent and the applicable LC Issuer have been made)).

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

Each Guarantor represents and warrants to the Collateral Agent and the other
Secured Creditors that (a) the execution, delivery and performance by such
Guarantor of this Agreement have been duly authorized by all necessary corporate
or limited liability or limited partnership action and, if required, action by
the holders of such Guarantor’s Equity Interests,

 

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and that this Agreement has been duly executed and delivered by such Guarantor
and constitutes its legal, valid and binding obligation, enforceable against it
in accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation, court protection, administration or
other laws affecting creditors’ rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in equity
or at law, and (b) all representations and warranties set forth in the Credit
Agreement as to such Guarantor are true and correct in all material respects;
provided that, to the extent such representations and warranties specifically
refer to an earlier date, they are true and correct in all material respects as
of such earlier date; provided, further that any representation and warranty
that is qualified as to “materiality,” “Material Adverse Effect” or similar
language is true and correct in all respects.

ARTICLE V

MISCELLANEOUS

SECTION 5.01. 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 notices hereunder
to any Guarantor shall be given to it in care of the Borrower as provided in
Section 11.05 of the Credit Agreement.

SECTION 5.02. Waivers; Amendment. (a) No failure or delay by the Collateral
Agent or any Lender in exercising any right or power hereunder or under any
other Loan Document shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Collateral Agent and the Lenders hereunder and under the
other Loan Documents are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any provision of this
Agreement or consent to any departure by any Loan Party therefrom shall in any
event be effective unless the same shall be permitted by paragraph (b) of this
Section 5.02, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. Without limiting the
generality of the foregoing, the making of a Loan shall not be construed as a
waiver of any Default, regardless of whether the Collateral Agent or any Lender
may have had notice or knowledge of such Default at the time. No notice or
demand on any Loan Party in any case shall entitle any Loan Party to any other
or further notice or demand in similar or other circumstances.

(b) 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 Collateral Agent and the Guarantor or Guarantors 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; provided that
the Collateral Agent may, without the consent of any Secured Party, consent to a
departure by any Guarantor from any covenant of such Guarantor set forth herein
to the extent such departure is consistent with the authority of the Collateral
Agent set forth in the definition of the term “Collateral and Guarantee
Requirement” in the Credit Agreement.

 

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SECTION 5.03. Collateral Agent’s Fees and Expenses; Indemnification. (a) Each
Guarantor, jointly with the other Guarantors and severally, agrees to reimburse
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
the “Borrower” shall be deemed to be a reference to “each Guarantor.”

(b) Without limitation of its indemnification obligations under the other Loan
Documents, each Guarantor, jointly with the other Guarantors and severally,
agrees to indemnify the Collateral Agent and the other Indemnitees against, and
hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and reasonable and documented or invoiced out-of-pocket fees and
expenses (limited, in the case of (i) legal fees and expenses to the reasonable
and documented or invoiced out-of-pocket fees and expenses of one counsel for
all Indemnitees and, to the extent reasonably determined by the Collateral Agent
to be necessary, one firm of local counsel in each relevant material
jurisdiction (which may include a single special counsel acting in multiple
jurisdictions) (and, in the case of an actual conflict of interest, where the
Indemnitee affected by such conflict notifies the Borrower of the existence of
such conflict and thereafter retains its own counsel, one additional counsel for
the affected Indemnitees similarly situated) for all Indemnitees (which may
include a single special counsel acting in multiple jurisdictions) and (ii) the
fees and expenses of any other advisor or consultant, to the reasonable and
documented or invoiced out-of-pocket fees and expenses of such advisor or
consultant, but solely to the extent that such consultant or advisor has been
retained with the Borrower’s consent (such consent not to be unreasonably
withheld or delayed), incurred by or asserted against any Indemnitee by any
third party or by the Borrower or any Subsidiary arising out of, in connection
with, or as a result of, the execution, delivery or performance of this
Agreement or any actual or prospective claim, litigation, investigation or
proceeding relating to any of the foregoing, whether brought by a third party or
by the Borrower or any Subsidiary 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, costs or
related expenses (w) resulted from the gross negligence, bad faith or willful
misconduct of such Indemnitee or its Related Parties (as determined by a court
of competent jurisdiction in a final and non-appealable judgment), (x) resulted
from a material breach of the Loan Documents by such Indemnitee or its Related
Parties (as determined by a court of competent jurisdiction in a final and
non-appealable judgment), (y) arise from disputes between or among Indemnitees
(other than claims against an Indemnitee in its capacity or in fulfilling its
role as an agent, an arranger or any similar roles under the Loan Documents)
that do not involve an act or omission by the Borrower or any Subsidiary or
(z) any settlement effected without the Borrower’s prior consent, but if settled
with the Borrower’s prior consent (such consent not to be unreasonably withheld
or delayed), the Borrower will indemnify and hold harmless each Indemnitee from
and against any and all losses, claims, damages, liabilities and expenses by
reason of such settlement or judgment in accordance with this paragraph;
provided further that the Borrower shall not, without the prior written consent
of the applicable Indemnitee (which consent shall not be unreasonably withheld,
delayed or conditioned), effect any settlement of any pending or threatened
claim, litigation, investigation or proceeding in respect of which indemnity
could have been sought hereunder by such Indemnitee unless (a) such settlement
includes a full and unconditional release of such Indemnitee in form and
substance reasonably satisfactory to such Indemnitee from all liability on
claims that are the subject matter of such claim, litigation, investigation or
proceeding and (b) does not include any statement as to or any admission of
fault, culpability or a failure to act by or on behalf of such Indemnitee.

 

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(c) To the fullest extent permitted by applicable law, no party hereto nor any
Affiliate of any party hereto, nor any officer, director, employee, agent,
controlling person, advisor or other representative of the foregoing or any
successor or permitted assign of any of the foregoing shall assert, and each
hereby waives, any claim against any other such Person on any theory of
liability for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages, but in any event including, without limitation, any
loss of profits, business or anticipated savings) (whether or not the claim
therefor is based on contract, tort or duty imposed by any applicable legal
requirement) arising out of, in connection with, or as a result of, or in any
way related to, this Agreement or any Loan Document or any agreement or
instrument contemplated hereby or thereby, the Financing Transactions, any Loan
or the use of the proceeds thereof and each such Person further agrees not to
sue upon any such claim or any such damages, whether or not accrued and whether
or not known or suspected to exist in its favor; provided that the foregoing
shall in no event limit the Guarantors’ indemnification obligations under clause
(b) above.

(d) Notwithstanding anything to the contrary in this Agreement, to the extent
permitted by applicable law, no party hereto or an Indemnitee shall assert, and
each hereby waives, any claim against any other Person for any direct or actual
damages arising from the use by unintended recipients of information or other
materials distributed to such unintended recipients by such Indemnitee through
telecommunications, electronic or other information transmission systems
(including the Internet) in connection with this Agreement or the other Loan
Documents or the transactions contemplated hereby or thereby; except to the
extent that such direct or actual damages are determined by a court of competent
jurisdiction in a final, non-appealable judgment to have resulted from the gross
negligence, bad faith or willful misconduct of, or a material breach of the Loan
Documents by, such Indemnitee or its Related Parties.

(e) The provisions of this Section 5.03 shall remain operative and in full force
and effect regardless of the termination of this Agreement or any other Loan
Document, the consummation of the transactions contemplated hereby or thereby,
the repayment of any of the Obligations, the invalidity or unenforceability of
any term or provision of this Agreement or any other Loan Document, or any
investigation made by or on behalf of any Secured Party. All amounts due under
this Section 5.03 shall be payable not later than 10 Business Days after written
demand therefore; provided, however, any Indemnitee shall promptly refund an
indemnification payment received hereunder to the extent that there is a final
judicial determination that such Indemnitee was not entitled to indemnification
with respect to such payment pursuant to this Section 5.03. Any such amounts
payable as provided hereunder shall be additional Obligations.

SECTION 5.04. 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 the Collateral Agent that are
contained in this Agreement shall bind and inure to the benefit of their
respective successors and assigns.

 

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SECTION 5.05. Survival of Agreement. All covenants, agreements, representations
and warranties made by the Loan Parties in this Agreement and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement 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, in each case, in accordance with and subject to the
limitations set forth in Section 11.20 of the Credit Agreement.

SECTION 5.06. Counterparts; Effectiveness; Several Agreement. This Agreement 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. Delivery of an executed
signature page to this Agreement by facsimile or other electronic transmission
shall be effective as delivery of a manually signed counterpart of this
Agreement. This Agreement shall become effective as to any Guarantor when a
counterpart hereof executed on behalf of such Guarantor shall have been
delivered to the Collateral Agent and a counterpart hereof shall have been
executed on behalf of the Collateral Agent, and thereafter shall be binding upon
such Guarantor and the Collateral Agent and their respective permitted
successors and assigns, and shall inure to the benefit of such Guarantor, the
Collateral Agent and the other Secured Creditors and their respective successors
and assigns, except that no Guarantor shall have the right to assign or transfer
its rights or obligations hereunder or any interest herein (and any such
assignment or transfer shall be void) except as expressly provided in this
Agreement and the Credit Agreement. This Agreement shall be construed as a
separate agreement with respect to each Guarantor and may be amended, 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.

SECTION 5.07. Severability. Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.

SECTION 5.08. Right of Set-Off. If an Event of Default shall have occurred and
be continuing, each Lender is hereby authorized at any time and from time to
time, to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final, in whatever
currency) at any time held and other obligations (in whatever currency) at any
time owing by such Lender to or for the credit or the account of any Guarantor
against any of and all the obligations of such Guarantor then due and owing
under this Agreement held by such Lender, irrespective of whether or not such
Lender shall have made any demand under this Agreement and although (i) such
obligations may be contingent or unmatured and (ii) such obligations are owed to
a branch or office of such Lender different from the branch or office holding
such deposit or obligated on such Indebtedness. The applicable Lender shall
notify the applicable Guarantor and the Collateral Agent of such setoff and
application; provided that any failure to give or any delay in giving such
notice shall not affect the validity of any such setoff and application under
this Section 5.08. The rights of each Lender and its Affiliates under this
Section 5.08 are in addition to other rights and remedies (including other
rights of setoff) that such Lender and its Affiliates may have.

 

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SECTION 5.09. Governing Law; Jurisdiction; Consent to Service of Process;
Appointment of Service of Process Agent. (a) This Agreement shall be construed
in accordance with and governed by the laws of the State of New York.

(b) Each party hereto hereby irrevocably and unconditionally submits, for itself
and its property, to the exclusive jurisdiction of the Supreme Court of the
State of New York sitting in New York County and of the United States District
Court of the Southern District of New York, and any appellate court from any
thereof, in any action or proceeding arising out of or relating to this
Agreement or any other Loan Document, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such New York State or, to the extent permitted by law, in
such Federal court. Each of the parties hereto agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that the Collateral Agent or
any Lender may otherwise have to bring any action or proceeding relating to this
Agreement against any Guarantor or its respective properties in the courts of
any jurisdiction.

(c) Each party hereto hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection that it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement in any court referred to in
paragraph (b) of this Section 5.09. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.

(d) Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 5.01. Nothing in this Agreement will
affect the right of any party to this Agreement or any other Loan Document to
serve process in any other manner permitted by law.

(e) Each Guarantor hereby irrevocably designates, appoints and empowers the
Borrower as its designee, appointee and agent to receive, accept and acknowledge
for and on its behalf, and in respect of its property, service of any and all
legal process, summons, notices and documents that may be served in any such
action or proceeding and the Borrower hereby accepts such designation and
appointment.

SECTION 5.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN

 

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INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 5.10.

SECTION 5.11. 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 shall not affect the construction of, or to be taken into
consideration in interpreting, this Agreement.

SECTION 5.12. Termination or Release. (a) Subject to Section 2.04, this
Agreement and the Guarantees made herein shall terminate automatically on the
Termination Date.

(b) The guarantees made herein shall also terminate and be released at the time
or times and in the manner set forth in Section 11.27 of the Credit Agreement.

(c) In connection with any termination or release pursuant to paragraph (a) or
(b) of this Section 5.12, the Collateral Agent shall execute and deliver to any
Loan Party, at such Loan Party’s expense, all documents that such Loan Party
shall reasonably request to evidence such termination or release so long as the
applicable Loan Party shall have provided the Collateral Agent such
certifications or documents as the Collateral Agent shall reasonably request in
order to demonstrate compliance with this Section 5.12. Any execution and
delivery of documents by the Collateral Agent pursuant to this Section 5.12
shall be without recourse to or warranty by the Collateral Agent or any other
Secured Party.

SECTION 5.13. Additional Guarantors. Additional Persons may become Guarantors
after the date hereof as contemplated by the Credit Agreement. Upon execution
and delivery by the Collateral Agent and a Person of a Supplement, any such
Person shall become a Guarantor hereunder with the same force and effect as if
originally named as such 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 Person as a party to this
Agreement.

SECTION 5.14. Keepwell. Each Qualified ECP Loan Party, jointly and severally,
hereby absolutely, unconditionally and irrevocably undertakes to provide such
funds or other support as may be needed from time to time by each other Loan
Party to honor all of such Loan Party’s obligations under this Agreement and the
other Loan Documents in respect of Secured Swap Obligations (provided, however,
that each Qualified ECP Loan Party shall only be liable under this Section 5.14
for the maximum amount of such liability that can be hereby incurred without
rendering its obligations under this Section 5.14, or otherwise under this
Agreement or the other Loan Documents, voidable under applicable law, including
fraudulent conveyance or fraudulent transfer laws, and not for any greater
amount). The obligations of each Qualified ECP Loan Party under this
Section 5.14 shall remain in full force and effect until the Termination Date,
in each case, in accordance with and subject to the limitations set forth in
Section 9.05 of the Credit Agreement. Each Qualified ECP Loan Party intends that
this Section 5.16 constitute, and this Section 5.14 shall be deemed to
constitute, a “keepwell, support, or other agreement” for the benefit of each
other Loan Party for all purposes of Section 1a(18)(A)(v)(II) of the Commodity
Exchange Act.

 

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SECTION 5.15. Amendment and Restatement.

(a) On the Closing Date, the Existing Guaranty shall be amended and restated in
its entirety by this Agreement, and the Existing Guaranty shall thereafter be
and shall be deemed replaced and superseded in all respects by this Agreement.
The parties hereto acknowledge and agree that (i) this Agreement and the other
Loan Documents, whether executed and delivered in connection herewith or
otherwise, do not constitute a novation or termination of the Obligations under
the Existing Guaranty or the other Loan Documents as in effect prior to the
Closing Date and which remain outstanding as of the Closing Date and (ii) the
Obligations under the Existing Guaranty and the other Loan Documents are in all
respects continuing (as amended and restated hereby and which are in all
respects hereinafter subject to the terms herein).

(b) On and after the Closing Date, (i) all references to the Existing Guaranty
or the “ABL Guarantee Agreement” in the Loan Documents (other than this
Agreement) shall be deemed to refer to the Existing Guaranty as amended and
restated hereby, (ii) all references to any section (or subsection) of the
Existing Guaranty or the ABL Guarantee Agreement in any Loan Document (but not
herein) shall be deemed to refer to the corresponding provisions of this
Agreement, and (iii) except as the context otherwise provides, all references to
this Agreement herein (including for purposes of indemnification) shall be
deemed to be references to the Existing Guaranty as amended and restated hereby.

[Signature Pages Follow]

 

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.

 

Builders FirstSource Holdings, Inc. Builders FirstSource - Northeast Group, LLC
Builders FirstSource - Texas GenPar, LLC Builders FirstSource - MBS, LLC BFS
Texas, LLC BFS IP, LLC Builders FirstSource - Dallas, LLC Builders FirstSource -
Florida, LLC Builders FirstSource - Florida Design Center, LLC Builders
FirstSource - Ohio Valley, LLC BFS, LLC Builders FirstSource - Atlantic Group,
LLC Builders FirstSource - Southeast Group, LLC Builders FirstSource - Raleigh,
LLC Builders FirstSource - Colorado Group, LLC Builders FirstSource - Colorado,
LLC ProBuild Holdings LLC ProBuild Company LLC ProBuild North Transportation,
LLC Timber Roots, LLC Spenard Builders Supply LLC Pro-Build Real Estate
Holdings, LLC Builder’s Capital, LLC By  

/s/ Donald F. McAleenan

  Name:   Donald F. McAleenan   Title:   Senior Vice President and Secretary
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:   Builders FirstSource, Inc. Its:   General
Partner By  

/s/ Donald F. McAleenan

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

[Signature Page to Term Guarantee Agreement]

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SUNTRUST BANK, as Collateral Agent By  

/s/ Amanda Watkins

  Name:   Amanda Watkins   Title:   Director

[Signature Page to Term Guarantee Agreement]