EX-4.5 3 e05301a2exv4w5.txt EX-4.5: STOCKHOLDERS AGREEMENT EXHIBIT 4.5 STOCKHOLDERS AGREEMENT This STOCKHOLDERS AGREEMENT ("Agreement"), dated as of June 11, 1999, is among Stonegate Resources Holdings, LLC, a Delaware limited liability company ("Stonegate"), BSL Holdings, Inc., a Delaware corporation and majority owned subsidiary of Stonegate (the "Company"), Holmes Lumber Company, a Florida Corporation ("HLC"), and Lockwood Holmes, an individual resident of the State of Florida and the majority stockholder of HLC ("Holmes"). W I T N E S S E T H - - - - - - - - - - WHEREAS, simultaneously with the execution of this Agreement, pursuant to the Asset Purchase Agreement, dated as of the date hereof (the "Asset Purchase Agreement") among HLC, Holmes, the Company and Holmes Lumber Company, a Delaware corporation and a wholly owned subsidiary of the Company ("Buyer"), Buyer is, among other things, purchasing from HLC, and HLC is selling to Buyer, substantially all of the property and assets of the building products manufacturing and distribution business currently conducted by HLC, other than Excluded Assets (the "Business"), free and clear of all liabilities, obligations, claims, liens and encumbrances (other than the Assumed Liabilities and the Permitted Encumbrances) (capitalized terms not otherwise defined herein shall have the respective meanings assigned to such terms in the Asset Purchase Agreement); WHEREAS, pursuant to the Asset Purchase Agreement, HLC shall be entitled to receive up to 2,000,000 shares (the "Earn Out Shares") of Common Stock (as hereinafter defined) in the event that the Business exceeds certain targets, as set forth in Section 1.13 of the Asset Purchase Agreement; WHEREAS, pursuant to the Asset Purchase Agreement and the Option Agreement, the Company is herewith granting to Holmes an option (the "Option") to purchase 1,000,000 shares of Common Stock (the "Option Shares"), pursuant to the terms of Section 1.7 of the Asset Purchase Agreement and the Option Agreement; and WHEREAS, in connection with the transactions contemplated by the Asset Purchase Agreement and the Option Agreement, Stonegate, the Company, HLC and Holmes have agreed to enter into this Agreement to memorialize certain agreements of the parties with respect to the Earn Out Shares and the Option Shares, all in accordance with the terms and conditions set forth herein. NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for good and valuable consideration, the receipt of which is hereby acknowledged, the parties agree as follows: ARTICLE I Certain Definitions For purposes of this Agreement, the following terms shall have the following meanings: (a) The term "Board" shall mean the Board of Directors of the Company. (b) The term "Commission" shall mean the United States Securities and Exchange Commission or any successor agency. (c) The term "Common Stock" shall mean the common stock, par value $.01 per share, of the Company. (d) The term "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. (e) The term "Fair Market Value" shall mean the fair market value of the Common Stock determined by such methods or procedures as shall be established from time to time by the Board. Unless otherwise determined by the Board in good faith, the per share Fair Market Value of Common Stock as of a particular date shall mean (i) the closing sales price per share of the Common Stock on the national securities exchange on which the Common Stock is principally traded, for the last preceding date on which there was a sale of such Common Stock on such exchange, or (ii) if the shares of Common Stock are then traded in an over- the-counter market, the average of the closing bid and asked prices for the shares of Common Stock in such over-the-counter market for the last preceding date on which there was a sale of such Common Stock in such market, or (iii) if the shares of Common Stock are not then listed on a national securities exchange or traded in an 2 over-the-counter market, such value as the Board, in its sole discretion, shall determine. (f) The term "Initial Public Offering" shall mean the first Public Offering of shares of Common Stock. (g) The term "Permitted Transferee" shall mean, with respect to each Stockholder bound by the terms of this Agreement, (i) any descendant, Affiliate or Associate (each, as defined in Rule 405 of the Securities Act) of such Stockholder or any Permitted Transferee of such Affiliate; (ii) the Company; (iii) in the event of the dissolution, liquidation or winding up of any such Stockholder that is a partnership or a corporation, the partners of a partnership that is such Stockholder, the stockholders of a corporation that is such Stockholder or a successor partnership all of the partners of which or a successor corporation all of the stockholders of which are the Persons who were the partners of such partnership or the stockholders of such corporation immediately prior to the dissolution, liquidation or winding up of such Stockholder; (iv) a transferee by testamentary or intestate disposition; (v) a transferee by inter vivos transfer to the transferring Person's spouse, children and/or other lineal descendants; (vi) a trust transferee by inter vivos transfer, the beneficiaries of which are the transferring Person, spouse, children and/or other lineal descendants; or (vii) a successor nominee or trustee for the beneficial owner of the Shares for which such Person acts as nominee or trustee, as the case may be. (h) The term "Person" shall mean any individual, firm, corporation, partnership, limited liability company, trust or other entity, and shall include any successor (by merger or otherwise) of such entity. (i) The term "Public Offering" shall mean a public offering of equity securities of the Company pursuant to an effective registration statement under the Securities Act (other than (i) a registration statement filed under Regulation A or on form S-4 or any successor form or (ii) a registration statement filed on Form S-8 or any successor form). (j) The term "Registrable Securities" shall mean (i) the Earn Out Shares, if any, to be issued to HLC pursuant to Section 1.13 of the Asset Purchase Agreement, (ii) the Option Shares, if any, to be issued to Holmes upon exercise of the Option in accordance with the terms of Section 1.7 of the Asset Purchase Agreement and the Option Agreement and (iii) additional shares of Common Stock acquired by HLC or Holmes upon any stock split, dividend, recapitalization, combination or otherwise after the date hereof. As to any particular Registrable Securities, 3 such securities shall cease to be Registrable Securities when (i) a registration statement registering such securities under the Securities Act has been declared effective and such securities have been sold or otherwise transferred by the holder thereof pursuant to such effective registration statement, or (ii) such securities are sold in accordance with Rule 144 (or any successor provision) promulgated under the Securities Act, or (iii) such securities are transferred under circumstances in which any legend borne by the certificates for such securities relating to restrictions on transferability thereof, under the Securities Act or otherwise, is removed by the Company. (k) The term "Registration Period" shall mean the period commencing on the first anniversary of the closing date of the Initial Public Offering and ending on the third anniversary thereof. (l) The term "Securities Act" shall mean the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder. (m) The term "Shares" shall mean (i) the Earn Out Shares, if any, to be issued to HLC pursuant to Section 1.13 of the Asset Purchase Agreement, (ii) the Option Shares, if any, to be issued to Holmes upon exercise of the Option in accordance with the terms of Section 1.7 of the Asset Purchase Agreement and the Option Agreement and (iii) additional shares of Common Stock acquired by HLC or Holmes upon any stock split, dividend, recapitalization, contribution or otherwise after the date hereof. (n) The term "Stockholders" shall mean Holmes and HLC, and the term "Stockholder" shall mean Holmes or HLC, as the case may be. (o) The term "Transfer" shall mean any voluntary or involuntary attempt to, directly or indirectly through the transfer of interests in controlled Affiliates or otherwise, offer, sell, assign, transfer, grant a participation in, pledge or otherwise dispose of any Shares, or the consummation of any such transactions, or the soliciting of any offers to purchase or otherwise acquire, or taking a pledge of, any of the Shares; provided, however, that the transfer of an interest in any of the Stockholders shall not be deemed to be a transfer. 4 ARTICLE II Representations and Warranties of the Stockholders Section 2.01 Acquisition of Shares for Investment. In addition to the representations and warranties made by each Stockholder in the Asset Purchase Agreement, each Stockholder individually represents and warrants to the Company the following: (a) such Stockholder will be acquiring the Shares to be acquired by such Stockholder for investment purposes only, without any intention of distributing or selling such Shares in violation of federal, state or other securities laws. If such Stockholder should in the future decide to dispose of any of such Shares, such Stockholder understands and agrees that it may do so only in compliance with the terms of Article III hereof and the Securities Act and applicable state securities laws, as then in effect. Such Stockholder agrees to the imprinting, so long as required by law, of legends on certificates representing all of the Shares to the following effect: THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE. THE SECURITIES MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS. THE SALE, ASSIGNMENT, HYPOTHECATION, PLEDGE, ENCUMBRANCE OR OTHER DISPOSITION (EACH A "TRANSFER") OF ANY OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE RESTRICTED BY THE TERMS OF THE STOCKHOLDERS AGREEMENT, DATED AS OF JUNE 11, 1999, AMONG STONEGATE RESOURCES HOLDINGS, LLC, BSL HOLDINGS, INC., HOLMES LUMBER COMPANY AND LOCKWOOD HOLMES. THE COMPANY WILL NOT REGISTER THE TRANSFER OF SUCH SECURITIES ON THE BOOKS OF THE COMPANY UNLESS AND UNTIL THE TRANSFER HAS BEEN 5 MADE IN COMPLIANCE WITH THE TERMS OF THE STOCKHOLDERS AGREEMENT. (b) such Stockholder understands that the Shares will not be registered at the time of their issuance under the Securities Act for the reason that the issuance provided for in the Asset Purchase Agreement and the Option Agreement is exempt pursuant to Section 4(2) of the Securities Act and that the reliance of the Company on such exemption is predicated in part on such Stockholder's representations set forth herein. Such Stockholder represents that it is experienced in evaluating companies such as the Company, has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of its investment and has the ability to suffer the total loss of its investment. Such Stockholder further represents that it has had the opportunity to conduct due diligence on the Company, to ask questions of and receive answers from the Company concerning the terms and conditions of the offering and to obtain additional information to such Stockholder's satisfaction. (c) such Stockholder is an "Accredited Investor" within the meaning of Rule 501 of Regulation D under the Securities Act, as presently in effect. ARTICLE III Transfer of Shares Section 3.01 General Restrictions. Neither of the Stockholders nor any of their Permitted Transferees may Transfer any Shares except for Transfers (i) to any of their Permitted Transferees; provided, however, that, prior to any such Transfer of Shares, such Permitted Transferee shall agree in writing to take such Shares subject to, and to comply with, all of the provisions of this Agreement, a copy of which Agreement shall be executed by such Permitted Transferee and filed with the Secretary of the Company and shall include the address of such Permitted Transferee to which notices hereunder shall be sent, (ii) pursuant to the provisions of Section 3.04 or 3.05 hereof or (iii) during the Registration Period, pursuant to a Public Offering of such Shares, on the terms set forth in Article IV hereof. Section 3.02 Compliance with Securities Laws. Each Stockholder agrees that every Transfer of its Shares shall comply with all federal, state and local securities laws applicable to such Transfer. At the request of the Company, the 6 transferring Stockholder shall deliver to the Company an opinion of counsel, which counsel and opinion shall be reasonably satisfactory to the Company, to the effect that the Transfer satisfies this Section 3.02. Section 3.03 Transfers Not In Compliance. In the event of any purported or attempted Transfer of Shares by a Stockholder that does not comply with this Agreement, the purported transferee or successor by operation of law shall not be deemed to be a stockholder of the Company for any purpose and shall not be entitled to any of the rights of a stockholder, including, without limitation, the right to vote the Shares or to receive a certificate for the Shares or any dividends or other distributions on or with respect to the Shares. Section 3.04 Tag-Along Rights. Except as provided below, if, at any time during the term of this Agreement, Stonegate proposes to directly or indirectly Transfer more than twenty percent (20%) of its shares of Common Stock to a Person (other than to a Permitted Transferee), Stonegate shall provide HLC and Holmes (each a "Notice Recipient") and the Company with not less than twenty (20) days' prior written notice (the "Sale Notice") of such proposed Transfer, which notice shall include all of the terms and conditions of such proposed Transfer and which shall identify such purchaser; and the Notice Recipient shall have the option, exercisable by written notice to Stonegate within ten (10) days after the receipt of the Sale Notice, to require Stonegate to arrange for such purchaser or purchasers to purchase the same percentage (the "Percentage") of the Shares then owned by such Notice Recipient as the ratio of the total number of shares of Common Stock which are to be Transferred by Stonegate pursuant to the proposed Transfer to the total number of shares of Common Stock owned by Stonegate immediately prior to such Transfer, or any lesser amount of Shares as such Notice Recipient shall desire, together with Stonegate's shares of Common Stock at the same time as, and upon the same terms and conditions (including all direct or indirect consideration or compensation) at which, Stonegate sells its shares of Common Stock. If a Notice Recipient shall so elect, Stonegate agrees that it shall either (a) arrange for the proposed purchaser or purchasers to purchase all or a portion (as such Notice Recipient shall specify) of the same Percentage of the Shares then owned by such Notice Recipient at the same time as and upon the same terms and conditions at which Stonegate sells its shares of Common Stock, and provided that if such purchaser or purchasers shall elect to purchase only such aggregate number of shares of Common Stock as originally agreed with Stonegate, then the number of shares of Common Stock to be sold by Stonegate and the number of Shares to be sold by all Notice Recipients electing to participate in the proposed Transfer shall be reduced pro rata to such aggregate number, or (b) not effect the proposed Transfer to such purchaser or purchasers. In 7 the event that a Notice Recipient does not exercise its right to participate in such Transfer or declines to so participate, Stonegate shall have 120 days from the date of such Sale Notice to consummate the transaction on the terms set forth therein without being required to provide an additional Sale Notice to the remaining Stockholder and comply with the terms of this Section 3.04. Section 3.05 Drag-Along Rights. If at any time during the term of this Agreement, Stonegate proposes to Transfer all or substantially all of its shares of Common Stock (other than to a Permitted Transferee), Stonegate shall have the right, upon not less than twenty (20) business days' prior written notice of such proposed sale (the "Purchase Notice"), which notice shall include all of the terms and conditions of such proposed sale and which shall identify the proposed purchaser(s) of such shares of Common Stock ("Drag Along Purchaser(s)"), to require each of HLC and Holmes to sell to the Drag Along Purchaser(s) that number of Shares ("Call Shares") equal to the product, rounded down to the nearest whole number, of (a) a fraction, the numerator of which is the total number of shares of Common Stock proposed to be sold by Stonegate and the denominator of which is the total number of shares of Common Stock then owned by Stonegate, multiplied by (b) the number of Shares then owned by HLC and Holmes, respectively. If Stonegate shall so elect, Stonegate shall arrange for such Drag Along Purchaser(s) to purchase the Call Shares at the same time as and upon the same terms and conditions (including all direct or indirect consideration or compensation) at which Stonegate sells its shares of Common Stock. Upon receipt of the Purchase Notice, each of HLC and Holmes shall cooperate with Stonegate and otherwise take, or cause to be taken, all actions and do, or cause to be done, all things necessary or appropriate to enter into, consummate and make effective the sale and purchase of the Call Shares, together with Stonegate's shares of Common Stock being so Transferred. Section 3.06 Effect of Notices. Notwithstanding any provision hereof to the contrary, the giving to HLC and Holmes of any Sale Notice or any Purchase Notice shall not obligate Stonegate to consummate or effect any transaction referred to therein, and Stonegate shall be free to abandon any such transaction prior to the effectiveness thereof. If any such transaction is so abandoned, HLC, Holmes and Stonegate shall continue to be subject to the terms of this Article III with respect to the Shares included in such Sale Notice or Purchase Notice. Section 3.07 Call Option Upon Termination. Upon the termination of Holmes' employment with the Company or any of its Affiliates, for any reason, the Company shall have the right, but not the obligation, to purchase any or all of the Shares then held by Holmes and/or HLC for a payment in cash equal to the Fair 8 Market Value of such Shares as of the date of such termination. Such option may be exercised by the Company by delivering written notice thereof to Holmes and HLC within 120 days following the date of such termination, together with a check in the full amount of the Fair Market Value of the Shares to be purchased. Section 3.08 Put Option Upon Termination. (a) Upon the termination of Holmes' employment with the Company or any of its Affiliates, for any reason (other than for Cause), Holmes and/or HLC may elect to have the Company repurchase any or all the Shares then held by such Stockholder. Written irrevocable election to have the Company repurchase such Shares must be received by the Company within ninety (90) days after the date of Holmes' termination. Subject to the conditions described in subsection (b) below, the Company will repurchase such Shares within sixty (60) days after receipt of such request by delivering a check to such Stockholder in the full amount of the Fair Market Value of the Shares to be purchased. (b) The Company's obligation to repurchase the Shares as described in subparagraph (a) above (i) shall terminate upon the Initial Public Offering and (ii) will not apply to the extent that total repurchases by the Company of Common Stock from all employees of the Company or its Affiliates during the calendar year in which the termination of Holmes' employment occurs exceed $500,000. The Company's obligation to repurchase such Shares is also subject to compliance with applicable law and with the provisions of the Company's then existing loan facility. ARTICLE IV Registration Rights Section 4.01 Piggyback Registrations. (a) Right to Piggyback. During the Registration Period, whenever the Company proposes to register any of its equity securities or securities convertible or exchangeable into or exercisable for its equity securities under the Securities Act (other than a registration under Regulation A or relating to Company employee benefit plans, exchange offers by the Company or a merger or acquisition of a business or assets by the Company including, without limitation, a registration on Form S-4 or Form S-8 or any successor form) (a "Piggyback Registration"), the Company shall give each of the Stockholders prompt written notice thereof (but not 9 less than ten (10) days prior to the filing by the Company with the Commission of any registration statement with respect thereto). Such notice (a "Piggyback Notice") shall specify, at a minimum, the number of securities proposed to be registered, the proposed date of filing of such registration statement with the Commission, the proposed means of distribution, the proposed managing underwriter or underwriters (if any and if known), and a good faith estimate by the Company of the proposed minimum offering price of such securities. Upon the written request of a Stockholder given within ten (10) business days of such Stockholder's receipt of the Piggyback Notice (which written request shall specify the number of Registrable Securities intended to be disposed of by such Stockholder and the intended method of distribution thereof), the Company shall include in such registration all Registrable Securities with respect to which the Company has received such written requests for inclusion. (b) Priority on Piggyback Registrations. If, in connection with a Piggyback Registration, any managing underwriter (or, if such Piggyback Registration is not an underwritten offering, a nationally recognized independent underwriter selected by the Company advises the Company and the holders of the Registrable Securities to be included in such Piggyback Registration, that, in its opinion, the inclusion of all the securities sought to be included in such Piggyback Registration by the Company, any Persons who have sought to have shares registered thereunder pursuant to rights to demand (other than pursuant to so-called "piggyback" or other incidental or participation registration rights) such registration (such demand rights being "Other Demand Rights" and such Persons being "Other Demanding Sellers"), any holders of Registrable Securities seeking to sell such securities in such Piggyback Registration ("Piggyback Sellers") and any other proposed sellers, in each case, if any, would adversely affect the marketability of the securities sought to be sold pursuant thereto, then the Company shall include in the registration statement applicable to such Piggyback Registration only such securities as the Company, the Other Demanding Sellers, and the Piggyback Sellers are so advised by such underwriter can be sold without such an effect (the "Maximum Piggyback Number"), as follows and in the following order of priority: (i) if the Piggyback Registration is an offering on behalf of the Company and not any Person exercising Other Demand Rights (whether or not other Persons seek to include securities therein pursuant to so-called "piggyback" or other incidental or participatory registration rights) (a "Primary Offering"), then (A) first, such number of securities to be sold by the Company as the Company, in its reasonable judgment and acting in good faith and in 10 accordance with sound financial practice, shall have determined, (B) second, if the number of securities to be included under clause (A) above is less than the Maximum Piggyback Number, pro rata in proportion to the Registrable Securities sought to be registered by all the Piggyback Sellers and all other proposed sellers, which in the aggregate, when added to the number of securities to be registered under clause (A) above, equals the Maximum Piggyback Number; (ii) if the Piggyback Registration is an offering other than pursuant to a Primary Offering, then (A) first, such number of securities sought to be registered by each Other Demanding Seller, pro rata in proportion to the number of securities sought to be registered by all such Other Demanding Sellers, (B) second, if the number of securities to be included under clause (A) above is less than the Maximum Piggyback Number, the number of Registrable Securities sought to be registered by each Piggyback Seller, pro rata in proportion to the Registrable Securities sought to be registered by all the Piggyback Sellers and all other proposed sellers, which in the aggregate, when added to the number of securities to be registered under clause (A) above, equals the Maximum Piggyback Number. (c) Withdrawal by the Company. If, at any time after giving written notice of its intention to register any of its securities as set forth in this Section 3.01 and prior to the time the registration statement filed in connection with such registration is declared effective, the Company shall determine for any reason not to register such securities, the Company may, at its election, give written notice of such determination to each Stockholder and thereupon shall be relieved of its obligation to register any Registrable Securities in connection with such particular withdrawn or abandoned registration (but not from its obligation to pay the Registration Expenses in connection therewith as provided herein). Section 4.02 Withdrawal Rights. Any Stockholder having notified or directed the Company to include any or all of its Registrable Securities in a registration statement under the Securities Act shall have the right to withdraw any such notice or direction with respect to any or all of the Registrable Securities designated for registration thereby by giving written notice to such effect to the Company prior to the effective date of such registration statement. In the event of any such withdrawal, the Company shall not include such Registrable Securities in the applicable registration and such Registrable Securities shall continue to be 11 Registrable Securities hereunder. No such withdrawal shall affect the obligations of the Company with respect to the Registrable Securities not so withdrawn. Section 4.03 Holdback Agreements. Each Stockholder agrees not to effect any public sale or distribution (including sales pursuant to Rule 144) of equity securities of the Company, or any securities convertible into or exchangeable or exercisable for such securities, during the ten (10) day period prior to the date which the Company has notified the Stockholders that it intends to commence a Public Offering through the ninety (90) day period immediately following the effective date of any Piggyback Registration (except as part of such registration), or, if later, the date of any underwriting agreement with respect thereto. Section 4.04 Registration Procedures. (a) Whenever the Stockholders have requested that any Registrable Securities be registered pursuant to this Agreement, the Company (subject to its right to withdraw such registration as contemplated by Section 4.01(c)) shall use commercially reasonable efforts to effect the registration and the sale of such Registrable Securities in accordance with the intended method of disposition thereof and, in connection therewith, the Company shall: (i) promptly (1) notify each seller of Registrable Securities of each of (A) the filing and effectiveness of the registration statement and prospectus and any amendment or supplements thereto, (B) the receipt of any comments from the Commission or any state securities law authorities or any other governmental authorities with respect to any such registration statement or prospectus or any amendments or supplements thereto, and (C) any oral or written stop order with respect to such registration, any suspension of the registration or qualification of the sale of such Registrable Securities in any jurisdiction or any initiation or threatening of any proceedings with respect to any of the foregoing and (2) use commercially reasonable efforts to obtain the withdrawal of any order suspending the registration or qualification (or the effectiveness thereof) or suspending or preventing the use of any related prospectus in any jurisdiction with respect thereto; (ii) furnish to each seller of Registrable Securities, the underwriters and the sales or placement agent, if any, and counsel for each of the foregoing, a conformed copy of such 12 registration statement and each amendment and supplement thereto (in each case, including all exhibits thereto and documents incorporated by reference therein) and such additional number of copies of such registration statement, each amendment and supplement thereto (in such case without such exhibits and documents) the prospectus (including each preliminary prospectus) included in such registration statement and prospectus supplements and all exhibits thereto and documents incorporated by reference therein and such other documents as such seller, underwriter, agent or counsel may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such Seller; (iii) use commercially reasonable efforts to register or qualify such Registrable Securities under such securities or "blue sky" laws of such jurisdictions as the holders of a majority of Registrable Securities sought to be registered reasonably request and do any and all other acts and things which may be reasonably necessary or advisable to enable the holders of a majority of Registrable Securities sought to be registered to consummate the disposition in such jurisdictions of the Registrable Securities owned by such holders and keep such registration or qualification in effect for so long as the registration statement remains effective under the Securities Act (provided that the Company shall not be required to (x) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this paragraph, (y) subject itself to taxation in any such jurisdiction where it would not otherwise be subject to taxation but for this paragraph or (z) consent to the general service of process in any jurisdiction where it would not otherwise be subject to general service of process but for this paragraph); (iv) notify each seller of such Registrable Securities, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, upon the discovery that, or of the happening of any event as a result of which, the registration statement covering such Registrable Securities, as then in effect, contains an untrue statement of a material fact or omits to state any material fact required to be stated therein or any fact necessary to make the statements therein not misleading, and promptly prepare and furnish to each such seller a supplement or amendment to the prospectus contained in such registration statement so that such Registration 13 Statement shall not, and such prospectus as thereafter delivered to the purchasers of such Registrable Securities shall not, contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or any fact necessary to make the statements therein not misleading; (v) cause all such Registrable Securities to be listed on any securities exchange or established over-the-counter market on which or through which similar securities of the Company are listed or traded and, if not so listed or traded, to be listed on the NASD automated quotation system ("Nasdaq") and if listed on Nasdaq, use its reasonable efforts to secure designation of all such Registrable Securities covered by such registration statement as a Nasdaq "national market system security" within the meaning of Rule 11Aa2-1 under the Exchange Act; or, failing that, to secure Nasdaq authorization for such Registrable Securities; (vi) make available for inspection by any seller of Registrable Securities and any attorney, accountant or other agent retained by any such seller or underwriter all financial and other records, pertinent corporate documents and properties of the Company, and cause the Company's officers, directors, employees, attorneys and independent accountants to supply all information reasonably requested by any such sellers, attorneys, accountants or agents in connection with such registration statement. Information which the Company determines, in good faith, to be confidential shall not be disclosed by such persons unless (x) the disclosure of such information is necessary to avoid or correct a misstatement or omission in such registration statement, or (y) the release of such information is ordered pursuant to a subpoena or other order from a court of competent jurisdiction. Each seller of Registrable Securities agrees, on its own behalf and on behalf of all its accountants, attorneys and agents, that the information obtained by it as a result of such inspections shall be deemed confidential and shall not be used by it as the basis for any market transactions in the securities of the Company unless and until such is made generally available to the public. Each seller of Registrable Securities further agrees, on its own behalf and on behalf of all its accountants, attorneys and agents, that it will, upon learning that disclosure of such information is sought in a court of competent jurisdiction, give notice to the Company and allow 14 the Company, at its expense, to undertake appropriate action to prevent disclosure of the information deemed confidential; (vii) use commercially reasonable efforts to comply with all applicable laws related to such registration statement and offering and sale of securities and all applicable rules and regulations of governmental authorities in connection therewith (including, without limitation, the Securities Act and the Exchange Act) and make generally available to its security holders as soon as practicable (but in any event not later than fifteen (15) months after the effectiveness of such registration statement) an earnings statement of the Company and its subsidiaries complying with Section 11(a) of the Securities Act; (viii) permit any Stockholder, which Stockholder, in its sole and exclusive judgment, might be deemed to be an underwriter or controlling person of the Company, to participate in the preparation of such registration statement and to require the insertion therein of material, furnished to the Company in writing, which in the reasonable judgment of such holder and such holder's counsel should be included; and (ix) use commercially reasonable efforts to furnish to each seller of Registrable Securities a signed counterpart of (x) an opinion of counsel for the Company and (y) a "comfort" letter signed by the independent public accountants who have certified the Company's financial statements included or incorporated by reference in such registration statement, covering such matters with respect to such registration statement and, in the case of the accountants' comfort letter, with respect to events subsequent to the date of such financial statements, as are customarily covered in opinions of issuer's counsel and in accountants' comfort letters delivered to the underwriters in underwritten public offerings of securities for the account of, or on behalf of, an issuer of common stock, such opinion and comfort letters to be dated the date of such opinions and comfort letters are customarily dated in such transactions, and covering in the case of such legal opinion, such other legal matters and, in the case of such comfort letter, such other financial matters, as the holders of a majority of the Registrable Securities being sold may reasonably request. 15 (b) Underwriting. Without limiting any of the foregoing, in the event that the offering of Registrable Securities is to be made by or through an underwriter, the Company shall enter into an underwriting agreement with a managing underwriter or underwriters containing representations, warranties, indemnities and agreements customarily included (but not inconsistent with the agreements contained herein) by an issuer of common stock in underwriting agreements with respect to offerings of common stock for the account of, or on behalf of, such issuers. In connection with the sale of Registrable Securities hereunder, any seller of such Registrable Securities may, at its option, require that any and all representations and warranties by, and indemnities and agreements of, the Company to or for the benefit of such underwriter or underwriters (or which would be made to or for the benefit of such an underwriter or underwriter if such sale of Registrable Securities were pursuant to a customary underwritten offering) be made to and for the benefit of such seller and that any or all of the conditions precedent to the obligations of such underwriter or underwriters (or which would be so for the benefit of such underwriter or underwriters under a customary underwriting agreement) be conditions precedent to the obligations of such seller in connection with the disposition of its securities pursuant to the terms hereof. In connection with any offering of Registrable Securities registered pursuant to this Agreement, the Company shall (x) furnish to the underwriter, if any (or, if no underwriter, the sellers of such Registrable Securities), unlegended certificates representing ownership of the Registrable Securities being sold, in such denominations as requested and (y) instruct any transfer agent and registrar of the Registrable Securities to release any stop transfer order with respect thereto. (c) Return of Prospectuses. Each seller of Registrable Securities hereunder agrees that upon receipt of any notice from the Company of the happening of any event of the kind described in Section 4.04(a)(iv), such seller shall forthwith discontinue such seller's disposition of Registrable Securities pursuant to the applicable registration statement and prospectus relating thereto until such seller's receipt of the copies of the supplemented or amended prospectus contemplated by Section 4.04(a)(iv) and, if so directed by the Company, deliver to the Company all copies, other than permanent file copies, then in such seller's possession of the prospectus current at the time of receipt of such notice relating to such Registrable Securities. In the event the Company shall give such notice, the ninety (90) day period during which such registration statement must remain effective pursuant to this Agreement shall be extended by the number of days during the period from the date of giving of a notice regarding the happening of an event of the kind described in Section 4.04(a)(iv) to the date when all such sellers shall receive such a 16 supplemented or amended prospectus and such prospectus shall have been filed with the Commission. Section 4.05 Registration Expenses. All expenses incident to the Company's performance of, or compliance with, its obligations under this Agreement including, without limitation, all registration and filing fees, all fees and expenses of compliance with securities and "blue sky" laws (including, without limitation, the fees and expenses of counsel for underwriters or placement or sales agents in connection therewith), all printing and copying expenses, all messenger and delivery expenses, all fees and expenses of underwriters and sales and placement agents in connection therewith (excluding discounts and commissions and the fees and expenses of counsel therefor), all fees and expenses of the Company's independent certified public accountants and counsel (including, without limitation, with respect to "comfort" letters and opinions) (collectively, the "Registration Expenses") shall be borne by the Company; notwithstanding the foregoing, all applicable federal and blue sky registration and filing fees, National Association of Securities Dealers filing fees, the expenses and fees for listing the securities to be registered on each securities exchange and included in each established over-the-counter market on which similar securities issued by the Company are then listed or traded or for listing on Nasdaq and underwriting discounts and commissions allocable to each Stockholder selling Registrable Securities shall be borne by such Stockholder. The Company shall not be responsible for the fees and expenses of any additional counsel, or any of the accountants, agents or experts retained by the Stockholders in connection with the sale of Registrable Securities. The Company will pay its internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties, the expense of any annual audit and the expense of any liability insurance) and the expenses and fees for listing the securities to be registered on each securities exchange and included in each established over-the-counter market on which similar securities issued by the Company are then listed or traded or for listing on Nasdaq. Section 4.06 Indemnification. (a) By the Company. The Company agrees to indemnify, to the fullest extent permitted by law, each holder of Registrable Securities being sold, its officers, directors, employees and agents and each Person who controls (within the meaning of the Securities Act) such holder or such an other indemnified Person against all losses, claims, damages, liabilities and expenses (collectively, the "Losses") caused by, resulting from or relating to any untrue or alleged untrue statement of material fact contained in any registration statement, prospectus or 17 preliminary prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or a fact necessary to make the statements therein not misleading, except insofar as the same are caused by or contained in any information furnished to the Company by or on behalf of such holder expressly for use therein or by such holder's failure to deliver a copy of the registration statement or prospectus or any amendments or supplements thereto after the Company has furnished such holder with a sufficient number of copies of the same. In connection with an underwritten offering and without limiting any of the Company's other obligations under this Agreement, the Company shall indemnify such underwriters, their officers, directors, employees and agents and each Person who controls (within the meaning of the Securities Act) such underwriters or such an other indemnified Person to the same extent as provided above with respect to the indemnification of the holders of Registrable Securities being sold. (b) By Stockholders. In connection with any registration statement in which a holder of Registrable Securities is participating, each such holder will furnish to the Company in writing information regarding such holder's ownership of Registrable Securities and, to the extent permitted by law, shall indemnify the Company, its directors, officers, employees and agents and each Person who controls (within the meaning of the Securities Act) the Company or such an other indemnified Person against all Losses caused by, resulting from or relating to any untrue or alleged untrue statement of material fact contained in the registration statement, prospectus or preliminary prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that such untrue statement or omission is caused by and contained in such information so furnished in writing by or on behalf of such holder; provided, however, that each holder's obligation to indemnify the Company hereunder shall be apportioned between each holder based upon the net amount received by each holder from the sale of Registrable Securities, as compared to the total net amount received by all of the holders of Registrable Securities sold pursuant to such registration statement, no such holder being liable to the Company in excess of such apportionment. (c) Notice. Any Person entitled to indemnification hereunder shall give prompt written notice to the indemnifying party of any claim with respect to which its seeks indemnification; provided, however, the failure to give such notice shall not release the indemnifying party from its obligation, except to the extent that the indemnifying party has been materially prejudiced by such failure to provide such notice. 18 (d) Defense of Actions. In any case in which any such action is brought against any indemnified party, and it notifies an indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein, and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof the indemnifying party will not (so long as it shall continue to have the right to defend, contest, litigate and settle the matter in question in accordance with this paragraph) be liable to such indemnified party hereunder for any legal or other expense subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation, supervision and monitoring (unless such indemnified party reasonably objects to such assumption on the grounds that there may be defenses available to it which are different from or in addition to the defenses available to such indemnifying party, in which event the indemnified party shall be reimbursed by the indemnifying party for the expenses incurred in connection with retaining separate legal counsel). An indemnifying party shall not be liable for any settlement of an action or claim effected without its consent. The indemnifying party shall lose its right to defend, contest, litigate and settle a matter if it shall fail to diligently contest such matter (except to the extent settled in accordance with the next following sentence). No matter shall be settled by an indemnifying party without the consent of the indemnified party (which consent shall not be unreasonably withheld). (e) Survival. The indemnification provided for under this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified Person and will survive the transfer of the Registrable Securities and the termination of this Agreement. (f) Contribution. If recovery is not available under the foregoing indemnification provisions for any reason or reasons other than as specified therein, any Person who would otherwise be entitled to indemnification by the terms thereof shall nevertheless be entitled to contribution with respect to any Losses with respect to which such Person would be entitled to such indemnification but for such reason or reasons. In determining the amount of contribution to which the respective Persons are entitled, there shall be considered the Persons' relative knowledge and access to information concerning the matter with respect to which the claim was asserted, the opportunity to correct and prevent any statement or omission, and other equitable considerations appropriate under the circumstances. It is hereby agreed that it would not necessarily be equitable if the amount of such contribution 19 were determined by pro rata or per capita allocation. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not found guilty of such fraudulent misrepresentation. Notwithstanding the foregoing, no Stockholder shall be required to make a contribution in excess of the net amount received by such holder from the sale of Registrable Securities. ARTICLE V Miscellaneous Section 5.01 Legends. Each of the Stockholders agrees that substantially the following legend shall be placed on the certificates representing any Shares owned by them: THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") AND MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF ("TRANSFERRED") EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN EXEMPTION FROM REGISTRATION THEREUNDER. THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS OF THE STOCKHOLDERS AGREEMENT DATED AS OF JUNE 11, 1999 AND MAY NOT BE TRANSFERRED UNLESS SUCH TRANSFER COMPLIES WITH THE PROVISIONS OF SUCH STOCKHOLDERS AGREEMENT, A COPY OF SUCH STOCKHOLDERS AGREEMENT IS ON FILE WITH THE SECRETARY OF BSL HOLDINGS, INC. AND IS AVAILABLE WITH OUT CHARGE UPON WRITTEN REQUEST THEREFOR. THE HOLDER OF THIS CERTIFICATE, BY ACCEPTANCE OF THIS CERTIFICATE, AGREES TO BE BOUND BY ALL OF THE PROVISIONS OF THE AFORESAID AGREEMENT. From and after the date of this Agreement, any reference in any legend on any certificate representing any Shares to the Stockholders Agreement shall be deemed for all purposes to refer to this Agreement. 20 Section 5.02 Specific Performance. Each of the Stockholders acknowledges and agrees that in the event of any breach of this Agreement, the non-breaching party or parties would be irreparably harmed and could not be made whole by monetary damages. The Stockholders hereby agree that in addition to any other remedy to which any party may be entitled at law or in equity, they shall be entitled to compel specific performance of this Agreement in any action instituted in any court of the United States or any state thereof having subject matter jurisdiction for such action. Section 5.03 Headings. The headings in this Agreement are for convenience of reference only and shall not control or affect the meaning or construction of any provisions hereof. Section 5.04 Entire Agreement. This Agreement constitutes the entire agreement and understanding of the parties hereto in respect of the subject matter contained herein, and there are no restrictions, promises, representations, warranties, covenants, conditions or undertakings with respect to the subject matter hereof, other than those expressly set forth or referred to herein. This Agreement supersedes all prior agreements and understandings between the parties hereto with respect to the subject matter hereof. Section 5.05 Notices. All notices and other communications hereunder shall be in writing and shall be delivered personally or by next-day courier or telecopied with confirmation of receipt, to the parties at the addresses specified below (or at such other address for a party as shall be specified by like notice; provided that notices of change of address shall be effective only upon receipt thereof). Any such notice shall be effective upon receipt, if personally delivered or telecopied, or one day after delivery to a courier for next-day delivery. If to the Stonegate or the Company, to: BSL Holdings, Inc. 2200 Ross Avenue, Suite 4900 West Dallas, TX 75201 Attention: Donald F. McAleenan, Esq. Fax: (214) 880-3599 21 with a copy to: Skadden, Arps, Slate, Meagher & Flom LLP One Rodney Square Wilmington, DE 19801 Attention: Robert B. Pincus, Esq. Fax: (302) 651-3001 If to HLC or Holmes, to: Holmes Lumber Company 6550 Roosevelt Boulevard Jacksonville, FL 32244 Attention: Lockwood Holmes Fax: (904) 772-8514 with a copy to: Brant, Moore, MacDonald & Wells 50 North Laura Street Suite 3100 Jacksonville, FL 32202 Attention: William Brant, Esq. Fax: (904) 353-1166 Section 5.06 Applicable Law. The substantive laws of the State of Delaware shall govern the interpretation, validity and performance of the terms of this Agreement, regardless of the law that might be applied under applicable principles of conflicts of laws. THE PARTIES HERETO WAIVE THEIR RIGHT TO A JURY TRIAL WITH RESPECT TO DISPUTES HEREUNDER; ALL SUCH DISPUTES SHALL BE SETTLED BY BINDING ARBITRATION PURSUANT TO THE RULES OF THE AMERICAN ARBITRATION ASSOCIATION IN DALLAS, TEXAS AND THE ORDER OF SUCH ARBITRATORS SHALL BE FINAL AND BINDING ON ALL PARTIES HERETO AND MAY BE ENTERED AS A JUDGMENT IN A COURT HAVING JURISDICTION OVER THE PARTIES. Section 5.07 Severability. The invalidity, illegality or unenforceability of one or more of the provisions of this Agreement in any 22 jurisdiction shall not affect the validity, legality or enforceability of the remainder of this Agreement in such jurisdiction or the validity, legality or enforceability of this Agreement, including any such provision, in any other jurisdiction, it being intended that all rights and obligations of the parties hereunder shall be enforceable to the fullest extent permitted by law. Section 5.08 Successors; Assigns. The provisions of this Agreement shall be binding upon the parties hereto and their respective heirs, successors and permitted assigns. Neither this Agreement nor the rights or obligations of any Stockholder hereunder may be assigned, except in connection with the transfer by a Stockholder of shares of Common Stock to a Permitted Transferee. Any such attempted assignment in contravention of this Agreement shall be void and of no effect. Section 5.09 Amendments. This Agreement may not be amended, modified or supplemented unless such modification is in writing and signed by the Company, Stonegate and Stockholders owning at least 662/3% of the outstanding shares of Common Stock subject to this Agreement as of the date hereof. Section 5.10 Waiver. Any waiver (express or implied) of any default or breach of this Agreement shall not constitute a waiver of any other or subsequent default or breach. Section 5.11 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same Agreement. Section 5.12 Termination. Unless earlier terminated, this Agreement shall terminate upon the earlier of (i) the third anniversary of the date of the Initial Public Offering or (ii) the tenth anniversary of the date hereof. [SIGNATURE PAGES FOLLOW] 23 IN WITNESS WHEREOF, the undersigned hereby agree to be bound by the terms and provisions of this Stockholders Agreement as of the date first above written. BSL HOLDINGS, INC. By: /s/ Donald F. McAleenan ------------------------ Name: Donald F. McAleenan STONEGATE RESOURCES HOLDINGS, LLC By: /s/ Donald F. McAleenan ------------------------ Name: Donald F. McAleenan HOLMES LUMBER COMPANY, a Florida corporation By: /s/ Lockwood Holmes --------------------------- Name: Lockwood Holmes /s/ Lockwood Holmes --------------------------- Lockwood Holmes