0001193125-21-226682.txt : 20210728 0001193125-21-226682.hdr.sgml : 20210728 20210728090157 ACCESSION NUMBER: 0001193125-21-226682 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 14 CONFORMED PERIOD OF REPORT: 20210722 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Termination of a Material Definitive Agreement ITEM INFORMATION: Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant ITEM INFORMATION: Unregistered Sales of Equity Securities ITEM INFORMATION: Material Modifications to Rights of Security Holders ITEM INFORMATION: Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers ITEM INFORMATION: Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20210728 DATE AS OF CHANGE: 20210728 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Core & Main, Inc. CENTRAL INDEX KEY: 0001856525 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-DURABLE GOODS, NEC [5099] IRS NUMBER: 863149194 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-40650 FILM NUMBER: 211119965 BUSINESS ADDRESS: STREET 1: 1830 CRAIG PARK COURT CITY: ST. LOUIS STATE: MO ZIP: 63146 BUSINESS PHONE: 314-432-4700 MAIL ADDRESS: STREET 1: 1830 CRAIG PARK COURT CITY: ST. LOUIS STATE: MO ZIP: 63146 8-K 1 d185428d8k.htm 8-K 8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 28, 2021 (July 22, 2021)

 

 

Core & Main, Inc.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   001-40650   86-3149194

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

1830 Craig Park Court

St. Louis, Missouri

  63146
(Address of principal executive offices)   (Zip Code)

(314) 432-4700

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of Class

 

Trading

Symbol

 

Name of Each Exchange

on Which Registered

Class A common stock, par value $0.01 per share   CNM   New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 


Item 1.01. Entry into a Material Definitive Agreement.

Initial Public Offering

On July 27, 2021, Core & Main, Inc. (the “Company”) closed its initial public offering (“IPO”) of 34,883,721 shares of Class A common stock, par value $0.01 per share (the “Class A Common Stock”), at an offering price of $20.00 per share, pursuant to the Company’s registration statement on Form S-1, as amended (File No. 333-256382) (the “Registration Statement”). On July 26, 2021, the Company filed a Prospectus, dated July 22, 2021 (the “Prospectus”), with the Securities and Exchange Commission pursuant to Rule 424(b) under the Securities Act of 1933, as amended (the “Securities Act”).

In connection with the IPO, the Company entered into the following agreements, forms of which were previously filed as exhibits to the Registration Statement:

 

   

the Master Reorganization Agreement, dated as of July 22, 2021, by and among, the Company, CD&R Associates X Waterworks, L.P., CD&R Waterworks Holdings GP, Ltd., CD&R WW Holdings, L.P., CD&R Waterworks Holdings, L.P., Core & Main Management Feeder, LLC, Core & Main GP, LLC, CD&R Plumb Buyer, LLC, Core & Main Holdings, LP (“Holdings”), CD&R Fund X Waterworks B1, L.P., CD&R Fund X-A Waterworks B, L.P., CD&R Fund X Advisor Waterworks B, L.P., CD&R WW Holdings, LLC, CD&R WW, LLC, CD&R WW Advisor, LLC, Brooks Merger Sub 1, Inc., Brooks Merger Sub 2, Inc. and CD&R Waterworks Holdings, LLC (the “Master Reorganization Agreement”), a copy of which is filed as Exhibit 2.1 hereto and incorporated by reference herein;

 

   

the Second Amended and Restated Agreement of Limited Partnership of Core & Main Holdings, LP, dated as of July 22, 2021, by and among the Company, CD&R Waterworks Holdings, LLC, CD&R WW, LLC and Core & Main Management Feeder, LLC, a copy of which is filed as Exhibit 10.1 hereto and incorporated by reference herein;

 

   

the Registration Rights Agreement, dated as of July 27, 2021, by and among the Company, CD&R Waterworks Holdings, LLC, CD&R Fund X Advisor Waterworks B, L.P., CD&R Fund X Waterworks B1, L.P. and CD&R Fund X-A Waterworks B, L.P., a copy of which is filed as Exhibit 10.2 hereto and incorporated by reference herein;

 

   

the Stockholders Agreement, dated as of July 22, 2021, by and among the Company, CD&R Waterworks Holdings, LLC, CD&R Fund X Advisor Waterworks B, L.P., CD&R Fund X Waterworks B1, L.P. and CD&R Fund X-A Waterworks B, L.P., a copy of which is filed as Exhibit 10.3 hereto and incorporated by reference herein;

 

   

the Former Limited Partners Tax Receivable Agreement, dated as of July 22, 2021, by and among the Company, Holdings, CD&R Fund X Advisor Waterworks B, L.P., CD&R Fund X Waterworks B1, L.P. and CD&R Fund X-A Waterworks B, L.P., a copy of which is filed as Exhibit 10.6 hereto and incorporated by reference herein;

 

   

the Continuing Limited Partners Tax Receivable Agreement, dated as of July 22, 2021, by and among the Company, Holdings, CD&R Waterworks Holdings, LLC and Core & Main Management Feeder, LLC, a copy of which is filed as Exhibit 10.7 hereto and incorporated by reference herein; and

 

   

the Exchange Agreement, dated as of July 22, 2021, by and among the Company, Holdings, CD&R Waterworks Holdings, LLC, and Core & Main Management Feeder, LLC, a copy of which is filed as Exhibit 10.8 hereto and incorporated by reference herein.


The terms of these agreements are substantially the same as the terms set forth in the forms of such agreements filed as exhibits to the Registration Statement as described therein. Certain parties to certain of these agreements have various relationships with the Company. For further information, see “Certain Relationships and Related Party Transactions” in the Prospectus.

Term Loan Credit Agreement Amendment

On August 1, 2017, Core & Main LP (“Core & Main”) entered into a Term Loan Credit Agreement (the “Term Loan Credit Agreement”), by and among Core & Main, JPMorgan Chase Bank, N.A., as administrative agent and collateral agent (the “Term Loan Agent”), and the several banks and other financial institutions from time to time party thereto, which provided for a senior secured term loan credit facility (the “Existing Term Loan Facility”) in an original aggregate principal amount of $1,075.0 million. On July 8, 2019, Core & Main amended the Term Loan Credit Agreement in order to, among other things, increase the aggregate principal amount of the Existing Term Loan Facility by $225.0 million. On July 27, 2021, Core & Main entered into a First Amendment (the “First Amendment”), by and among Core & Main, the several banks and other financial institutions party thereto, and JPMorgan Chase Bank, N.A., as administrative agent, which amended the Term Loan Credit Agreement in order to, among other things, enter into a new $1,500.0 million seven-year term loan facility (the “New Term Loan Facility”). As described further in the Prospectus, proceeds of the New Term Loan Facility were used to, among other things, (a) redeem the Senior Notes (as defined below) and the PIK Toggle Notes (as defined below), plus, in each case, accrued and unpaid interest, if any, at the applicable redemption price, as discussed below under Item1.02, (b) prepay the approximately $1,257.8 million outstanding under the Existing Term Loan Facility as of May 2, 2021, plus accrued and unpaid interest, if any, and (c) pay related fees, premiums and expenses. The New Term Loan Facility amortizes in nominal quarterly installments equal to 0.25% of the aggregate initial principal amount thereof per annum, with the remaining balance payable upon final maturity of the New Term Loan Facility on July 27, 2028.

The New Term Loan Facility bears annual interest at a floating rate measured by reference to, at Core & Main’s option, either (i) an adjusted London inter-bank offered rate, or “LIBOR,” (subject to a floor of 0.00%) plus an applicable margin of 2.50% per annum or (ii) an alternate base rate plus an applicable margin of 1.50% per annum.

The New Term Loan Facility may be prepaid at Core & Main’s option at any time, subject to minimum principal amount requirements. Prepayments of the New Term Loan Facility in connection with a repricing transaction (as defined in the Term Loan Credit Agreement) prior to January 27, 2022 are subject to a 1.00% prepayment premium. Prepayments may otherwise be made without premium or penalty (other than customary breakage costs).

Subject to certain exceptions, the New Term Loan Facility is subject to mandatory prepayment in an amount equal to:

 

   

100% of the net cash proceeds of (1) certain asset sales and (2) certain insurance recovery and condemnation events, subject to reduction to 50% and 0% if a specified secured leverage ratio target is met, and to the extent that the amount of such net cash proceeds exceeds the greater of $80,000,000 and 5.00% of Consolidated Tangible Assets (as defined in the Term Loan Credit Agreement);

 

   

the net cash proceeds of certain debt offerings; and

 

   

50% of annual excess cash flow (as defined in the Term Loan Credit Agreement), subject to reduction to 0% if a specified secured leverage ratio target is met, and to the extent that the amount of such percentage of excess cash flow exceeds $20.0 million.


The Term Loan Credit Agreement contains customary representations and warranties and customary affirmative and negative covenants. The negative covenants, among other things, limit or restrict the ability of Core & Main and its subsidiaries to: incur additional indebtedness; make dividends and other restricted payments; incur additional liens; consolidate, merge, sell or otherwise dispose of all or substantially all assets; make investments; transfer or sell assets; enter into restrictive agreements; change the nature of the business; and enter into certain transactions with affiliates.

Subject to certain conditions, without the consent of the then existing lenders (but subject to the receipt of commitments), the New Term Loan Facility may be expanded (or a new term loan facility, revolving credit facility or letter of credit facility added) by up to (i) the greater of (x) $400.0 million and (y) an amount equal to consolidated EBITDA for the four most recently ended fiscal quarters for which financial statements of Core & Main are available plus (ii) an unlimited amount either (x) as will not cause the consolidated secured leverage ratio after giving effect to the incurrence of such additional amount and any use of proceeds thereof to exceed 3.75 to 1.00 or (y) if incurred in connection with an acquisition or other investment permitted under the Term Loan Credit Agreement, the pro forma consolidated secured leverage ratio after giving effect to such incurrence and acquisition or investment does not exceed the consolidated secured leverage ratio in effect prior to such transactions. Amounts available pursuant to clause (ii) of the preceding sentence may be utilized prior to amounts under clause (i).

The obligations under the Term Loan Credit Agreement are guaranteed by Core & Main Midco, LLC and Core & Main Intermediate GP, LLC, and will be guaranteed by each direct and indirect future wholly-owned U.S. restricted subsidiary of Core & Main (if any), other than special purpose entities, subsidiaries of foreign subsidiaries, immaterial subsidiaries, unrestricted subsidiaries and certain other exceptions.

All obligations of Core & Main and each guarantor are secured by:

 

   

a perfected security interest in substantially all tangible and intangible assets of Core & Main and each subsidiary guarantor (other than ABL Priority Collateral (as defined below)), including the capital stock of each direct material U.S. subsidiary of Core & Main and each subsidiary guarantor, and the capital stock of Core & Main, and 65% of each series of capital stock of any non-U.S. subsidiary held directly by Core & Main or any subsidiary guarantor, and subject to certain customary exceptions (the “Term Loan Priority Collateral”), which security interest is senior to the security interest in the foregoing assets securing the ABL Facility (as defined below); and

 

   

a perfected security interest in the ABL Priority Collateral, which security interest is junior to the security interest in the ABL Priority Collateral securing the ABL Facility.

The terms of the First Amendment are substantially the same as the terms set forth in the forms of such agreement filed as an exhibit to the Registration Statement as described therein. A copy of the First Amendment is filed herewith as Exhibit 10.9 and incorporated herein by reference.


ABL Credit Agreement Amendment

On August 1, 2017, Core & Main entered into an ABL Credit Agreement (the “ABL Credit Agreement”), by and among Core & Main, the subsidiary borrowers from time to time party thereto, Citibank, N.A., as administrative agent and collateral agent (the “ABL Agent”), and the several banks and other financial institutions from time to time party thereto, which provided for an asset-based revolving credit facility of up to $500.0 million (the “ABL Facility”). On July 8, 2019, Core & Main entered into Amendment No. 1 to the ABL Credit Agreement, by and among Core & Main, the several banks and other financial institutions party thereto and the ABL Agent, which amended the ABL Credit Agreement in order to, among other things, increase the aggregate commitments under the ABL Facility by $200.0 million to $700.0 million overall. On July 27, 2021, Core & Main entered into Amendment No. 3 to the ABL Credit Agreement (“Amendment No. 3”), by and among Core & Main, the several banks and other financial institutions party thereto and the ABL Agent, which amended the ABL Credit Agreement in order to, among other things, (i) increase the aggregate commitments under the ABL Facility by $150.0 million to $850.0 million overall and (ii) extend the maturity of the ABL Facility to be for a new five-year maturity. Core & Main and, at Core & Main’s option, certain of Core & Main’s subsidiaries are the borrowers under the ABL Facility. As of July 27, 2021, there were no subsidiary borrowers under the ABL Facility. All borrowings under the ABL Facility mature on July 27, 2026. At July 27, 2021, following consummation of the IPO, there were no amounts drawn and $9.1 million of letters of credit issued under the ABL Facility.

Borrowing availability under the ABL Facility is determined by a monthly borrowing base collateral calculation that is based on specified percentages of the value of eligible inventory, eligible accounts receivable and eligible credit card receivables, less certain reserves and subject to certain other adjustments as set forth in the ABL Credit Agreement. Availability is reduced by issuance of letters of credit as well as any borrowings.

Loans outstanding under the ABL Facility bear interest at a floating rate measured by reference to, at Core & Main’s option, either (i) adjusted LIBOR (subject to a LIBOR floor of 0.00%) plus an applicable margin ranging from 1.25% to 1.75% per annum depending on the average daily excess availability under the ABL Facility or (ii) an alternate base rate plus an applicable margin ranging from 0.25% to 0.75% per annum depending on the average daily excess availability under the ABL Facility. Additionally, unused commitments under the ABL Facility are subject to a 0.25% per annum fee.

The ABL Credit Agreement contains customary representations and warranties and customary affirmative and negative covenants. The negative covenants, among other things, limit or restrict the ability of Core & Main and its subsidiaries to: incur additional indebtedness; make dividends and other restricted payments; incur additional liens; consolidate, merge, sell or otherwise dispose of all or substantially all assets; make investments and acquisitions; transfer or sell collateral; enter into restrictive agreements; change the nature of the business; and enter into certain transactions with affiliates. The negative covenants are subject to customary exceptions and also permit acquisitions, investments, mergers, consolidations and amalgamations, asset sales, dividends and other restricted payments, and sales of all or substantially all assets involving subsidiaries upon satisfaction of a “payment condition”. The payment condition is deemed satisfied upon 30-day specified availability and specified availability exceeding agreed upon thresholds and, in certain cases, the absence of specified events of default or known events of default and pro forma compliance with a consolidated fixed charge coverage ratio of 1.00 to 1.00.

Subject to certain conditions, without consent of the existing lenders (but subject to receipt of commitments), Core & Main is entitled to request additional revolving credit commitments or term loans under the ABL Facility, which will share in the borrowing base up to an amount such that the aggregate


amount of ABL commitments and term loans under the ABL Facility do not exceed the greater of (x) $1,350.0 million and (y) the aggregate borrowing base. Moreover, subject to certain conditions and the completion of certain additional documentation, the ABL Facility permits the creation of an asset-based revolving sub-facility (which, to the extent drawn, would reduce availability under the ABL Facility on a dollar-for-dollar basis) of up to $75.0 million for Canadian subsidiaries of Core & Main, which may be available to be drawn in U.S. Dollars or Canadian Dollars, and which may include a sub-facility for Canadian letters of credit up to an amount to be agreed.

The obligations under the ABL Credit Agreement are guaranteed by Core & Main Midco, LLC and Core & Main Intermediate GP, LLC, and will be guaranteed by each direct and indirect future wholly-owned U.S. restricted subsidiary of Core & Main (if any), other than special purpose entities, subsidiaries of foreign subsidiaries, immaterial subsidiaries, unrestricted subsidiaries and certain other exceptions.

All obligations of Core & Main and each guarantor are secured by:

 

   

a perfected security interest in all present and after-acquired inventory, accounts receivable, deposit accounts, securities accounts, and any cash or other assets in such accounts (and, to the extent evidencing or otherwise related to such items, all general intangibles, intercompany debt, insurance proceeds, letter of credit rights, commercial tort claims, chattel paper, instruments, supporting obligations, documents, investment property and payment intangibles) and the proceeds of any of the foregoing and all books and records relating to, or arising from, any of the foregoing, except to the extent such proceeds constitute Term Loan Priority Collateral, and subject to certain customary exceptions (the “ABL Priority Collateral”), which security interest is senior to the security interest in the foregoing assets securing the New Term Loan Facility; and

 

   

a perfected security interest in the Term Loan Priority Collateral, which security interest is junior to the security interest in the Term Loan Priority Collateral securing the New Term Loan Facility.

The ABL Credit Agreement includes a minimum consolidated fixed charge coverage ratio of 1.00 to 1.00, which is tested only when specified availability is less than 10.0% of the lesser of (x) the then applicable borrowing base and (y) the then aggregate effective commitments under the ABL Facility, and continuing until such time as specified availability has been in excess of such threshold for a period of 20 consecutive calendar days.

The terms of Amendment No. 3 are substantially the same as the terms set forth in the forms of such agreement filed as an exhibit to the Registration Statement as described therein. A copy of Amendment No. 3 is filed herewith as Exhibit 10.10 and incorporated herein by reference.

Item 1.02. Termination of a Material Definitive Agreement.

Consulting Agreement

In connection with the completion of the IPO, the consulting agreement, dated as of August 1, 2017, by and between Core & Main and Clayton, Dubilier & Rice, LLC (“CD&R”) was terminated pursuant to the Termination Agreement, dated as of July 27, 2021, a copy of which is filed as Exhibit 10.4 hereto and incorporated by reference herein.


Registration Rights Agreement

In connection with the completion of the IPO, the registration rights agreement, dated as of August 1, 2017, by and among Core & Main and certain affiliates of CD&R was terminated pursuant to the Termination Agreement, dated as of July 27, 2021, by and between Core & Main, the Company and CD&R WW, LLC, a copy of which is filed as Exhibit 10.5 hereto and incorporated by reference herein.

Satisfaction and Discharge of 6.125% Senior Notes due 2025

On July 27, 2021, Core & Main issued a Notice of Full Redemption to the holders of all of its issued and outstanding 6.125% Senior Notes due 2025 (the “Senior Notes”) issued under the indenture (as amended and supplemented, the “Senior Notes Indenture”), dated as of August 1, 2017, among Core & Main (formerly known as HD Supply Waterworks, Ltd. (as successor by merger to CD&R Waterworks Merger Sub, LLC)) and Wilmington Trust, National Association, as trustee (the “Trustee”), whereby Core & Main elected to redeem all $750,000,000 aggregate principal amount outstanding of the Senior Notes on August 15, 2021. The redemption date of the Senior Notes is August 15, 2021. The redemption price with respect to the Senior Notes is equal to 101.531% of the principal amount thereof, plus accrued but unpaid interest thereon to but not including the redemption date (the “Senior Notes Redemption Price”). This report does not constitute a notice of redemption under the Senior Notes Indenture nor an offer to tender for, or purchase, any notes or any other security.

On July 27, 2021, Core & Main irrevocably caused to be deposited with the Trustee funds solely for the benefit of the holders of the Senior Notes in an amount sufficient to pay the Senior Notes Redemption Price and all other sums payable under the Senior Notes Indenture. The Trustee executed and delivered an acknowledgement of satisfaction and discharge, dated as of July 27, 2021, with respect to the satisfaction and discharge of the Senior Notes and the Senior Notes Indenture.

Satisfaction and Discharge of 8.625%/9.375% Senior PIK Toggle Notes due 2024

On July 15, 2021, Holdings issued a Notice of Conditional Full Redemption to the holders of all of its issued and outstanding 8.625%/9.375% Senior PIK Toggle Notes due 2024 (the “PIK Toggle Notes”) issued under the indenture (as amended and supplemented, the “PIK Toggle Notes Indenture”), dated as of September 16, 2019, among Holdings and the Trustee, whereby Holdings elected to redeem all $300,000,000 aggregate principal amount outstanding of the PIK Toggle Notes, subject to the completion of the IPO with sufficient net cash proceeds to redeem the PIK Toggle Notes and satisfaction of certain other conditions. The redemption date of the PIK Toggle Notes is July 27, 2021 or, if the conditions precedent are not satisfied on or about July 27, 2021, such later date (but not later than September 8, 2021) as the conditions precedent are satisfied. The redemption price with respect to the PIK Toggle Notes is equal to 102.000% of the principal amount thereof, plus accrued but unpaid interest thereon to but not including the redemption date (the “PIK Toggle Notes Redemption Price”). This report does not constitute a notice of redemption under the PIK Toggle Notes Indenture nor an offer to tender for, or purchase, any notes or any other security.

On July 27, 2021, Holdings irrevocably caused to be deposited with the Trustee funds solely for the benefit of the holders of the PIK Toggle Notes in an amount sufficient to pay PIK Toggle Notes Redemption Price and all other sums payable under the PIK Toggle Notes Indenture. The Trustee executed and delivered an acknowledgement of satisfaction and discharge, dated as of July 27, 2021, with respect to the satisfaction and discharge of the PIK Toggle Notes and the PIK Toggle Notes Indenture.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information contained in Item 1.01 concerning Core & Main’s direct financial obligations under the First Amendment and Amendment No. 3 is incorporated herein by reference.


Item 3.02. Unregistered Sales of Equity Securities.

On July 22, 2021, pursuant to the Master Reorganization Agreement, the Company issued an aggregate of 119,950,882 shares of Class A Common Stock to the Former Limited Partners (defined and described in the Prospectus), including as a result of the Blocker Mergers (defined and described in the Prospectus), in exchange for Partnership Interests (as defined and described in the Prospectus) in Holdings, together with the retirement of a corresponding number of shares of Class B common stock, par value $0.01 per share, of the Company, held by such Former Limited Partners.

The issuances of the shares of Class A Common Stock described in the foregoing paragraph were made in reliance on Section 4(a)(2) of the Securities Act as transactions by an issuer not involving a public offering. No underwriters were involved in the above transactions.

Item 3.03. Material Modifications to Rights of Security Holdings.

The description in Item 5.03 below of the Amended and Restated Certificate of Incorporation and Amended and Restated By-laws is incorporated by reference herein.

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

2021 Omnibus Equity Incentive Plan

Effective July 22, 2021, the Company’s board of directors adopted and approved the Company’s 2021 Omnibus Equity Incentive Plan (the “Omnibus Equity Incentive Plan”). The terms of the Omnibus Equity Incentive Plan are substantially the same as the terms set forth in the form thereof filed as an exhibit to the Registration Statement as described therein. A copy of the Omnibus Equity Incentive Plan is filed herewith as Exhibit 10.11 and incorporated herein by reference.

Employee Stock Purchase Plan

Effective July 22, 2021, the Company adopted and approved the Employee Stock Purchase Plan (the “ESPP”). The terms of the ESPP are substantially the same as the terms set forth in the form thereof filed as an exhibit to the Registration Statement as described therein. A copy of the ESPP is filed herewith as Exhibit 10.12 and incorporated herein by reference.

Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

On July 22, 2021, in connection with the IPO, the Company amended and restated its certificate of incorporation (the “Amended and Restated Certificate of Incorporation”), and the Company’s amended and restated by-laws (the “Amended and Restated By-laws”) became effective, as previously reported in the Registration Statement. The descriptions and forms of the Amended and Restated Certificate of Incorporation and Amended and Restated By-laws are substantially the same as the descriptions and forms set forth in and filed as exhibits to the Registration Statement. The Company’s Amended and Restated Certificate of Incorporation and Amended and Restated By-laws are filed as Exhibits 3.1 and 3.2 hereto, respectively, and incorporated by reference herein.


Item 9.01. Financial Statements and Exhibits

(d)     Exhibits

 

Exhibit No.

  

Description

2.1*    Master Reorganization Agreement, dated as of July 22, 2021, by and among, Core  & Main, Inc., CD&R Associates X Waterworks, L.P., CD&R Waterworks Holdings GP, Ltd., CD&R WW Holdings, L.P., CD&R Waterworks Holdings, L.P., Core & Main Management Feeder, LLC, Core  & Main GP, LLC, CD&R Plumb Buyer, LLC, Core  & Main Holdings, LP, CD&R Fund X Waterworks B1, L.P., CD&R Fund X-A Waterworks B, L.P., CD&R Fund X Advisor Waterworks B, L.P., CD&R WW Holdings, LLC, CD&R WW, LLC, CD&R WW Advisor, LLC, Brooks Merger Sub 1, Inc., Brooks Merger Sub 2, Inc. and CD&R Waterworks Holdings, LLC.
3.1*    Amended and Restated Certificate of Incorporation of Core & Main, Inc.
3.2*    Amended and Restated By-laws of Core & Main, Inc.
10.1*    Second Amended and Restated Agreement of Limited Partnership of Core & Main Holdings, LP.
10.2*    Registration Rights Agreement, dated as of July 27, 2021, by and among Core  & Main, Inc., CD&R Waterworks Holdings, LLC, CD&R Fund X Advisor Waterworks B, L.P., CD&R Fund X Waterworks B1, L.P. and CD&R Fund X-A Waterworks B, L.P.
10.3*    Stockholders Agreement, dated as of July 22, 2021, by and among Core  & Main, Inc., CD&R Waterworks Holdings, LLC, CD&R Fund X Advisor Waterworks B, L.P., CD&R Fund X Waterworks B1, L.P., and CD&R Fund X-A Waterworks B, L.P.
10.4*    Termination Agreement, dated as of July 27, 2021, by and between Core & Main LP and Clayton, Dubilier & Rice, LLC.
10.5*    Termination Agreement, dated as of July 27, 2021, by and among Core & Main LP, Core & Main, Inc. and CD&R WW, LLC.
10.6*    Former Limited Partner Tax Receivable Agreement, dated as of July 22, 2021, by and among Core & Main, Inc., Core  & Main Holdings, LP, CD&R Fund X Advisor Waterworks B, L.P., CD&R Fund X Waterworks B1, L.P. and CD&R Fund X-A Waterworks B, L.P.
10.7*    Continuing Limited Partner Tax Receivable Agreement, dated as of July 22, 2021, by and among Core & Main, Inc., Core  & Main Holdings, LP, CD&R Waterworks Holdings, LLC, and Core & Main Management Feeder, LLC.
10.8*    Exchange Agreement, dated as of July 22, 2021 by and among Core & Main, Inc., Core & Main Holdings, LP, CD&R Waterworks Holdings, LLC and Core  & Main Management Feeder, LLC.
10.9*    First Amendment to the Credit Agreement, dated as of July 27, 2021, by and among Core  & Main LP, the several banks and other financial institutions party thereto and JPMorgan Chase Bank, N.A., as administrative agent.



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Core & Main, Inc.
By:  

/s/ Stephen O. LeClair

Name:   Stephen O. LeClair
Title:   Chief Executive Officer

Date: July 28, 2021

EX-2.1 2 d185428dex21.htm EX-2.1 EX-2.1

Exhibit 2.1

EXECUTION VERSION

MASTER REORGANIZATION AGREEMENT

This MASTER REORGANIZATION AGREEMENT (this “Agreement”) is entered into on this 22nd day of July 2021, by and among each of the following entities (each, a “Party,” and collectively, the “Parties”): CD&R Associates X Waterworks, L.P., a Cayman Islands exempted limited partnership (“CD&R Associates X Waterworks”), CD&R Waterworks Holdings GP, Ltd., a Cayman Islands exempted company (“CD&R Waterworks Holdings GP”), CD&R WW Holdings, L.P., a Delaware limited partnership (“CD&R WW Holdings LP”), CD&R Waterworks Holdings, L.P., a Delaware limited partnership (“CD&R Waterworks Holdings”), CD&R Waterworks Holdings, LLC, a Delaware limited liability company (“CD&R Waterworks LLC”), Core & Main Management Feeder, LLC, a Delaware limited liability company (“C&M Management Feeder”), Core & Main GP, LLC, a Delaware limited liability company (“C&M GP”), CD&R Plumb Buyer, LLC, a Delaware limited liability company (“CD&R Plumb Buyer”), Core & Main Holdings, LP, a Delaware limited partnership (“C&M Holdings”), CD&R Fund X Advisor Waterworks B, L.P., a Cayman Islands exempted limited partnership, CD&R Fund X Waterworks B1, L.P., a Cayman Islands exempted limited partnership (“CD&R Fund X Waterworks B1”), CD&R Fund X-A Waterworks B, L.P., a Cayman Islands exempted limited partnership (“CD&R Fund X-A Waterworks B”), CD&R WW Holdings, LLC, a Delaware limited liability company (“CD&R WW Holdings”), CD&R WW, LLC, a Delaware limited liability company (“CD&R WW”), CD&R WW Advisor, LLC, a Delaware limited liability company (“CD&R WW Advisor”), Brooks Merger Sub 1, Inc., a Delaware corporation (“Brooks Merger Sub 1”), Brooks Merger Sub 2, Inc., a Delaware corporation (“Brooks Merger Sub 2”), and Core & Main, Inc., a Delaware corporation (“PubCo”).

RECITALS

WHEREAS, in connection with the proposed initial public offering of PubCo (the “IPO”), the Parties desire to effect an organizational restructuring of certain of their affiliates and direct and indirect subsidiaries (including certain affiliates and/or subsidiaries to be formed as part of such organizational restructuring) through a series of sequential transactions as more fully set forth herein (each such transaction, a “Restructuring Step” and such transactions together, the “Restructuring”);

WHEREAS, in connection with and prior to the Restructuring, the partners of C&M Holdings entered into an amended and restated Agreement of Limited Partnership of C&M Holdings (the “A&R LPA”), which provided for, among other things, the reclassification of all of C&M Holdings’ outstanding units and profits interests into limited partner interests (the “LP Interest”) and general partner interests (the “GP Interest” and together with the LP Interest, the “Reclassification”);

WHEREAS, in connection with the Restructuring, CD&R Waterworks Holdings desires and intends to contribute, transfer, assign and convey all of the limited liability company interests of CD&R Plumb Buyer to CD&R Waterworks LLC (the “CD&R Waterworks LLC CD&R Waterworks Holdings Contribution”) and CD&R Waterworks LLC desires and intends to accept the CD&R Waterworks LLC CD&R Waterworks Holdings Contribution and to be admitted as a substitute member of CD&R Plumb Buyer in connection therewith;


WHEREAS, in connection with the Restructuring and following the CD&R Waterworks LLC CD&R Waterworks Holdings Contribution, CD&R Plumb Buyer desires and intends to distribute, transfer, assign and convey the LP Interests of C&M Holdings set forth opposite such entity’s name on Schedule 3 to CD&R Waterworks LLC (the “CD&R Waterworks LLC CD&R Plumb Distribution”) and CD&R Waterworks LLC desires and intends to accept the CD&R Waterworks LLC CD&R Plumb Distribution and to be admitted as a substitute limited partner in connection therewith;

WHEREAS, immediately following the CD&R Waterworks LLC CD&R Plumb Distribution, CD&R Waterworks LLC desires and intends to distribute, transfer, assign and convey all of the limited liability company interests of CD&R Plumb Buyer to CD&R Waterworks Holdings (the “CD&R Waterworks Holdings CD&R Waterworks LLC Distribution”) and CD&R Waterworks Holdings desires and intends to accept the CD&R Waterworks Holdings CD&R Waterworks LLC Distribution and to be admitted as a substitute member of CD&R Plumb Buyer in connection therewith;

WHEREAS, immediately following the CD&R Waterworks Holdings CD&R Waterworks LLC Distribution and in connection with the Restructuring, CD&R Plumb Buyer desires and intends to distribute, transfer, assign and convey the LP Interests of C&M Holdings set forth opposite such entity’s name on Schedule 5A to CD&R Waterworks Holdings (the “CD&R Waterworks Holdings CD&R Plumb Distribution”) and CD&R Waterworks Holdings desires and intends to accept the CD&R Waterworks Holdings CD&R Plumb Distribution and to be admitted as a substitute limited partner in connection therewith;

WHEREAS, simultaneously with the CD&R Waterworks Holdings CD&R Plumb Distribution, C&M GP desires and intends to distribute, transfer, assign and convey the LP Interests of C&M Holdings set forth opposite such entity’s name on Schedule 5A to CD&R WW Holdings LP (the “C&M GP Distribution,” together with the CD&R Waterworks Holdings CD&R Plumb Distribution, the “Step 5A Distributions”) and CD&R WW Holdings LP desires and intends to accept the C&M GP Distribution and to be admitted as a substitute limited partner in connection therewith;

WHEREAS, immediately following the Step 5A Distributions, CD&R WW Holdings LP desires and intends to distribute, transfer, assign and convey to (i) CD&R Waterworks Holdings GP the LP Interests of C&M Holdings set forth opposite such entity’s name on Schedule 5B (the “CD&R Waterworks Holdings GP CD&R WW Holdings LP Distribution”), (ii) CD&R Associates X Waterworks the LP Interests of C&M Holdings set forth opposite such entity’s name on Schedule 5B (the “CD&R Associates X Waterworks CD&R WW Holdings LP Distribution”) and (iii) CD&R WW (x) the LP Interests of C&M Holdings set forth opposite such entity’s name on Schedule 5B (the “CD&R WW CD&R WW Holdings LP Distribution” and (y) all of the equity interests of C&M GP (the “CD&R WW C&M GP Distribution” and collectively with the CD&R Waterworks Holdings GP CD&R WW Holdings LP Distribution, the CD&R Associates X Waterworks CD&R WW Holdings LP Distribution and the CD&R WW CD&R WW Holdings LP Distribution, the “Step 5B Distributions”) and each of CD&R Waterworks Holdings GP, CD&R Associates X Waterworks and CD&R WW desires and intends to accept the Step 5B Distributions and to be admitted as substitute limited partners of C&M Holdings and, with respect to CD&R WW, to be admitted as a substitute member of C&M GP, in connection therewith;

 

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WHEREAS, immediately following the Step 5A Distributions and simultaneously with the Step 5B Distributions, CD&R Waterworks Holdings desires and intends to distribute, transfer, assign and convey to (i) CD&R WW Advisor the LP Interests of C&M Holdings set forth opposite such entity’s name on Schedule 5C (the “CD&R WW Advisor CD&R Waterworks Holdings Distribution”), (ii) CD&R WW Holdings (X) the LP Interests of C&M Holdings set forth opposite such entity’s name on Schedule 5C (the “CD&R WW Holdings CD&R Waterworks Holdings LP Distribution”) and (Y) all of the equity of CD&R Plumb Buyer (the “CD&R WW Holdings CD&R Waterworks Holdings Plumb Distribution”), and (iii) CD&R Waterworks Holdings GP the LP Interests of C&M Holdings set forth opposite such entity’s name on Schedule 5C (the “CD&R Waterworks Holdings GP CD&R Waterworks Holdings Distribution” and collectively with the CD&R WW Advisor CD&R Waterworks Holdings Distribution, the CD&R WW Holdings CD&R Waterworks Holdings LP Distribution and the CD&R WW Holdings CD&R Waterworks Holdings Plumb Distribution, the “Step 5C Distributions”) and each of CD&R WW Advisor, CD&R WW Holdings and CD&R Waterworks Holdings GP desires and intends to accept the Step 5C Distributions and to be admitted as substitute limited partners of C&M Holdings and, with respect to CD&R WW Holdings, to be admitted as a substitute member of CD&R Plumb Buyer, in connection therewith;

WHEREAS, following the Step 5B Distributions, CD&R WW Holdings LP will be dissolved and wound up;

WHEREAS, immediately following the Step 5A Distributions, the Step 5B Distributions and the Step 5C Distributions, C&M Holdings desires and intends to distribute, transfer, assign and convey to (i) C&M Management Feeder the shares of Class B common stock of PubCo (“Class B Shares of PubCo”) set forth opposite such entity’s name on Schedule 7(a) (the “C&M Management Feeder C&M Holdings Distribution”), (ii) CD&R Waterworks LLC the Class B Shares of PubCo set forth opposite such entity’s name on Schedule 7(a) (the “CD&R Waterworks LLC C&M Holdings Distribution”), (iii) CD&R Waterworks Holdings GP the Class B Shares of PubCo set forth opposite such entity’s name on Schedule 7(a) (the “CD&R Waterworks Holdings GP C&M Holdings Distribution”), (iv) CD&R WW Advisor the Class B Shares of PubCo set forth opposite such entity’s name on Schedule 7(a) (the “CD&R WW Advisor C&M Holdings Distribution”), (v) CD&R WW Holdings the Class B Shares of PubCo set forth opposite such entity’s name on Schedule 7(a) (the “CD&R WW Holdings C&M Holdings Distribution”) and (vi) CD&R Associates X Waterworks the Class B Shares of PubCo set forth opposite such entity’s name on Schedule 7(a) (the “CD&R Associates X Waterworks C&M Holdings Distribution,” and collectively with the C&M Management Feeder C&M Holdings Distribution, the CD&R Waterworks LLC C&M Holdings Distribution, the CD&R Waterworks Holdings GP C&M Holdings Distribution, the CD&R WW Advisor C&M Holdings Distribution and the CD&R WW Holdings C&M Holdings Distribution, the “Step 7(a) Distributions”) and each of C&M Management Feeder, CD&R Waterworks LLC, CD&R Waterworks Holdings GP, CD&R WW Advisor, CD&R WW Holdings and CD&R Associates X Waterworks desires and intends to accept the Step 7(a) Distributions;

WHEREAS, immediately following the Step 7(a) Distributions, (i) CD&R Waterworks LLC desires and intends to contribute, transfer, assign and convey the LP Interests of C&M Holdings and to transfer and surrender the Class B Shares of PubCo set forth opposite such entity’s name on Schedule 7(b)(i) to PubCo (the “CD&R Waterworks LLC Step 7(b)(i) Contribution”) in exchange for an amount of newly issued shares of Class A common stock of PubCo (“Class A Shares of PubCo”) set forth opposite such entity’s name on Schedule 7(b)(i) hereto (such shares, the “CD&R Waterworks LLC Step 7(b)(i) PubCo Subscription Shares”) and (ii) C&M Management Feeder desires and intends to contribute, transfer, assign and convey the LP Interests of

 

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C&M Holdings and to transfer and surrender the Class B Shares of PubCo set forth opposite such entity’s name on Schedule 7(b)(i) to PubCo (the “Feeder Step 7(b)(i) Contribution” and together with the CD&R Waterworks LLC Step 7(b)(i) Contribution, the “Step 7(b)(i) Contributions”) in exchange for an amount of newly issued Class A Shares of PubCo set forth opposite such entity’s names on Schedule 7(b)(i) hereto (such shares, the “Feeder Step 7(b)(i) PubCo Subscription Shares” and together with the CD&R Waterworks LLC Step 7(b)(i) PubCo Subscription Shares, the “Step 7(b)(i) PubCo Subscription Shares”), and PubCo desires to accept the Step 7(b)(i) Contributions and to be admitted a substitute limited partner of C&M Holdings in connection therewith and issue, sell and deliver the Step 7(b)(i) PubCo Subscription Shares to CD&R Waterworks LLC and C&M Management Feeder in the number with respect to CD&R Waterworks LLC and C&M Management Feeder set forth opposite each such entity’s name on Schedule 7(b)(i) attached hereto (the “Step 7(b)(i) PubCo Subscription,” and together with the Step 7(b)(i) Contributions, the “Step 7(b)(i) Contribution and Subscription”);

WHEREAS, simultaneously with the Step 7(b)(i) Contribution and Subscription, CD&R Waterworks Holdings GP desires and intends to contribute, transfer, assign and convey the LP Interests of C&M Holdings and to transfer and surrender the Class B Shares of PubCo set forth opposite such entity’s name on Schedule 7(b)(ii) to PubCo (the “Step 7(b)(ii) Contribution”) in exchange for an amount of newly issued Class A Shares of PubCo set forth opposite such entity’s name on Schedule 7(b)(ii) hereto (such shares, the “Step 7(b)(ii) PubCo Subscription Shares”), and PubCo desires and intends to accept the Step 7(b)(ii) Contribution and to be admitted as a substitute limited partner of C&M Holdings in connection therewith and issue, sell and deliver the Step 7(b)(ii) PubCo Subscription Shares to CD&R Waterworks Holdings GP in the number with respect to CD&R Waterworks Holdings GP set forth opposite such entity’s name on Schedule 7(b)(ii) attached hereto (the “Step 7(b)(ii) PubCo Subscription,” and together with the Step 7(b)(ii) Contribution, the “Step 7(b)(ii) Contribution and Subscription”);

WHEREAS, simultaneously with the Step 7(b)(i) Contribution and Subscription and the Step 7(b)(ii) Contribution and Subscription, CD&R Associates X Waterworks desires and intends to contribute, transfer, assign and convey the LP Interests of C&M Holdings and to transfer and surrender the Class B Shares of PubCo set forth opposite such entity’s name on Schedule 7(b)(iii) to PubCo (the “Step 7(b)(iii) Contribution”) in exchange for an amount of newly issued Class A Shares of PubCo set forth opposite such entity’s name on Schedule 7(b)(iii) hereto (such shares, the “Step 7(b)(iii) PubCo Subscription Shares”), and PubCo desires and intends to accept the Step 7(b)(iii) Contribution and to be admitted as a substitute limited partner of C&M Holdings in connection therewith and issue, sell and deliver the Step 7(b)(iii) PubCo Subscription Shares to CD&R Associates X Waterworks in the number with respect to CD&R Associates X Waterworks set forth opposite such entity’s name on Schedule 7(b)(iii) attached hereto (the “Step 7(b)(iii) PubCo Subscription,” and together with the Step 7(b)(iii) Contribution, the “Step 7(b)(iii) Contribution and Subscription,” and collectively with the Step 5A Distributions, the Step 5B Distributions, the Step 5C Distributions, the Step 7(a) Distributions, the Step 7(b)(i) Contribution and Subscription, the Step 7(b)(ii) Contribution and Subscription and the Step 7(b)(iii) Contribution and Subscription, the “Distributions, Contributions and Subscriptions”);

 

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WHEREAS, immediately following the Distributions, Contributions and Subscriptions, CD&R Plumb Buyer will be merged with and into CD&R WW Holdings in accordance with the DLLCA (as defined herein) and this Agreement (the “Step 9(a)(i) Merger”) with CD&R WW Holdings being the surviving company in the Step 9(a)(i) Merger, and, in connection therewith, CD&R WW Holdings will be admitted as a substitute general partner of C&M Holdings;

WHEREAS, simultaneously with the Step 9(a)(i) Merger, C&M GP will be merged with and into CD&R WW in accordance with the DLLCA and this Agreement (the “Step 9(a)(ii) Merger”) with CD&R WW being the surviving company in the Step 9(a)(ii) Merger;

WHEREAS, immediately following the Step 9(a)(i) Merger and the Step 9(a)(ii) Merger, Brooks Merger Sub 1 will be merged with and into CD&R WW Advisor in accordance with the DGCL (as defined herein) and DLLCA, as applicable, and this Agreement (the “Step 10(a)(i) Merger”) with CD&R WW Advisor being the surviving company in the Step 10(a)(i) Merger, and in consideration thereof, the former equity holders of CD&R WW Advisor will receive Class A Shares of PubCo subject to, and in accordance with, the terms and conditions hereof;

WHEREAS, simultaneously with the Step 10(a)(i) Merger, Brooks Merger Sub 2 will be merged with and into CD&R WW Holdings in accordance with the DGCL and DLLCA, as applicable, and this Agreement (the “Step 10(a)(ii) Merger”) with CD&R WW Holdings being the surviving company in the Step 10(a)(ii) Merger, and in consideration thereof, the former equity holders of CD&R WW Holdings will receive Class A Shares of PubCo subject to, and in accordance with, the terms and conditions hereof;

WHEREAS, immediately following the Step 10(a)(i) Merger and the Step 10(a)(ii) Merger, (i) PubCo, C&M Holdings and each Partnership Interest Holder (as defined in the Continuing LP TRA (as defined below)) will enter into a Tax Receivable Agreement (the “Continuing LP TRA”) and (ii) PubCo, C&M Holdings and each Exchanged Owner (as defined in the Former LP TRA (as defined below)) will enter into a Tax Receivable Agreement (the “Former LP TRA”);

WHEREAS, immediately following the Step 10(a)(i) Merger and the Step 10(a)(ii) Merger, CD&R WW Advisor will be merged with and into PubCo in accordance with the DGCL and DLLCA, as applicable, and this Agreement (the “Step 11(a)(i) Merger”) with PubCo being the surviving company in the Step 11(a)(i) Merger, and PubCo will be admitted as a substitute limited partner of C&M Holdings in connection therewith;

WHEREAS, simultaneously with the Step 11(a)(i) Merger, CD&R WW Holdings will be merged with and into PubCo in accordance with the DGCL and DLLCA, as applicable, and this Agreement (the “Step 11(a)(ii) Merger,” and collectively with the Step 9(a)(i) Merger, the Step 9(a)(ii) Merger, the Step 10(a)(i) Merger, the Step 10(a)(ii) Merger and the Step 11(a)(i) Merger, the “Mergers”) with PubCo being the surviving company in the Step 11(a)(ii) Merger, and PubCo will be admitted as a substitute limited partner and a substitute general partner of C&M Holdings and a substitute member of CD&R WW in connection therewith;

WHEREAS, immediately following the Mergers, CD&R Waterworks Holdings GP desires and intends to contribute, transfer, assign and convey the Class A Shares of PubCo set forth on Schedule 12(i) to (i) CD&R Fund X Waterworks B1 (the “CD&R Fund X Waterworks B1 CD&R Waterworks Holdings GP Contribution”) and CD&R Fund X Waterworks B1 intends to accept the CD&R Fund X Waterworks B1 CD&R Waterworks Holdings GP

 

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Contribution and (ii) CD&R Fund X-A Waterworks B (the “CD&R Fund X-A Waterworks B CD&R Waterworks Holdings GP Contribution” and together with the CD&R Fund X Waterworks B1 CD&R Waterworks Holdings GP Contribution, the “Step 12(i) Contributions”) and CD&R Fund X-A Waterworks B intends to accept the CD&R Fund X-A Waterworks B CD&R Waterworks Holdings GP Contribution;

WHEREAS, simultaneously with the Step 12(i) Contributions, CD&R Associates X Waterworks desires and intends to contribute, transfer, assign and convey the Class A Shares of PubCo set forth on Schedule 12(ii) to (i) CD&R Fund X Waterworks B1 (the “CD&R Fund X Waterworks B1 CD&R Associates X Waterworks Contribution”) in exchange for a newly issued limited partner interest in CD&R Fund X Waterworks B1 and intends to be admitted as a limited partner of CD&R Fund X Waterworks B1 in connection therewith and CD&R Fund X Waterworks B1 intends to accept the CD&R Fund X Waterworks B1 CD&R Associates X Waterworks Contribution and (ii) CD&R Fund X-A Waterworks B (the “CD&R Fund X-A Waterworks B CD&R Associates X Waterworks Contribution” and together with the CD&R Fund X Waterworks B1 CD&R Associates X Waterworks Contribution, the “Step 12(ii) Contributions”) in exchange for a newly issued limited partner interest of CD&R Fund X-A Waterworks B and intends to be admitted as a limited partner of CD&R Fund X-A Waterworks B in connection therewith and CD&R Fund X-A Waterworks B intends to accept the CD&R Fund X-A Waterworks B CD&R Associates X Waterworks Contribution;

WHEREAS, (i) the general partner of CD&R Waterworks Holdings has approved the CD&R Waterworks LLC CD&R Waterworks Holdings Contribution, (ii) the manager of CD&R Plumb Buyer has approved the CD&R Waterworks LLC CD&R Plumb Distribution, the CD&R Waterworks Holdings CD&R Plumb Distribution and the Step 9(a)(i) Merger; (iii) the manager of CD&R Waterworks LLC has approved the CD&R Waterworks Holdings CD&R Waterworks LLC Distribution, (iv) the manager of C&M GP has approved the C&M GP Distribution and the Step 9(a)(ii) Merger, (v) the general partner of CD&R WW Holdings LP has approved the Step 5B Distributions, (vi) the general partner of CD&R Waterworks Holdings has approved the Step 5C Distributions, (vii) the general partners of C&M Holdings have approved the Step 7(a) Distributions, (viii) the manager of CD&R Waterworks LLC has approved the Step 7(b)(i) Contribution and Subscription, (ix) the manager of C&M Management Feeder has approved the Step 7(b)(i) Contribution and Subscription, (x) the board of directors of CD&R Waterworks Holdings GP has approved the Step 7(b)(ii) Contribution and Subscription and the Step 12(i) Contributions, (xi) the general partner of CD&R Associates X Waterworks has approved the Step 7(b)(iii) Contribution and Subscription and the Step 12(ii) Contributions, (xii) the general partner of CD&R Fund X Waterworks B1 has approved the CD&R Fund X Waterworks B1 CD&R Waterworks Holdings GP Contribution and the CD&R Fund X Waterworks B1 CD&R Associates X Waterworks Contribution; (xiii) the general partner of CD&R Fund X-A Waterworks B has approved the CD&R Fund X-A Waterworks B CD&R Waterworks Holdings GP Contribution and the CD&R Fund X-A Waterworks B CD&R Associates X Waterworks Contribution; (xiv) the board of directors of PubCo has authorized each of the issuances of Class A Shares of PubCo set forth in this Agreement; (xv) the manager of CD&R WW has approved the Step 9(a)(ii) Merger; (xvi) the manager of CD&R WW Advisor has approved the Step 10(a)(i) Merger and the Step 11(a)(i) Merger; (xvi) the board of directors of Brooks Merger Sub 1 has authorized, subject to receipt of stockholder approval thereof, the Step 10(a)(i) Merger; (xvii) the manager of CD&R WW Holdings has approved the Step 9(a)(i), the Step 10(a)(ii) Merger and the Step 11(a)(ii) Merger; (xviii) the board of directors of Brooks Merger Sub 2 has authorized, subject to the receipt of stockholder approval thereof, the Step 10(a)(ii) Merger; (xix) the board of directors of PubCo has authorized, subject to the receipt of stockholder approval thereof, the Step 11(a)(i) Merger and (xx) the board of directors of PubCo has authorized, subject to the receipt of stockholder approval thereof, the Step 11(a)(ii) Merger;

 

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WHEREAS, this Agreement shall constitute an “agreement of merger” with respect to the Mergers for all purposes of the DLLCA and the DGCL, as applicable;

WHEREAS, to the extent a Party is making any distribution pursuant to this Agreement, such distribution is in compliance with all applicable laws (including, without limitation, Section 18-607 of the DLLCA and Section 17-607 of the Delaware Revised Uniform Limited Partnership Act (6 Del. C. § 17-101 et seq.)); and

WHEREAS, the Parties intend for the Restructuring to be completed as of the date hereof (except as otherwise provided herein).

NOW, THEREFORE, in consideration of the mutual promises and covenants made herein and of the mutual benefits to be derived herefrom, the parties agree as follows:

 

1.

CD&R Waterworks LLC CD&R Waterworks Holdings Contribution. In the order and at the time set forth in the Recitals:

 

  1.1.

CD&R Waterworks Holdings hereby makes the CD&R Waterworks LLC CD&R Waterworks Holdings Contribution to CD&R Waterworks LLC.

 

  1.2.

Simultaneously with the CD&R Waterworks LLC CD&R Waterworks Holdings Contribution, CD&R Waterworks LLC hereby accepts the CD&R Waterworks LLC CD&R Waterworks Holdings Contribution and is hereby admitted as a substitute member of CD&R Plumb Buyer in connection therewith.

 

  1.3.

Immediately following the admission of CD&R Waterworks LLC as a substitute member of CD&R Plumb Buyer pursuant to Section 1.2 above, CD&R Waterworks Holdings hereby ceases to be a member of CD&R Plumb Buyer with respect to the membership interests in CD&R Plumb Buyer so transferred, and CD&R Plumb Buyer is hereby continued without dissolution.

 

2.

CD&R Waterworks LLC CD&R Plumb Distribution. In the order and at the time set forth in the Recitals:

 

  2.1.

CD&R Plumb Buyer hereby makes the CD&R Waterworks LLC CD&R Plumb Distribution to CD&R Waterworks LLC.

 

  2.2.

Simultaneously with the CD&R Waterworks LLC CD&R Plumb Distribution, CD&R Waterworks LLC hereby accepts the CD&R Waterworks LLC CD&R Plumb Distribution and is hereby admitted as a substitute limited partner of C&M Holdings in connection therewith.

 

  2.3.

Immediately following the admission of CD&R Waterworks LLC as a substitute limited partner of C&M Holdings pursuant to Section 2.2 above, CD&R Plumb Buyer hereby ceases to be a limited partner of C&M Holdings with respect to the partnership interests in C&M Holdings so transferred, and C&M Holdings is hereby continued without dissolution.

 

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3.

CD&R Waterworks Holdings CD&R Waterworks LLC Distribution. In the order and at the time set forth in the Recitals:

 

  3.1.

CD&R Waterworks LLC hereby makes the CD&R Waterworks Holdings CD&R Waterworks LLC Distribution to CD&R Waterworks Holdings.

 

  3.2.

Simultaneously with the CD&R Waterworks Holdings CD&R Waterworks LLC Distribution, CD&R Waterworks Holdings hereby accepts the CD&R Waterworks Holdings CD&R Waterworks LLC Distribution and is hereby admitted as a substitute member of CD&R Plumb Buyer in connection therewith.

 

  3.3.

Immediately following the admission of CD&R Waterworks Holdings as a substitute member of CD&R Plumb Buyer pursuant to Section 3.2 above, CD&R Waterworks LLC hereby ceases to be a member of CD&R Plumb Buyer with respect to the membership interests in CD&R Plumb Buyer so transferred, and CD&R Plumb Buyer is hereby continued without dissolution.

 

4.

CD&R Waterworks Holdings CD&R Plumb Distribution. In the order and at the time set forth in the Recitals:

 

  4.1.

CD&R Plumb Buyer hereby makes the CD&R Waterworks Holdings CD&R Plumb Distribution to CD&R Waterworks Holdings.

 

  4.2.

Simultaneously with the CD&R Waterworks Holdings CD&R Plumb Distribution, CD&R Waterworks Holdings hereby accepts the CD&R Waterworks Holdings CD&R Plumb Distribution and is hereby admitted as a substitute limited partner of C&M Holdings in connection therewith.

 

  4.3.

Immediately following the admission of CD&R Waterworks Holdings as a substitute limited partner of C&M Holdings pursuant to Section 4.2 above, CD&R Plumb Buyer hereby ceases to be a limited partner of C&M Holdings with respect to the partnership interests in C&M Holdings so transferred, and C&M Holdings is hereby continued without dissolution.

 

5.

C&M GP Distribution. In the order and at the time set forth in the Recitals:

 

  5.1.

C&M GP hereby makes the C&M GP Distribution to CD&R WW Holdings LP.

 

  5.2.

Simultaneously with the C&M GP Distribution, CD&R WW Holdings LP hereby accepts the C&M GP Distribution and is hereby admitted as a substitute limited partner of C&M Holdings in connection therewith.

 

  5.3.

Immediately following the admission of CD&R WW Holdings LP as a substitute limited partner of C&M Holdings pursuant to Section 5.2 above, C&M GP hereby ceases to be a limited partner of C&M Holdings with respect to the partnership interests in C&M Holdings so transferred, and C&M Holdings is hereby continued without dissolution.

 

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6.

Step 5B Distributions. In the order and at the time set forth in the Recitals:

 

  6.1.

CD&R WW Holdings LP hereby makes the CD&R Waterworks Holdings GP CD&R WW Holdings LP Distribution to CD&R Waterworks Holdings GP.

 

  6.2.

Simultaneously with the CD&R Waterworks Holdings GP CD&R WW Holdings LP Distribution, CD&R Waterworks Holdings GP hereby accepts the CD&R Waterworks Holdings GP CD&R WW Holdings LP Distribution and is hereby admitted as a substitute limited partner of C&M Holdings in connection therewith. Immediately following the admission of CD&R Waterworks Holdings GP as a substitute limited partner of C&M Holdings, CD&R WW Holdings LP hereby ceases to be a limited partner of C&M Holdings with respect to the partnership interests so transferred.

 

  6.3.

CD&R WW Holdings LP hereby makes the CD&R Associates X Waterworks CD&R WW Holdings LP Distribution to CD&R Associates X Waterworks.

 

  6.4.

Simultaneously with the CD&R Associates X Waterworks CD&R WW Holdings LP Distribution, CD&R Associates X Waterworks hereby accepts the CD&R Associates X Waterworks CD&R WW Holdings LP Distribution and is hereby admitted as a substitute limited partner of C&M Holdings in connection therewith. Immediately following the admission of CD&R Associates X Waterworks as a substitute limited partner of C&M Holdings, CD&R WW Holdings LP hereby ceases to be a limited partner of C&M Holdings with respect to the partnership interests so transferred.

 

  6.5.

CD&R WW Holdings LP hereby makes the CD&R WW CD&R WW Holdings LP Distribution to CD&R WW.

 

  6.6.

Simultaneously with the CD&R WW CD&R WW Holdings LP Distribution, CD&R WW hereby accepts the CD&R WW CD&R WW Holdings LP Distribution and is hereby admitted as a substitute limited partner of C&M Holdings in connection therewith. Immediately following the admission of CD&R WW as a substitute limited partner of C&M Holdings, CD&R WW Holdings LP hereby ceases to be a limited partner of C&M Holdings with respect to the partnership interests so transferred, and C&M Holdings is hereby continued without dissolution.

 

  6.7.

CD&R WW Holdings LP hereby makes the CD&R WW C&M GP Distribution to CD&R WW.

 

  6.8.

Simultaneously with the CD&R WW C&M GP Distribution, CD&R WW hereby accepts the CD&R WW C&M GP Distribution and is hereby admitted as a substitute member of C&M GP in connection therewith. Immediately following the admission of CD&R WW as a substitute member of C&M GP, CD&R WW Holdings LP hereby ceases to be a member of C&M GP and C&M GP is hereby continued without dissolution.

 

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7.

Steps 5C Distributions. In the order and at the time set forth in the Recitals:

 

  7.1.

CD&R Waterworks Holdings hereby makes the CD&R WW Advisor CD&R Waterworks Holdings Distribution to CD&R WW Advisor.

 

  7.2.

Simultaneously with the CD&R WW Advisor CD&R Waterworks Holdings Distribution, CD&R WW Advisor hereby accepts the CD&R WW Advisor CD&R Waterworks Holdings Distribution and is hereby admitted as a substitute limited partner of C&M Holdings in connection therewith. Immediately following the admission of CD&R WW Advisor as a substitute limited partner of C&M Holdings, CD&R Waterworks Holdings hereby ceases to be a limited partner of C&M Holdings with respect to the partnership interests so transferred, and C&M Holdings is hereby continued without dissolution.

 

  7.3.

CD&R Waterworks Holdings hereby makes the CD&R WW Holdings CD&R Waterworks Holdings LP Distribution to CD&R WW Holdings.

 

  7.4.

Simultaneously with the CD&R WW Holdings CD&R Waterworks Holdings Distribution, CD&R WW Holdings hereby accepts the CD&R WW Holdings CD&R Waterworks Holdings LP Distribution and is hereby admitted as a substitute limited partner of C&M Holdings in connection therewith. Immediately following the admission of CD&R WW Holdings as a substitute limited partner of C&M Holdings, CD&R Waterworks Holdings hereby ceases to be a limited partner of C&M Holdings with respect to the partnership interests so transferred, and C&M Holdings is hereby continued without dissolution.

 

  7.5.

CD&R Waterworks Holdings hereby makes the CD&R WW Holdings CD&R Waterworks Holdings Plumb Distribution to CD&R WW Holdings.

 

  7.6.

Simultaneously with the CD&R WW Holdings CD&R Waterworks Holdings Plumb Distribution, CD&R WW Holdings hereby accepts the CD&R WW Holdings CD&R Waterworks Holdings Plumb Distribution and is hereby admitted as a substitute member of CD&R Plumb Buyer in connection therewith. Immediately following the admission of CD&R WW Holdings as a substitute member of CD&R Plumb Buyer, CD&R Waterworks Holdings hereby ceases to be a member of CD&R Plumb Buyer, and CD&R Plumb Buyer is hereby continued without dissolution.

 

  7.7.

CD&R Waterworks Holdings hereby makes the CD&R Waterworks Holdings GP CD&R Waterworks Holdings Distribution to CD&R Waterworks Holdings GP.

 

  7.8.

Simultaneously with the CD&R Waterworks Holdings GP CD&R Waterworks Holdings Distribution, CD&R Waterworks Holdings GP hereby accepts the CD&R Waterworks Holdings GP CD&R Waterworks Holdings Distribution and is hereby admitted as a substitute limited partner of C&M Holdings in connection therewith. Immediately following the admission of CD&R Waterworks Holdings GP as a substitute limited partner of C&M Holdings, CD&R Waterworks Holdings hereby ceases to be a limited partner of C&M Holdings with respect to the partnership interests so transferred, and C&M Holdings is hereby continued without dissolution.

 

10


8.

Steps 7(a) Distributions. In the order and at the time set forth in the Recitals:

 

  8.1.

C&M Holdings hereby agrees to make the C&M Management Feeder C&M Holdings Distribution to C&M Management Feeder.

 

  8.2.

C&M Management Feeder hereby agrees to accept the C&M Management Feeder C&M Holdings Distribution.

 

  8.3.

C&M Holdings hereby agrees to make the CD&R Waterworks LLC C&M Holdings Distribution to CD&R Waterworks LLC.

 

  8.4.

CD&R Waterworks LLC hereby agrees to accept the CD&R Waterworks LLC C&M Holdings Distribution.

 

  8.5.

C&M Holdings hereby agrees to make the CD&R Waterworks Holdings GP C&M Holdings Distribution to CD&R Waterworks Holdings GP.

 

  8.6.

CD&R Waterworks Holdings GP hereby agrees to accept the CD&R Waterworks Holdings GP C&M Holdings Distribution.

 

  8.7.

C&M Holdings hereby agrees to make the CD&R WW Advisor C&M Holdings Distribution to CD&R WW Advisor.

 

  8.8.

CD&R WW Advisor hereby agrees to accept the CD&R WW Advisor C&M Holdings Distribution.

 

  8.9.

C&M Holdings hereby agrees to make the CD&R WW Holdings C&M Holdings Distribution to CD&R WW Holdings.

 

  8.10.

CD&R WW Holdings hereby agrees to accept the CD&R WW Holdings C&M Holdings Distribution.

 

  8.11.

C&M Holdings hereby agrees to make the CD&R Associates X Waterworks C&M Holdings Distribution to CD&R Associates X Waterworks.

 

  8.12.

CD&R Associates X Waterworks hereby agrees to accept the CD&R Associates X Waterworks C&M Holdings Distribution.

 

9.

CD&R Waterworks LLC Step 7(b)(i) Contribution. In the order and at the time set forth in the Recitals:

 

  9.1.

CD&R Waterworks LLC hereby makes the CD&R Waterworks LLC Step 7(b)(i) Contribution to PubCo.

 

  9.2.

Simultaneously with the CD&R Waterworks LLC Step 7(b)(i) Contribution, PubCo hereby accepts the CD&R Waterworks LLC
Step 7(b)(i) Contribution and is hereby admitted as a substitute limited partner of C&M Holdings in connection therewith.

 

11


  9.3.

Immediately following the admission of PubCo as a substitute limited partner of C&M Holdings pursuant to Section 9.2 above, CD&R Waterworks LLC hereby ceases to be a limited partner of C&M Holdings with respect to the partnership interests so transferred, and C&M Holdings is hereby continued without dissolution.

 

10.

Feeder Step 7(b)(i) Contribution. In the order and at the time set forth in the Recitals:

 

  10.1.

C&M Management Feeder hereby makes the Feeder Step 7(b)(i) Contribution to PubCo.

 

  10.2.

Simultaneously with the Feeder Step 7(b)(i) Contribution, PubCo hereby accepts the Feeder Step 7(b)(i) Contribution and is hereby admitted as a substitute limited partner of C&M Holdings in connection therewith.

 

  10.3.

Immediately following the admission of PubCo as a substitute limited partner of C&M Holdings pursuant to Section 10.2 above, C&M Management Feeder hereby ceases to be a limited partner of C&M Holdings with respect to the partnership interests so transferred, and C&M Holdings is hereby continued without dissolution.

 

11.

Step 7(b)(i) PubCo Subscription. In the order and at the time set forth in the Recitals:

 

  11.1.

PubCo hereby agrees to make the Step 7(b)(i) PubCo Subscription to CD&R Waterworks LLC and C&M Management Feeder in the number with respect to CD&R Waterworks LLC and C&M Management Feeder set forth opposite each such entity’s name on
Schedule 7(b)(i) attached hereto.

 

  11.2.

CD&R Waterworks LLC hereby agrees to accept the Step 7(b)(i) PubCo Subscription.

 

  11.3.

C&M Management Feeder hereby agrees to accept the Step 7(b)(i) PubCo Subscription.

 

12.

Step 7(b)(ii) Contribution. In the order and at the time set forth in the Recitals:

 

  12.1.

CD&R Waterworks Holdings GP hereby makes the Step 7(b)(ii) Contribution to PubCo.

 

  12.2.

Simultaneously with the Step 7(b)(ii) Contribution, PubCo hereby accepts the Step 7(b)(ii) Contribution and is hereby admitted as a substitute limited partner of C&M Holdings in connection therewith.

 

  12.3.

Immediately following the admission of PubCo as a substitute limited partner of C&M Holdings pursuant to Section 12.2 above, CD&R Waterworks Holdings GP hereby ceases to be a limited partner of C&M Holdings with respect to the partnership interests so transferred, and C&M Holdings is hereby continued without dissolution.

 

12


13.

Step 7(b)(ii) PubCo Subscription. In the order and at the time set forth in the Recitals:

 

  13.1.

PubCo hereby agrees to make the Step 7(b)(ii) PubCo Subscription to CD&R Waterworks Holdings GP.

 

  13.2.

CD&R Waterworks Holdings GP hereby agrees to accept the Step 7(b)(ii) PubCo Subscription.

 

14.

Step 7(b)(iii) Contribution. In the order and at the time set forth in the Recitals:

 

  14.1.

CD&R Associates X Waterworks hereby makes the Step 7(b)(iii) Contribution to PubCo.

 

  14.2.

Simultaneously with the Step 7(b)(iii) Contribution, PubCo hereby accepts the Step 7(b)(iii) Contribution and is hereby admitted as a substitute limited partner of C&M Holdings in connection therewith.

 

  14.3.

Immediately following the admission of PubCo as a substitute limited partner of C&M Holdings pursuant to Section 14.2 above, CD&R Associates X Waterworks hereby ceases to be a limited partner of C&M Holdings with respect to the partnership interests so transferred, and C&M Holdings is hereby continued without dissolution.

 

15.

Step 7(b)(iii) Subscription. In the order and at the time set forth in the Recitals:

 

  15.1.

PubCo hereby agrees to make the Step 7(b)(iii) PubCo Subscription to CD&R Associates X Waterworks.

 

  15.2.

CD&R Associates X Waterworks hereby agrees to accept the Step 7(b)(iii) PubCo Subscription.

 

16.

Step 9(a)(i) Merger.

 

  16.1.

In accordance with the provisions of this Agreement and Section 18-209 of the Delaware Limited Liability Company Act (6 Del. C. § 18-101 et seq.), as amended from time to time (the “DLLCA”), immediately following the Distributions, Contributions and Subscriptions, CD&R Plumb Buyer shall be merged with and into the CD&R WW Holdings. From and after the Step 9(a)(i) Merger Effective Time (as defined below), the separate existence of CD&R Plumb Buyer shall cease and CD&R WW Holdings shall be the surviving company (the “Step 9(a)(i) Merger Surviving Company”) and shall continue its limited liability company existence under the laws of the State of Delaware.

 

  16.2.

The name of the Step 9(a)(i) Merger Surviving Company shall be CD&R WW Holdings, LLC. The Step 9(a)(i) Merger shall have the effect set forth in Section 18-209 of the DLLCA and the Step 9(a)(i) Merger Surviving Company shall possess all the rights, privileges and powers of CD&R Plumb Buyer, and shall by operation of law become liable for all the debts, liabilities and duties of CD&R Plumb Buyer to the same extent as if said debts, liabilities and duties had been incurred or contracted by CD&R WW Holdings, as provided in the DLLCA.

 

13


  16.3.

The Step 9(a)(i) Merger shall become effective at the time designated in a certificate of merger filed with the Secretary of State of the State of Delaware in accordance with the DLLCA (the “Step 9(a)(i) Merger Effective Time”).

 

  16.4.

Step 9(a)(i) Merger Effect on Capital Stock and Interests. At the Step 9(a)(i) Merger Effective Time:

 

  16.4.1.

All of the limited liability company interests of CD&R Plumb Buyer outstanding immediately prior to the Step 9(a)(i) Merger Effective Time shall, by virtue of the Step 9(a)(i) Merger and without any action on the part of any Party, be cancelled.

 

  16.4.2.

Each limited liability company interest of CD&R WW Holdings outstanding immediately prior to the Step 9(a)(i) Merger Effective Time shall, by virtue of the Step 9(a)(i) Merger and without any action on the part of CD&R WW Holdings or any other person or entity, remain outstanding as the limited liability company interests of the Step 9(a)(i) Merger Surviving Company, which shall constitute the only outstanding limited liability company interests of the Step 9(a)(i) Merger Surviving Company.

 

  16.4.3.

CD&R WW Holdings shall automatically be admitted as a substitute general partner and limited partner of C&M Holdings in connection therewith, and C&M Holdings shall be continued without dissolution.

 

17.

Step 9(a)(ii) Merger.

 

  17.1.

Simultaneously with the Step 9(a)(i) Merger and in accordance with the provisions of this Agreement and Section 18-209 of the DLLCA, C&M GP shall be merged with and into CD&R WW. From and after the Step 9(a)(ii) Merger Effective Time (as defined below), the separate existence of C&M GP shall cease and CD&R WW shall be the surviving company (the “Step 9(a)(ii) Merger Surviving Company”) and shall continue its limited liability company existence under the laws of the State of Delaware.

 

  17.2.

The name of the Step 9(a)(ii) Merger Surviving Company shall be CD&R WW, LLC. The Step 9(a)(ii) Merger shall have the effect set forth in Section 18-209 of the DLLCA and the Step 9(a)(ii) Merger Surviving Company shall possess all the rights, privileges and powers of C&M GP, and shall by operation of law become liable for all the debts, liabilities and duties of C&M GP to the same extent as if said debts, liabilities and duties had been incurred or contracted by CD&R WW, as provided in the DLLCA.

 

  17.3.

The Step 9(a)(ii) Merger shall become effective at the time designated in a certificate of merger filed with the Secretary of State of the State of Delaware in accordance with the DLLCA (the “Step 9(a)(ii) Merger Effective Time”).

 

  17.4.

Step 9(a)(ii) Merger Effect on Capital Stock and Interests. At the Step 9(a)(ii) Merger Effective Time:

 

  17.4.1.

All of the limited liability company interests of C&M GP outstanding immediately prior to the Step 9(a)(ii) Merger Effective Time shall, by virtue of the Step 9(a)(ii) Merger and without any action on the part of any Party, be cancelled.

 

14


  17.4.2.

Each limited liability company interest of CD&R WW outstanding immediately prior to the Step 9(a)(ii) Merger Effective Time shall, by virtue of the Step 9(a)(ii) Merger and without any action on the part of any other person entity, remain outstanding as the limited liability company interests of the Step 9(a)(ii) Merger Surviving Company, which shall constitute the only outstanding limited liability company interests of the Step 9(a)(ii) Merger Surviving Company.

 

  17.4.3.

CD&R WW shall automatically be admitted as a limited partner of C&M Holdings in connection therewith.

 

18.

Step 10(a)(i) Merger.

 

  18.1.

Immediately following the Step 9(a)(i) Merger and the Step 9(a)(ii) Merger and in accordance with the provisions of this Agreement and the General Corporation Law of the State of Delaware (as amended from time to time, the “DGCL”) and the DLLCA, as applicable, Brooks Merger Sub 1 shall be merged with and into CD&R WW Advisor. From and after the Step 10(a)(i) Merger Effective Time (as defined below), the separate existence of Brooks Merger Sub 1 shall cease and CD&R WW Advisor shall be the surviving company (the “Step 10(a)(i) Merger Surviving Company”) and shall continue its limited liability company existence under the laws of the State of Delaware.

 

  18.2.

The name of the Step 10(a)(i) Merger Surviving Company shall be CD&R WW Advisor, LLC. The Step 10(a)(i) Merger shall have the effects set forth in the DGCL, including Sections 259 and 264 thereof, and Section 18-209 of the DLLCA and the Step 10(a)(i) Merger Surviving Company shall possess all the rights, privileges, immunities, powers and franchises of Brooks Merger Sub 1, and shall by operation of law become liable for all the debts, liabilities, obligations and duties of Brooks Merger Sub 1 to the same extent as if said debts, liabilities, obligations and duties had been incurred or contracted by CD&R WW Advisor, as provided in the DGCL and the DLLCA, as applicable.

 

  18.3.

The Step 10(a)(i) Merger shall become effective at the time designated in a certificate of merger filed with the Secretary of State of the State Delaware in accordance with the DGCL and the DLLCA (the “Step 10(a)(i) Merger Effective Time”).

 

  18.4.

Step 10(a)(i) Merger Effect on Capital Stock and Interests. At the Step 10(a)(i) Merger Effective Time:

 

  18.4.1.

All of the capital stock of Brooks Merger Sub 1 outstanding immediately prior to the Step 10(a)(i) Merger Effective Time shall, by virtue of the Step 10(a)(i) Merger and without any action on the part of Brooks Merger Sub 1 or the holder thereof, be automatically converted into all of the limited liability company interests in the Step 10(a)(i) Merger Surviving Company which, as a result of the actions set forth

 

15


  in Section 18.4.2, shall constitute the only outstanding limited liability company interests of the Step 10(a)(i) Merger Surviving Company. PubCo, as the former holder of capital stock of Brooks Merger Sub 1 shall, at the Step 10(a)(i) Merger Effective Time, be admitted as the manager of the Step 10(a)(i) Merger Surviving Company and the Step 10(a)(i) Merger Surviving Company shall be continued without dissolution.

 

  18.4.2.

Each limited liability company interest of CD&R WW Advisor outstanding immediately prior to the Step 10(a)(i) Merger Effective Time shall, by virtue of the Step 10(a)(i) Merger and without any action on the part of CD&R WW Advisor or the holders thereof, be automatically converted into and thereafter represent the right to receive one (1) validly issued, fully paid and non-assessable Class A Share of PubCo (the “Step 10(a)(i) Merger Consideration”). As of the Step 10(a)(i) Merger Effective Time, all limited liability company interests of CD&R WW Advisor outstanding immediately prior to the Step 10(a)(i) Merger Effective Time shall no longer be outstanding and shall automatically be canceled and shall cease to exist, and each holder of any such limited liability company interest shall cease to have any rights with respect thereto, except the right to receive the Step 10(a)(i) Merger Consideration to be paid in consideration therefor.

 

19.

Step 10(a)(ii) Merger.

 

  19.1.

Simultaneously with the Step 10(a)(i) Merger and in accordance with the provisions of this Agreement and the DGCL and the DLLCA, as applicable, Brooks Merger Sub 2 shall be merged with and into CD&R WW Holdings. From and after the Step 10(a)(ii) Merger Effective Time (as defined below), the separate existence of Brooks Merger Sub 2 shall cease and the CD&R WW Holdings shall be the surviving company (the “Step 10(a)(ii) Merger Surviving Company”) and shall continue its limited liability company existence under the laws of the State of Delaware.

 

  19.2.

The name of the Step 10(a)(ii) Merger Surviving Company shall be CD&R WW Holdings, LLC. The Step 7(a)(ii) Merger shall have the effects set forth in the DGCL, including Sections 259 and 264 thereof, and Section 18-209 of the DLLCA and the Step 10(a)(ii) Merger Surviving Company shall possess all the rights, privileges, immunities, powers and franchises of Brooks Merger Sub 2, and shall by operation of law become liable for all the debts, liabilities, obligations and duties of Brooks Merger Sub 2 to the same extent as if said debts, liabilities, obligations and duties had been incurred or contracted by CD&R WW Holdings, as provided in the DGCL and the DLLCA, as applicable.

 

  19.3.

The Step 10(a)(ii) Merger shall become effective at the time designated in a certificate of merger filed with the Secretary of State of Delaware in accordance with the DGCL and the DLLCA, as applicable (the “Step 10(a)(ii) Merger Effective Time”).

 

  19.4.

Step 10(a)(ii) Merger Effect on Capital Stock and Interests. At the Step 10(a)(ii) Merger Effective Time:

 

16


  19.4.1.

All of the capital stock of Brooks Merger Sub 2 outstanding immediately prior to the Step 10(a)(ii) Merger Effective Time shall, by virtue of the Step 10(a)(ii) Merger and without any action on the part of Brooks Merger Sub 2 or the holder thereof, be automatically converted into all of the limited liability company interests in the Step 10(a)(ii) Merger Surviving Company which, as a result of the actions set forth in Section 19.4.2, shall constitute the only outstanding limited liability company interests of the Step 10(a)(ii) Merger Surviving Company. PubCo, as the former holder of capital stock of Brooks Merger Sub 2 shall, at the Step 10(a)(ii) Merger Effective Time, be admitted as the manager of the Step 10(a)(ii) Merger Surviving Company and the Step 10(a)(ii) Merger Surviving Company shall be continued without dissolution.

 

  19.4.2.

Each limited liability company interest of CD&R WW Holdings outstanding immediately prior to the Step 10(a)(ii) Merger Effective Time shall, by virtue of the Step 10(a)(ii) Merger and without any action on the part of CD&R WW Holdings or the holders thereof, be automatically converted into and thereafter represent the right to receive one (1) validly issued, fully paid and non-assessable Class A Share of PubCo (the “Step 10(a)(ii) Merger Consideration”). As of the Step 10(a)(ii) Merger Effective Time, all limited liability company interests of CD&R WW Holdings outstanding immediately prior to the Step 10(a)(ii) Merger Effective Time shall no longer be outstanding and shall automatically be canceled and shall cease to exist, and each holder of any such limited liability company interest shall cease to have any rights with respect thereto, except the right to receive the Step 10(a)(ii) Merger Consideration to be paid in consideration therefor.

 

20.

Step 11(a)(i) Merger.

 

  20.1.

Immediately following the Step 10(a)(i) Merger and the Step 10(a)(ii) Merger and in accordance with the provisions of this Agreement and the DGCL and the DLLCA, as applicable, CD&R WW Advisor (the Step 10(a)(i) Merger Surviving Company) shall be merged with and into PubCo. From and after the Step 11(a)(i) Merger Effective Time (as defined below), the separate existence of CD&R WW Advisor shall cease and PubCo shall be the surviving company (the “Step 11(a)(i) Merger Surviving Company”) and shall continue its corporate existence under the laws of the State of Delaware.

 

  20.2.

The name of the Step 11(a)(i) Merger Surviving Company shall be Core & Main, Inc. The Step 11(a)(i) Merger shall have the effects set forth in the DGCL, including Sections 259 and 264 thereof, and Section 18-209 of the DLLCA and the Step 11(a)(i) Merger Surviving Company shall possess all the rights, privileges, immunities, powers and franchises of CD&R WW Advisor, and shall by operation of law become liable for all the debts, liabilities, obligations and duties of CD&R WW Advisor to the same extent as if said debts, liabilities, obligations and duties had been incurred or contracted by PubCo, as provided in the DGCL and the DLLCA, as applicable.

 

  20.3.

The Step 11(a)(i) Merger shall become effective at the time designated in a certificate of merger filed with the Secretary of State of the State of Delaware in accordance with the DGCL and the DLLCA (the “Step 11(a)(i) Merger Effective Time”).

 

17


  20.4.

Step 11(a)(i) Merger Effect on Capital Stock and Interests. At the Step 11(a)(i) Merger Effective Time:

 

  20.4.1.

All of the limited liability company interests of CD&R WW Advisor outstanding immediately prior to the Step 11(a)(i) Merger Effective Time shall, by virtue of the Step 11(a)(i) Merger and without any action on the part of any Party, be cancelled.

 

  20.4.2.

Subject to Section 20.4.3 hereof, the shares of the capital stock of PubCo outstanding immediately prior to the Step 11(a)(i) Merger Effective Time shall, by virtue of the Step 11(a)(i) Merger and without any action on the part of PubCo or the holder thereof, shall remain outstanding and be the shares of common stock in the Step 11(a)(i) Merger Surviving Company.

 

  20.4.3.

All of the Class B Shares of PubCo owned by CD&R WW Advisor immediately prior to the Step 11(a)(i) Merger Effective Time shall, by virtue of the Step 11(a)(i) Merger and without any action on the part of any Party, be retired.

 

  20.4.4.

PubCo shall be admitted as a substitute limited partner of C&M Holdings with respect to any partnership interests transferred to PubCo pursuant to the Step 11(a)(i) Merger, and C&M Holdings shall be continued without dissolution.

 

21.

Step 11(a)(ii) Merger.

 

  21.1.

Simultaneously with the Step 11(a)(i) Merger and in accordance with the provisions of this Agreement and the DGCL and the DLLCA, as applicable, CD&R WW Holdings (the Step 10(a)(ii) Merger Surviving Company) shall be merged with and into PubCo. From and after the Step 11(a)(ii) Merger Effective Time (as defined below), the separate existence of CD&R WW Holdings shall cease and PubCo shall be the surviving company (the “Step 11(a)(ii) Merger Surviving Company”) and shall continue its corporate existence under the laws of the State of Delaware.

 

  21.2.

The name of the Step 11(a)(ii) Merger Surviving Company shall be Core & Main, Inc. The Step 11(a)(ii) Merger shall have the effects set forth in the DGCL, including Sections 259 and 264 thereof and Section 18-209 of the DLLCA, and the Step 11(a)(ii) Merger Surviving Company shall possess all the rights, privileges, immunities, powers and franchises of CD&R WW Holdings, and shall by operation of law become liable for all the debts, liabilities, obligations and duties of CD&R WW Holdings to the same extent as if said debts, liabilities, obligations and duties had been incurred or contracted by PubCo, as provided in the DGCL and the DLLCA, as applicable.

 

  21.3.

The Step 11(a)(ii) Merger shall become effective at the time designated in a certificate of merger filed with the Secretary of State of the State Delaware in accordance with the DGCL and the DLLCA (the “Step 11(a)(ii) Merger Effective Time,” and together with the Step 9(a)(i) Merger Effective Time, the Step 9(a)(ii) Merger Effective Time, the Step 10(a)(i) Merger Effective Time, the Step 10(a)(ii) Merger Effective Time and the Step 11(a)(i) Merger Effective Time, the “Merger Effective Times”).

 

18


  21.4.

Step 11(a)(ii) Merger Effect on Capital Stock and Interests. At the Step 11(a)(ii) Merger Effective Time:

 

  21.4.1.

All of the limited liability company interests of CD&R WW Holdings outstanding immediately prior to the Step 11(a)(ii) Merger Effective Time shall, by virtue of the Step 11(a)(ii) Merger and without any action on the part of any Party, be cancelled.

 

  21.4.2.

Subject to Section 21.4.3, the shares of the capital stock of PubCo outstanding immediately prior to the Step 11(a)(ii) Merger Effective Time shall, by virtue of the Step 11(a)(ii) Merger and without any action on the part of PubCo or the holder thereof, shall remain outstanding and be the shares of common stock in the Step 11(a)(ii) Merger Surviving Company. PubCo, as the former holder of all of the limited liability company interests of CD&R WW Holdings, at the Step 11(a)(ii) Merger Effective Time, shall be admitted as the general partner of C&M Holdings and shall be admitted as a substitute limited partner of C&M Holdings with respect to any limited partner interests transferred to PubCo pursuant to the Step 11(a)(ii) Merger and shall be admitted as a substitute member of CD&R WW, and C&M Holdings and CD&R WW shall be continued without dissolution.

 

  21.4.3.

All of the Class B Shares of PubCo owned by CD&R WW Holdings immediately prior to the Step 11(a)(ii) Merger Effective Time shall, by virtue of the Step 11(a)(ii) Merger and without any action on the part of any Party, be retired.

 

22.

Step 12(i) Contributions. In the order and at the time set forth in the Recitals:

 

  22.1.

CD&R Waterworks Holdings GP hereby agrees to make the CD&R Fund X Waterworks B1 CD&R Waterworks Holdings GP Contribution to CD&R Fund X Waterworks B1.

 

  22.2.

CD&R Fund X Waterworks B1 hereby agrees to accept the CD&R Fund X Waterworks B1 CD&R Waterworks Holdings GP Contribution.

 

  22.3.

CD&R Waterworks Holdings GP hereby agrees to make the CD&R Fund X-A Waterworks B CD&R Waterworks Holdings GP Contribution to CD&R Fund X-A Waterworks B.

 

  22.4.

CD&R Fund X-A Waterworks B hereby agrees to accept the CD&R Fund X-A Waterworks B CD&R Waterworks Holdings GP Contribution.

 

23.

Step 12(ii) Contributions. In the order and at the time set forth in the Recitals:

 

  23.1.

CD&R Associates X Waterworks hereby agrees to make the CD&R Fund X Waterworks B1 CD&R Associates X Waterworks Contribution to CD&R Fund X Waterworks B1.

 

19


  23.2.

CD&R Fund X Waterworks B1 hereby agrees to accept the CD&R Fund X Waterworks B1 CD&R Associates X Waterworks Contribution and hereby issues the applicable limited partner interest in CD&R Fund X Waterworks B1 to CD&R Associates X Waterworks in connection therewith, and CD&R Associates X Waterworks is hereby admitted as a limited partner of CD&R Fund X Waterworks B1 in connection therewith.

 

  23.3.

CD&R Associates X Waterworks hereby agrees to make the CD&R Fund X-A Waterworks B CD&R Associates X Waterworks Contribution to CD&R Fund X-A Waterworks B.

 

  23.4.

CD&R Fund X-A Waterworks B hereby agrees to accept the CD&R Fund X-A Waterworks B CD&R Associates X Waterworks Contribution and hereby issues the applicable limited partner interest in CD&R Fund X-A Waterworks B to CD&R Associates X Waterworks, and CD&R Associates X Waterworks is hereby admitted as a limited partner of CD&R Fund X-A Waterworks B in connection therewith.

 

24.

Holdings LPA.

Immediately following the Step 11(a)(i) Merger Effective Time and the Step 11(a)(ii) Merger Effective Time, PubCo, as the sole general partner and a limited partner of C&M Holdings, and CD&R Waterworks LLC, CD&R WW and C&M Management Feeder, as limited partners of C&M Holdings, shall enter into the Second Amended and Restated Agreement of Limited Partnership of C&M Holdings.

 

25.

Representations and Warranties of Each Party to the Mergers.

Each Party hereto hereby represents and warrants to all of the other Parties hereto as follows:

 

  25.1.

Subject to the receipt of any board and stockholder approvals required by the DGCL, as applicable, the execution, delivery and performance by such Party of this Agreement has been duly authorized by all necessary action.

 

  25.2.

Such Party is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization or incorporation.

 

  25.3.

Subject to the receipt of any board and stockholder approvals required by the DGCL, as applicable, such Party has the requisite power, authority and legal right to execute and deliver this Agreement, and to consummate the transactions contemplated hereby.

 

26.

Tax Treatment of Certain Transactions.

It is the intention of the Parties that (i) the Step 7(b)(i) Contribution and Subscription, the Step 7(b)(ii) Contribution and Subscription and the Step 7(b)(iii) Contribution and Subscription will be treated as a contribution pursuant to Section 351 of the U.S. Internal Revenue Code of 1986, as amended from time to time (the “Code”) and (ii) (x) the Step 10(a)(i) Merger together with the Step 11(a)(i) Merger and (y) the Step 10(a)(ii) Merger together with the Step 11(a)(ii) Merger, will each be treated as a “reorganization” within the meaning of Section 368(a) of the Code and this Agreement is intended to be and is adopted as a plan of reorganization with respect to each such reorganization for purposes of Sections 354 and 361 of the Code.

 

20


27.

Certificate of Incorporation and Certificate of Formation.

 

  27.1.

The certificate of incorporation of PubCo as in effect immediately prior to the Step 11(a)(i) Merger Effective Time and the Step 11(a)(ii) Merger Effective Time shall be the certificate of incorporation of the Step 11(a)(i) Merger Surviving Company and the Step 11(a)(ii) Merger Surviving Company until amended in accordance with applicable law.

 

  27.2.

The certificate of formation of CD&R WW Holdings as in effect immediately prior to the Step 9(a)(i) Merger Effective Time shall, at the Step 9(a)(i) Merger Effective Time, continue to be the certificate of formation of the Step 9(a)(i) Merger Surviving Company until amended in accordance with applicable law.

 

  27.3.

The certificate of formation of CD&R WW as in effect immediately prior to the Step 9(a)(ii) Merger Effective Time shall, at the
Step 9(a)(ii) Merger Effective Time, continue to be the certificate of formation of the Step 9(a)(ii) Merger Surviving Company until amended in accordance with applicable law.

 

  27.4.

The certificate of formation of CD&R WW Advisor as in effect immediately prior to the Step 10(a)(i) Merger Effective Time shall, at the Step 10(a)(i) Merger Effective Time, be the certificate of formation of the Step 10(a)(i) Merger Surviving Company until amended in accordance with applicable law.

 

  27.5.

The certificate of formation of CD&R WW Holdings as in effect immediately prior to the Step 10(a)(ii) Merger Effective Time shall, at the Step 10(a)(ii) Merger Effective Time, be the certificate of formation of the Step 10(a)(ii) Merger Surviving Company until amended in accordance with applicable law.

 

28.

Bylaws and Limited Liability Company Agreement.

 

  28.1.

The bylaws of PubCo as in effect immediately prior to the Step 11(a)(i) Merger Effective Time and the Step 11(a)(ii) Merger Effective Time shall be the bylaws of the Step 11(a)(i) Merger Surviving Company and the Step 11(a)(ii) Merger Surviving Company, until amended in accordance with applicable law.

 

  28.2.

The limited liability company agreement of CD&R WW Holdings as in effect immediately prior to the Step 9(a)(i) Merger Effective Time shall, at the Step 9(a)(i) Merger Effective Time, continue be the limited liability company agreement of the Step 9(a)(i) Merger Surviving Company.

 

  28.3.

The limited liability company agreement of CD&R WW as in effect immediately prior to the Step 9(a)(ii) Merger Effective Time shall, at the Step 9(a)(ii) Merger Effective Time, continue to be the limited liability company agreement of the Step 9(a)(ii) Merger Surviving Company until amended in accordance with applicable law.

 

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  28.4.

The limited liability company agreement of CD&R WW Advisor as in effect immediately prior to the Step 10(a)(i) Merger Effective Time shall, at the Step 10(a)(i) Merger Effective Time, continue be the limited liability company agreement of the Step 10(a)(i) Merger Surviving Company.

 

  28.5.

The limited liability company agreement of CD&R WW Holdings as in effect immediately prior to the Step 10(a)(ii) Merger Effective Time shall, at the Step 10(a)(ii) Merger Effective Time, continue to be the limited liability company agreement of the Step 10(a)(ii) Merger Surviving Company until amended in accordance with applicable law.

 

29.

Directors and Officers.

From and after the applicable Effective Time, the directors of PubCo shall continue to be the directors of the Step 11(a)(i) Merger Surviving Company and the Step 11(a)(ii) Merger Surviving Company. From and after the applicable Effective Time, the officers of PubCo shall continue to be the officers of the Step 11(a)(i) Merger Surviving Company and the Step 11(a)(ii) Merger Surviving Company.

 

30.

Miscellaneous.

 

  30.1.

Further Assurances. Each party hereto agrees to execute and deliver such instruments and evidences of payment and give such further assurances and perform such further acts as the other may reasonably request and as may reasonably be necessary in connection with the transactions contemplated by this Agreement.

 

  30.2.

Governing Law. All matters relating to the interpretation, construction, validity and enforcement of this Agreement, including all claims (whether in contract or tort) that may be based upon, arise out of or relate to this Agreement or the negotiation, execution or performance of this Agreement or the transactions contemplated hereby, shall be governed by and construed in accordance with the domestic laws of the State of Delaware without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of laws of any jurisdiction other than the State of Delaware. EACH OF THE PARTIES HERETO AGREES THAT THIS AGREEMENT INVOLVES AT LEAST U.S. $100,000.00 AND THAT THIS AGREEMENT HAS BEEN ENTERED INTO IN EXPRESS RELIANCE UPON 6 Del. C. § 2708. EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES (i) TO BE SUBJECT TO THE JURISDICTION OF THE COURTS OF THE STATE OF DELAWARE AND OF THE FEDERAL COURTS SITTING IN THE STATE OF DELAWARE, AND (ii)(A) TO THE EXTENT SUCH PARTY IS NOT OTHERWISE SUBJECT TO SERVICE OF PROCESS IN THE STATE OF DELAWARE, TO APPOINT AND MAINTAIN AN AGENT IN THE STATE OF DELAWARE AS SUCH PARTY’S AGENT FOR ACCEPTANCE OF LEGAL PROCESS AND TO NOTIFY THE OTHER PARTIES OF THE NAME AND ADDRESS OF SUCH AGENT, AND (B) THAT, TO THE FULLEST EXTENT PERMITTED BY LAW, SERVICE OF PROCESS MAY ALSO BE MADE ON SUCH PARTY BY

 

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  PREPAID CERTIFIED MAIL WITH A VALIDATED PROOF OF MAILING RECEIPT CONSTITUTING EVIDENCE OF VALID SERVICE, AND THAT SERVICE MADE PURSUANT TO (ii)(A) OR (B) ABOVE SHALL, TO THE FULLEST EXTENT PERMITTED BY LAW, HAVE THE SAME LEGAL FORCE AND EFFECT AS IF SERVED UPON SUCH PARTY PERSONALLY WITHIN THE STATE OF DELAWARE.

 

  30.3.

Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement.

 

  30.4.

Further Assurances. Each party hereto agrees to execute and deliver such instruments and evidences of payment and give such further assurances and perform such further acts as the other may reasonably request and as may reasonably be necessary in connection with the transactions contemplated by this Agreement.

 

  30.5.

Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns.

[Remainder of this page intentionally left blank.]


IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

 

CD&R ASSOCIATES X WATERWORKS, L.P.
By: CD&R Investment Associates X, Ltd., its general partner
By:  

/s/ Rima Simson

Name:   Rima Simson
Title:   Vice President, Treasurer and Secretary
CD&R WATERWORKS HOLDINGS GP, LTD.
By:  

/s/ Rima Simson

Name:   Rima Simson
Title:   Vice President, Treasurer and Secretary
CD&R WW HOLDINGS, L.P.
By:   CD&R Waterworks Holdings GP, Ltd., its general partner
By:  

/s/ Rima Simson

Name:   Rima Simson
Title:   Vice President, Treasurer and Secretary
CD&R WATERWORKS HOLDINGS, L.P.
By:   CD&R Waterworks Holdings GP, Ltd., its general partner
By:  

/s/ Rima Simson

Name:   Rima Simson
Title:   Vice President, Treasurer and Secretary

[Signature Page to Master Reorganization Agreement]


CORE & MAIN MANAGEMENT FEEDER, LLC
By:   CD&R Waterworks Holdings GP, Ltd., its manager
By:  

/s/ Rima Simson

Name:   Rima Simson
Title:   Vice President, Treasurer and Secretary
CORE & MAIN GP, LLC
By:   CD&R WW Holdings, L.P., its manager
By:   CD&R Waterworks Holdings GP, Ltd., its general partner
By:  

/s/ Rima Simson

Name:   Rima Simson
Title:   Vice President, Treasurer and Secretary
CD&R PLUMB BUYER, LLC
By: CD&R Waterworks Holdings, L.P., its manager
By:   CD&R Waterworks Holdings GP, Ltd., its general partner
By:  

/s/ Rima Simson

Name:   Rima Simson
Title:   Vice President, Treasurer and Secretary
CORE & MAIN HOLDINGS, LP
By:  

/s/ Stephen O. LeClair

  Name: Stephen O. LeClair
  Title: Chief Executive Officer

[Signature Page to Master Reorganization Agreement]


CD&R FUND X WATERWORKS B1, L.P.
By:   CD&R Waterworks Holdings GP, Ltd., its general partner
By:  

/s/ Rima Simson

Name:   Rima Simson
Title:   Vice President, Treasurer and Secretary
CD&R FUND X-A WATERWORKS B, L.P.
By:   CD&R Waterworks Holdings GP, Ltd., its general partner
By:  

/s/ Rima Simson

Name:   Rima Simson
Title:   Vice President, Treasurer and Secretary
CD&R WW HOLDINGS, LLC
By:   CD&R Fund X-A Waterworks B, L.P., its manager
By:   CD&R Waterworks Holdings GP, Ltd., its general partner
By:  

/s/ Rima Simson

Name:   Rima Simson
Title:   Vice President, Treasurer and Secretary

[Signature Page to Master Reorganization Agreement]


CD&R WW, LLC
By: CD&R WW Holdings, LLC, its manager
By:   CD&R Fund X-A Waterworks B, L.P., its manager
By:   CD&R Waterworks Holdings GP, Ltd., its general partner
By:  

/s/ Rima Simson

Name:   Rima Simson
Title:   Vice President, Treasurer and Secretary
CD&R WW ADVISOR, LLC
By:   CD&R Fund X Advisor Waterworks B, L.P., its manager
By:   CD&R Waterworks Holdings GP, Ltd., its general partner
By:  

/s/ Rima Simson

Name:   Rima Simson
Title:   Vice President, Treasurer and Secretary
BROOKS MERGER SUB 1, INC.
By:  

/s/ Stephen O. LeClair

  Name: Stephen O. LeClair
  Title: Chief Executive Officer
BROOKS MERGER SUB 2, INC.
By:  

/s/ Stephen O. LeClair

  Name: Stephen O. LeClair
  Title: Chief Executive Officer

[Signature Page to Master Reorganization Agreement]


CORE & MAIN, INC.
By:  

/s/ Stephen O. LeClair

  Name: Stephen O. LeClair
  Title: Chief Executive Officer
CD&R WATERWORKS HOLDINGS, LLC
By: CD&R Waterworks Holdings, L.P., its manager
By: CD&R Waterworks Holdings GP, Ltd., its general partner
By:  

/s/ Rima Simson

Name:   Rima Simson
Title:   Vice President, Treasurer and Secretary

[Signature Page to Master Reorganization Agreement]


CD&R FUND X ADVISOR WATERWORKS B, L.P.
By:   CD&R Waterworks Holdings GP, Ltd.,
  its general partner
By:  

/s/ Rima Simson

Name:   Rima Simson
Title:   Vice President, Treasurer and Secretary

 

 

[Signature Page to Master Reorganization Agreement]

EX-3.1 3 d185428dex31.htm EX-3.1 EX-3.1

Exhibit 3.1

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

OF

CORE & MAIN, INC.

Core & Main, Inc., a corporation organized and existing under the laws of the State of Delaware (the “Corporation”), hereby certifies as follows:

1. The name of the Corporation is Core & Main, Inc.

2. The original Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on April 9, 2021.

3. This amendment and restatement of the Certificate of Incorporation of the Corporation has been duly adopted by the Board of Directors of the Corporation and by the written consent of the stockholders of the Corporation in accordance with the provisions of Sections 228, 242 and 245 of the General Corporation Law of the State of Delaware (as amended from time to time, the “DGCL”).

4. The Corporation’s Certificate of Incorporation is hereby amended and restated pursuant to Sections 242 and 245 of the DGCL, so as to read in its entirety as set forth in the form attached hereto as Exhibit A and incorporated herein by this reference.


IN WITNESS WHEREOF, the undersigned officer of the Corporation has executed this Amended and Restated Certificate of Incorporation on the 22nd day of July, 2021.

 

By:  

/s/ Stephen O. LeClair

Name:   Stephen O. LeClair
Title:   Chief Executive Officer

[Signature Page to Amended and Restated Certificate of Incorporation]


Exhibit A

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

OF

CORE & MAIN, INC.

FIRST. Name. The name of the corporation is Core & Main, Inc. (the “Corporation”).

SECOND. Registered Office. The Corporation’s registered office in the State of Delaware is 251 Little Falls Drive, Wilmington, County of New Castle, Delaware, 19808. The name of its registered agent at such address is Corporation Service Company.

THIRD. Purpose. The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware (as currently in effect or as the same may hereafter be amended, the “DGCL”).

FOURTH. Capital Stock. The total number of shares of stock which the Corporation shall have authority to issue is 1,600,000,000, consisting of: (x) 1,000,000,000 shares of Class A common stock, par value $0.01 per share (“Class A Common Stock”), (y) 500,000,000 shares of Class B common stock, par value $0.01 per share (“Class B Common Stock” and, together with the Class A Common Stock, the “Common Stock”) and (z) 100,000,000 shares of preferred stock, par value $1.00 per share (“Preferred Stock”), issuable in one or more series as hereinafter provided. Except as otherwise expressly provided herein or in a Preferred Stock Certificate of Designation (as defined herein), the number of authorized shares of Class A Common Stock, Class B Common Stock or Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of at least a majority of the voting power of the outstanding stock of the Corporation entitled to vote thereon irrespective of the provisions of Section 242(b)(2) of the DGCL or any corresponding provision hereinafter enacted, and no vote of the holders of outstanding shares of Class A Common Stock, Class B Common Stock or Preferred Stock voting separately as a class shall be required therefor.

Immediately upon this Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”) becoming effective pursuant to the DGCL (the “Effective Time”), each one (1) share of the Corporation’s common stock issued and outstanding or held by the Corporation as treasury stock immediately prior to the Effective Time (the “Old Common Stock”) shall automatically be subdivided and reclassified into 2,058,042.65 validly issued, fully paid and non-assessable shares of Class B Common Stock, without any action required on the part of the Corporation or any stockholder (the “Reclassification”). Each stock certificate or book-entry position that, immediately prior to the Effective Time, represented shares of Old Common Stock shall, from and after the Effective Time, automatically and without the necessity of presenting the same for exchange, represent that number of shares of Class B Common Stock after the Effective Time into which the shares of Old Common Stock have been reclassified pursuant to the foregoing, until the same shall be surrendered to the Corporation.

1. Provisions Relating to the Common Stock.


(a) General. Except as otherwise provided in this Certificate of Incorporation or required by the DGCL, shares of Class A Common Stock and Class B Common Stock shall have the same rights and powers, rank equally, share ratably and be identical in all respects and as to all matters.

(b) Voting. Except as otherwise provided in this Certificate of Incorporation or required by applicable law, (i) each holder of outstanding shares of Class A Common Stock and Class B Common Stock shall be entitled, with respect to each outstanding share of Common Stock held by such holder, to one vote in person or by proxy on all matters submitted to a vote of the holders of Common Stock and (ii) the holders of Common Stock will vote together as a single class on all matters presented to stockholders for their vote or approval. Notwithstanding the foregoing, (A) the holders of the outstanding shares of Class A Common Stock shall be entitled to vote separately as a class upon a proposed amendment to the Certificate of Incorporation, if the amendment would increase or decrease the par value of the shares of such Class A Common Stock or alter or change the powers, preferences or special rights of the shares of such Class A Common Stock so as to affect them adversely, and (B) the holders of the outstanding shares of Class B Common Stock shall be entitled to vote separately as a class upon a proposed amendment to the Certificate of Incorporation, if the amendment would increase or decrease the par value of the shares of such Class B Common Stock or alter or change the powers, preferences or special rights of the shares of such Class B Common Stock so as to affect them adversely.

(c) Dividends. Subject to the preferences and rights, if any, applicable to shares of Preferred Stock or any series thereof, (i) the holders of outstanding shares of Class A Common Stock shall be entitled to receive such dividends in cash, property or stock as may be declared thereon by the board of directors of the Corporation (the “Board”) at any time and from time to time out of assets or funds of the Corporation legally available therefor and shall share equally on a per share basis in such dividends, and (ii) the holders of outstanding shares of Class B Common Stock shall not be entitled to receive any dividends in cash, property or stock.

(d) Liquidation, Dissolution or Winding Up. In the event of any voluntary or involuntary liquidation, dissolution or winding-up of the Corporation, after payment or provision for payment of the debts and other liabilities of the Corporation, and subject to the preferences and rights, if any, applicable to shares of Preferred Stock or any series thereof, (i) the holders of outstanding shares of Class A Common Stock shall be entitled to receive all of the remaining assets of the Corporation available for distribution to its stockholders, ratably in proportion to the number of outstanding shares of Class A Common Stock held by them and (ii) the holders of outstanding shares of Class B Common Stock shall not be entitled to receive any of the remaining assets of the Corporation available for distribution to its stockholders.

(e) Reservation of Class A Common Stock. The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Class A Common Stock the number of shares of Class A Common Stock required to be issued pursuant to the Exchange Agreement (as defined below); provided that nothing contained herein shall be construed to preclude the Corporation from satisfying its obligations with respect to any exchange by delivery of shares of Class A Common Stock which are held in the treasury of the Corporation.

 

2


2. Additional Provisions Relating to the Class B Common Stock.

(a) General. The shares of Class B Common Stock may be issued only to, and registered in the name of, the Holdings Limited Partners (as defined below), their respective successors and assigns as well as their transferees permitted in accordance with Section 2(b) of this Article FOURTH (including all subsequent successors, assigns and permitted transferees) (the Holdings Limited Partners together with such persons, collectively, “Permitted Class B Owners”) and Section 4 of this Article FOURTH, and the aggregate number of outstanding shares of Class B Common Stock following any such issuance registered in the name of each such Permitted Class B Owner must be equal to the aggregate number of Partnership Interests (as defined below) held of record by such Permitted Class B Owner under the LPA (as defined below), as described further under Section 4 of this Article FOURTH. As used in this Certificate of Incorporation, (i) “Holdings Limited Partners” means each of the holders (other than the Corporation and CD&R WW, LLC, a Delaware limited liability company) of Partnership Interests of Core & Main Holdings, LP, a Delaware limited partnership, or any successor entities thereto (“Holdings”) as from time to time set forth on Schedule A to the LPA, and (ii) “Partnership Interests” means the limited partner interests of Holdings, authorized and issued under its Amended and Restated Agreement of Limited Partnership, dated as of the date hereof, as such agreement may be further amended, restated, amended and restated, supplemented or otherwise modified from time to time (the “LPA”), and constituting a “LP Partnership Interest” as defined in the LPA. A copy of the LPA will be kept with the books and records of the Corporation.

(b) Transfer of Class B Common Stock:

(i) A holder of Class B Common Stock may transfer (including by operation of law) and surrender shares of Class B Common Stock to the Corporation only if, and only to the extent permitted by the LPA and the Exchange Agreement, dated as of the date hereof, by and among the Corporation, Holdings and holders of Partnership Interests party thereto (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Exchange Agreement”), such holder also simultaneously surrenders an equal number of such holder’s Partnership Interests (as such number may be adjusted to reflect equitably any stock split, subdivision, combination or similar change with respect to the Class B Common Stock or Partnership Interests) to the Corporation in compliance with the LPA and the Exchange Agreement. Following the transfer and surrender of any shares of Class B Common Stock to the Corporation, such shares of Class B Common Stock of the Corporation shall be immediately and automatically retired, without any further action on the part of the Corporation or the holder of such shares. Notwithstanding the foregoing, any transfer of shares of Class B Common Stock pursuant to the Master Reorganization Agreement, dated as of the date hereof, by and among the Corporation, Holdings and the other parties party thereto (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Reorganization Agreement”), including by a transfer by operation of law pursuant to any merger or merger agreement contemplated by the Reorganization Agreement, shall not be subject to the transfer restrictions set forth herein.

 

3


(ii) A holder of Class B Common Stock may transfer shares of Class B Common Stock to any transferee (other than the Corporation) only if, and only to the extent permitted by the LPA, such holder also simultaneously transfers an equal number of such holder’s Partnership Interests (as such number may be adjusted to reflect equitably any stock split, subdivision, combination or similar change with respect to the Class B Common Stock or Partnership Interests) to such transferee in compliance with the LPA. The transfer restrictions described in this Section 2(b)(ii) of Article FOURTH are referred to as the “Restrictions.”

(iii) Any purported transfer of shares of Class B Common Stock in violation of Section 2(b)(i) and the Restrictions shall be null and void. If, notwithstanding the Restrictions, a person shall, voluntarily or involuntarily, purportedly become or attempt to become, the purported owner (“Purported Owner”) of shares of Class B Common Stock in violation of the Restrictions, then the Purported Owner shall not obtain any rights in and to such shares of Class B Common Stock (the “Restricted Shares”), and the purported transfer of the Restricted Shares to the Purported Owner shall not be recognized by the Corporation’s transfer agent (the “Transfer Agent”).

(iv) Upon a determination by the Board that a person has attempted or may attempt to transfer or to acquire Restricted Shares in violation of the Restrictions, the Board may take such action as it deems advisable to refuse to give effect to such transfer or acquisition on the books and records of the Corporation, including without limitation to cause the Transfer Agent not to record the Purported Owner’s transferor as the record owner of the Restricted Shares, and to institute proceedings to enjoin or rescind any such transfer or acquisition.

(v) The Board may, to the extent permitted by law, from time to time establish, modify, amend or rescind regulations and procedures that are consistent with the provisions of this Section 2(b) of Article FOURTH for determining whether any transfer or acquisition of shares of Class B Common Stock would violate the Restrictions and for the orderly application, administration and implementation of the provisions of this Section 2(b) of Article FOURTH. Any such procedures and regulations shall be kept on file with the Secretary of the Corporation and with its Transfer Agent and shall be made available for inspection by any prospective transferee and, upon written request, shall be mailed to holders of shares of Class B Common Stock.

(vi) The Board shall have all powers necessary to implement the Restrictions, including without limitation the power to prohibit the transfer of any shares of Class B Common Stock in violation thereof.

(c) Immediately upon the exchange of a Partnership Interest (together with the transfer and surrender of a share of Class B Common Stock) with the Corporation pursuant to the terms of the LPA and the Exchange Agreement, such share of Class B Common Stock shall automatically and, without further action on the part of the Corporation or the holder of such share, be transferred to the Corporation with no consideration being paid or issued with respect thereto, pursuant and subject to the terms of the provisions of Section 2(b) of this Article FOURTH, the Exchange Agreement and the LPA. Upon such transfer, such shares of Class B Common Stock of the Corporation shall be immediately and automatically retired, without any further action on the part of the Corporation or the holder of such shares.

 

4


(d) Notwithstanding the Restrictions, (i) in the event that any outstanding share of Class B Common Stock shall cease to be held by a registered holder of a Partnership Interest, such share of Class B Common Stock shall automatically and, without further action on the part of the Corporation or any holder of Class B Common Stock, be transferred to the Corporation for no consideration, such shares of Class B Common Stock of the Corporation shall be immediately and automatically retired, without any further action on the part of the Corporation or the holder of such shares, (ii) in the event that any registered holder of the Class B Common Stock no longer holds an interest in the Partnership Interest, the shares of Class B Common Stock registered in the name of such holder shall automatically and, without further action on the part of the Corporation or any holder of Class B Common Stock, be transferred to the Corporation for no consideration, such shares of Class B Common Stock of the Corporation shall be immediately and automatically retired, without any further action on the part of the Corporation or the holder of such shares and (iii) in the event that no Permitted Class B Owner owns any Partnership Interest that is redeemable pursuant to the LPA, then all shares of Class B Common Stock shall automatically and, without further action on the part of the Corporation or any holder of Class B Common Stock, be transferred to the Corporation for no consideration, such shares of Class B Common Stock of the Corporation shall be immediately and automatically retired, without any further action on the part of the Corporation or the holder of such shares.

(e) All certificates representing shares of Class B Common Stock, as the case may be, shall bear a legend substantially in the following form (or in such other form as the Board may determine):

THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO THE RESTRICTIONS (INCLUDING RESTRICTIONS ON TRANSFER) SET FORTH IN THE CERTIFICATE OF INCORPORATION, AS AMENDED AND/OR RESTATED FROM TIME TO TIME (A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE CORPORATION AND SHALL BE PROVIDED FREE OF CHARGE TO ANY STOCKHOLDER MAKING A REQUEST THEREFOR).

All holders of uncertificated shares of Class B Common Stock shall be given notice within a reasonable time after the issuance or transfer of uncertificated shares of such stock, in writing or by electronic transmission, that the shares of Class B Common Stock represented by book entry are subject to the restrictions (including restrictions on transfer) set forth in this Certificate of Incorporation (a copy of which is on file with the Secretary of the Corporation and shall be provided free of charge to any stockholder making a request therefor).

 

5


3. Provisions Relating to the Preferred Stock.

(a) Subject to the provisions of this Article FOURTH and any limitations prescribed by law, the Preferred Stock may be issued at any time and from time to time in one or more series. The Board is hereby authorized to provide, out of the unissued shares of Preferred Stock, for the issuance of shares of Preferred Stock in one or more series and, by resolution duly adopted and by filing a certificate of designation pursuant to the applicable provisions of the DGCL (hereinafter referred to as a “Preferred Stock Certificate of Designation”), to establish from time to time the number of shares to be included in each such series, and to fix the voting powers, designations, preferences and the relative participating, optional or other special rights and qualifications, limitations and restrictions of each series, including, without limitation, dividend rights, dividend rates, conversion rights, voting rights, terms of redemption and liquidation preferences. The powers, preferences and relative, participating, optional and other special rights of each series of Preferred Stock, and the qualifications, limitations or restrictions thereof, if any, may differ from those of any and all other series at any time outstanding.

(b) The Common Stock shall be subject to the express terms of the Preferred Stock and any series thereof.

(c) Except as otherwise required by law, holders of Common Stock, as such, shall not be entitled to vote on any amendment to this Certificate of Incorporation including a Preferred Stock Certificate of Designation that alters or changes the powers, preferences, rights or other terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other series of Preferred Stock, to vote thereon pursuant to this Certificate of Incorporation including a Preferred Stock Certificate of Designation or pursuant to the DGCL.

4. Ratio of Outstanding Shares of Common Stock to Partnership Interests.

(a) The Corporation shall undertake all actions, including, without limitation, an issuance, reclassification, dividend, division or recapitalization, with respect to the outstanding shares of Class A Common Stock necessary to maintain at all times a one-to-one ratio between the number of Partnership Interests owned by the Corporation (directly or indirectly, including through its subsidiaries) and the number of outstanding shares of Class A Common Stock, disregarding, for purposes of maintaining the one-to-one ratio, (i) treasury stock, (ii) the exchange of Partnership Interests by the Corporation in accordance with an Exchange for a Cash Exchange Payment (each as defined in the Exchange Agreement) pursuant to the Exchange Agreement, (iii) Preferred Stock or other debt or equity securities (including without limitation warrants, options and rights) issued by the Corporation that are convertible or exercisable or exchangeable for Class A Common Stock and (iv) shares of Class A Common Stock issued pursuant to the Core & Main, Inc. 2021 Omnibus Equity Incentive Plan, as the same may be amended from time to time, and any other stock incentive plan adopted by the Corporation from time to time, that have not vested thereunder.

(b) The Corporation shall undertake all actions, including, without limitation, an issuance, reclassification, division or recapitalization, with respect to the outstanding shares of Class B Common Stock necessary to maintain at all times a one-to-one ratio between the number of Partnership Interests owned by all Permitted Class B Owners and the number of outstanding shares of Class B Common Stock owned by all Permitted Class B Owners.

(c) The Corporation shall not:

 

6


(i) undertake or authorize (A) any subdivision (by any stock split, stock dividend, reclassification, recapitalization or similar event) or combination (by reverse stock split, reclassification, recapitalization or similar event) of the Class A Common Stock that is not accompanied by an identical subdivision or combination of the Partnership Interests to maintain at all times a one-to-one ratio between the number of Partnership Interests owned by the Corporation (directly or indirectly, including through its subsidiaries) and the number of outstanding shares of Class A Common Stock as provided in Section 4(a) of this Article FOURTH; or (B) any subdivision (by any stock split, stock dividend, reclassification, recapitalization or similar event) or combination (by reverse stock split, reclassification, recapitalization or similar event) of the Class B Common Stock that is not accompanied by an identical subdivision or combination of the Partnership Interests to maintain at all times, subject to the provisions of this Certificate of Incorporation, a one-to-one ratio between the number of Partnership Interests owned by the Permitted Class B Owners and the number of outstanding shares of Class B Common Stock, unless, in the case of clause (A) or (B) of this Section 4(c) of Article FOURTH, such action is necessary to maintain at all times both a one-to-one ratio between the number of Partnership Interests owned by the Corporation (directly or indirectly, including through its subsidiaries) and the number of outstanding shares of Class A Common Stock as provided in Section 4(a) of this Article FOURTH and a one-to-one ratio between the number of Partnership Interests owned by the Permitted Class B Owners and the number of outstanding shares of Class B Common Stock;

(ii) issue, transfer or deliver from treasury stock or repurchase outstanding shares of Class A Common Stock unless in connection with any such issuance, transfer, delivery or repurchase the Corporation takes or authorizes all requisite action such that, after giving effect to all such issuances, transfers, deliveries or repurchases, the number of Partnership Interests owned by the Corporation (directly or indirectly, including through its subsidiaries) will equal on a one-for-one basis the number of outstanding shares of Class A Common Stock as provided in Section 4(a) of this Article FOURTH; or

(iii) to the fullest extent permitted by law, consolidate, merge, combine or consummate any other transaction (other than an action or transaction for which an adjustment is provided in this Article FOURTH) in which shares of Class A Common Stock are exchanged for or converted into other stock or securities, or the right to receive cash and/or any other property, unless in connection with any such consolidation, merger, combination or other transaction, each Partnership Interest shall be entitled to be exchanged for or converted into the same kind and amount of stock or securities, cash and/or any other property, as the case may be, into which or for which each share of Class A Common Stock is exchanged or converted, in each case to maintain at all times a one-to-one ratio between (x) the stock or securities, or rights to receive cash and/or any other property issuable in such transaction in exchange for or conversion of one share of Class A Common Stock and (y) the stock or securities, or rights to receive cash and/or any other property issuable in such transaction in exchange for or conversion of one Partnership Interest.

 

7


The foregoing provisions of this Section 4(c) of Article FOURTH shall not apply to any action or transaction (including any consolidation, merger or combination) approved by the holders of a majority of the voting power of the outstanding Class A Common Stock and Class B Common Stock, each voting as a separate class.

5. Voting in Election of Directors. Except as may be required by the DGCL or as provided in this Certificate of Incorporation including a Preferred Stock Certificate of Designation, holders of Common Stock shall have the exclusive right to vote for the election of directors and for all other purposes, and holders of Preferred Stock shall not be entitled to vote on any matter or receive notice of any meeting of stockholders.

FIFTH. Management of Corporation. The following provisions are inserted for the management of the business, for the conduct of the affairs of the Corporation and for the purpose of creating, defining, limiting and regulating the powers of the Corporation and its directors and stockholders:

1. Except as may otherwise be provided by law, the business and affairs of the Corporation shall be managed by or under the direction of the Board.

2. Subject to any rights granted to the holders of shares of any class or series of Preferred Stock then outstanding and the rights granted pursuant to the Stockholders Agreement, by and among the Corporation and CD&R Waterworks Holdings, LLC, a Delaware limited liability company, CD&R Fund X Advisor Waterworks B, L.P., a Cayman Islands exempted limited partnership, CD&R Fund X Waterworks B1, L.P., a Cayman Islands exempted limited partnership, and CD&R Fund X-A Waterworks B, L.P., a Cayman Islands exempted limited partnership (together with their successors and assigns, the “CD&R Investors”), to be effective upon the date of the completion of the Corporation’s underwritten initial public offering of its Class A Common Stock (as the same may be amended, supplemented, restated or otherwise modified from time to time, the “Stockholders Agreement”), the number of directors of the Corporation shall be fixed, and may be altered from time to time, exclusively by resolution of the Board, but in no event may the number of directors of the Corporation be less than one.

3. The directors of the Corporation, subject to any rights granted to holders of shares of any class or series of Preferred Stock then outstanding, shall be divided into three classes designated Class I, Class II and Class III. Each class shall consist, as nearly as possible, of one-third of the total number of such directors. Class I directors shall initially serve for a term expiring at the first annual meeting of stockholders of the Corporation following the time at which the initial classification of the Board becomes effective (the “Effective Date”), Class II directors shall initially serve for a term expiring at the second annual meeting of stockholders following the Effective Date, and Class III directors shall initially serve for a term expiring at the third annual meeting of stockholders following the Effective Date. Directors of each class shall hold office until the annual meeting at which his or her term expires and until his or her successor shall be elected and qualified, or his or her death, resignation, retirement, disqualification or removal from office. At each succeeding annual meeting, successors to the class of directors whose term expires at that annual meeting shall be elected for a term expiring at the third succeeding annual meeting of stockholders, subject to any rights granted to holders of

 

8


shares of any class or series of Preferred Stock then outstanding to elect directors and the rights granted pursuant to the Stockholders Agreement. If the number of such directors is changed, any increase or decrease shall be apportioned among the classes so as to maintain the number of directors in each class as nearly equal as possible, and any such additional director of any class elected to fill a newly created directorship resulting from an increase in such class shall hold office for a term that shall coincide with the remaining term of that class, but in no case shall a decrease in the number of directors remove or shorten the term of any incumbent director. The Board is authorized to assign members of the Board already in office to their respective class.

4. Subject to any rights granted to the holders of shares of any class or series of Preferred Stock then outstanding and the rights granted pursuant to the Stockholders Agreement, (a) following the Effective Date and until the first date (the “Trigger Date”) on which the CD&R Investors, together with their affiliates, cease to collectively beneficially own (directly or indirectly) shares of stock of the Corporation representing at least forty percent (40%) of the combined voting power of all of the outstanding shares of stock of the Corporation, a director may be removed at any time, either with or without cause, upon the affirmative vote of the holders of at least a majority of the voting power of the outstanding shares of stock of the Corporation then entitled to vote in an election of directors, and (b) from and after the Trigger Date, a director may be removed from office only for cause and only upon the affirmative vote of the holders of at least a majority of the voting power of the outstanding shares of stock of the Corporation then entitled to vote in an election of directors.

5. Subject to any rights granted to the holders of shares of any class or series of Preferred Stock then outstanding and the rights granted pursuant to the Stockholders Agreement, and except as otherwise provided by law, any vacancy in the Board that results from an increase in the number of directors, from the death, disability, resignation, disqualification or removal of any director or from any other cause shall be filled solely by an affirmative vote of at least a majority of the directors then in office, even if less than a quorum, or by a sole remaining director. A director elected to fill a vacancy or a newly created directorship shall hold office until the next annual meeting of stockholders held to elect the class of directors to which such director is elected and until his or her successor has been elected and qualified or until his or her earlier death, resignation or removal.

6. No director of the Corporation shall be liable to the Corporation or its stockholders for monetary damages for breach of his or her fiduciary duty as a director, provided that nothing contained in this Article FIFTH shall eliminate or limit the liability of a director (a) for any breach of the director’s duty of loyalty to the Corporation or its stockholders, (b) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of the law, (c) under Section 174 of the DGCL or (d) for any transaction from which the director derived an improper personal benefit. If the DGCL is amended to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL, as so amended. No amendment, repeal or modification of this provision shall apply to or have any adverse effect on any right or protection of, or any limitation of the liability of, a director of the Corporation existing at the time of such amendment, repeal or modification with respect to acts or omissions occurring prior to such repeal or modification.

 

9


7. To the fullest extent permitted by the DGCL, the Corporation shall indemnify and advance expenses (including reasonable attorneys’ fees) to the directors and officers of the Corporation, provided that, except as otherwise provided in the Corporation’s Amended and Restated By-laws (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “By-laws”) the Corporation shall not be obligated to indemnify or advance expenses to a director or officer of the Corporation in respect of an action, suit or proceeding (or part thereof) instituted by such director or officer, unless such action, suit or proceeding (or part thereof) has been authorized by the Board. The rights provided by this Section 7 of Article FIFTH shall not limit or exclude any rights, indemnities or limitations of liability to which any director or officer of the Corporation may be entitled, whether as a matter of law, under the By-laws, by agreement, vote of the stockholders, approval of the directors of the Corporation or otherwise.

8. Unless and except to the extent that the By-laws of the Corporation shall so require, the election of directors of the Corporation need not be by written ballot.

SIXTH. Stockholder Action by Consent. Until the Trigger Date, any action required or permitted to be taken by the stockholders of the Corporation may be effected by consent in writing or electronic transmission in accordance with the DGCL in lieu of a meeting. From and after the Trigger Date, any action required or permitted to be taken by the stockholders of the Corporation may be taken only upon the vote of the stockholders at an annual or special meeting duly called and may not be taken by consent of the stockholders.

SEVENTH. Special Meeting of Stockholders. Except as otherwise required by law and subject to any rights granted to holders of shares of any class or series of Preferred Stock then outstanding, special meetings of the stockholders of the Corporation for any purpose or purposes may be called only by the Chair of the Board or pursuant to a resolution of the Board adopted by at least a majority of the directors then in office, provided that, until the Trigger Date, a special meeting of the stockholders may also be called by the Secretary of the Corporation at the request of the holders of record of at least a majority of the voting power of the outstanding shares of stock of the Corporation. From and after the Trigger Date, the stockholders of the Corporation shall not have the power to call a special meeting of the stockholders of the Corporation or to request the Secretary of the Corporation to call a special meeting of the stockholders.

EIGHTH. Business Opportunities. To the fullest extent permitted by Section 122(17) of the DGCL (or any successor provision), the Corporation, on behalf of itself and its subsidiaries, renounces and waives any interest or expectancy of the Corporation and its subsidiaries in, or in being offered an opportunity to participate in, directly or indirectly, any potential transactions, matters or business opportunities (including, without limitation, any business activities or lines of business that are the same as or similar to those pursued by, or competitive with, the Corporation or any of its subsidiaries or any dealings with customers or clients of the Corporation or any of its subsidiaries) (each a “Corporate Opportunity”) that are from time to time presented to any of the CD&R Investors or any of their officers, directors, employees, agents, stockholders, members, partners, affiliates or subsidiaries (other than the Corporation and its subsidiaries), even if the transaction, matter or opportunity is one that the Corporation or its subsidiaries might reasonably be deemed to have pursued or had the ability or desire to pursue if granted the

 

10


opportunity to do so. To the fullest extent permitted by law, none of the CD&R Investors nor any of their respective officers, directors, employees, agents, stockholders, members, partners, affiliates or subsidiaries shall be liable to the Corporation or any of its subsidiaries for breach of any fiduciary or other duty, as a director or officer or otherwise, by reason of the fact that such person pursues, acquires or participates in such Corporate Opportunity, directs such Corporate Opportunity to another person or fails to communicate, offer or present such Corporate Opportunity, or information regarding such Corporate Opportunity, to the Corporation or its subsidiaries, unless, in the case of any such person who is a director or officer of the Corporation, such business opportunity is expressly offered to such director or officer in writing solely in his or her capacity as a director or officer of the Corporation. Any person purchasing or otherwise acquiring or holding any interest in any shares of stock of the Corporation shall be deemed to have notice of and have consented to the provisions of this Article EIGHTH. Neither the alteration, amendment or repeal of this Article EIGHTH, nor the adoption of any provision of this Certificate of Incorporation inconsistent with this Article EIGHTH, nor, to the fullest extent permitted by Delaware law, any modification of law, shall eliminate or reduce the effect of this Article EIGHTH in respect of any Corporate Opportunity first identified or any other matter occurring, or any cause of action, suit or claim that, but for this Article EIGHTH, would accrue or arise, prior to such alteration, amendment, repeal, adoption or modification. If any provision or provisions of this Article EIGHTH shall be held to be invalid, illegal or unenforceable as applied to any circumstance for any reason whatsoever: (a) the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of this Article EIGHTH (including, without limitation, each portion of any paragraph of this Article EIGHTH containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and (b) to the fullest extent possible, the provisions of this Article EIGHTH (including, without limitation, each such portion of any paragraph of this Article EIGHTH containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to permit the Corporation to protect its directors, officers, employees and agents from personal liability in respect of their good faith service to or for the benefit of the Corporation to the fullest extent permitted by law. This Article EIGHTH shall not limit any protections or defenses available to, or indemnification or advancement rights of, any director or officer of the Corporation under this Certificate of Incorporation, the By-laws, applicable law, any agreement or otherwise.

NINTH. Section 203 of the DGCL. The Corporation elects not to be governed by Section 203 of the DGCL or any successor provision thereto (“Section 203”), as permitted under and pursuant to subsection (b)(3) of Section 203, and the restrictions contained in Section 203 shall not apply to the Corporation until the first time at which both of the following conditions exist (if ever): (a) Section 203 by its terms would, but for the provisions of this Article NINTH, apply to the Corporation; and (b) the CD&R Investors, together with their affiliates, cease to collectively beneficially own (directly or indirectly) shares of stock of the Corporation representing at least five percent (5%) of the combined voting power of all of the outstanding shares of stock of the Corporation. From and after such time, the Corporation shall be governed by Section 203 so long as Section 203 by its terms would apply to the Corporation.

 

11


TENTH. Amendment of the Certificate of Incorporation. The Corporation reserves the right to amend, alter or repeal any provision contained in this Certificate of Incorporation in the manner now or hereafter prescribed by the DGCL, and all rights herein conferred upon stockholders or directors are granted subject to this reservation, provided, however, that any amendment, alteration or repeal of Sections 6 or 7 of Article FIFTH shall not adversely affect any right or protection existing under this Certificate of Incorporation immediately prior to such amendment, alteration or repeal, including any right or protection of a director thereunder in respect of any act or omission occurring prior to the time of such amendment, alteration or repeal. Notwithstanding anything to the contrary contained in this Certificate of Incorporation, and notwithstanding that a lesser percentage may be permitted from time to time by applicable law, no provision of Articles FIFTH, SIXTH, SEVENTH, EIGHTH, NINTH, this Article TENTH and Articles ELEVENTH and TWELFTH may be amended, altered or repealed in any respect, nor may any provision or by-law inconsistent therewith be adopted, unless in addition to any other vote required by this Certificate of Incorporation or otherwise required by law, (a) until the Trigger Date, such amendment, alteration or repeal is approved by the affirmative vote of the holders of at least a majority of the voting power of the outstanding shares of stock of the Corporation then entitled to vote thereon, and (b) from and after the Trigger Date, such amendment, alteration or repeal is approved by the holders of at least two-thirds (66 2/3%) of the voting power of the outstanding shares of stock of the Corporation then entitled to vote thereon.

ELEVENTH. Amendment of the By-laws. In furtherance and not in limitation of the powers conferred by law, the Board is expressly authorized to amend, alter or repeal the By-laws, without the assent or vote of stockholders of the Corporation. Any amendment, alteration or repeal of the By-laws by the Board shall require the affirmative vote of at least a majority of the directors then in office, so long as a quorum is present. In addition to any other vote otherwise required by law, the stockholders of the Corporation may amend, alter or repeal the By-laws, provided that any such action will require (a) until the Trigger Date, the affirmative vote of the holders of at least a majority of the voting power of the outstanding shares of stock of the Corporation then entitled to vote thereon and (b) from and after the Trigger Date, the affirmative vote of the holders of at least two-thirds (66 2/3%) of the voting power of the outstanding shares of stock of the Corporation then entitled to vote thereon. In addition, so long as the Stockholders Agreement remains in effect, the Board shall not approve any amendment, alteration or repeal of any provision of the By-laws, or the adoption of any new by-law, that would be contrary to or inconsistent with the then-applicable terms, if any, of the Stockholders Agreement, or this sentence.

TWELFTH. Exclusive Jurisdiction for Certain Actions. Unless the Corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (the “Court of Chancery”) (or, if such court does not have subject matter jurisdiction thereof, the federal district court of the State of Delaware) shall, to the fullest extent permitted by law, be the sole and exclusive forum for (a) any derivative action, suit or proceeding brought on behalf of the Corporation, (b) any action, suit or proceeding asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, employee, agent or stockholder of the Corporation to the Corporation or the Corporation’s stockholders (c) any action, suit or proceeding asserting a claim arising out of or pursuant to or seeking to enforce any right obligation or remedy under any provision of the Certificate of Incorporation or By-laws (as either may be amended or restated) or the DGCL, or as to which the DGCL confers jurisdiction on the Court of Chancery, or (d) any action or proceeding asserting a claim that is governed by

 

12


the internal affairs doctrine. Unless the Corporation consents in writing to the selection of an alternative forum, the federal district courts of the United States of America will, to the fullest extent permitted by law, be the sole and exclusive forum for the resolution of any action asserting a cause of action arising under the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder. Any person or entity holding, owning, purchasing or otherwise acquiring any interest in shares of stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Article TWELFTH.

 

13

EX-3.2 4 d185428dex32.htm EX-3.2 EX-3.2

Exhibit 3.2

 

 

CORE & MAIN, INC.

AMENDED AND RESTATED BY-LAWS

Effective as of July 22, 2021

 

 


CORE & MAIN, INC.

AMENDED AND RESTATED BY-LAWS

Table of Contents

 

     Page  

ARTICLE I MEETINGS OF STOCKHOLDERS

     1  
Section 1.01.  

Annual Meetings

     1  
Section 1.02.  

Special Meetings

     1  
Section 1.03.  

Participation in Meetings by Remote Communication

     1  
Section 1.04.  

Notice of Meetings; Waiver of Notice

     2  
Section 1.05.  

Proxies

     3  
Section 1.06.  

Voting Lists

     3  
Section 1.07.  

Quorum

     4  
Section 1.08.  

Voting

     4  
Section 1.09.  

Adjournment

     5  
Section 1.10.  

Organization; Procedure

     5  
Section 1.11.  

Consent of Stockholders in Lieu of Meeting

     6  
Section 1.12.  

Notice of Stockholder Proposals and Nominations

     6  

ARTICLE II BOARD OF DIRECTORS

     11  
Section 2.01.  

General Powers

     11  
Section 2.02.  

Number and Term of Office

     11  
Section 2.03.  

Classification; Election of Directors

     11  
Section 2.04.  

Regular Meetings

     11  
Section 2.05.  

Special Meetings

     11  
Section 2.06.  

Notice of Meetings; Waiver of Notice

     11  
Section 2.07.  

Quorum; Voting

     12  
Section 2.08.  

Participation by Electronic Communications Equipment

     12  
Section 2.09.  

Adjournment

     12  
Section 2.10.  

Action Without a Meeting

     12  
Section 2.11.  

Regulations

     12  
Section 2.12.  

Resignations of Directors

     12  
Section 2.13.  

Removal of Directors

     13  
Section 2.14.  

Vacancies and Newly Created Directorships

     13  
Section 2.15.  

Compensation

     13  
Section 2.16.  

Reliance on Accounts and Reports, etc

     13  

ARTICLE III COMMITTEES

     13  
Section 3.01.  

Designation of Committees

     13  
Section 3.02.  

Members and Alternate Members

     14  
Section 3.03.  

Committee Procedures

     14  
Section 3.04.  

Meetings and Actions of Committees

     14  

 

i


Section 3.05.  

Resignations and Removals

     14  
Section 3.06.  

Vacancies

     15  

ARTICLE IV OFFICERS

     15  
Section 4.01.  

Officers

     15  
Section 4.02.  

Election

     15  
Section 4.03.  

Compensation

     15  
Section 4.04.  

Removal and Resignation; Vacancies

     15  
Section 4.05.  

Authority and Duties of Officers

     15  
Section 4.06.  

Chief Executive Officer

     16  
Section 4.07.  

Vice Presidents

     16  
Section 4.08.  

Secretary

     16  
Section 4.09.  

Treasurer

     17  

ARTICLE V CAPITAL STOCK

     18  
Section 5.01.  

Certificates of Stock, Uncertificated Shares

     18  
Section 5.02.  

Facsimile Signatures

     18  
Section 5.03.  

Lost, Stolen or Destroyed Certificates

     18  
Section 5.04.  

Transfer of Stock

     19  
Section 5.05.  

Registered Stockholders

     19  
Section 5.06.  

Transfer Agent and Registrar

     19  

ARTICLE VI INDEMNIFICATION

     19  
Section 6.01.  

Indemnification

     19  
Section 6.02.  

Advance of Expenses

     20  
Section 6.03.  

Procedure for Indemnification

     20  
Section 6.04.  

Burden of Proof

     21  
Section 6.05.  

Contract Right; Non-Exclusivity; Survival

     21  
Section 6.06.  

Insurance

     22  
Section 6.07.  

Employees and Agents

     22  
Section 6.08.  

Interpretation; Severability

     22  
Section 6.09.  

Other Sources

     22  

ARTICLE VII OFFICES

     22  
Section 7.01.  

Registered Office

     22  
Section 7.02.  

Other Offices

     22  

ARTICLE VIII GENERAL PROVISIONS

     23  
Section 8.01.  

Dividends

     23  
Section 8.02.  

Reserves

     23  
Section 8.03.  

Execution of Instruments

     23  
Section 8.04.  

Voting as Stockholder or Equity Holder

     23  
Section 8.05.  

Fiscal Year

     23  

 

ii


Section 8.06.  

Seal

     24  
Section 8.07.  

Books and Records; Inspection

     24  
Section 8.08.  

Electronic Transmission

     24  

ARTICLE IX AMENDMENT OF BY-LAWS

     24  
Section 9.01.  

Amendment

     24  

 

 

iii


CORE & MAIN, INC.

AMENDED AND RESTATED BY-LAWS

As amended and restated, effective as of July 22, 2021

ARTICLE I

MEETINGS OF STOCKHOLDERS

Section 1.01. Annual Meetings. An annual meeting of the stockholders of Core & Main, Inc. (the “Corporation”) for the election of directors to succeed directors whose terms expire and for the transaction of such other business as properly may come before such meeting shall be held each year either within or without the State of Delaware on such date and time, and at such place, if any, as exclusively may be fixed from time to time by resolution of the Corporation’s board of directors (the “Board”), and set forth in the notice or waiver of notice of the meeting. In lieu of holding an annual meeting of the stockholders at a designated place, the Board may, in its sole discretion, determine that any annual meeting of stockholders may be held solely by means of remote communication in accordance with Section 1.03 of these Amended and Restated By-laws (as amended from time to time, the “By-laws”) and Section 211(a) of the General Corporation Law of the State of Delaware, as amended from time to time (the “DGCL”). The Board may postpone, recess, reschedule or cancel any annual meeting of stockholders previously scheduled by the Board.

Section 1.02. Special Meetings. A special meeting of the stockholders for any purpose may be called only in the manner set forth in the Certificate of Incorporation of the Corporation as then in effect (as amended from time to time, the “Certificate of Incorporation”). Notice of every special meeting of the stockholders of the Corporation shall state the purpose or purposes of such meeting. Except as otherwise required by law, the business conducted at a special meeting of stockholders of the Corporation shall be limited exclusively to the business set forth in the Corporation’s notice of meeting. Any special meeting of the stockholders shall be held either within or without the State of Delaware, at such place, if any, and on such date and time, as shall be specified in the notice of such special meeting. In lieu of holding a special meeting of the stockholders at a designated place, the Board may, in its sole discretion, determine that any special meeting of stockholders may be held solely by means of remote communication in accordance with Section 1.03 of these By-laws and Section 211(a) of the DGCL. The Board may postpone, recess, reschedule or cancel any special meeting of stockholders previously scheduled by the Board.

Section 1.03. Participation in Meetings by Remote Communication. The Board, acting in its sole discretion, may establish guidelines and procedures in accordance with applicable provisions of the DGCL and any other applicable law for the participation by stockholders and proxyholders in a meeting of stockholders by means of remote communications (including by webcast), and may determine that any meeting of stockholders will not be held at any place but will be held solely by means of remote communication (including by webcast). Stockholders and proxyholders complying with such procedures and guidelines and otherwise entitled to vote at a meeting of stockholders shall be deemed present in person and entitled to vote at a meeting


of stockholders, whether such meeting is to be held at a designated place or solely by means of remote communication (including by webcast); provided that (i) the Corporation shall implement reasonable measures to verify that each person deemed present and permitted to vote at the meeting by means of remote communication is a stockholder or proxyholder, (ii) the Corporation shall implement reasonable measures to provide such stockholders and proxyholders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the stockholders, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with such proceedings, and (iii) if any stockholder or proxyholder votes or takes other action at the meeting by means of remote communication, a record of such vote or other action shall be maintained by the Corporation.

Section 1.04. Notice of Meetings; Waiver of Notice.

(a) Whenever stockholders are required or permitted to take any action at a meeting, a notice of the meeting shall be given that shall specify (i) the place, if any, date and time of such meeting, (ii) the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such meeting, (iii) in the case of a special meeting, the purpose or purposes for which such meeting is called, and (iv) the record date for determining the stockholders entitled to vote at the meeting (if such date is different from the record date for stockholders entitled to notice of the meeting). The notice may contain such other information as may be required by law or as may be deemed appropriate by the Chair of the Board, the Secretary or the Board. Unless otherwise required by law, the Certificate of Incorporation or these By-laws, the notice of any meeting shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder entitled to vote at the meeting as of the record date for determining the stockholders entitled to notice of the meeting. If the stockholder list referred to in Section 1.06 of these By-laws will be made accessible on an electronic network for the ten (10) days prior to the meeting, the notice of meeting must indicate how the stockholder list can be accessed. Notice shall be deemed to have been given to all stockholders of record who share an address if notice if given in accordance with the “householding” rules set forth in Rule 14a-3(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 233 of the DGCL. If the meeting of stockholders is to be held solely by means of electronic communications, the notice of meeting must provide the information required to access such stockholder list during the meeting.

(b) A written waiver of notice of meeting signed by a stockholder or a waiver by electronic transmission by a stockholder, whether given before or after the meeting time stated in such notice, is deemed equivalent to notice. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders need be specified in a waiver of notice. Attendance of a stockholder at a meeting is a waiver of notice of such meeting, except when the stockholder attends a meeting for the express purpose of objecting at the beginning of the meeting to the transaction of any business at the meeting on the ground that the meeting is not lawfully called or convened.

 

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(c) Without limiting the manner by which notice otherwise may be given effectively to stockholders pursuant to the DGCL, any notice to stockholders given by the Corporation under the DGCL, the Certificate of Incorporation or these By-laws may be given in writing directed to the stockholder’s mailing address (or by electronic transmission directed to the stockholder’s electronic mail address, as applicable) as it appears on the records of the Corporation and shall be deemed given (i) if mailed, when the notice is deposited in the United States mail, postage prepaid, (ii) if delivered by courier service, the earlier of when the notice is (x) received or (y) left at such stockholder’s address or (iii) if given by electronic mail, when directed to such stockholder’s electronic mail address unless the stockholder has notified the Corporation in writing or by electronic transmission of an objection to receiving notice by electronic mail or such notice is prohibited by subsection (e) of Section 232 of the DGCL. A notice by electronic mail must include a prominent legend that the communication is an important notice regarding the Corporation. Notice given by electronic transmission (other than by electronic mail) pursuant to this subsection shall be deemed given: (1) if by facsimile telecommunication, when directed to a facsimile telecommunication number at which the stockholder has consented to receive notice; (2) if by posting on an electronic network together with separate notice to the stockholder of such specific posting, upon the later of (A) such posting and (B) the giving of such separate notice; and (3) if by any other form of electronic transmission, when directed to the stockholder. An affidavit of the Secretary or an Assistant Secretary or of the transfer agent or other agent of the Corporation that the notice has been given by personal delivery, by mail or by a form of electronic transmission shall, in the absence of fraud, be prima facie evidence of the facts stated therein.

Section 1.05. Proxies.

(a) Each stockholder entitled to vote at a meeting of stockholders or to express consent to or dissent from corporate action without a meeting (if permitted by the Certificate of Incorporation) may authorize another person or persons to act for such stockholder by proxy.

(b) No proxy may be voted or acted upon after the expiration of three years from the date of such proxy, unless such proxy provides for a longer period. Every proxy is revocable at the sole discretion of the stockholder executing it unless the proxy states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A stockholder may revoke any proxy that is not irrevocable by attending the meeting and voting in person or by delivering to the Secretary a revocation of the proxy or a new proxy bearing a later date.

Section 1.06. Voting Lists. The Corporation shall prepare, at least ten (10) days before every meeting of the stockholders (and before any adjournment thereof for which a new record date has been set), a complete list of the stockholders entitled to vote at the meeting (provided, however, if the record date for determining the stockholders entitled to vote is fewer than ten (10) days before the date of the meeting, the list shall reflect the stockholders entitled to vote as of the tenth (10th) day before the meeting date), arranged in alphabetical order and showing the address of each stockholder and the number of outstanding shares registered in the name of each stockholder. This list shall be open to the examination of any stockholder beginning at least ten (10) days prior to the meeting for any purpose germane to the meeting: (i) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of meeting, or (ii) during ordinary business hours at the principal place of business of the Corporation. If the meeting is to be held at a place, then a list of stockholders entitled to vote at the meeting shall be produced and kept at the time and place of the meeting during the whole time thereof and may be examined by any stockholder who is present. If the

 

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meeting is to be held solely by means of remote communication, then the list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting. The stock ledger shall be the only evidence as to who are the stockholders entitled by this Section 1.06 to examine the list required by this Section 1.06 or to vote in person or by proxy at any meeting of stockholders.

Section 1.07. Quorum. Except as otherwise required by law or by the Certificate of Incorporation, the presence in person or by proxy of the holders of record of a majority of the voting power of outstanding shares of stock of the Corporation entitled to vote at the meeting of stockholders shall constitute a quorum for the transaction of business at such meeting. Notwithstanding the foregoing, where a separate vote by a class or series or classes or series is required, a majority of the voting power of the outstanding shares of such class or series or classes or series, present in person or represented by proxy, shall constitute a quorum entitled to take action with respect to the vote on that matter. In the absence of a quorum, then either (a) the chairperson of the meeting or (b) stockholders by the affirmative vote of a majority of the voting power of the outstanding shares of stock then entitled to vote thereon, present in person or represented by proxy, shall have the power to adjourn the meeting from time to time in the manner provided in Section 1.09 of these By-laws until a quorum is present or represented.

Section 1.08. Voting. Except as otherwise provided in the Certificate of Incorporation or by applicable law, every holder of record of outstanding shares of stock of the Corporation entitled to vote at a meeting of stockholders is entitled to one vote for each share outstanding in his, her or its name on the books of the Corporation (a) at the close of business on the record date for such meeting, or (b) if no record date has been fixed, at the close of business on the day next preceding the day on which notice of the meeting is given, or if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. Any outstanding share of stock of the Corporation held by the Corporation or any of its majority-controlled subsidiaries (except as expressly permitted by law) shall not be entitled to vote or be counted for quorum purposes. All matters at any meeting at which a quorum is present, except the election of directors, shall be decided by the affirmative vote of the holders of at least a majority of the voting power of the outstanding shares of stock of the Corporation present in person or represented by proxy at the meeting and entitled to vote on the subject matter in question, unless a different or minimum vote is required by express provision of law, the Certificate of Incorporation, these By-laws, the rules or regulations of any stock exchange applicable to the Corporation or any rule or regulation applicable to the Corporation or its securities, in which case such different or minimum vote shall be the applicable vote on the matter. The election of directors shall be decided by the affirmative vote of the holders of at least a plurality of the votes cast in respect of the outstanding shares of stock present in person or represented by proxy at the meeting and entitled to vote in an election of directors, unless otherwise expressly provided by express provision of law, the Certificate of Incorporation or these By-laws. The stockholders do not have the right to cumulate their votes for the election of directors.

 

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Section 1.09. Adjournment. Any meeting of stockholders may be adjourned, from time to time, by the chairperson of the meeting or by the vote of a majority of the voting power of the outstanding shares of stock of the Corporation present in person or represented by proxy at the meeting and entitled to vote thereon, to reconvene at the same or some other place, and notice need not be given of any such adjourned meeting if the place, if any, and date and time thereof (and the means of remote communication, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting) are announced at the meeting at which the adjournment is taken, unless the adjournment is for more than thirty (30) days or a new record date is fixed for the adjourned meeting after the adjournment, in which case notice of the adjourned meeting in accordance with Section 1.04 of these By-laws shall be given to each stockholder of record entitled to vote at the meeting. If after the adjournment a new record date for determination of stockholders entitled to vote is fixed for the adjourned meeting, the Board shall fix as the record date for determining stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote at the adjourned meeting, and shall give notice of the adjourned meeting to each stockholder of record as of the record date so fixed for notice of such adjourned. At the adjourned meeting, the Corporation may transact any business that might have been transacted at the original meeting.

Section 1.10. Organization; Procedure.

(a) At every meeting of stockholders the presiding person shall be the Chair of the Board or, in the event of his or her absence or disability, the Chief Executive Officer, or, in the event of his or her absence or disability, a presiding person chosen by resolution of the Board. The Secretary or, in the event of his or her absence or disability, the Assistant Secretary, if any, or, if there be no Assistant Secretary, in the absence of the Secretary, an appointee of the presiding person, shall act as secretary of the meeting. The Board may make such rules or regulations for the conduct of meetings of stockholders as it shall deem necessary, appropriate or convenient. Subject to any such rules and regulations, the presiding person of any meeting shall have the right and authority to convene and (for any or no reason) to recess and/or adjourn the meeting, prescribe rules, regulations and procedures for such meeting and to take all such actions as in the judgment of the presiding person are appropriate for the proper conduct of such meeting. Such rules, regulations or procedures, whether adopted by the Board or prescribed by the presiding person of the meeting, may include, without limitation, the following: (i) the establishment of an agenda or order of business for the meeting; (ii) rules and procedures for maintaining order at the meeting and the safety of those present; (iii) limitations on attendance at or participation in the meeting to stockholders or records of the Corporation, their duly authorized and constituted proxies or such other persons as the presiding person of the meeting shall determine; (iv) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (v) limitations on the time allotted to questions or comments by participants. The presiding person at any meeting of stockholders, in addition to making any other determinations that may be appropriate to the conduct of the meeting, shall, if the facts warrant, determine and declare to the meeting that a matter or business was not properly brought before the meeting and if such presiding person should so determine, such presiding person shall so declare to the meeting and any such matter or business not properly brought before the meeting shall not be transacted or considered. Unless and to the extent determined by the Board or the person presiding over the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure.

 

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(b) Preceding any meeting of the stockholders, the Board may, and when required by law shall, appoint one or more persons to act as inspectors of elections, and may designate one or more alternate inspectors. If no inspector or alternate so appointed by the Board is able to act, or if no inspector or alternate has been appointed and the appointment of an inspector is required by law, the person presiding at the meeting shall appoint one or more inspectors to act at the meeting. No director or nominee for election to the Board shall be appointed as an inspector of elections. Each inspector, before entering upon the discharge of the duties of an inspector, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability. The inspectors shall discharge their duties in accordance with the requirements of applicable law.

Section 1.11. Consent of Stockholders in Lieu of Meeting. Except as otherwise provided in the Certificate of Incorporation, stockholders may not take any action by consent in lieu of action at an annual or special meeting of stockholders.

Section 1.12. Notice of Stockholder Proposals and Nominations.

(a) Annual Meetings of Stockholders.

(i) Nominations of persons for election to the Board and proposals of business to be considered by the stockholders may be made at an annual meeting of stockholders only (A) in accordance with the then-applicable terms, if any, of the Stockholders Agreement, by and among the Corporation and CD&R Waterworks Holdings, LLC, a Delaware limited liability company, CD&R Fund X Advisor Waterworks B, L.P., a Cayman Islands exempted limited partnership, CD&R Fund X Waterworks B1, L.P., a Cayman Islands exempted limited partnership, and CD&R Fund X-A Waterworks B, L.P., a Cayman Islands exempted limited partnership (together with their successors and assigns, the “CD&R Investors”), to be effective upon the date of the completion of the Corporation’s underwritten initial public offering of its Class A common stock, par value $0.01 per share (“Class A Common Stock”) (as amended, supplemented, restated or otherwise modified from time to time, the “Stockholders Agreement”), (B) pursuant to the Corporation’s notice of the meeting (or any supplement thereto) delivered pursuant to Section 1.04 of these By-laws, (C) by or at the direction of the Board or a Committee (as defined in Section 3.01 of these By-laws) appointed by the Board for such purpose or (D) by any stockholder of the Corporation who is entitled to vote at the meeting, who complies with the notice procedures set forth in clauses (ii) and (iii) of this Section 1.12(a) and who is a stockholder of record at the time such notice is delivered to the Secretary and at the date of the meeting, subject to paragraph (c)(ii)(D) of this Section 1.12.

(ii) For nominations or other business to be properly brought before an annual meeting by a stockholder pursuant to subclause (D) of Section 1.12(a)(i) of these By-laws, the stockholder must have given timely notice thereof in writing to the Secretary and, in the case of business other than nominations for persons for election to the Board, such other business must constitute a proper matter for stockholder action. To be timely, a stockholder’s notice shall be delivered to the Secretary at the principal executive offices of the Corporation not less than ninety (90) days nor more than one hundred and twenty (120) days prior to the first anniversary date of the preceding year’s annual meeting (which date shall, for purposes of the Corporation’s first annual meeting of stockholders after its shares of Class A Common Stock are first publicly traded, be deemed to have occurred on July 1, 2021); provided, however, that in the event that the date of the annual meeting is advanced by more than thirty (30) days or delayed by more than seventy (70) days from such anniversary date of the preceding year’s annual meeting, notice by

 

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the stockholder to be timely must be so delivered not earlier than one hundred and twenty (120) days prior to such annual meeting and not later than the close of business on the later of the ninetieth (90th) day prior to such annual meeting or the close of business on the tenth (10th) day following the day on which public announcement of the date of such meeting is first made. The number of nominees a stockholder may nominate for election at an annual meeting (or in the case of a stockholder giving the notice on behalf of a beneficial owner, the number of nominees a stockholder may nominate for election at an annual meeting on behalf of such beneficial owner) shall not exceed the number of directors to be elected at such annual meeting. Such stockholder’s notice shall set forth (A) as to each person whom the stockholder proposes to nominate for election or re-election as a director, all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to and in accordance with Section 14(a) of the Exchange Act and the rules and regulations promulgated thereunder, including such person’s written consent to being named in the Corporation’s proxy statement as a nominee and to serving as a director if elected; (B) as to any other business that the stockholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the text of the proposal or business (including the text of any resolutions proposed for consideration and, in the event that such business includes a proposal to amend these By-laws, the text of the proposed amendment), the reasons for conducting such business at the meeting and any material interest in such business of such stockholder and of the beneficial owner, if any, on whose behalf the proposal is made; and (C) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (1) the name and address of such stockholder, as they appear on the Corporation’s books, and of such beneficial owner; (2) the class or series and number of outstanding shares of stock of the Corporation which are owned, directly or indirectly, beneficially and of record by such stockholder and such beneficial owner; (3) a representation that the stockholder is a holder of record of the outstanding stock of the Corporation at the time of giving the notice, will be entitled to vote at such meeting and will appear in person or by proxy at the meeting to propose such business or nomination; (4) a representation whether the stockholder or the beneficial owner, if any, will be or is part of a group which will (x) deliver a proxy statement and/or form of proxy to the holders of at least the percentage of the voting power of the Corporation’s outstanding stock required to approve or adopt the proposal or elect the nominee and/or (y) otherwise solicit proxies or votes from stockholders in support of such proposal or nomination; and (5) a certification regarding whether such stockholder and beneficial owner, if any, have complied with all applicable federal, state and other legal requirements in connection with the stockholder’s and/or beneficial owner’s acquisition of shares of stock or other securities of the Corporation and/or the stockholder’s and/or beneficial owner’s acts or omissions as a stockholder of the Corporation. Notice of a stockholder nomination or proposal shall also set forth, as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (I) a description of any agreement, arrangement or understanding with respect to the nomination or proposal and/or the voting of shares of any class or series of stock of the Corporation between or among the stockholder giving notice, the beneficial owner, if any, on whose behalf the nomination or proposal is made, any of their respective affiliates or associates and/or other person or persons (including their names) acting in concert with any of the foregoing (collectively, the “proponent persons”); (II) a description of any agreement, arrangement or understanding (including, without limitation, regardless of the form of settlement, any derivative,

 

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long or short positions, profit interests, forwards, futures, swaps, options, warrants, convertible securities, appreciation or similar rights, hedging transactions and borrowed or loaned shares) to which any proponent person is a party, the effect or intent of which is to transfer to or from any proponent person, in whole or in part, any of the economic consequences of ownership of any security of the Corporation, to increase or decrease the voting power of any proponent person with respect to shares of any class or series of stock of the Corporation and/or to provide any proponent person, directly or indirectly, with the opportunity to profit or share in any profit derived from, or to otherwise benefit economically from, any increase or decrease in the value of any security of the Corporation (a “Derivative Instrument”); (III) to the extent not disclosed pursuant to the immediately preceding clause (II), the principal amount of any indebtedness of the Corporation or any of its subsidiaries beneficially owned by such stockholder or by the beneficial owner, if any, together with the title of the instrument under which such indebtedness was issued and a description of any Derivative Instrument entered into by or on behalf of such stockholder or such beneficial owner relating to the value or payment of any indebtedness of the Corporation or any such subsidiary; and (IV) any other information relating to such stockholder and beneficial owner, if any, required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for, as applicable, the proposal and/or for the election of directors in an election contest pursuant to and in accordance with Section 14(a) of the Exchange Act and the rules and regulations promulgated thereunder. The foregoing notice requirements shall be deemed satisfied by a stockholder if the stockholder has notified the Corporation of his, her or its intention to present a proposal at an annual meeting in compliance with Rule 14a–8 (or any successor thereof) promulgated under the Exchange Act, and such stockholder’s proposal has been included in a proxy statement that has been prepared by the Corporation to solicit proxies for such annual meeting. A stockholder providing notice of a proposed nomination for election to the Board or other business proposed to be brought before a meeting (whether given pursuant to this paragraph (a)(ii) or paragraph (b) of this Section 1.12 of these By-laws) shall update and supplement such notice from time to time to the extent necessary so that the information provided or required to be provided in such notice shall be true and correct (x) as of the record date for determining the stockholders entitled to notice of the meeting and (y) as of the date that is fifteen (15) days prior to the meeting or any adjournment or postponement thereof, provided that if the record date for determining the stockholders entitled to vote at the meeting is less than fifteen (15) days prior to the meeting or any adjournment or postponement thereof, the information shall be supplemented and updated as of such later date. Any such update and supplement shall be delivered in writing to the Secretary at the principal executive offices of the Corporation not later than five (5) days after the record date for determining the stockholders entitled to notice of the meeting (in the case of any update and supplement required to be made as of the record date for determining the stockholders entitled to notice of the meeting), not later than ten (10) days prior to the date for the meeting or any adjournment or postponement thereof (in the case of any update or supplement required to be made as of fifteen (15) days prior to the meeting or adjournment or postponement thereof) and not later than five (5) days after the record date for determining the stockholders entitled to vote at the meeting, but no later than the date prior to the meeting or any adjournment or postponement thereof (in the case of any update and supplement required to be made as of a date less than fifteen (15) days prior to the date of the meeting or any adjournment or postponement thereof). The Corporation may require any proposed nominee to furnish such other information as it may reasonably require to determine the eligibility of such proposed nominee to serve as a director of the Corporation and to determine the independence of such director under the Exchange Act and the rules and regulations promulgated thereunder and applicable stock exchange rules. In addition, a stockholder seeking to bring an item of business before the annual meeting shall promptly provide any other information reasonably requested by the Corporation.

 

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(iii) Notwithstanding anything in Section 1.12(a)(ii) of these By-laws to the contrary, in the event that the number of directors to be elected to the Board at an annual meeting is increased and there is no public announcement naming all of the nominees for director or specifying the size of the increased Board made by the Corporation at least one hundred (100) days prior to the first anniversary date of the preceding year’s annual meeting (which date shall, for purposes of the Corporation’s first annual meeting of stockholders after its shares of Class A Common Stock are first publicly traded, be deemed to have occurred on July 1, 2021), then a stockholder’s notice under this Section 1.12(a) shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it is received by the Secretary at the principal executive offices of the Corporation not later than the close of business on the tenth (10th) day following the day on which such public announcement is first made by the Corporation.

(b) Special Meetings of Stockholders. Only such business as shall have been brought before the special meeting of the stockholders pursuant to the Corporation’s notice of meeting shall be conducted at such meeting. Nominations of persons for election to the Board may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation’s notice of meeting (1) in accordance with the then-applicable terms, if any, of the Stockholders Agreement, (2) by or at the direction of the Board or a Committee appointed by the Board for such purpose or stockholders pursuant to Article SEVENTH of the Certificate of Incorporation or (3) provided that the Board has, or stockholders pursuant to Article SEVENTH of the Certificate of Incorporation have, determined that directors shall be elected at such meeting, by any stockholder of the Corporation who is entitled to vote at the meeting, who complies with the notice procedures set forth in this Section 1.12(b) and at the date of the meeting who is a stockholder of record at the time such notice is delivered to the Secretary, subject to paragraph (c)(ii)(D) of this Section 1.12. The number of nominees a stockholder may nominate for election at a special meeting (or in the case of a stockholder giving the notice on behalf of a beneficial owner, the number of nominees a stockholder may nominate for election at a special meeting on behalf of such beneficial owner) shall not exceed the number of directors to be elected at such special meeting. In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more directors of the Corporation, any stockholder entitled to vote at such meeting may nominate a person or persons, as the case may be, for election to such position(s) as specified by the Corporation, if the stockholder’s notice as required by Section 1.12(a)(ii) of these By-laws shall be delivered to the Secretary at the principal executive offices of the Corporation not earlier than one hundred and twenty (120) days prior to such special meeting and not later than the close of business on the later of the ninetieth (90th) day prior to such special meeting or the tenth (10th) day following the day on which public announcement is first made of the date of the special meeting at which directors are to be elected.

(c) General.

 

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(i) Only such persons who are nominated in accordance with the procedures set forth in this Section 1.12 or in accordance with the then-applicable terms, if any, of the Stockholders Agreement shall be eligible to serve as directors and only such business shall be conducted at an annual or special meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this Section 1.12. Except as otherwise provided by applicable law, the Certificate of Incorporation or these By-laws, the presiding officer of a meeting of stockholders shall have the power and duty (x) to determine whether a nomination or any business proposed to be brought before the meeting was made in accordance with the procedures set forth in this Section 1.12 (including whether the stockholder or beneficial owner, if any, on whose behalf the nomination or proposal is made, solicited (or is part of a group which solicited) or did not so solicit, as the case may be, proxies in support of such stockholder’s nominee or proposal in compliance with such stockholder’s representation as required by clause (a)(ii)(C)(4) of this Section 1.12), and (y) if any proposed nomination or business is not in compliance with this Section 1.12, to declare that such defective nomination shall be disregarded or that such proposed business shall not be transacted.

(ii) If the stockholder (or a qualified representative of the stockholder) making a nomination or proposal under this Section 1.12 does not appear at a meeting of stockholders to present such nomination or proposal, the nomination shall be disregarded and/or the proposed business shall not be transacted, as the case may be, notwithstanding that proxies in favor thereof may have been received by the Corporation. For purposes of this Section 1.12, to be considered a qualified representative of the stockholder, a person must be authorized by a writing executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as proxy at the meeting of stockholders and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the meeting of stockholders.

(A) Whenever used in these By-laws, “public announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Reuters Information Services, Inc., Associated Press or comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act and the rules and regulations promulgated thereunder.

(B) Notwithstanding the foregoing provisions of this Section 1.12, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations promulgated thereunder with respect to the matters set forth in this Section 1.12. Nothing in this Section 1.12 shall be deemed to affect any rights of (x) stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act or (y) the holders of any class or series of preferred stock to elect directors pursuant to any applicable provisions of the Certificate of Incorporation or of the relevant preferred stock certificate of designation.

(C) The announcement of an adjournment or postponement of an annual or special meeting does not commence a new time period (and does not extend any time period) for the giving of notice of a stockholder nomination or a stockholder proposal as described above.

 

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(D) Notwithstanding anything to the contrary contained in this Section 1.12, for as long as the Stockholders Agreement remains in effect, the CD&R Investors shall not be subject to the notice procedures set forth in paragraphs (a)(ii), (a)(iii) or (b) of this Section 1.12 with respect to any annual or special meeting of stockholders.

ARTICLE II

BOARD OF DIRECTORS

Section 2.01. General Powers. Except as may otherwise be provided by law or the Certificate of Incorporation, the affairs and business of the Corporation shall be managed by or under the direction of the Board. The directors shall act only as a Board, and the individual directors shall have no power as such.

Section 2.02. Number and Term of Office. The number of directors constituting the entire Board and the term of office for each director shall be fixed, and may be altered from time to time, in the manner provided for in the Certificate of Incorporation.

Section 2.03. Classification; Election of Directors. The Board shall be classified into three classes as provided by the Certificate of Incorporation.

Section 2.04. Regular Meetings. Regular meetings of the Board shall be held on such dates, and at such times and places as are determined from time to time by resolution of the Board. A notice of regular meetings of the Board shall not be required.

Section 2.05. Special Meetings. Special meetings of the Board shall be held whenever called by the Chair or, in the event of his or her absence or disability, by the Secretary, or by a majority of the directors then in office, at such place, date and time as may be specified in the respective notices or waivers of notice of such meetings. Any business may be conducted at a special meeting.

Section 2.06. Notice of Meetings; Waiver of Notice.

(a) Notice to directors of the date, place and time of any special meeting of the Board shall be given to each director by the Secretary or by the officer or one of the directors calling the meeting. If the notice is delivered in person, by electronic mail, telephone or other means of electronic transmission, it shall be delivered or sent at least twenty-four (24) hours before the time of the holding of the meeting. If the notice is sent by mail, it shall be deposited in the United States mail at least five (5) days before the time of the holding of the meeting. Except as otherwise provided herein or permitted by applicable law, notices to any director may be in writing and delivered personally or mailed to such director at such director’s address appearing on the books of the Corporation, or may be given by telephone or by any means of electronic transmission (including, without limitation, electronic mail) directed to an address for receipt by such director of electronic transmissions appearing on the books of the Corporation.

(b) A written waiver of notice of meeting signed by a director or a waiver by electronic transmission by a director, whether given before or after the meeting time stated in such notice, is deemed equivalent to notice. Attendance of a director at a meeting is a waiver of notice of such meeting, except when the director attends a meeting for the express purpose of objecting at the beginning of the meeting to the transaction of any business at the meeting on the ground that the meeting is not lawfully called or convened.

 

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Section 2.07. Quorum; Voting. At all meetings of the Board, the presence of a majority of the total authorized number of directors shall constitute a quorum for the transaction of business. Except as otherwise required by law, the Certificate of Incorporation or these By-laws, the vote of a majority of the directors present at any meeting at which a quorum is present shall be the act of the Board.

Section 2.08. Participation by Electronic Communications Equipment. Members of the Board may participate in a meeting of the Board by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this provision shall constitute presence in person at such meeting.

Section 2.09. Adjournment. A majority of the directors present may adjourn any meeting of the Board to another date, time or place, whether or not a quorum is present. No notice need be given of any adjourned meeting unless (a) the date, time and place of the adjourned meeting are not announced at the time of adjournment, in which case notice conforming to the requirements of Section 2.06 of these By-laws shall be given to each director, or (b) the meeting is adjourned for more than twenty-four (24) hours, in which case the notice referred to in clause (a) shall be given to those directors not present at the announcement of the date, time and place of the adjourned meeting.

Section 2.10. Action Without a Meeting. Any action required or permitted to be taken at any meeting of the Board may be taken without a meeting if all members of the Board consent thereto in writing or by electronic transmission. Thereafter, such writing or writings or electronic transmissions shall be filed with the minutes of proceedings of the Board. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.

Section 2.11. Regulations. To the extent consistent with applicable law, the Certificate of Incorporation and these By-laws, the Board may adopt such rules and regulations for the conduct of meetings of the Board and for the management of the affairs and business of the Corporation as the Board may deem appropriate. Subject to the then-applicable terms of the Stockholders Agreement, the Board may elect from among its members a chairperson and one or more vice-chairpersons to preside over meetings and to perform such other duties as may be designated by the Board.

Section 2.12. Resignations of Directors. Any director may resign at any time by submitting an electronic transmission or by delivering a written notice of resignation, signed by such director, to the Chair of the Board, Chief Executive Officer or the Secretary. Such resignation shall take effect upon delivery unless the resignation specifies a later effective date or an effective date determined upon the happening of a specified event.

 

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Section 2.13. Removal of Directors. Directors may be removed in the manner set forth in the Certificate of Incorporation and applicable law.

Section 2.14. Vacancies and Newly Created Directorships. Any vacancies or newly created directorships shall be filled as set forth in the Certificate of Incorporation, subject to the then-applicable terms, if any, of the Stockholders Agreement.

Section 2.15. Compensation. Unless otherwise restricted by the Certificate of Incorporation or these By-laws, the Board shall have the authority to fix the compensation of directors. The directors may be paid their expenses, if any, of attendance at each meeting of the Board and may be paid a fixed sum for attendance at each meeting of the Board or a stated salary or other compensation as a director. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Members of special or standing Committees may be allowed compensation for attending Committee meetings. Any director of the Corporation may decline any or all such compensation payable to such director in his or her discretion. The Board may by resolution determine the expenses in the performance of such services for which a director is entitled to reimbursement.

Section 2.16. Reliance on Accounts and Reports, etc. A director, as such or as a member of any Committee designated by the Board, shall in the performance of his or her duties be fully protected in relying in good faith upon the records of the Corporation and upon information, opinions, reports or statements presented to the Corporation by any of the Corporation’s officers or employees, or Committees designated by the Board, or by any other person as to the matters the member reasonably believes are within such other person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation.

ARTICLE III

COMMITTEES

Section 3.01. Designation of Committees. The Board shall designate such committees as may be required by applicable laws, regulations or stock exchange rules, and may designate such additional committees, sub-committees or special committees as it deems necessary or appropriate (collectively, the “Committees”). Each Committee shall consist of such number of directors, with such qualifications, as may be required by applicable laws, regulations or stock exchange rules, or as from time to time may be fixed by the Board and shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation to the extent delegated to such Committee by resolution of the Board, which delegation shall include all such powers and authority as may be required by applicable laws, regulations or stock exchange rules. No Committee shall have any power or authority (a) as to approving or adopting, or recommending to the stockholders, any action or matter (other than the election or removal of directors) expressly required by the DGCL to be submitted to stockholders for approval, (b) as to adopting, amending or repealing any of these By-laws or (c) as may otherwise be excluded by law or by the Certificate of Incorporation. Any Committee may be abolished or re-designated from time to time by the Board.

 

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Section 3.02. Members and Alternate Members. The members of each Committee and any alternate members shall be selected by the Board. The Board may provide that the members and alternate members serve at the pleasure of the Board. An alternate member may replace any absent or disqualified member at any meeting of the Committee. An alternate member shall be given all notices of Committee meetings, may attend any meeting of the Committee, but may count towards a quorum and vote only if a member for whom such person is an alternate is absent or disqualified. In the absence or disqualification of a member of a Committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in the place of any such absent or disqualified member. Each member (and each alternate member) of any Committee (whether designated at an annual meeting of the Board or to fill a vacancy or otherwise) shall hold office until the time he or she shall cease for any reason to be a director, or until his or her earlier death, resignation or removal.

Section 3.03. Committee Procedures. A quorum for each Committee shall be a majority of its members, unless the Committee has only one or two members, in which case a quorum shall be one member, unless a greater quorum is established by the Board. The vote of a majority of the Committee members present at a meeting at which a quorum is present shall be the act of the Committee. Each Committee shall keep regular minutes of its meetings and report to the Board when required. The Board may adopt other rules and regulations for the government of any Committee not inconsistent with the provisions of these By-laws, and each Committee may adopt its own rules and regulations of government, to the extent not inconsistent with these By-laws or rules and regulations adopted by the Board.

Section 3.04. Meetings and Actions of Committees. Meetings and actions of each Committee shall be governed by, and held and taken in accordance with, the provisions of the following sections of these By-laws, with such By-laws being deemed to refer to the Committee and its members in lieu of the Board and its members:

 

  (a)

Section 2.04 (relating to regular meetings);

 

  (b)

Section 2.05 (relating to special meetings);

 

  (c)

Section 2.06 (relating to notice and waiver of notice);

 

  (d)

Section 2.08 (relating to electronic communications equipment);

 

  (e)

Section 2.09 (relating to adjournment and notice of adjournment); and

 

  (f)

Section 2.10 (relating to action without a meeting).

Special meetings of Committees may also be called by resolution of the Board.

Section 3.05. Resignations and Removals. Any member (and any alternate member) of any Committee may resign from such position at any time by delivering a notice of resignation, either in writing signed by such member or by electronic transmission, to the Chair of the Board, Chief Executive Officer or the Secretary. Unless otherwise specified therein, such resignation shall take effect upon delivery. Any member (and any alternate member) of any Committee may be removed from such position by the Board at any time, either for or without cause.

 

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Section 3.06. Vacancies. If a vacancy occurs in any Committee for any reason, the remaining members (and any alternate members) may continue to act if a quorum is present. A Committee vacancy may be filled only by the Board subject to Section 3.01 of these By-laws.

ARTICLE IV

OFFICERS

Section 4.01. Officers. The officers of the Corporation shall be chosen by the Board and shall be a Chief Executive Officer and a Secretary, provided that for so long as the Stockholders Agreement is in effect, the choosing of any such officer shall also be subject to the then-applicable terms, if any, of the Stockholders Agreement. The Board may also elect a Treasurer, one or more Vice Presidents, Assistant Secretaries and Assistant Treasurers, and such other officers and agents as the Board may determine (including a Chief Financial Officer). In addition, the Board from time to time may delegate to any officer the power to appoint subordinate officers or agents and to prescribe their respective rights, terms of office, authorities and duties. Any action by an appointing officer may be superseded by action by the Board. Any number of offices may be held by the same person. Each officer shall hold office until his or her successor is elected and qualified or until his or her earlier resignation or removal. No officer need be a director of the Corporation.

Section 4.02. Election. The officers of the Corporation elected by the Board shall serve at the pleasure of the Board. Officers and agents appointed pursuant to delegated authority as provided in Section 4.01 of these By-laws (or, in the case of agents, as provided in Section 4.06 of these By-laws) shall hold their offices for such terms as may be determined from time to time by the appointing officer. Each officer shall hold office until his or her successor has been elected or appointed and qualified, or until his or her earlier death, resignation or removal.

Section 4.03. Compensation. The salaries and other compensation of all officers and agents of the Corporation shall be fixed by the Board or in the manner established by the Board.

Section 4.04. Removal and Resignation; Vacancies. Any officer may be removed for or without cause at any time by the Board. Any officer granted the power to appoint subordinate officers and agents as provided in Section 4.01 of these By-laws may remove any subordinate officer or agent appointed by such officer, for or without cause. Any officer or agent may resign at any time by delivering notice of resignation, either in writing signed by such officer or by electronic transmission, to the Board or the Chief Executive Officer. Unless otherwise specified therein, such resignation shall take effect upon delivery. Any vacancy occurring in any office of the Corporation by death, resignation, removal or otherwise, may be filled by the Board or by the officer, if any, who appointed the person formerly holding such office.

Section 4.05. Authority and Duties of Officers. An officer of the Corporation shall have such authority and shall exercise such powers and perform such duties (a) as may be required by law, (b) to the extent not inconsistent with law, as are specified in these By-laws, (c) to the extent not inconsistent with law or these By-laws, as may be specified by resolution of the Board, and (d) to the extent not inconsistent with any of the foregoing, as may be specified by the appointing officer with respect to a subordinate officer appointed pursuant to delegated authority under Section 4.01 of these By-laws.

 

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Section 4.06. Chief Executive Officer. The Chief Executive Officer shall, unless otherwise provided by the Board, be the chief executive officer of the Corporation, shall have general control and supervision of the policies and operations of the Corporation and shall see that all orders and resolutions of the Board are carried into effect. He or she shall manage and administer the Corporation’s business and affairs and shall also perform all duties and exercise all powers usually pertaining to the office of a chief executive officer of a corporation, unless otherwise specified by the Board. He or she shall have the authority to sign, in the name and on behalf of the Corporation, checks, orders, contracts, leases, notes, drafts and all other documents and instruments in connection with the business of the Corporation. He or she shall have the authority to cause the employment or appointment of such employees or agents of the Corporation as the conduct of the business of the Corporation may require, to fix their compensation, and to remove or suspend any employee or any agent employed or appointed by any officer or to suspend any agent appointed by the Board. The Chief Executive Officer shall have the duties and powers of the Treasurer if no Treasurer is elected and shall have such other duties and powers as the Board may from time to time prescribe.

Section 4.07. Vice Presidents. If one or more Vice-Presidents have been elected, each Vice President shall perform such duties and exercise such powers as may be assigned to him or her from time to time by the Board or the Chief Executive Officer. In the event of absence or disability of the Chief Executive Officer, the duties of the Chief Executive Officer shall be performed, and his or her powers may be exercised, by such Vice President(s) as shall be designated by the Board or, failing such designation, by the Vice President(s) in order of seniority of election to that office.

Section 4.08. Secretary. Unless otherwise determined by the Board, the Secretary shall have the following powers and duties:

(a) The Secretary shall keep or cause to be kept a record of all the proceedings of the meetings of the stockholders, the Board and any Committees thereof in books provided for that purpose.

(b) The Secretary shall cause all notices to be duly given in accordance with the provisions of these By-laws and as required by law.

(c) Whenever any Committee shall be appointed pursuant to a resolution of the Board, the Secretary shall furnish a copy of such resolution to the members of such Committee and any alternate members thereof.

(d) The Secretary shall be the custodian of the records and of the seal of the Corporation, if any, and cause such seal (or a facsimile thereof), if any, to be affixed to all certificates representing shares of the Corporation prior to the issuance thereof and to all documents and instruments that the Board or any officer of the Corporation has determined should be executed under seal, may sign (together with any other authorized officer) any such document or instrument, and when the seal is so affixed he or she may attest the same.

 

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(e) The Secretary shall properly maintain and file all books, reports, statements, certificates and all other documents and records required by law, the Certificate of Incorporation or these By-laws.

(f) The Secretary shall have charge of the stock books and ledgers of the Corporation and shall cause the stock and transfer books to be kept in such manner as to show at any time the number of shares of stock of the Corporation of each class issued and outstanding, the names (alphabetically arranged) and the addresses of the holders of record of such shares, the number of shares held by each holder and the date as of which each such holder became a holder of record.

(g) The Secretary shall sign (unless the Treasurer, an Assistant Treasurer or an Assistant Secretary shall have signed) certificates representing shares of the Corporation the issuance of which shall have been authorized by the Board.

(h) The Secretary shall perform, in general, all duties incident to the office of secretary and such other duties as may be specified in these By-laws or as may be assigned to the Secretary from time to time by the Board or the Chief Executive Officer.

Section 4.09. Treasurer. Unless otherwise determined by the Board, the Treasurer, if there be one, shall be the Chief Financial Officer of the Corporation and shall have the following powers and duties:

(a) The Treasurer shall have charge and supervision over and be responsible for the moneys, securities, receipts and disbursements of the Corporation, and shall keep or cause to be kept full and accurate records thereof.

(b) The Treasurer shall cause the moneys and other valuable effects of the Corporation to be deposited in the name and to the credit of the Corporation in such banks or trust companies or with such bankers or other depositaries as shall be determined by the Board or the Chief Executive Officer, or by such other officers of the Corporation as may be authorized by the Board or the Chief Executive Officer to make such determinations.

(c) The Treasurer shall cause the moneys of the Corporation to be disbursed by checks or drafts (signed by such officer or officers or such agent or agents of the Corporation, and in such manner, as the Board or the Chief Executive Officer may determine from time to time) upon the authorized depositaries of the Corporation and cause to be taken and preserved proper vouchers for all moneys disbursed.

(d) The Treasurer shall render to the Board or the Chief Executive Officer, whenever requested, a statement of the financial condition of the Corporation and of the transactions of the Corporation, and render a full financial report at the annual meeting of the stockholders, if called upon to do so.

 

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(e) The Treasurer shall be empowered from time to time to require from all officers or agents of the Corporation reports or statements giving such information as he or she may desire with respect to any and all financial transactions of the Corporation.

(f) The Treasurer may sign (unless an Assistant Treasurer or the Secretary or an Assistant Secretary shall have signed) certificates representing shares of stock of the Corporation the issuance of which shall have been authorized by the Board.

(g) The Treasurer shall perform, in general, all duties incident to the office of treasurer and such other duties as may be specified in these By-laws or as may be assigned to the Treasurer from time to time by the Board or the Chief Executive Officer.

ARTICLE V

CAPITAL STOCK

Section 5.01. Certificates of Stock, Uncertificated Shares. The shares of the Corporation shall be represented by certificates, except to the extent that the Board has provided by resolution that some or all of any or all classes or series of the stock of the Corporation shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the Corporation. Every holder of stock in the Corporation represented by certificates shall be entitled to have a certificate signed by any two authorized officers of the Corporation, representing the number and class of shares registered in certificate form and owned by such holder. Such certificate shall be in such form as the Board may determine, to the extent consistent with applicable law, the Certificate of Incorporation and these By-laws.

Section 5.02. Facsimile Signatures. Any or all signatures on the certificates referred to in Section 5.01 of these By-laws may be in any form permitted under the DGCL. If any officer, transfer agent or registrar who has signed, or whose signature has been placed upon, a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he or she were such officer, transfer agent or registrar at the date of issue.

Section 5.03. Lost, Stolen or Destroyed Certificates. A new certificate may be issued in place of any certificate theretofore issued by the Corporation alleged to have been lost, stolen or destroyed only upon delivery to the Corporation of an affidavit of the owner or owners (or their legal representatives) of such certificate, setting forth such allegation, and a bond or other undertaking as may be satisfactory to a financial officer of the Corporation designated by the Board to indemnify the Corporation against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of any such new certificate.

 

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Section 5.04. Transfer of Stock.

(a) Subject to any lawful restrictions on transfer of shares which may be contained in the Certificate of Incorporation, these By-laws or the Stockholders Agreement, if any, transfer of shares represented by certificates shall be made on the books of the Corporation upon surrender to the Corporation of a certificate for shares, duly endorsed or accompanied by appropriate evidence of succession, assignment or authority to transfer, and otherwise in compliance with applicable law. Transfers of uncertificated shares shall be made on the books of the Corporation as provided by applicable law. Within a reasonable time after the transfer of uncertificated stock, the Corporation shall send to the registered owner thereof a notice, in writing or by electronic transmission, containing the information required to be set forth or stated on certificates pursuant to Sections 151, 156, 202(a) and 218(a) of the DGCL. Subject to applicable law, the provisions of the Certificate of Incorporation and these By-laws, the Board may prescribe such additional rules and regulations as it may deem appropriate relating to the issue, transfer and registration of shares of the Corporation.

(b) The Corporation may enter into agreements with stockholders to restrict the transfer of stock of the Corporation in any manner not prohibited by the DGCL.

Section 5.05. Registered Stockholders. Prior to due surrender of a certificate for registration of transfer, or due delivery of instructions for the registration of transfer of uncertificated shares, the Corporation may treat the registered owner as the person exclusively entitled to receive dividends and other distributions, to vote, to receive notice and otherwise to exercise all the rights and powers of the owner of the shares represented by such certificate or of such uncertificated shares, and the Corporation shall not be bound to recognize any equitable or legal claim to or interest in such shares on the part of any other person, whether or not the Corporation shall have notice of such claim or interests except as required by applicable law. If a transfer of shares is made for collateral security, and not absolutely, this fact shall be so expressed in the entry of the transfer if, when the certificates are presented to the Corporation for transfer or uncertificated shares are requested to be transferred, both the transferor and transferee request the Corporation to do so.

Section 5.06. Transfer Agent and Registrar. The Board may appoint one or more transfer agents and one or more registrars, and may require all certificates representing shares to bear the signature of any such transfer agents or registrars.

ARTICLE VI

INDEMNIFICATION

Section 6.01. Indemnification.

(a) In General. Subject to Section 6.01(c) of these By-laws, the Corporation shall indemnify, to the fullest extent permitted by the DGCL and other applicable law (including as it presently exists or may hereafter be amended, but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than such law permitted the Corporation to provide prior to such amendment), any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (each, a “proceeding”) by reason of the fact that (x) such person is or was serving or has agreed to serve as a director or officer of the Corporation, (y) such person, while serving as a director or officer of the Corporation, is or was serving or has agreed to serve at the request of the Corporation as a

 

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director, officer, employee, manager or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise or (z) such person is or was serving or has agreed to serve at the request of the Corporation as a director, officer or manager of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise (provided that notwithstanding the foregoing, the Company, in the discretion of the Board, may so indemnify a person who is or was serving or has agreed to serve at the request of the Company in any other capacity for or on behalf of the Company), or by reason of any action alleged to have been taken or omitted by such person in such capacity, and who satisfies the applicable standard of conduct set forth in the DGCL or other applicable law:

(i) in a proceeding other than a proceeding by or in the right of the Corporation, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person or on such person’s behalf in connection with such proceeding and any appeal therefrom, or

(ii) in a proceeding by or in the right of the Corporation to procure a judgment in its favor, against expenses (including attorneys’ fees) actually and reasonably incurred by such person or on such person’s behalf in connection with the defense or settlement of such proceeding and any appeal therefrom.

(b) Indemnification in Respect of Successful Defense. To the extent that a person has been successful on the merits or otherwise in defense of any proceeding referred to in Section 6.01(a) of these By-laws or in defense of any claim, issue or matter therein, such person shall be indemnified by the Corporation against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith.

(c) Indemnification in Respect of Proceedings Instituted by Indemnitee. Section 6.01(a) of these By-laws does not require the Corporation to indemnify a person in respect of a proceeding (or part thereof) instituted by such person on his or her own behalf, unless such proceeding (or part thereof) has been authorized by the Board or the indemnification requested is pursuant to the last sentence of Section 6.03 of these By-laws.

Section 6.02. Advance of Expenses. The Corporation shall to the fullest extent permitted by the DGCL advance all expenses (including reasonable attorneys’ fees) incurred by a person in defending any proceeding referred to in Section 6.01(a) of these By-laws prior to the final disposition of such proceeding upon written request of such person and delivery of an undertaking by such person to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the Corporation. The Corporation may authorize any counsel for the Corporation to represent (subject to applicable conflict of interest considerations) such person in any proceeding, whether or not the Corporation is a party to such proceeding.

Section 6.03. Procedure for Indemnification. Any indemnification under Section 6.01 of these By-laws or any advance of expenses under Section 6.02 of these By-laws shall be made only against a written request therefor (together with supporting documentation) submitted by or on behalf of the person seeking indemnification or advance. Indemnification may be sought by a person under Section 6.01 of these By-laws in respect of a proceeding only to the extent that both the liabilities for which indemnification is sought and all portions of the proceeding relevant to

 

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the determination of whether the person has satisfied any appropriate standard of conduct have become final. A person seeking indemnification or advance of expenses may seek to enforce such person’s rights to indemnification or advance of expenses (as the case may be) in the Delaware Court of Chancery to the extent all or any portion of a requested indemnification has not been granted within sixty (60) days of, or to the extent all or any portion of a requested advance of expenses has not been granted within twenty (20) days of, the submission of such request. All expenses (including reasonable attorneys’ fees) incurred by such person in connection with successfully establishing such person’s right to indemnification or advancement of expenses under this Article VI, in whole or in part, shall also be indemnified by the Corporation to the fullest extent permitted by law.

Section 6.04. Burden of Proof.

(a) In any proceeding brought to enforce the right of a person to receive indemnification to which such person is entitled under Section 6.01 of these By-laws, the Corporation has the burden of demonstrating that the standard of conduct applicable under the DGCL or other applicable law was not met. A prior determination by the Corporation (including its Board or any Committee thereof, its independent legal counsel, or its stockholders) that the claimant has not met such applicable standard of conduct does not itself constitute evidence that the claimant has not met the applicable standard of conduct.

(b) In any proceeding brought to enforce a claim for advances to which a person is entitled under Section 6.02 of these By-laws, the person seeking an advance need only show that he or she has satisfied the requirements expressly set forth in Section 6.02 of these By-laws.

Section 6.05. Contract Right; Non-Exclusivity; Survival.

(a) The rights to indemnification and advancement of expenses provided by this Article VI shall be deemed to be separate contract rights between the Corporation and each person referred to in Section 6.01(a) of these By-laws who serves in any such capacity at any time while these provisions as well as the relevant provisions of the DGCL are in effect, and no repeal or modification of any of these provisions or any relevant provisions of the DGCL shall adversely affect any right or obligation of such person existing at the time of such repeal or modification with respect to any state of facts then or previously existing or any proceeding previously or thereafter brought or threatened based in whole or in part upon any such state of facts. Such “contract rights” may not be modified retroactively as to any such person without the consent of such person.

(b) The rights to indemnification and advancement of expenses provided by this Article VI shall not be deemed exclusive of any other indemnification or advancement of expenses to which a person seeking indemnification or advancement of expenses may be entitled by any agreement, vote of stockholders or disinterested directors, or otherwise.

(c) The rights to indemnification and advancement of expenses provided by this Article VI to any person referred to in Section 6.01(a) of these By-laws shall inure to the benefit of the estate, heirs, executors and administrators of such person.

 

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Section 6.06. Insurance. The Corporation may purchase and maintain insurance on behalf of any person who is or was or has agreed to become a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee, manager or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any liability asserted against such person and incurred by such person or on such person’s behalf in any such capacity, or arising out of such person’s status as such, whether or not the Corporation would have the power to indemnify such person against such liability under the provisions of this Article VI.

Section 6.07. Employees and Agents. The Board, or any officer authorized by the Board generally or in the specific case to make indemnification decisions, may cause the Corporation to indemnify any present or former employee or agent of the Corporation in such manner and for such liabilities as the Board may determine, up to the fullest extent permitted by the DGCL and other applicable law.

Section 6.08. Interpretation; Severability. Terms defined in Sections 145(h) or (i) of the DGCL have the meanings set forth in such sections when used in this Article VI. If this Article VI or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify each person referred to in Section 6.01(a) of these By-laws as to costs, charges and expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative, including an action by or in the right of the Corporation, to the fullest extent permitted by any applicable portion of this Article VI that shall not have been invalidated and to the fullest extent permitted by applicable law.

Section 6.09. Other Sources. The Corporation’s obligation under this Article VI, if any, to indemnify or to advance expenses to (a) any person who, while serving as a director or officer of the Corporation, is or was serving or has agreed to serve at the request of the Corporation as a director, officer, employee, manager or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise or (b) any person who is or was serving or has agreed to serve at the request of the Corporation as a director, officer or manager of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise shall be reduced by any amount such person may collect as indemnification or advancement of expenses from such other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise.

ARTICLE VII

OFFICES

Section 7.01. Registered Office. The registered office of the Corporation in the State of Delaware shall be located at the location provided in the Certificate of Incorporation.

Section 7.02. Other Offices. The Corporation may maintain offices or places of business at such other locations within or without the State of Delaware as the Board may from time to time determine or as the business of the Corporation may require.

 

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ARTICLE VIII

GENERAL PROVISIONS

Section 8.01. Dividends.

(a) Subject to any applicable provisions of law and the Certificate of Incorporation, dividends upon the outstanding shares of the Corporation’s stock may be declared by the Board and any such dividend may be paid in cash, property or shares of the Corporation’s stock.

(b) A member of the Board, or a member of any Committee designated by the Board shall be fully protected in relying in good faith upon the records of the Corporation and upon such information, opinions, reports or statements presented to the Corporation by any of its officers or employees, or Committees of the Board, or by any other person as to matters the director reasonably believes are within such other person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation, as to the value and amount of the assets, liabilities and/or net profits of the Corporation, or any other facts pertinent to the existence and amount of surplus or other funds from which dividends might properly be declared and paid.

Section 8.02. Reserves. There may be set apart out of any funds of the Corporation available for dividends such sum or sums as the Board from time to time may determine proper as a reserve or reserves for meeting contingencies, equalizing dividends, repairing or maintaining any property of the Corporation or for such other purpose or purposes as the Board may determine conducive to the interest of the Corporation, and the Board may similarly modify or abolish any such reserve.

Section 8.03. Execution of Instruments. Except as otherwise required by law or the Certificate of Incorporation, the Board or any officer of the Corporation authorized by the Board may authorize any other officer or agent of the Corporation to enter into any contract or execute and deliver any instrument in the name and on behalf of the Corporation. Any such authorization must be in writing or by electronic transmission and may be general or limited to specific contracts or instruments.

Section 8.04. Voting as Stockholder or Equity Holder. Unless otherwise determined by resolution of the Board, the Chief Executive Officer or any Vice President shall have full power and authority on behalf of the Corporation to attend any meeting of stockholders or equity holders of any company or entity in which the Corporation may hold stock or other equity interests, and to act, vote (or execute proxies to vote) and exercise in person or by proxy all other rights, powers and privileges incident to the ownership of such stock or equity interests at any such meeting, or through action without a meeting. The Board may by resolution from time to time confer such power and authority (in general or confined to specific instances) upon any other person or persons.

Section 8.05. Fiscal Year. The fiscal year of the Corporation shall be the 52- or 53-week period ending on the Sunday nearest to January 31, unless otherwise fixed by the Board by resolution.

 

23


Section 8.06. Seal. The seal of the Corporation, if any, shall be circular in form and shall contain the name of the Corporation, the year of its incorporation and the words “Corporate Seal” and “Delaware”. The form of such seal, if any, shall be subject to alteration by the Board. The seal may be used by causing it or a facsimile thereof to be impressed, affixed or reproduced, or may be used in any other lawful manner.

Section 8.07. Books and Records; Inspection. Except to the extent otherwise required by law, the books and records of the Corporation shall be kept at such place or places within or without the State of Delaware as may be determined from time to time by the Board.

Section 8.08. Electronic Transmission. “Electronic transmission”, as used in these By-laws, means any form of communication, not directly involving the physical transmission of paper, including the use of, or participation in, one (1) or more electronic networks or databases (including one (1) or more distributed electronic networks or databases) that creates a record that may be retained, retrieved and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process.

ARTICLE IX

AMENDMENT OF BY-LAWS

Section 9.01. Amendment. Subject to the provisions of the Certificate of Incorporation, these By-laws may be amended, altered or repealed, or new by-laws may be adopted:

(a) by the affirmative vote of at least a majority of the directors then in office, so long as a quorum is present, and

(b) (i) until the date on which the CD&R Investors, together with their affiliates, cease to collectively beneficially own (directly or indirectly) shares of stock of the Corporation representing at least forty percent (40%) of the combined voting power of all of the outstanding shares of stock of the Corporation (the “Trigger Date”), by the affirmative vote of the holders of at least a majority of the voting power of the outstanding shares of stock of the Corporation then entitled to vote thereon, or

(ii) from and after the Trigger Date, by affirmative vote of the holders of at least two-thirds (66 2/3%) of the voting power of the outstanding shares of stock of the Corporation then entitled to vote thereon.

Notwithstanding the foregoing, (x) no amendment to the Stockholders Agreement (whether or not such amendment modifies any provision of the Stockholders Agreement to which these By-laws are subject) shall be deemed to be an amendment of these By-laws for purposes of this Section 9.01, and (y) no amendment, alteration or repeal of Article VI of these By-laws shall adversely affect any right or protection existing under these By-laws immediately prior to such amendment, alteration or repeal, including any right or protection of a director, officer or other person thereunder in respect of any act or omission occurring prior to the time of such amendment.

 

24

EX-10.1 5 d185428dex101.htm EX-10.1 EX-10.1

Exhibit 10.1

Execution Version

 

 

SECOND AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

OF

CORE & MAIN HOLDINGS, LP

Dated as of July 22, 2021

THE PARTNERSHIP INTERESTS OF CORE & MAIN HOLDINGS, LP HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES OF AMERICA SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), THE SECURITIES LAWS OF ANY STATE IN THE UNITED STATES OR ANY OTHER APPLICABLE SECURITIES LAWS, IN RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. SUCH PARTNERSHIP INTERESTS MAY BE ACQUIRED FOR INVESTMENT ONLY, AND NEITHER SUCH PARTNERSHIP INTERESTS NOR ANY PART THEREOF MAY BE OFFERED FOR SALE, PLEDGED, CHARGED, HYPOTHECATED, SOLD, ASSIGNED OR TRANSFERRED AT ANY TIME EXCEPT IN COMPLIANCE WITH (I) THE SECURITIES ACT, ANY APPLICABLE STATE SECURITIES LAWS AND ANY OTHER APPLICABLE SECURITIES LAWS AND (II) THE TERMS AND CONDITIONS OF THIS SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP. THE PARTNERSHIP INTERESTS WILL NOT BE TRANSFERRED OF RECORD OR OTHERWISE EXCEPT IN COMPLIANCE WITH SUCH LAWS AND THIS SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP. THEREFORE, PURCHASERS OF SUCH PARTNERSHIP INTERESTS WILL BE REQUIRED TO BEAR THE RISK OF THEIR INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

 

  

 

 


Table of Contents

 

         Page  
ARTICLE I

 

GENERAL PROVISIONS

 

1.1

  Name of Partnership      2  

1.2

  Registered Agent      2  

1.3

  Registered Office      2  

1.4

  Purpose      2  
ARTICLE II

 

PARTNERSHIP INTERESTS

 

2.1

  Partnership Interests      2  
ARTICLE III

 

DISTRIBUTIONS

 

3.1

  Distributions Generally      3  

3.2

  Sale of Partnership      3  

3.3

  Tax Distributions      3  
ARTICLE IV

 

LIQUIDATION, TERMINATION AND DISSOLUTION

 

4.1

  Winding Up and Dissolution      4  
ARTICLE V

 

RESTRICTIONS ON TRANSFER

 

5.1

  Restrictions on Transfer      5  

5.2

  Overriding Provisions      6  
ARTICLE VI

 

MANAGEMENT

 

6.1

  Management of the Partnership      6  

6.2

  Officers      7  

 

i


Table of Contents

(continued)

 

         Page  
ARTICLE VII

 

PARTNERS

 

7.1

  Admission of Partners      7  

7.2

  Liability of Partners      8  

7.3

  Rights, Duties and Authority of the General Partner      8  

7.4

  Expenses      10  

7.5

  Withdrawal      10  

7.6

  General Partner      10  
ARTICLE VIII

 

LIABILITY, EXCULPATION AND INDEMNIFICATION

 

8.1

  Liability      10  

8.2

  Exculpation      10  

8.3

  Fiduciary Duty; Partnership Opportunities      11  

8.4

  Insurance and Indemnification      12  

8.5

  Expenses      12  

8.6

  Severability; Third Party Rights      13  
ARTICLE IX

 

CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS; ALLOCATIONS

 

9.1

  Capital Contributions      13  

9.2

  Capital Accounts, Adjustments, Allocation of Book Income and Loss      13  

9.3

  Tax Allocations; Other Tax Matters      14  
ARTICLE X

 

BOOKS AND RECORDS

 

10.1

  Books and Records; Information      17  
ARTICLE XI

 

MISCELLANEOUS

 

11.1

  Notices      17  

11.2

  Power of Attorney      18  

11.3

  Agreement Binding upon Successors and Assigns; Recapitalizations, Exchanges, etc      18  

11.4

  Fiscal Year      19  

 

ii


Table of Contents

(continued)

 

         Page  

11.5

  Governing Law; Waiver of Trial by Jury      19  

11.6

  Injunctive Relief      20  

11.7

  Consents      20  

11.8

  Miscellaneous      20  

11.9

  Amendments and Waiver      21  

11.10

  Restrictions on Other Agreements      21  

Annex I     Defined Terms

 

 

iii


SECOND AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

OF

CORE & MAIN HOLDINGS, LP

THIS SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP (this “Agreement”) of Core & Main Holdings, LP, a Delaware limited partnership (the “Partnership”), is entered into by and among Core & Main, Inc., a Delaware corporation (“C&M Inc.”), as general partner (in such capacity, the “General Partner”) and a limited partner, CD&R Waterworks Holdings, LLC, a Delaware limited liability company (the “CD&R Partner”), as a limited partner, CD&R WW, LLC, a Delaware limited liability company (the “Intermediate Partner”), as a limited partner, and Core & Main Management Feeder, LLC, a Delaware limited liability company (the “Management Partner”), as a limited partner. C&M Inc., the CD&R Partner, the Intermediate Partner and the Management Partner, in their capacities as limited partners of the Partnership, and together with those other Persons who may be admitted to the Partnership in accordance with the provisions hereof from time to time (excluding the General Partner), are hereinafter referred to as the “Limited Partners”, and each, a “Limited Partner”. The Partnership, the General Partner and the Limited Partners are collectively referred to as the “Parties” and the General Partner and the Limited Partners are collectively referred to as the “Partners”. Capitalized terms used herein and not otherwise defined herein shall have the meanings set forth in Annex I.

W I T N E S S E T H:

WHEREAS, on August 5, 2019, the Partnership was formed by the filing of the Certificate of Limited Partnership with the office of the Secretary of State of the State of Delaware and the execution of the Agreement of Limited Partnership of the Partnership, dated as of August 5, 2019 (the “Original Agreement”);

WHEREAS, on July 22, 2021, the Original Agreement was amended and restated by the Amended and Restated Agreement of Limited Partnership of the Partnership, dated as of July 22, 2021 (the “A&R Agreement”);

WHEREAS, immediately prior to the effectiveness of this Agreement, the Partnership and certain of its Affiliates, including the Prior General Partners and one or more limited partners of the Partnership, effected certain reorganizational transactions (the “Reorganization Transactions”), including multiple Transfers of limited partner interest in the Partnership, and the admission of the assignees thereof as substitute limited partners, and the Transfer by merger of all GP Partnership Interests held by the Prior General Partners to CD&R WW Advisor, LLC and CD&R WW, LLC, and the admission of such transferees as substitute general partners of the Partnership;

WHEREAS, it is proposed that, immediately following the effectiveness of this Agreement, C&M, Inc. will undertake an initial underwritten public offering of shares of Class A Common Stock (the “IPO”); and

 

1


WHEREAS, each of the Partners hereby desires to amend and restate the A&R Agreement, including to facilitate the IPO.

NOW, THEREFORE, in consideration of the mutual promises and agreements herein made and intending to be legally bound hereby, the Parties hereby agree to amend and restate the A&R Agreement as follows:

ARTICLE I

GENERAL PROVISIONS

1.1 Name of Partnership. The name of the Partnership continued without dissolution hereby is “Core & Main Holdings, LP” or such other name as may be selected by the General Partner from time to time.

1.2 Registered Agent. The registered agent of the Partnership is Corporation Service Company. The address of the Partnership’s registered agent is 251 Little Falls Drive, Wilmington, County of New Castle, Delaware, 19808.

1.3 Registered Office. The registered office of the Partnership in the state of Delaware is the office address of the Partnership’s registered agent at 251 Little Falls Drive, Wilmington, County of New Castle, Delaware, 19808. At any time, the General Partner may designate another registered agent or registered office in the State of Delaware and shall notify the Limited Partners of such change in registered office.

1.4 Purpose. The Partnership has been formed for the object and purpose of engaging in any lawful act or activity for which limited partnerships may be formed under the laws of Delaware.

ARTICLE II

PARTNERSHIP INTERESTS

2.1 Partnership Interests.

(a) The ownership interests in the Partnership shall consist of limited partner interests referred to as the “LP Partnership Interests” and general partner interests referred to as the “GP Partnership Interests”, all of which shall be uncertificated. At all times, (x) each Limited Partner shall hold one or more LP Partnership Interests and (y) each General Partner shall hold one or more GP Partnership Interests (and may hold one or more LP Partnership Interests).

(b) The number of GP Partnership Interests and LP Partnership Interests held by each Partner as of the date of this Agreement is set forth opposite such Partner’s name on Schedule A hereto in the columns entitled “GP Partnership Interests” and “LP Partnership Interests”, respectively. All such GP Partnership Interests and LP Partnership Interests have been validly issued, and constitute valid partnership interests in the Partnership. Such schedule shall be updated from time to time by the General Partner, without further action by the Limited Partners, to reflect the changes in the information thereon that occur pursuant to this Agreement and that otherwise are not in violation of the terms of this Agreement or the Act. Any GP Partnership Interests or LP Partnership Interests sold to any Partner shall be subject to the terms and conditions of this Agreement.

 

2


(c) The number and kind of shares or other equity interests to which Partnership Interests may relate and the number and kinds of securities deliverable shall be proportionally adjusted, as deemed by the General Partner to be equitable and appropriate to the Partners, in the event of any extraordinary dividend, stock split, share combination, recapitalization, merger, consolidation, reorganization, exchange of shares or other equity interests or any other similar event affecting the Partnership or any of its subsidiaries.

(d) The Partnership Interests reflected on Schedule A as of the date of this Agreement are intended for U.S. federal income tax purposes to be, and shall be treated for all purposes of this Agreement (including this Section 2.1) to be, a continuation of the GP Units, Common Units and Profits Units outstanding under the Original Agreement.

ARTICLE III

DISTRIBUTIONS

3.1 Distributions Generally. Subject to Section 3.2 and Section 4.1, when the General Partner determines that the Partnership shall distribute any cash or other property of the Partnership (which shall be valued at fair market value), such amounts or property shall be distributed to the Partners in accordance with this Section 3.1. Any amounts distributable to the Partners pursuant to this Section 3.1 shall be distributed as follows:

(a) Subject to the other provisions of this Section 3.1, to the Partners in proportion to the aggregate number of Partnership Interests held by each Partner as of the time of such distribution.

(b) The General Partner may increase or decrease a distribution that would otherwise be made to any Partner pursuant to Section 3.1(a) (including, for the avoidance of doubt, by making distributions to some Partners but not to all) as it reasonably determines to be necessary or appropriate to reduce or eliminate any amount that may otherwise be taken into account as a Liquidation Adjustment pursuant to Section 4.1.

3.2 Sale of Partnership. If a sale of the Partnership is structured as a direct or indirect disposition of Partnership Interests, whether by a sale of Partnership Interests, merger, consolidation or otherwise, the purchase or other agreement governing such disposition shall contain provisions, which replicate, and each Partner agrees to apportion the proceeds among the Partners to replicate, to the maximum extent possible, the economic result that would have been attained under Section 3.1 had the sale been structured as a sale of the Partnership’s assets and a distribution of the net proceeds thereof after transaction expenses related to such sale. For the avoidance of doubt, this Section 3.2 is not applicable to any of the Reorganization Transactions or the IPO.

3.3 Tax Distributions. Notwithstanding Section 3.1, the Partnership shall, to the extent of available cash, make distributions:

 

3


(a) To each Partner in amounts intended to enable such Partner (or any person whose tax liability is determined by reference to the income of any such Partner) to discharge its U.S. federal, state and local (and, as the General Partner shall determine, non-U.S.) tax liabilities arising from allocations made (or to be made) and any distributions made pursuant to this Section 3.3 (“Tax Distributions”). The amount of each Tax Distribution shall be determined by the General Partner, taking into account the maximum combined U.S. federal, New York State and New York City tax rate applicable to individuals on ordinary income and capital gain (taking into account the applicable holding period), as the case may be, the amounts of ordinary income and capital gain (including amounts subject to tax at capital gain rates under Section 1(h)(11) of the Code) allocated to the Partners pursuant to this Agreement, and otherwise based on such reasonable assumptions as the General Partner determines in good faith to be appropriate, provided that the net taxable income allocated to the Partners shall be determined without taking into account adjustments to basis pursuant to Section 743(b) of the Code. Tax Distributions made pursuant to the foregoing shall be treated as advances against subsequent distributions payable to the applicable Partner pursuant to Section 3.1 or Section 4.1, as the case may be.

(b) To the General Partner in amounts intended to enable the General Partner to satisfy its payment obligations under the Continuing Limited Partners Tax Receivable Agreement and the Former Limited Partners Tax Receivable Agreement (“TRA Distributions”). TRA Distributions shall be treated as advances against subsequent distributions payable to the General Partner pursuant to Section 3.1 or Section 4.1, as the case may be.

3.4 Limitations on Distributions. Notwithstanding any other provision of this Agreement, the Partnership shall not make a distribution to a Partner on account of its interest in the Partnership if such distribution would violate the Act or other applicable law.

ARTICLE IV

LIQUIDATION, TERMINATION AND DISSOLUTION

4.1 Winding Up and Dissolution.

(a) The Partnership shall dissolve, and its affairs shall be wound up, at such time as (i) the General Partner of the Partnership approves in writing, (ii) an event of withdrawal of the General Partner has occurred under the Act (unless the Partnership is continued without dissolution in accordance with this Agreement or the Act), (iii) an entry of a decree of judicial dissolution has occurred under Section 17-802 of the Act or (iv) the Partnership does not have a Limited Partner (unless the Partnership is continued without dissolution in accordance with the Act); provided, however, that the Partnership shall not be dissolved or required to be wound up upon an event of withdrawal of the General Partner described in Section 4.1(b) hereof if (x) at the time of such event of withdrawal, there is at least one (1) other General Partner of the Partnership who carries on the business of the Partnership (any remaining General Partner being hereby authorized to carry on the business of the Partnership) or (y) within ninety (90) days after the occurrence of such event of withdrawal, all remaining Partners agree in writing to continue the business of the Partnership and to the appointment, effective as of the event of withdrawal, of one (1) or more additional general partners of the Partnership. For the avoidance of doubt, none of the Reorganization Transactions (including any general partner ceasing to be a general partner of the Partnership) resulted in the dissolution of the Partnership, and the Partnership is hereby continued without dissolution.

 

4


(b) Upon dissolution of the Partnership pursuant to this Agreement and the Act, the General Partner, or if there is none, a Person selected by the Partners holding a majority of the Partnership Interests to act as a liquidating trustee (the “Liquidating Trustee”), shall wind up the affairs of the Partnership and proceed within a reasonable period of time to sell or otherwise liquidate all of the assets of the Partnership, after paying or making due provisions by the setting up of reserves or otherwise for all liabilities to creditors of the Partnership, and to distribute the assets among the Partners in accordance with the provisions of this Agreement. Within a reasonable time after the effective date of the commencement of the winding up of the Partnership, the assets of the Partnership, or proceeds therefrom, shall be distributed or used as follows: (i) first, to the payment and discharge of all of the Partnership’s debts and liabilities (including debts and liabilities to the Partners, to the extent permitted by law) and the expenses of the liquidation and to the setting up of any reserves which the General Partner (or Liquidating Trustee, as applicable) may deem reasonably necessary for any contingent, conditional or unmatured liabilities or obligations of the Partnership and (ii) second, to the Partners, in accordance with Section 3.1. Notwithstanding the foregoing, (x) if, prior to making any distribution to the Partners contemplated under clause (ii), a Partner has received from the Partnership since the date of this Agreement aggregate cumulative distributions pursuant to Section 3.1 and Section 3.3 in an amount that is greater or less than the distributions such Partner would have been entitled to receive if all previous distributions were made to the Partners pursuant to Section 3.1(a) (such excess or deficit, a “Liquidation Adjustment”), the General Partner shall make such adjustments to the amounts distributable to the Partners under clause (ii) as the General Partner determines necessary in its reasonable discretion to ensure that the cumulative distributions to the Partners since the date of this Agreement is consistent with Section 3.1(a).

(c) In the event of dissolution of the Partnership, the Partners shall execute, do or concur in all necessary or proper instruments, acts, matters and things for realizing the outstanding debts of the Partnership and for dividing the surplus assets between the Partners as herein provided and for notifying the winding up and dissolution of the Partnership to Persons having had dealings with the Partnership.

ARTICLE V

RESTRICTIONS ON TRANSFER

5.1 Restrictions on Transfer.

(a) Each Partner, and its respective Transferees, shall be permitted to Transfer its Partnership Interests, including pursuant to Exchange Transactions, subject to compliance with this Agreement, the Management Subscription Agreements, the Management Partner LLC Agreement and any applicable lock-up agreements then in effect.

 

5


(b) Notwithstanding anything otherwise to the contrary in this Section 5.1, each Partner may Transfer any LP Partnership Interests in Exchange Transactions pursuant to, and in accordance with, the Exchange Agreement; provided that in the case of any Partners other than the CD&R Partner, such Exchange Transaction shall be effected in compliance with reasonable policies that the General Partner may adopt or promulgate from time to time (including policies requiring the use of designated administrators or brokers) in its sole discretion. Any transferee of such LP Partnership Interests pursuant to the Exchange Agreement shall automatically be admitted as a substitute Limited Partner with respect to such LP Partnership Interests notwithstanding any other provision of this Agreement to the contrary.

(c) The General Partner may in its sole discretion at any time and from time to time, without the consent of any Partner or other Person, cause to be Transferred in an Exchange Transaction any and all LP Partnership Interests, except for LP Partnership Interests held by the CD&R Partner and/or in which the CD&R Partner has an indirect interest as set forth in the books and records of the Partnership or the CD&R Partner. Any such determinations by the General Partner need not be uniform and may be made selectively among Partners, whether or not such Partners are similarly situated. In addition, the General Partner may, with the consent of the CD&R Partner and the consent of Partners holding at least 66 2/3% of the outstanding LP Partnership Interests, require all Partners to Transfer in an Exchange Transaction all LP Partnership Interests held by them; provided that the prior written consent of the CD&R Partner will be required.

5.2 Overriding Provisions. Notwithstanding any contrary provision in this Agreement, in no event may any Partner Transfer all or a portion of such Partner’s Partnership Interests if the General Partner determines such Transfer would pose a material risk that the Partnership would be treated as a “publicly traded partnership” within the meaning of 7704 of the Code; provided, however, that a Transfer will not be prohibited on this basis so long as the Partnership satisfies the “private placements” safe harbor under Section 1.7704-1(h) of the Treasury Regulations. In addition, none of the Partnership Interests may be Transferred if such Transfer would result in the Partnership becoming subject to the reporting requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934, as amended (or other similar provision of non-U.S. law). To the fullest extent permitted by law, any purported Transfer in violation of this Section 5.2 shall be void ab initio. For the avoidance of doubt, this Section 5.2 and Section 5.1 do not apply to any Transfers of LP Partnership Interests or GP Partnership Interests pursuant to or in connection with the Reorganization Transactions (all such Transfers being hereby ratified, approved and confirmed in all respects).

ARTICLE VI

MANAGEMENT

6.1 Management of the Partnership.

(a) General. The General Partner shall manage, operate, control and direct the business and affairs of the Partnership. Subject to the provisions of this Agreement, the General Partner shall have the exclusive power and authority to make all decisions and determinations with respect to the Partnership or affecting the business and affairs of the Partnership, to take all such actions as it deems necessary, advisable, appropriate or desirable to accomplish the purposes of the Partnership as set forth in this Agreement and shall otherwise possess all rights

 

6


and powers as provided in the Act and otherwise by law to the general partner of a limited partnership. Notwithstanding the foregoing, the General Partner shall have the power and authority to delegate all or any portion of its powers hereunder to such Persons as it may deem appropriate, and no such delegation shall cause the General Partner to cease to be the general partner of the Partnership or limit the General Partner’s rights to continue to manage, operate, control and direct the business and affairs of the Partnership. The Partnership is hereby authorized to execute, deliver and perform, and the General Partner and each Officer, acting singly, are hereby authorized to execute and deliver on behalf of the Partnership, any agreements or other documents that are related to, in connection with or in furtherance of the Reorganization Transactions or the IPO, all without any further act, vote or approval of any Partner or any other Person notwithstanding any other provision of this Agreement to the contrary (such execution, delivery and performance being hereby ratified, approved and confirmed in all respects).

(b) Participation by Limited Partners. Except as otherwise provided in this Agreement, no Limited Partner (in such capacity) has the right or power to participate in the management, affairs, conduct or control of the business of the Partnership, nor does any Limited Partner (in such capacity) have the power to sign for or bind the Partnership or deal with third parties on behalf of the Partnership. In addition, each Limited Partner (in such capacity) agrees that it will not hold itself out as a general partner of the Partnership to any Person transacting business with the Partnership.

6.2 Officers. The Partnership may have such officers (the “Officers”) as the General Partner in its discretion may appoint or who may be appointed by the other Officers if specifically authorized to do so by the General Partner. The General Partner may remove any Officer with or without cause at any time. Any such Officers may, subject to the general direction and control of the General Partner, have responsibility for the management of the normal and customary day-to-day operations of the Partnership to the extent so delegated by the General Partner or the Officer appointing such Officer, subject to the terms of this Agreement, and will be empowered to engage in all appropriate and necessary activities to accomplish the purposes of the Partnership as set forth herein. The Partners hereby delegate to each of the Officers the nonexclusive power and authority to act as an agent of the Partnership and, in such capacity, to bind the Partnership in the ordinary course of the Partnership’s business and to execute any and all documents to be signed by the Partnership, subject to the limitations on the authority of the Officers set forth herein and under the Act.

ARTICLE VII

PARTNERS

7.1 Admission of Partners. The name, address and number of Partnership Interests held by each Partner are set forth on Schedule A. The General Partner hereby continues as the sole general partner of the Partnership and each Limited Partner hereby continues as a limited partner of the Partnership. To the extent the Intermediate Partner has not heretofore ceased to be a general partner of the Partnership, the Intermediate Partner hereby ceases to be a general partner of the Partnership and the Partnership is hereby continued without dissolution with C&M Inc. as the sole general partner of the Partnership. The General Partner shall amend Schedule A from time to time to reflect (a) the admission of any additional Partners, (b) a change in the

 

7


Partnership Interests owned by any Partner, (c) the removal, withdrawal or termination of any Partner or (d) the receipt by the Partnership of notice of any change of name or address of a Partner, except that Schedule A will not be revised if any of the actions described in clauses (a) through (d) above violates any provision of this Agreement. After the date hereof, a Person shall be admitted as a Limited Partner of the Partnership only with the consent of the General Partner. One or more additional or substitute general partners of the Partnership may be admitted to the Partnership only with the consent of the General Partner. For the avoidance of doubt, the admission of any transferee of a Partnership Interest in connection with the Reorganization Transactions is hereby ratified, confirmed and approved in all respects.

7.2 Liability of Partners.

(a) The General Partner, in its capacity as general partner of the Partnership, shall not be personally obligated to contribute cash or other assets to the Partnership to make up deficits in the Capital Accounts of Limited Partners either during the term of the Partnership or after dissolution.

(b) No Limited Partner shall be liable for the losses, liabilities, debts or obligations of the Partnership beyond the amount such Partner has contributed to the Partnership in the form of capital contributions, except to the extent otherwise required by or pursuant to applicable Law. A Limited Partner’s obligation to make capital contributions to the Partnership shall be limited to such Limited Partner’s obligation, if any, to make capital contributions on the terms and conditions set forth in this Agreement. The Limited Partners shall not be obligated personally for any debt, obligation or liability of the Partnership solely by reason of being Limited Partners of the Partnership.

(c) In the event any Limited Partner shall Transfer its entire interest in the Partnership in compliance with the provisions of this Agreement, without retaining any interest therein, directly or indirectly, then such Limited Partner shall, to the fullest extent permitted by applicable Law, be relieved of any further liability arising hereunder for events occurring from and after the date of such Transfer and shall cease to be a Limited Partner of the Partnership.

7.3 Rights, Duties and Authority of the General Partner.

(a) To the fullest extent permitted by applicable Law, the doing of any act or the failure to do any act by the General Partner or any other Covered Person, the effect of which causes or may cause or results or may result in loss, liability, damage or expense to the General Partner, the Partnership, any Subsidiary or any other Partner, shall, to the greatest extent permitted by applicable Law, not subject the General Partner or any such other Covered Person to any liability to the General Partner, the Partnership, any such Subsidiary or to any other Partner, except in the event of Disabling Conduct by the General Partner or any such other Covered Person.

(b) The General Partner may consult with legal counsel, accountants and other experts reasonably selected by it in connection with its acting as the general partner hereunder, and, to the fullest extent permitted by applicable Law, any act or omission suffered or taken by the General Partner on behalf of the Partnership or believed by the General Partner to be in

 

8


furtherance of the Partnership in good faith in reliance upon and in accordance with the advice of such counsel, accountant or expert, shall be full justification for any such act or omission, and the General Partner shall, to the fullest extent permitted by applicable Law, be fully protected in so acting or omitting to act, and shall incur no liability to the Partnership or any other Partner as a result thereof.

(c) The General Partner may rely in good faith upon and, to the fullest extent permitted by applicable Law, shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, debenture or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties, and the General Partner shall not be responsible to the Partnership or any other Partner for any misconduct or negligence on the part of any broker, agent or attorney appointed with reasonable care by it hereunder.

(d) To the fullest extent permitted by applicable Law, the General Partner acting under this Agreement shall not be liable to the Partnership or to any other Partner for breach of fiduciary duty for its good faith reliance on the provisions of this Agreement. The provisions of this Agreement, to the extent that they expand or restrict or eliminate the duties (including fiduciary duties) and liabilities of the General Partner otherwise existing at law or in equity, are agreed by the Partners to modify to that extent and, to the fullest extent permitted by applicable Law, such other duties and liabilities of the General Partner.

(e) The Partnership and the General Partner shall be entitled to treat the record owner of any interest in the Partnership as the absolute owner thereof in all respects, and shall incur no liability for distributions of cash or other property made in good faith to such owner until such time as a written instrument of assignment of such interest has been received and accepted by the General Partner and the transferee or assignee (as applicable) has been admitted to the Partnership pursuant to the terms of this Agreement.

(f) The General Partner shall be entitled to retain any fees or expenses earned in any capacity relating to the Partnership.

(g) The Partnership and/or the General Partner either in their own names or on behalf of the Partnership shall, in addition to any other powers set out in this Agreement, have the power to incur indebtedness or to borrow or raise money and to enter into any commitment letter, loan, credit facility or other agreement in connection therewith; to make, issue, accept, endorse and execute notes and other instruments and evidences of indebtedness; to secure the payment, repayment and performance thereof by any mortgage, charge, assignment by way of security or creation of any other security interest in or over all or any part of the assets of the General Partner (in its capacity as general partner of the Partnership) and/or the Partnership then owned or thereafter acquired by the General Partner and/or the Partnership, as the case may be; to guarantee or secure the obligations of any other person; to grant any indemnity in favor of any person; to sell, mortgage, charge, assign by way of security or otherwise dispose of or create security interests over all or any assets of the Partnership and/or the General Partner to guarantee or secure the obligations of any person (including, to secure any guarantee or indemnity granted by the Partnership and/or the General Partner); and to enter into any subordination arrangements in connection with the foregoing. For the avoidance of doubt, any arrangements described in, or obligations incurred pursuant to, this Section 7.3 (including, without limitation, any borrowing, guarantee, indemnify or grant of a security interest) may be entered into by the Partnership and/or the General Partner on a joint and several basis with, or with respect to the debts and/or obligations of, any other person.

 

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7.4 Expenses. The Partnership shall bear all its own operating expenses (including the fees and expenses of attorneys, accountants, consultants, experts and custodians retained by the Partnership). All expenditures in respect of the Partnership, including, without limitation, the emoluments of all employees and agents employed by the Partnership and all expenses, losses or damages incurred in relation thereto shall be paid out of the assets of the Partnership or, failing that, out of other cash funds of the Partnership (including the capital of the Partnership and/or loans).

7.5 Withdrawal. Except as otherwise set forth in this Agreement, the General Partner shall not have the right or obligation to force a withdrawal of any Limited Partner from the Partnership prior to the dissolution of the Partnership. Limited Partners may not withdraw without the specific consent of the General Partner (which may be granted or withheld in the General Partner’s absolute discretion).

7.6 General Partner. The General Partner may (a) transfer its General Partner interest or (b) voluntarily withdraw as general partner of the Partnership; provided that in each case following such transfer or withdrawal, there shall remain at least one general partner of the Partnership which satisfies the requirements set out in the Act. Upon a transfer by the General Partner of its GP Partnership Interest as permitted hereunder, the Transferee shall be admitted to the Partnership as the General Partner of the Partnership and shall continue the business of the Partnership without dissolution.

ARTICLE VIII

LIABILITY, EXCULPATION AND INDEMNIFICATION

8.1 Liability. Except as otherwise provided by the Act, the debts, obligations and liabilities of the Partnership, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Partnership, and no Covered Person (other than the General Partner) shall be obligated personally for any such debt, obligation or liability of the Partnership solely by reason of being a Covered Person.

8.2 Exculpation. To the fullest extent permitted by applicable Law, no Covered Person shall be liable to the Partnership or any Person bound by this Agreement for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Covered Person in good faith on behalf of the Partnership and in a manner believed to be within the scope of authority conferred on such Covered Person by this Agreement, except that a Covered Person shall be liable for any such loss, damage or claim incurred by reason of such Covered Person’s Disabling Conduct. To the fullest extent permitted by applicable Law, each Covered Person shall in the performance of his or her duties be fully protected in relying in good faith upon the records of the Partnership and upon information, opinions, reports or statements presented to the Partnership by any Officers or employees of the Partnership, or committees

 

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designated by the General Partner, or by any other Person as to the matters the Covered Person reasonably believes are within such other Person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Partnership. Without limiting the foregoing, each Limited Partner agrees to waive, to the fullest extent permitted by applicable Law, any claim or right of action it might have, whether individually or on behalf of the Partnership, against the General Partner or any director of the General Partner on account of any action taken or failure to take any action in its, his or her capacity as a director of the General Partner; provided that such waiver shall not extend to any matter involving any actual fraud or dishonesty on the part of such director.

8.3 Fiduciary Duty; Partnership Opportunities.

(a) Waiver of Fiduciary Duties. Subject to the proviso in the last sentence of Section 8.2, any duties (including fiduciary duties) of a Covered Person to the Partnership, to any Partner or to any other Person bound by this Agreement that would otherwise apply at law or in equity are hereby eliminated to the fullest extent permitted under the Act and any other applicable Law, and each Partner waives to the fullest extent permitted by the Act and any other applicable Law, any duty that a Covered Person may have to the Partnership or any other Partner that would otherwise apply at law or in equity, to the extent such waiver is necessary to give effect to the terms of this Section 8.3(a); provided that the foregoing shall not eliminate (i) the obligation of each Covered Person to act in compliance with the express terms of this Agreement or (ii) the implied contractual covenant of good faith and fair dealing in construing this Agreement. A Covered Person acting under this Agreement shall not be liable to the Partnership or to any other Person bound by this Agreement for its good faith reliance on the provisions of this Agreement. Without limiting the generality of the foregoing, to the fullest extent permitted by applicable Law, to the extent that, at law or in equity, a Covered Person has duties (including fiduciary duties) and liabilities relating thereto to the Partnership or to any other Covered Person, a Covered Person acting under this Agreement shall not be liable to the Partnership or to any Partner or to any other Person bound by this Agreement for its good faith reliance on the provisions of this Agreement.

(b) Partnership Opportunities. Except as otherwise provided in the last sentence of this Section 8.3(b), to the fullest extent permitted by applicable Law, (i) no Covered Person shall have any duty to communicate or present an investment or business opportunity or prospective economic advantage to the Partnership or any of its Subsidiaries in which the Partnership or one of its Subsidiaries may, but for the provisions of this Section 8.3(b), have an interest or expectancy (“Partnership Opportunity”), and (ii) no Covered Person will be deemed to have breached any fiduciary or other duty or obligation to the Partnership, any Partner or any other Person bound by this Agreement by reason of the fact that any such Person pursues or acquires a Partnership Opportunity for itself or its Affiliates or directs, sells, assigns or transfers such Partnership Opportunity to another Person or does not communicate information regarding such Partnership Opportunity to the Partnership or any applicable Subsidiary. The Partnership, on behalf of itself and its Subsidiaries, renounces any interest in a Partnership Opportunity and any expectancy that a Partnership Opportunity will be offered to the Partnership; provided, however, that the Partnership does not renounce any interest or expectancy it may have in any Partnership Opportunity that is offered to an Officer or employee of the Partnership or any of its Subsidiaries, (x) who is not a director, officer or employee of a Partner, or (y) who is also a director, officer or employee of a Partner, if, in the case of clause (y), such opportunity is expressly offered to such Person in his or her capacity as an Officer or employee of the Partnership or any of its Subsidiaries, and the Partners recognize that the Partnership reserves such rights.

 

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(c) Overriding Provision. The provisions of this Agreement, to the extent that they restrict or eliminate the duties and liabilities of a Covered Person to the Partnership, any Partner or any other Person bound by this Agreement otherwise existing at law or in equity, are agreed by the parties hereto to replace such other duties and liabilities of such Covered Person to the fullest extent permitted by applicable law.

8.4 Insurance and Indemnification. In addition to the payment of expenses pursuant to Section 8.5, to the fullest extent permitted by applicable Law, the Partnership agrees to indemnify, pay and hold each Covered Person harmless from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs, expenses and disbursements of any kind or nature whatsoever (including any interest and penalties, out-of-pocket expenses, and the fees and disbursements of counsel for such Covered Person in connection with any investigative, administrative or judicial proceedings, whether or not such Covered Person shall be designated a party thereto), whether absolute, accrued, conditional or otherwise and whether or not resulting from third-party claims, which may be imposed on, incurred by or asserted against any such Covered Person, in any manner relating to or arising out of any act or omission performed or omitted by such Covered Person on behalf of the Partnership, except that no Covered Person shall be entitled to be indemnified in respect of any loss, damage or claim incurred by such Covered Person which is determined by a final, non-appealable decision of a court of competent jurisdiction to have resulted from such Covered Person’s Disabling Conduct; provided that any indemnity under this Section 8.4 shall be provided out of and to the extent of Partnership assets only, and no Covered Person shall have any personal liability on account thereof. The Partnership shall use its commercially reasonable efforts to purchase and maintain insurance (including directors and officers liability insurance) for the benefit of any Covered Person who is entitled to indemnification under this Section 8.4 against any liability asserted against or incurred by such Covered Person in any capacity with respect to or arising out of such Covered Person’s service with the Partnership, whether or not the Partnership would have the power to indemnify such Covered Person against such liability.

8.5 Expenses. To the fullest extent permitted by applicable Law, expenses (including reasonable attorneys’ fees, disbursements, fines and amounts paid in settlement) incurred by a Covered Person in defending any claim, demand, action, suit or proceeding relating to or arising out of his or her performance of his or her duties on behalf of the Partnership, or with respect to advice sought regarding his or her rights and responsibilities, or the protection of rights or interests, under this Agreement, shall, from time to time, be advanced by the Partnership prior to the final disposition of such claim, demand, action, suit or proceeding upon receipt by the Partnership of an undertaking by or on behalf of the Covered Person to repay such amount if it shall ultimately be determined by a court of competent jurisdiction that the Covered Person is not entitled to be indemnified as authorized in Section 8.4.

 

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8.6 Severability; Third Party Rights. To the fullest extent permitted by applicable Law, if any portion of this Article VIII shall be invalidated on any ground by any court of competent jurisdiction, then the Partnership shall nevertheless indemnify each Covered Person and may indemnify each employee or agent of the Partnership as to costs, charges and expenses (including reasonable attorneys’ fees), judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative, including an action by or in the right of the Partnership, in each case to the fullest extent permitted by any applicable portion of this Article VIII that shall not have been invalidated. A Person who is not a party to this Agreement may not, in its own right or otherwise, enforce any term of this Agreement. Notwithstanding any other term of this Agreement, the consent of any person who is not a party to this Agreement (including, without limitation, any Covered Person) is not required for any amendment to, or variation, release, rescission or termination of this Agreement.

ARTICLE IX

CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS; ALLOCATIONS

9.1 Capital Contributions.

(a) Capital Contributions. Each Partner that has made (or is deemed to have made) capital contributions to the Partnership shall have such capital contributions reflected in its Capital Account. No Partner shall have any obligation to make any capital contributions or other contributions to the Partnership. Except as otherwise set forth in this Agreement, no interest shall accrue on any capital contribution, and no Partner shall have the right to withdraw or be repaid any capital contribution.

(b) Additional Capital Contributions. No Limited Partner shall be required to make any additional capital contribution or loan in respect of the Partnership Interests then owned by any such Limited Partner. However, a Limited Partner may make additional capital contributions to the Partnership with, and only with, the written consent of the General Partner and such Limited Partner and in compliance with the other terms and conditions set forth in this Agreement.

9.2 Capital Accounts, Adjustments, Allocation of Book Income and Loss.

(a) Capital Accounts. There shall be established on the books and records of the Partnership a capital account (a “Capital Account”) for each Partner. The Capital Accounts are intended to comply with Treasury Regulations § 1.704-1(b) and shall be interpreted and applied in a manner consistent with such regulations.

(b) Adjustments. Subject to Section 4.1, as of the last day of each Accounting Period, the balance in each Partner’s Capital Account shall be adjusted by: (i) increasing such balance by (A) such Partner’s allocable share of each item of the Partnership’s income and gain for such Accounting Period (allocated in accordance with Section 4.1(b)) and (B) the amount of any cash and the fair market value of any property (net of the amount of any liabilities to which such property is subject) contributed by such Partner during such Accounting Period and (ii) decreasing such balance by (A) such Partner’s allocable share of each item of the Partnership’s loss and deduction for such Accounting Period (allocated in accordance with

 

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Section 4.1(b)) and (B) the amount of cash or the fair market value of any property (net of the amount of any liabilities to which such property is subject) distributed to such Partner during such Accounting Period. Each Partner’s Capital Account shall be further adjusted with respect to any special allocations or adjustments made pursuant to this Agreement or otherwise determined by the General Partner to be necessary or appropriate under the circumstances.

(c) Allocation of Book Income and Loss. Except as otherwise provided herein, each item of income, gain, loss or deduction of the Partnership (determined in accordance with U.S. tax principles as applied to the maintenance of capital accounts) shall be allocated among the Capital Accounts of the Partners with respect to each Accounting Period, as of the end of such Accounting Period, in such a manner that as closely as possible gives economic effect to the provisions of this Agreement, taking into account the Partners’ varying interests in the Partnership during the relevant year, including in connection with the Original Agreement and the A&R Agreement.

9.3 Tax Allocations; Other Tax Matters.

(a) Tax Allocations. The income, gains, losses, credits and deductions recognized by the Partnership shall be allocated among the Partners, for U.S. federal, state and local income tax purposes, to the extent permitted under the Code and the Treasury Regulations, in the same manner that each such item is allocated to the Partners’ Capital Accounts in accordance with Section 9.2(c) or as otherwise expressly provided herein. Notwithstanding the foregoing, the General Partner may adjust such allocations for U.S. federal, state and local tax purposes so long as such adjusted allocations have substantial economic effect or are in accordance with the Partners’ interest in the Partnership, in each case within the meaning of the Code and the Treasury Regulations. In accordance with Section 704(c) of the Code and the Treasury Regulations thereunder, income, gain, loss and deduction with respect to any property contributed to the capital of the Partnership shall, solely for tax purposes, be allocated among the Partners so as to take account of any variation between the adjusted basis of such property to the Partnership for U.S. federal income tax purposes and its fair market value at the time of contribution. Tax credits and tax credit recapture shall be allocated in accordance with the interests of the Partners in the Partnership as provided in Treasury Regulations § 1.704-1(b)(4)(ii). All matters concerning allocations for U.S. federal, state and local and non-U.S. income tax purposes, including accounting procedures, not expressly provided for by the terms of this Agreement shall be determined by the General Partner in its sole discretion.

(b) Withholding Generally. Each Partner shall, to the fullest extent permitted by applicable Law, indemnify and hold harmless the Partnership and each Person who is or who is deemed to be the responsible withholding agent for U.S. federal, state or local or non-U.S. income tax purposes against all claims, liabilities and expenses of whatever nature relating to such Person’s obligation to withhold and to pay over, or otherwise pay, any withholding or other taxes payable by the Partnership with respect to such Partner or as a result of such Partner’s participation in the Partnership.

 

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(c) Authority to Withhold; Treatment of Withheld Tax. Notwithstanding any other provision of this Agreement, each Partner hereby authorizes the Partnership and the General Partner to withhold and to pay over, or otherwise pay, any withholding or other taxes payable or required to be deducted by the Partnership attributable to such Partner (including taxes attributable to income or gain allocable to such Partner) or resulting from such Partner’s participation in the Partnership. If and to the extent that the Partnership shall be required to withhold or pay any such withholding or other taxes, such Partner shall be deemed for all purposes of this Agreement to have received a payment from the Partnership as of the time such withholding or other taxes are withheld or required to be paid, whichever is earlier, which payment shall be deemed to be a distribution with respect to such Partner’s interest in the Partnership to the extent that such Partner (or any successor to such Partner’s interest in the Partnership) would have received a cash distribution but for such withholding or other taxes. To the extent that such payment exceeds the cash distribution that such Partner would have received but for such withholding, the General Partner shall notify such Partner as to the amount of such excess and such Partner shall make a prompt payment to the Partnership of such amount by wire transfer, which payment shall not constitute a capital contribution and, consequently, shall not increase the Capital Account of such Partner. For the avoidance of doubt, references to taxes in this Agreement include interest, penalties and additions to tax.

(d) Withholding from Distributions to the Partnership. In the event that the Partnership receives a distribution or payment from or in respect of which tax has been withheld or other taxes have been paid, the Partnership shall be deemed to have received cash in an amount equal to the amount of such withholding or other taxes, and each Partner shall be deemed for all purposes of this Agreement to have received a payment from the Partnership as of the time of such distribution or payment equal to the portion of such amount that is attributable to such Partner’s interest in the Partnership (or attributable to income allocable to such Partner) as determined by the General Partner in its sole discretion, which payment shall be deemed to be a distribution to such Partner pursuant to Section 3.1 to the extent that such Partner (or any successor to such Partner’s interest in the Partnership) would have received a cash distribution but for such withholding or other taxes. To the extent that such payment exceeds the cash distribution that such Partner would have received but for such withholding, the General Partner shall notify such Partner as to the amount of such excess and such Partner shall make a prompt payment to the Partnership of such amount by wire transfer, which payment shall not constitute a capital contribution and, consequently, shall not increase the Capital Account of such Partner.

(e) Withholding Forms and Information. Each Partner shall furnish the Partnership with any information, representations and forms as shall reasonably be requested by the Partnership from time to time to assist it in complying with any applicable Law or tax requirements or determining the extent of, and in fulfilling, any withholding obligations in respect of the Partnership. Each Partner shall furnish the Partnership with any information, representations and forms as shall reasonably be requested by the Partnership to assist it in obtaining any exemption, reduction or refund of any withholding or other taxes imposed by any taxing authority or other governmental agency upon the Partnership or amounts paid, or allocable, to the Partnership.

(f) Tax Elections. The General Partner shall (and is hereby authorized to) cause the Partnership and, if applicable, any subsidiary of the Partnership to make a timely election under Section 754 of the Code, or any similar provision enacted in lieu thereof, and any similar provisions under any state, local or non-U.S. tax law. The General Partner shall have the power to make any other election on behalf of the Partnership that the General Partner deems appropriate in its sole discretion.

 

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(g) Tax Representative. The General Partner shall designate a Person as the “partnership representative” of the Partnership for each taxable year of the Partnership, in accordance with Section 6223 of the Code and any similar provision under any state or local or non-U.S. tax laws (such Person with respect to any taxable year, the “Tax Representative”). Each Partner hereby consents to each such designation and agrees that, upon the request of the General Partner, such Partner will execute, certify, acknowledge, deliver, swear to, file and record at the appropriate public offices such documents as may be necessary or appropriate to evidence such consent. No Limited Partner may revoke any designation of a Tax Representative. The applicable Tax Representative shall have the sole discretion to determine all matters, and shall be authorized to take any actions necessary, with respect to preparing and filing any U.S. federal, state or local or non-U.S. tax return of the Partnership and any audit, examination or investigation (including any judicial or administrative proceeding) of the Partnership by any U.S. federal, state or local or non-U.S. taxing authority (including the allocation of any resulting taxes, penalties and interest among the Partners and whether to make an election under Section 6226 of the Code or any similar provision of any state or local tax laws with respect to any audit or other examination of the Partnership). Each Partner shall promptly upon request furnish to any Tax Representative any information that such Tax Representative may reasonably request in connection with (i) preparing or filing any tax returns of the Partnership, (ii) any tax election of the Partnership or (iii) any audit, examination or investigation (including any judicial or administrative proceeding) of the Partnership. If the applicable Tax Representative makes an election under Section 6226 of the Code or any similar provision of any state or local tax laws with respect to any audit adjustment of any item of the Partnership’s income, gain, loss, deduction or credit (or adjustment of the allocation of any such items among the Partners), each Partner shall comply with the requirements set forth in Section 6226 of the Code or any similar provision of any state or local or non-U.S. tax laws (and any applicable guidance issued by the applicable taxing authority) with respect to such election. Each Partner shall file all U.S. tax returns with respect to such Partner’s distributive share of any item of the Partnership’s income, gain, loss, deduction or credit in a manner consistent with the Partnership’s U.S. tax treatment of such item. For the avoidance of doubt, any taxes, penalties or interest imposed on the Partnership with respect to any audit, examination or investigation (including any judicial or administrative proceeding) of the Partnership by any taxing authority under Section 6225 of the Code (and any similar provisions under any state or local or non-U.S. tax laws) shall be deemed to be distributions subject to the provisions of Section 3.1. No Partner shall, without the consent of the General Partner, (A) file a request for administrative adjustment of Partnership items, (B) file a petition with respect to any Partnership item or other tax matters involving the Partnership or (C) enter into a settlement agreement with any taxing authority with respect to any Partnership items.

(h) Schedule K-1. The Partnership shall cause the preparation and timely filing of all of the Partnership’s tax returns and shall timely file all other writings required by any governmental authority having jurisdiction to require such filing. Each Partner shall provide such information to the Partnership as may be reasonably necessary for purposes of the Partnership’s preparing any such required tax return or information return. The General Partner shall use commercially reasonable efforts to provide to each Partner any information or relevant

 

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form, including but not limited to Internal Revenue Service Schedule K-1 to Internal Revenue Service Form 1065, regarding the Partnership’s taxable income or loss and each item of income, gain, loss, deduction or credit which is relevant to reporting a Partner’s share of the Partnership’s income, gain, loss, deduction or credit for income tax purposes, as soon as practicable after the close of the Partnership’s Tax Year (as defined below). Upon the written request of any Partner, the Partnership shall provide any information reasonably necessary for (i) the preparation of any U.S. federal, state, local and non-U.S. tax returns which may need to be filed by such Partner or (ii) financial accounting purposes.

ARTICLE X

BOOKS AND RECORDS

10.1 Books and Records; Information.

(a) Generally. The General Partner shall keep proper books and records pertaining to the Partnership’s business and all of its assets and liabilities, receipts and disbursements, realized profits and losses, Partners’ Capital Accounts and all transactions entered into by the Partnership, and all such books and records shall be maintained at the Partnership’s principal place of business and/or registered office, as applicable, and in accordance with the Act. The General Partner shall retain the books and records of the Partnership for a period of at least six (6) years following the filing of the final Partnership tax returns.

(b) Information. Except as provided for by this Agreement or required by the Act, each Limited Partner shall not have the right to obtain information from the Partnership unless otherwise determined by the General Partner.

ARTICLE XI

MISCELLANEOUS

11.1 Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in person, by courier service, by electronic mail or by registered or certified mail (postage prepaid, return receipt requested) to the respective parties at the following addresses (or at such other address for a party as shall be as specified in a notice given in accordance with this Section 11.1):

 

  (i)

If to the Partnership, to:

Core & Main Holdings, LP

c/o Core & Main, Inc.

1830 Craig Park Court

St. Louis, Missouri 63146

Email: X

Attention: General Counsel and Secretary

 

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with a copy (which shall not constitute notice) to:

Debevoise & Plimpton LLP

919 Third Avenue

New York, New York 10022

Email: pmrodel@debevoise.com

Attention: Paul M. Rodel, Esq.

 

  (ii)

If to the General Partner, to:

Core & Main, Inc.

1830 Craig Park Court

St. Louis, Missouri 63146

Email: X

Attention: General Counsel and Secretary

with a copy (which shall not constitute notice) to:

Debevoise & Plimpton LLP

919 Third Avenue

New York, New York 10022

Email: pmrodel@debevoise.com

Attention: Paul M. Rodel, Esq.

 

  (iii)

if to any Limited Partner, to the address of such Limited Partner as shown on Schedule A.

11.2 Power of Attorney. The Partners, jointly and severally, hereby irrevocably constitute and appoint the General Partner, with full power of substitution, their true and lawful attorney-in-fact in their name, place and stead to make, execute, sign and acknowledge, record and file, on behalf of them and on behalf of the Partnership the following: (i) a Certificate of Limited Partnership and any other certificates or instruments which may be required to be filed by the Partnership or the Partners under the laws of the State of Delaware and any other jurisdiction whose laws may be applicable; and (ii) any and all such other instruments as may be deemed necessary or desirable by the General Partner to carry out fully the provisions of this Agreement in accordance with its terms. Such power of attorney shall be irrevocable and is coupled with an interest.

11.3 Agreement Binding upon Successors and Assigns; Recapitalizations, Exchanges, etc.

(a) Except as herein otherwise specifically provided, this Agreement shall be binding upon and inure to the benefit of all of the parties and, to the extent permitted by this Agreement, their successors, executors, administrators, heirs, legal representatives and assigns.

 

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(b) The provisions of this Agreement shall apply to any and all equity interests in the Partnership or any successor or assign of the Partnership (whether by conversion, merger, consolidation, sale of assets or otherwise) which may be issued in respect of, in exchange for, or in substitution of any Partnership Interests, by reason of a partnership interest distribution, partnership interest split, partnership interest issuance, reverse partnership interest split, combination, recapitalization, reclassification, conversion, merger, consolidation or otherwise. Upon the occurrence of any such events, amounts hereunder shall be appropriately adjusted by the General Partner.

11.4 Fiscal Year. The fiscal year is a 52- or 53-week period ending on the Sunday nearest to January 31, or such other period as shall be determined by the General Partner. The tax year of the Partnership for income tax purposes shall be determined by the General Partner in accordance with Section 706 of the Code and the Treasury Regulations thereunder (the “Tax Year”).

11.5 Governing Law; Waiver of Trial by Jury.

(a) This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without giving effect to any choice or conflict of laws provision or rule that would cause the application of the laws of any other jurisdiction. The Parties hereto hereby declare that it is their intention that this Agreement shall be regarded as made under the laws of the State of Delaware and that the laws of said State shall be applied in interpreting its provisions in all cases where legal interpretation shall be required.

(b) The Parties irrevocably consent to the exclusive jurisdiction of the courts of the State of Delaware and of the federal courts sitting in the state of Delaware in connection with any action relating to this Agreement and each party agrees (i) to the extent such party is not otherwise subject to service of process in the State of Delaware, to appoint and maintain an agent in the State of Delaware as such party’s agent for acceptance of legal process and notify the other parties hereto of the name and address of such agent, and (ii) that, to the fullest extent permitted by applicable law, service of process may also be made on such party by prepaid certified mail with a proof of mailing receipt validated by the United States Postal Service constituting evidence of valid service, and that service made pursuant to (i) or (ii) above shall, to the fullest extent permitted by applicable law, have the same legal force and effect as if served upon such party personally within the State of Delaware. Any action against any party relating to the foregoing shall be brought in the Delaware Court of Chancery (or, solely if the Delaware Court of Chancery declines to accept or does not have jurisdiction over any action, to the exclusive jurisdiction of the Superior Court of the State of Delaware (Complex Commercial Division) or, if the subject matter jurisdiction over the action is vested exclusively in the federal courts of the United States of America, the United States District Court for the District of Delaware), and any appellate courts of any thereof. To the extent not prohibited by applicable law, each party hereto waives and agrees not to assert, by way of motion, as a defense or otherwise, in any such proceeding brought in the above-named courts, any claim that such party is not subject personally to the jurisdiction of such courts, that such party’s property is exempt or immune from attachment or execution, that such proceeding is brought in an inconvenient forum, that the venue of such proceeding is improper, or that this Agreement or the subject matter thereof, may not be enforced in or by such courts.

 

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(c) TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH CANNOT BE WAIVED, EACH PARTY HERETO HEREBY WAIVES AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE) ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE OR ACTION, CLAIM, CAUSE OF ACTION OR SUIT (IN CONTRACT, TORT OR OTHERWISE), INQUIRY, PROCEEDING OR INVESTIGATION ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE SUBJECT MATTER HEREOF OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE TRANSACTIONS CONTEMPLATED HEREBY, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING. EACH PARTY HERETO ACKNOWLEDGES THAT IT HAS BEEN INFORMED BY THE OTHER PARTIES HERETO THAT THIS SECTION 11.5(C) CONSTITUTES A MATERIAL INDUCEMENT UPON WHICH THEY ARE RELYING AND WILL RELY IN ENTERING INTO THIS AGREEMENT. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 11.5(C) WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF EACH SUCH PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.

11.6 Injunctive Relief. The General Partner and the Limited Partners hereby declare that it is impossible to measure in money the damages that will accrue to the parties hereto by reason of the failure of the General Partner or any Limited Partner to perform any of its obligations set forth in this Agreement. Therefore, to the fullest extent permitted by applicable Law, the General Partner and the Limited Partners shall have the right to specific performance of such obligations, and if any party hereto shall institute any action or proceeding to enforce the provisions hereof, the General Partner and the Limited Partners hereby waive, to the fullest extent permitted by applicable Law, the claim or defense that the party instituting such action or proceeding has an adequate remedy at law.

11.7 Consents. Any and all consents, agreements or approvals provided for or permitted by this Agreement shall be in writing, and a signed copy thereof shall be filed and kept with the books of the Partnership at the principal place of business of the Partnership.

11.8 Miscellaneous.

(a) All references to the masculine herein shall include both the neuter and the feminine. Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.”

(b) The titles, captions and headings preceding the text of each Section hereof shall be disregarded in the construction of this Agreement. Except as otherwise expressly provided, sections cited herein shall refer to sections of this Agreement.

(c) This Agreement may be executed and delivered (including by facsimile transmission or by e-mail delivery of a “.pdf” format data file) in one or more counterparts, and by the different Parties hereto in separate counterparts, each of which when executed and delivered shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. Copies of executed counterparts transmitted by telecopy, by e-mail delivery of a “.pdf” format data file or other electronic transmission service shall be considered original executed counterparts for purposes of this Section 11.8(c).

 

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(d) This Agreement constitutes the entire agreement among the parties with respect to the subject matter hereof, superseding any prior agreement or understanding among them, oral or written.

(e) If any provision, including any phrase, sentence, clause, section or subsection, of this Agreement is determined by a court of competent jurisdiction to be invalid, inoperative or unenforceable for any reason, such circumstances shall not have the effect of rendering such provision in question invalid, inoperative or unenforceable in any other case or circumstance, or of rendering any other provision herein contained invalid, inoperative or unenforceable to any extent whatsoever. Upon any such determination, the General Partner shall reasonably and in good faith modify this Agreement so as to effect the original intent of the parties as closely as possible in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.

(f) At any time or from time to time after the date hereof, the parties agree to cooperate with each other, and at the request of any other party, to execute and deliver any further instruments or documents and to take all such further action as the other party may reasonably request in order to evidence or effectuate the consummation of the transactions contemplated hereby in accordance with their terms and to otherwise carry out the intent of the parties hereunder.

11.9 Amendments and Waiver. Except as otherwise expressly provided herein, no modification, amendment or waiver of any provision of this Agreement shall be effective without the consent of the General Partner; provided that any Limited Partner may waive (in writing) the benefit of any provision of this Agreement with respect to itself for any purpose. Any written amendment or waiver to this Agreement that receives the vote or consent of the General Partner need not be signed by all Limited Partners, but shall be effective in accordance with its terms and shall be binding upon all Limited Partners; provided that this Agreement may not be amended in any manner adversely affecting the rights or obligations of any Limited Partner that does not, by its terms, adversely affect the rights or obligations of all similarly situated Limited Partners in a substantially similar manner without the consent of such Limited Partner.

11.10 Restrictions on Other Agreements. Following the date hereof, no Limited Partner shall enter into or agree to be bound by any Limited Partner agreements or arrangements of any kind with any Person with respect to any Partnership Interests (other than the Indemnification Agreement), to the extent that such agreement or arrangement would conflict with or violate any provision or term of this Agreement or otherwise be intended to circumvent the provisions set forth herein, except pursuant to the agreements specifically contemplated by the Indemnification Agreement.

[Remainder of page intentionally left blank.]

 

21


IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, have duly executed this Second Amended and Restated Agreement of Limited Partnership effective as of the date first set forth above.

 

GENERAL AND LIMITED PARTNER

CORE & MAIN, INC., in its capacity as the general partner and a limited partner

By:

 

/s/ Stephen O. LeClair

  Name: Stephen O. LeClair
  Title: Chief Executive Officer

LIMITED PARTNERS

CD&R WATERWORKS HOLDINGS, LLC, in its capacity as a limited partner

By its manager, CD&R Waterworks Holdings, L.P.

By its general partner, CD&R Waterworks Holdings GP, Ltd.

By:

 

/s/ Rima Simson

  Name: Rima Simson
  Title: Vice President, Treasurer and Secretary

CD&R WW, LLC, in its capacity as a limited partner

By its managing member, Core & Main, Inc.

By:

 

/s/ Stephen O. LeClair

  Name: Stephen O. LeClair
  Title: Chief Executive Officer

[Signature Page – Second Amended and Restated Limited Partnership Agreement of Core & Main Holdings, LP]


CORE & MAIN MANAGEMENT FEEDER, LLC, in its capacity as a limited partner

By:

 

/s/ Mark R. Witkowski

  Name: Mark R. Witkowski
  Title: Chief Financial Officer

[Signature Page – Second Amended and Restated Limited Partnership Agreement of Core & Main Holdings, LP]


DEFINED TERMS

Definitions. The terms defined in this Annex I, whenever used in this Agreement, shall have the following meanings for all purposes of this Agreement.

A&R Agreement” has the meaning set forth in the recitals to this Agreement.

Accounting Period” means, for the first Accounting Period, the period commencing on the day after the closing of the IPO and ending on the next Adjustment Date. All succeeding Accounting Periods shall commence on the day after an Adjustment Date and end on the next Adjustment Date.

Act” means the Delaware Revised Uniform Limited Partnership Act (6 Del. C. Section 17-101, et seq.), as amended.

Adjustment Date” means the last day of each Tax Year or any other date determined by the General Partner as appropriate for a closing of the Partnership’s books.

Affiliate” means, with respect to a specified Person, any Person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with the specified Person. As used in this definition, the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.

Agreement” has the meaning set forth in the preamble to this Agreement.

Business Day” means any day excluding Saturday, Sunday and any day that is a legal holiday under the laws of the State of New York or is a day on which banking institutions located in New York are closed.

C&M, Inc.” has the meanings set forth in the preamble to this Agreement.

Capital Account” has the meaning set forth in Section 9.2(a).

CD&R Partner” has the meaning set forth in the preamble to this Agreement.

Class A Common Stock” means the Class A common stock, par value $0.01 per share, of C&M Inc.

Class B Common Stock” means the Class B common stock, par value $0.01 per share, of C&M Inc.

Code” means the U.S. Internal Revenue Code of 1986, as amended.

Continuing Limited Partners Tax Receivable Agreement” means the Tax Receivable Agreement, dated on or about the date hereof, by and among C&M Inc., the Partnership, the holders of Partnership Interests and shares of Class B Common Stock party thereto and any other person from time to time a party thereto, as such agreement may be amended, restated, supplemented or otherwise modified from time to time.


Covered Person” means a current or former Partner, an Affiliate of a current or former Partner, any officer, director, shareholder, partner, member, employee, representative or agent of a current or former Partner or any of their respective Affiliates, or any current or former officer, employee or agent of the Partnership or any of its Affiliates.

Disabling Conduct” means, in respect of any Person, an act or omission (a) that is a criminal act by such Person that such Person had no reasonable cause to believe was lawful or (b) that constitutes fraud or willful misconduct by such Person.

Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.

Exchange Agreement” means the exchange agreement, dated as of or about the date hereof, by and among C&M Inc., the Partnership, the holders of Partnership Interests and shares of Class B Common Stock party thereto and any other person from time to time a party thereto, as such agreement may be amended, restated, supplemented or otherwise modified from time to time.

Exchange Transaction” means an exchange of an LP Partnership Interest for a number of shares of Class A Common Stock or, at the determination of the General Partner, acting by a majority of the disinterested members of its board of directors in accordance with Delaware General Corporation Law, a cash payment, in each case pursuant to, and subject to the conditions of, the Exchange Agreement.

Former Limited Partner Tax Receivable Agreement” means the Tax Receivable Agreement, dated on or about the date hereof, by and among the General Partner, the Partnership and certain stockholders of the General Partner, as such agreement may be amended, restated, supplemented or otherwise modified from time to time.

General Partner” has the meanings set forth in the preamble to this Agreement and includes any Person(s) admitted as additional or substitute General Partner(s) of the Partnership pursuant to this Agreement and in accordance with the Act.

GP Partnership Interests” has the meaning set forth in Section 2.1(a).

Indemnification Agreement” means the Indemnification Agreement, dated August 1, 2017, by and among the Prior General Partners, Core & Main LP and the other parties thereto, as modified by that certain letter agreement, dated as of August 5, 2019, by and among the Partnership, Core & Main Midco, LLC, Core & Main Intermediate GP, LLC, Core & Main LP, Clayton, Dubilier & Rice, LLC and the other parties thereto.

Intermediate Partner” has the meaning set forth in the preamble to this Agreement.

IPO” has the meaning set forth in the recitals to this Agreement.


Law” means any foreign, federal, state or local law, statute, regulation, ordinance, rule, order, decree, judgment, consent decree or other binding directive issued, enacted, promulgated, entered into, agreed or imposed by any domestic or foreign government, including any foreign, federal, state, provincial, local, territorial or municipal government or any governmental division, agency or authority thereof, court or judicial authority, tribunal or commission.

Limited Partner” and “Limited Partners” have the meanings set forth in the preamble to this Agreement and include any Person(s) admitted as additional or substitute Limited Partner(s) of the Partnership pursuant to this Agreement.

Liquidation Adjustment” has the meaning set forth in Section 4.1(b).

Liquidating Trustee” has the meaning set forth in Section 4.1(b).

LP Partnership Interests” has the meaning set forth in Section 2.1(a).

Management Member” shall mean a member of the Management Partner.

Management Partner” has the meaning set forth in the preamble to this Agreement.

Management Partner LLC Agreement” shall mean the limited liability company agreement of the Management Partner, as amended, restated and supplemented from time to time.

Management Subscription Agreement” means a subscription or award agreement between the Management Partner and a Management Member (among others), embodying the terms of, as applicable, any purchase of interests in the Management Partner by, or grant of interests in the Management Partner to, such Management Member made pursuant to the Management Partner LLC Agreement and in the form approved by the General Partner and the manager of the Management Partner from time to time for such purpose.

Officers” has the meaning set forth in Section 6.2.

Original Agreement” has the meaning set forth in the recitals to this Agreement.

Parties” has the meaning set forth in the preamble to this Agreement.

Partners” means the Limited Partners and the General Partner.

Partnership” has the meaning set forth in the preamble to this Agreement.

Partnership Interests” means the GP Partnership Interests, LP Partnership Interests and any other class or designation of interests in the limited partnership denominated in the form of partnership interests authorized by the General Partner.

Partnership Opportunity” has the meaning set forth in Section 8.3(b).


Person” means an individual, a partnership (including a limited partnership), a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, association or other entity or a governmental entity.

Prior General Partners” means CD&R Plumb Buyer, LLC, a Delaware limited liability company, and Core & Main GP, LLC, a Delaware limited liability company, as the prior general partners of the Partnership.

Reorganization Transactions” has the meaning set forth in the recitals.

Securities Act” has the meaning set forth on the cover page.

Subsidiary” means, with respect to any Person, any corporation, limited liability company, partnership, association or business entity of which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof, or (ii) if a limited liability company, partnership, association or other business entity (other than a corporation), a majority of partnership or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by any Person or one or more Subsidiaries of that Person or a combination thereof. For purposes hereof, a Person or Persons shall be deemed to have a majority ownership interest in a limited liability company, partnership, association or other business entity (other than a corporation) if such Person or Persons shall be allocated a majority of limited liability company, partnership, association or other business entity gains or losses or shall control the management of any such limited liability company, partnership, association or other business entity. For purposes hereof, references to a “Subsidiary” of any Person shall be given effect only at such times that such Person has one or more Subsidiaries.

Tax Distributions” means distributions made to Partners pursuant to Section 3.3(a).

Tax Representative” has the meaning set forth in Section 9.3(g).

Tax Year” has the meaning set forth in Section 11.4.

TRA Distribution” has the meaning set forth in Section 3.3(b).

Transfer” or “Transferred” means any direct or indirect sale, assignment, mortgage, transfer, gift, pledge, hypothecation or other encumbrance or disposal, the act of effecting any of the foregoing or any of the foregoing having been effected, as the context requires, including derivative or similar transactions or arrangements whereby a portion or all of the economic interest therein, or risk of loss or opportunity for gain with respect thereto, are transferred or shifted to another Person.

Transferee” means any Person to whom any Partner Transfers Partnership Interests in accordance with the terms hereof.


Treasury Regulations” means the Regulations of the Treasury Department of the United States issued pursuant to the Code.

United States” or “U.S.” means the United States of America.

EX-10.2 6 d185428dex102.htm EX-10.2 EX-10.2

Exhibit 10.2

Execution Version

 

 

 

REGISTRATION RIGHTS AGREEMENT

of

CORE & MAIN, INC.

Dated as of July 27, 2021

 

 

 

 


TABLE OF CONTENTS

 

     Page  

1.  Definitions

     1  

2.  Incidental Registrations

     6  

(a)   Right to Include Registrable Securities

     6  

(b)   Priority in Incidental Registrations

     7  

3.  Registration on Request

     7  

(a)   Request by the Demand Party

     7  

(b)   Priority on Demand Registration

     8  

(c)   Cancellation of a Demand Registration

     9  

(d)   Limitations on Demand Registrations

     9  

(e)   Postponements in Requested Registrations

     9  

(f)   Short-Form Registrations

     10  

(g)   Shelf Take-Downs

     11  

(h)   No Notice in Block Sales

     12  

(i) Registration Statement Form

     12  

(j) Selection of Underwriters

     12  

4.  Registration Procedures

     13  

5.  Indemnification

     20  

(a)   Indemnification by the Company

     20  

(b)   Indemnification by Holder of Registrable Securities

     20  

(c)   Conduct of Indemnification Proceedings

     21  

(d)   Contribution

     22  

(e)   Deemed Underwriter

     23  

(f)   Other Indemnification

     23  

(g)   Non-Exclusivity

     23  

(h)   Primacy of Indemnification

     23  

6.  Registration Expenses

     24  

7.  Rule 144

     24  

8.  Certain Additional Agreements

     25  

9.  Miscellaneous

     25  

(a)   Termination

     25  

(b)   Holdback Agreement

     25  

(c)   Amendments and Waivers

     26  

(d)   Successors, Assigns and Transferees

     26  

(e)   Notices

     26  

(f)   Further Assurances

     27  

 

i


TABLE OF CONTENTS

(continued)

 

     Page  

(g)   No Inconsistent Agreements

     27  

(h)   Entire Agreement; No Third-Party Beneficiaries

     27  

(i) Governing Law; Jurisdiction and Forum; Waiver of Jury Trial

     28  

(j) Severability

     28  

(k)   Enforcement

     28  

(l) Titles and Subtitles

     29  

(m) No Recourse

     29  

(n)   Counterparts; PDF Signatures

     29  

 

Exhibit A    Joinder Agreement

 

ii


This REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is entered into as of July 27, 2021, by and among Core & Main, Inc., a Delaware corporation (and any successor in interest thereto, the “Company”), CD&R Waterworks Holdings, LLC, a Delaware limited liability company, CD&R Fund X Advisor Waterworks B, L.P., a Cayman Islands exempted limited partnership, CD&R Fund X Waterworks B1, L.P., a Cayman Islands exempted limited partnership, and CD&R Fund X-A Waterworks B, L.P., a Cayman Islands exempted limited partnership (in each case together with any successor in interest thereto, the “CD&R Investors”), any Person who executes a Joinder Agreement in the form of Exhibit A hereto and any Person who becomes a party hereto pursuant to Section 9(d). Capitalized terms used herein shall have the meaning assigned to such terms in the text of this Agreement or in Section 1.

WHEREAS, the Company intends to undertake an underwritten initial public offering (the “IPO”) of its Class A common stock, par value $0.01 per share (“Class A Common Stock”); and

WHEREAS, in connection with the IPO, the Company desires to provide to the Holders rights to registration under the Securities Act of Registrable Securities, on the terms and subject to the conditions set forth herein.

NOW, THEREFORE, in consideration of the foregoing recitals and of the mutual promises hereinafter set forth, the Parties hereto agree as follows:

AGREEMENT

1. Definitions. As used in this Agreement, the following capitalized terms shall have the following respective meanings:

Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common control with such Person.

Agreement” has the meaning given to such term in the Preamble, as the same may be amended, supplemented or restated from time to time.

Automatic Shelf Registration Statement” has the meaning given to such term in Section 3(f)(iii).

beneficial owner” or “beneficially own” has the meaning given such term in Rule 13d-3 under the Exchange Act and a Person’s beneficial ownership of Equity Securities or other voting securities of the Company shall be calculated in accordance with the provisions of such Rule.

Block Sale” means the sale of Equity Securities to one or several purchasers in a registered transaction by means of a bought deal, a block trade or a direct sale.

Board” means the Board of Directors of the Company.


Business Day” means any day that is not a Saturday, a Sunday or other day on which banks are required or authorized by law to be closed in New York City.

CD&R Investors” has the meaning given to such term in the Preamble.

Charitable Gifting Event” means any transfer by a Holder of Registrable Securities, or any subsequent transfer by such Holder’s members, partners or other employees, in connection with a bona fide gift to any Charitable Organization made in connection with sales of Registrable Securities by a Holder pursuant to an effective registration statement.

Charitable Organization” means a charitable organization as described by Section 501(c)(3) of the Internal Revenue Code of 1986, as in effect from time to time.

Class A Common Stock” has the meaning given to such term in the Recitals.

Class B Common Stock” means the Class B common stock, par value $0.01 per share, of the Company.

Company” has the meaning given to such term in the Preamble.

control” (including the terms “controlling,” “controlled by” and “under common control with”), with respect to the relationship between or among two or more Persons, means the possession, directly or indirectly, of the power to direct or cause the direction of the affairs or management of a Person, whether through the ownership of voting securities, as trustee or executor, by contract or otherwise.

Covered Person” has the meaning given to such term in Section 5(a).

Demand Follow-Up Notice” has the meaning given to such term in Section 3(a).

Demand Notice” has the meaning given to such term in Section 3(a).

Demand Registration” has the meaning given to such term in Section 3(a).

Equity Securities” means (a) any and all shares of Class A Common Stock or other equity securities of the Company (now owned or hereafter acquired), including any Class A Common Stock issued or issuable (i) upon the exchange of any other securities of the Company or any of its subsidiaries (including, for the avoidance of doubt, any shares of Class A Common Stock issued or issuable upon exchange of any Paired Interest pursuant to the Exchange Agreement) and (ii) in connection with the Reorganization Transactions, and (b) any securities of the Company convertible into, or exchangeable or exercisable for, such shares, and options, warrants or other rights to acquire such shares or other equity securities.

Exchange Act” means the Securities Exchange Act of 1934, as amended, and any successor statute thereto and the rules and regulations of the SEC promulgated thereunder.

 

2


Exchange Agreement” means the Exchange Agreement, dated as of July 22, 2021 (as amended and in effect from time to time), by and among the Company, Core & Main Holdings, LP, CD&R Waterworks Holdings, LLC and Core & Main Management Feeder, LLC.

FINRA” means the Financial Industry Regulatory Authority.

Free Writing Prospectus” has the meaning given to such term in Section 4(a).

Holdback Period” means, with respect to a registered offering covered by this Agreement, 90 calendar days after and during the 10 calendar days before the effective date of the related Registration Statement or, in the case of a takedown from a Shelf Registration Statement, 90 calendar days after the date of the Prospectus supplement filed with the SEC in connection with such takedown and during such prior period (not to exceed 10 calendar days) as the Company has given reasonable written notice to the Holders, or such shorter period as may be agreed to by the managing underwriter(s).

Holder” means any of (i) the CD&R Investors, (ii) any other Person entitled to incidental or piggyback registration rights hereunder upon entering into a joinder agreement substantially in the form of Exhibit A hereto or (iii) any direct or indirect transferee of a Holder who has acquired Registrable Securities from a Holder and who has entered into a joinder agreement substantially in the form of Exhibit A hereto, in each case so long as such Person continues to hold any Registrable Securities.

Indemnified Party” has the meaning given to such term in Section 5(c).

Indemnifying Party” has the meaning given to such term in Section 5(c).

Indemnitors” has the meaning given to such term in Section 5(h).

IPO” has the meaning given to such term in the Recitals.

Losses” has the meaning given to such term in Section 5(a).

Paired Interest” has the meaning given to such term in the Exchange Agreement.

Parties” means the parties to this Agreement.

Person” means any individual, partnership, joint venture, corporation, limited liability company, trust, unincorporated organization, government or any department or agency thereof or any other entity.

Prospectus” means the prospectus included in any Registration Statement (including, without limitation, a prospectus that discloses information previously omitted from a prospectus filed as part of an effective Registration Statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, relating to Registrable Securities, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such prospectus.

 

3


Registrable Securities” means (a) any Equity Securities held by a Holder and (b) to the extent held, or to be held, by a Holder, any other equity securities or equity interests issued or issuable, directly or indirectly, with respect to the securities described in clause (a) by way of conversion or exchange thereof or stock dividends, stock splits or in connection with a combination of shares, reclassification, recapitalization, merger, consolidation or other reorganization. As to any particular Registrable Securities, once issued, such securities shall cease to be Registrable Securities when (i) they are disposed of pursuant to an effective Registration Statement under the Securities Act, (ii) they are sold to the public pursuant to Rule 144 or Rule 145 (or other exemption from registration under the Securities Act), (iii) other than with respect to Equity Securities held by the CD&R Investors or their Affiliates who are Holders, they are able to be sold by their Holder in a single day pursuant to, and in accordance with, Rule 144 and are held by a Holder that beneficially owns Equity Securities representing no more than 3% of the aggregate voting power of the outstanding shares of Class A Common Stock and Class B Common Stock, (iv) they shall have ceased to be outstanding, or (v) they have been sold in a private transaction in which the transferor’s rights under this Agreement are not assigned to the transferee of the securities.

Registration Statement” means any registration statement of the Company filed with the SEC under the Securities Act which covers any of the Registrable Securities pursuant to the provisions of this Agreement, including any Prospectus, Free Writing Prospectus, amendments and supplements to such registration statement, including post-effective amendments, all exhibits and all material incorporated by reference or deemed to be incorporated by reference in such registration statement.

Reorganization Transactions” means the reorganization transactions taken in connection with the IPO, as described under the caption “The Reorganization Transactions” in the preliminary prospectus, dated July 13, 2021, relating to the Class A Common Stock to be issued and sold in connection with the IPO, filed as part of Company’s registration statement on Form S-1 (Registration No. 333-256382).

Rule 144” means Rule 144 under the Securities Act, as such rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC.

Rule 145” means Rule 145 under the Securities Act, as such rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC.

Rule 158” means Rule 158 under the Securities Act, as such rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC.

 

4


Rule 405” means Rule 405 under the Securities Act, as such rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC.

Rule 415” means Rule 415 under the Securities Act, as such rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC.

Rule 424” means Rule 424 under the Securities Act, as such rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC.

Rule 433” means Rule 433 under the Securities Act, as such rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC.

Rule 430A” means Rule 430A under the Securities Act, as such rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC.

Rule 430B” means Rule 430B under the Securities Act, as such rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC.

SEC” means the U.S. Securities and Exchange Commission or any other federal agency at the time administering the Securities Act or the Exchange Act.

Securities Act” means the Securities Act of 1933, as amended, and any successor statute thereto and the rules and regulations of the SEC promulgated thereunder.

Shelf Registration Statement” has the meaning given to such term in Section 3(f)(i).

Shelf Underwritten Offering” has the meaning given to such term in Section 3(g).

Short-Form Registration” has the meaning given to such term in Section 3(f)(i).

Subsidiary” means (i) any corporation of which a majority of the securities entitled to vote generally in the election of directors thereof, at the time as of which any determination is being made, are owned by another entity, either directly or indirectly and (ii) any joint venture, general or limited partnership, limited liability company or other legal entity in which an entity is the record or beneficial owner, directly or indirectly, of a majority of the voting interests or the general partner.

Take-Down Notice” has the meaning given to such term in Section 3(g).

WKSI” has the meaning given to such term in Section 3(f)(iii).

 

5


2. Incidental Registrations.

(a) Right to Include Registrable Securities. If the Company determines to register its Equity Securities under the Securities Act (other than pursuant to an Automatic Shelf Registration Statement filed to effect a Block Sale in accordance with Section 3(f)(iii), a Registration Statement filed by the Company on Form S-4 or Form S-8, or any successor or other forms promulgated for similar purposes, or filed solely in connection with an exchange offer or any employee benefit or dividend reinvestment plan), whether or not for sale for its own account, in a manner which would permit registration of Registrable Securities for sale to the public under the Securities Act, it shall, at each such time, give prompt written notice to all Holders of its intention to do so and of such Holders’ rights under this Section 2. Upon the written request of any such Holder made within five calendar days after the receipt of any such notice (which request shall specify the Registrable Securities intended to be disposed of by such Holder and the intended method or methods of disposition thereof), the Company shall use its reasonable best efforts to effect the registration under the Securities Act of all Registrable Securities which the Company has been so requested to register by the Holders thereof, to the extent required to permit the disposition of the Registrable Securities so to be registered; provided that (x) if, at any time after giving written notice of its intention to register any securities and prior to the effective date of the Registration Statement filed in connection with such registration, the Company shall determine for any reason not to proceed with the proposed registration of the securities to be sold by it, the Company may, at its election, give written notice of such determination to each Holder and, thereupon, shall be relieved of its obligation to register any Registrable Securities in connection with such registration (but not from its obligation to pay the expenses in connection therewith) without prejudice to the rights of the Holders to request that such registration be effected as a registration under Section 3, and (y) if such registration involves an underwritten offering, all Holders requesting to be included in the Company’s registration must sell their Registrable Securities to the underwriters selected by the Company on the same terms and conditions as apply to the Company, with such differences, including any with respect to indemnification and liability insurance, as may be customary or appropriate in combined primary and secondary offerings. If a registration requested pursuant to this Section 2(a) involves an underwritten public offering, any Holder requesting to be included in such registration may elect, in writing at least two Business Days prior to the effective date of the Registration Statement filed in connection with such registration, to withdraw its request to register such securities in connection with such registration. The Company shall not be required to maintain the effectiveness of the Registration Statement for a registration requested pursuant to this Section 2(a) beyond the earlier to occur of (i) 180 calendar days after the effective date thereof and (ii) consummation of the distribution by the holders of the Registrable Securities included in such Registration Statement. Any Holder who has elected to sell Registrable Securities in an offering pursuant to this Section 2 shall be permitted to withdraw from such registration by written notice to the Company if the price to the public at which the Registrable Securities are proposed to be sold will be less than 90% of the average closing price of the class of stock being sold in the offering during the ten trading days preceding the date on which the Demand Notice of such offering was given pursuant to this Section 2(a).

 

6


(b) Priority in Incidental Registrations. The Company shall use reasonable efforts to cause the managing underwriter(s) of a proposed underwritten offering to permit Holders who have requested to include Registrable Securities in such offering to include in such offering all Registrable Securities so requested to be included on the same terms and conditions as any other Equity Securities, if any, of the Company included in the offering. Notwithstanding the foregoing, if the managing underwriter(s) of such underwritten offering have informed the Company that in its (or their) good-faith opinion the total number or dollar amount of securities that are intended to be included in such offering is such as to adversely affect the success of such offering (including, without limitation, adversely affect the per-share offering price), then the amount of securities to be offered for the account of Holders (other than the Company) shall be reduced to the extent necessary to reduce the total amount of securities to be included in such offering to the amount recommended in the good-faith opinion of such managing underwriter(s) by first reducing, or eliminating if necessary, all securities of the Company requested to be included by the Holders (other than the CD&R Investors and their Affiliates that are Holders) requesting such registration pro rata among such Holders on the basis of the percentage of the Registrable Securities requested to be included in such registration by such Holders; second, by reducing, or eliminating if necessary, all securities of the Company requested to be included by the CD&R Investors or their Affiliates that are Holders, pro rata among such Holders on the basis of the percentage of Registrable Securities requested to be included in such registration by such Holders; and third, by reducing all securities of the Company requested to be included by the Company.

3. Registration on Request.

(a) Request by the Demand Party. Subject to Section 3(d), at any time, each of the CD&R Investors and their Affiliates that are Holders shall have the right to require the Company to register, pursuant to the terms of this Agreement, under and in accordance with the provisions of the Securities Act, the number of Registrable Securities of such Holder requested to be so registered pursuant to this Agreement, in each case by delivering written notice to the Company (any such written notice, a “Demand Notice” and any such registration, a “Demand Registration”). Subject to Section 3(d), following receipt of a Demand Notice for a Demand Registration in accordance with this Section 3(a), the Company shall use its reasonable best efforts to file a Registration Statement as promptly as practicable, but no later than 30 calendar days, and to cause such Registration Statement to be declared effective under the Securities Act as promptly as practicable after the filing thereof.

No Demand Registration shall be deemed to have occurred for purposes of the first sentence of the preceding paragraph if (x) the Registration Statement relating thereto (A) does not become effective, (B) is not maintained effective for the period required pursuant to this Section 3, or (C) the offering of the Registrable Securities pursuant to such Registration Statement is subject to a stop order, injunction or similar order or requirement of the SEC during such period, (y) more than 80% of the Registrable Securities requested by the demanding Holder to be included in such registration are not so included pursuant to Section 3(b) or (z) the conditions to closing specified in any underwriting agreement, purchase agreement or similar agreement entered into in connection with the registration relating to such request are not satisfied (other than as a result of a material default or breach thereunder by such demanding Holder or its Affiliates) or otherwise waived by such demanding Holder; provided that the Company’s obligation to pay expenses pursuant to Section 6 hereof shall still apply.

 

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Within two calendar days after receipt by the Company of a Demand Notice in accordance with this Section 3(a), the Company shall give written notice (the “Demand Follow-Up Notice”) of such Demand Notice to all other Holders and shall, subject to the provisions of Section 3(b) hereof, include in such registration all Registrable Securities with respect to which the Company received written requests for inclusion therein within five calendar days after such Demand Follow-Up Notice is given by the Company to such Holders.

All requests made pursuant to this Section 3 shall specify the number of Registrable Securities to be registered and the intended method or methods of disposition thereof.

The Company shall be required to maintain the effectiveness of the Registration Statement with respect to any Demand Registration for a period of at least 180 calendar days after the effective date thereof or such shorter period during which all Registrable Securities included in such Registration Statement have actually been sold; provided that such period shall be extended for a period of time equal to the period the Holder refrains from selling any securities included in such Registration Statement at the request of the Company or an underwriter pursuant to the provisions of this Agreement.

(b) Priority on Demand Registration. If any of the Registrable Securities registered pursuant to a Demand Registration are to be sold in a firm commitment underwritten offering, and the managing underwriter(s) advise the Holders of such securities that in its (or their) good-faith opinion the total number or dollar amount of Registrable Securities proposed to be sold in such offering (including, without limitation, securities proposed to be included by other Holders entitled to include securities in such Registration Statement pursuant to incidental or piggyback registration rights) is such as to adversely affect the success of such offering, then there shall be included in such firm commitment underwritten offering the number or dollar amount of Registrable Securities that in the good faith opinion of such managing underwriter(s) can be sold without adversely affecting such offering, and such number of Registrable Securities shall be allocated as follows, unless the underwriters require a different allocation:

(i) first, to the CD&R Investors and their Affiliates that are Holders requesting such registration (whether pursuant to a Demand Notice or pursuant to incidental or piggyback registration rights), pro rata on the basis of the percentage of Registrable Securities owned by each such Holder relative to the number of Registrable Securities owned by the CD&R Investors and their Affiliates that are Holders, until, with respect to each such Holder, all Registrable Securities requested for registration by such Holders have been included in such registration;

(ii) second, among the Holders (other than the CD&R Investors and their Affiliates that are Holders) requesting such registration pursuant to incidental or piggyback registration rights pro rata, with respect to the Holders, on the basis of the percentage of Registrable Securities owned by each such Holder relative to the number of Registrable Securities owned by all such Holders, until, with respect to each such Holder, all Registrable Securities requested for registration by such Holders have been included in such registration; and

 

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(iii) third, the securities for which inclusion in such Demand Registration was requested by the Company.

(c) Cancellation of a Demand Registration. Each Holder that submitted a Demand Notice pursuant to a particular offering and the holders of a majority of the Registrable Securities that are to be registered in a particular offering pursuant to this Section 3 shall have the right, prior to the effectiveness of the Registration Statement, to notify the Company that it or they, as the case may be, have determined that the Registration Statement be abandoned or withdrawn, in which event the Company shall abandon or withdraw such Registration Statement. Any Holder who has elected to sell Registrable Securities in an underwritten offering pursuant to this Section 3 (including the Holder who delivered the Demand Notice of such registration) shall be permitted to withdraw from such registration by written notice to the Company if the price to the public at which the Registrable Securities are proposed to be sold will be less than 90% of the average closing price of the class of stock being sold in the offering during the ten trading days preceding the date on which the Demand Notice of such offering was given pursuant to Section 3(a).

(d) Limitations on Demand Registrations. The CD&R Investors and their Affiliates that are Holders shall, collectively, be entitled to initiate an unlimited number of Demand Registrations.

(e) Postponements in Requested Registrations. If the filing, initial effectiveness or continued use of a Registration Statement, including a Shelf Registration Statement, with respect to a Demand Registration would require the Company to make a public disclosure of material, non-public information, which disclosure in the good-faith judgment of the Board (after consultation with external legal counsel) (i) would be required to be made in any Registration Statement so that such Registration Statement would not contain any untrue statement of material fact or omit to state a material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading, (ii) would not be required to be made at such time but for the filing, effectiveness or continued use of such Registration Statement and (iii) would reasonably be expected to have a material adverse effect on the Company or its business or on the Company’s ability to effect a bona fide material proposed acquisition, disposition, financing, reorganization, recapitalization or similar transaction, then the Company may, upon giving prompt written notice of such action to the Holders participating in such registration, delay the filing or initial effectiveness (but not the preparation) of, or suspend use of, such Registration Statement; provided that the Company shall not be permitted to so delay or suspend (x) more than once in any six-month period or (y) for any single period of time in excess of 45 calendar days, or, for periods exceeding, in the aggregate, 60 calendar days during any 12-month period. In the event that the Company exercises its rights under the preceding sentence, such Holders agree to suspend, promptly upon receipt of the notice referred to above, the use of any Prospectus relating to such registration in connection with any sale or offer to sell Registrable Securities. The Company covenants and agrees that it shall not deliver a suspension notice with respect to a suspension period unless all of the Company’s employees, associates, officers and directors who are subject to any of the Company’s policies on trading in securities, and who are prohibited by the terms thereof from effecting any public sales of securities of the Company beneficially owned by them, are so prohibited for the duration of the suspension period. If the Company so postpones the filing of a

 

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Prospectus or the effectiveness of a Registration Statement, the demanding Holder shall be entitled to withdraw such request and, if such request is withdrawn, such registration request shall not count for the purposes of the limitations set forth in Section 3(d). The Company shall promptly give the Holders requesting registration thereof pursuant to this Section 3 written notice of any postponement made in accordance with the preceding sentence.

(f) Short-Form Registrations.

(i) The Company shall use its reasonable best efforts to qualify for registration on Form S-3 or any comparable or successor form or forms or any similar short-form registration (a “Short-Form Registration”), and, if requested by any of the CD&R Investors and their Affiliates that are Holders and available to the Company, such Short-Form Registration shall be a “shelf” registration statement providing for the registration of, and the sale on a continuous or delayed basis of, the Registrable Securities, pursuant to Rule 415 or otherwise (a “Shelf Registration Statement”). At any time and from time to time, the CD&R Investors and their Affiliates that are Holders shall be entitled to request an unlimited number of Short-Form Registrations, if available to the Company, with respect to the Registrable Securities held by such requesting Holder and its Affiliates in addition to the other registration rights provided in Section 2 and this Section 3. In no event shall the Company be obligated to effect any shelf registration other than pursuant to a Short-Form Registration, subject to the immediately following sentence. If any Demand Registration is proposed by the demanding Holder to be a Short-Form Registration and an underwritten offering, and if the managing underwriter(s) shall advise the Company and the Holders that, in its (or their) good-faith opinion, it is of material importance to the success of such proposed offering to file a registration statement on Form S-1 (or any successor or similar registration statement) or to include in such registration statement information not required to be included in a Short-Form Registration, then the Company shall file a registration statement on Form S-1 or supplement the Short-Form Registration as reasonably requested by such managing underwriter(s).

(ii) Upon filing any Short-Form Registration, the Company shall use its reasonable best efforts to keep such Short-Form Registration effective with the SEC at all times and to re-file such Short-Form Registration upon its expiration, and to cooperate in any shelf take-down, whether or not underwritten, by amending or supplementing the Prospectus related to such Short-Form Registration as may be reasonably requested by the CD&R Investors and their Affiliates that are Holders or as otherwise required, until such time as all Registrable Securities that could be sold in such Short-Form Registration have been sold or are no longer outstanding. To the extent that the Company becomes ineligible to use Form S-3, the Company shall file a “shelf” registration statement on Form S-1 not later than 45 calendar days after the date of such ineligibility and use its reasonable best efforts to have such registration statement declared effective as promptly as practicable.

 

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(iii) To the extent the Company is a well-known seasoned issuer (as defined in Rule 405) (a “WKSI”) at the time any Demand Notice for a Short-Form Registration is submitted to the Company and such Demand Notice requests that the Company file a Shelf Registration Statement, the Company shall file an automatic shelf registration statement (as defined in Rule 405) on Form S-3 (an “Automatic Shelf Registration Statement”) in accordance with the requirements of the Securities Act, which covers the number or class of Registrable Securities which are requested to be registered. If registering a number of Registrable Securities, the Company shall pay the registration fee for all Registrable Securities to be registered pursuant to an Automatic Shelf Registration Statement at the time of filing of the Automatic Shelf Registration Statement and shall not elect to pay any portion of the registration fee on a deferred basis. The Company shall use its reasonable best efforts to remain a WKSI (and not to become an ineligible issuer (as defined in Rule 405)) during the period during which any Automatic Shelf Registration Statement is effective. If at any time following the filing of an Automatic Shelf Registration Statement when the Company is required to re-evaluate its WKSI status the Company determines that it is not a WKSI, the Company shall use its reasonable best efforts to (A) post-effectively amend the Automatic Shelf Registration Statement to a Shelf Registration Statement on Form S-3 or file a new Shelf Registration Statement on Form S-3 or, if such form is not available, Form S-1, (B) have such Shelf Registration Statement declared effective by the SEC and (C) keep such Registration Statement effective during the period during which such Short-Form Registration is required to be kept effective in accordance with Section 3(f)(ii). To the extent that the Company is eligible to file an Automatic Shelf Registration Statement, and any of the CD&R Investors or their Affiliates that are Holders notifies the Company that it wishes to engage in a Block Sale off of such an Automatic Shelf Registration Statement, and the Company does not have an Automatic Shelf Registration Statement related to the Registrable Securities, the Company shall use its commercially reasonable efforts to file an Automatic Shelf Registration Statement within three calendar days of such notification by such Holder.

(g) Shelf Take-Downs. At any time that a Shelf Registration Statement covering Registrable Securities is effective, if any of the CD&R Investors or their Affiliates that are Holders delivers a notice to the Company (a “Take-Down Notice”) stating that it intends to effect an underwritten offering of all or part of its Registrable Securities included by it on the shelf registration statement (a “Shelf Underwritten Offering”), then the Company shall amend or supplement the Shelf Registration Statement as may be necessary in order to enable such Registrable Securities to be distributed pursuant to the Shelf Underwritten Offering (taking into account the inclusion of Registrable Securities by any other Holders pursuant to Section 3(g)(i)). The CD&R Investors and their Affiliates that are Holders shall be entitled to request an unlimited number of shelf take-downs to effect a Shelf Underwritten Offering, if available to the Company, with respect to the Registrable Securities held by such Holders in addition to the other registration rights provided in Section 2 and this Section 3. In connection with any Shelf Underwritten Offering:

(i) the Company shall also deliver the Take-Down Notice to all other Holders with securities included on such Shelf Registration Statement and permit each such Holder to include its Registrable Securities included on the Shelf Registration Statement in the Shelf Underwritten Offering if such Holder notifies the requesting Holder and the Company within two calendar days after distribution or dissemination (including via e-mail, if available) of the Take-Down Notice to such Holder; and

 

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(ii) in the event that the underwriter advises such requesting Holder and the Company in its good-faith opinion that the total number or dollar amount of Registrable Securities proposed to be sold in such offering is such as to adversely affect the success of such offering (including, without limitation, adversely affect the per-share offering price), then the underwriter may limit the number of shares which would otherwise be included in such take-down offering in the same manner as described in Section 3(b) with respect to a limitation of shares to be included in a registration.

(h) No Notice in Block Sales. Notwithstanding any other provision of this Agreement, if any of the CD&R Investors or their Affiliates that are Holders wishes to engage in a Block Sale (including a Block Sale off of a Shelf Registration Statement or an effective Automatic Shelf Registration Statement, or in connection with the registration of such Holder’s Registrable Securities under an Automatic Shelf Registration Statement for purposes of effectuating a Block Sale), then notwithstanding the foregoing or any other provisions hereunder (including without limitation Section 2), no Holder shall be entitled to receive any notice of or have its Registrable Securities included in such Block Sale.

(i) Registration Statement Form. If any registration requested pursuant to this Section 3 which is proposed by the Company to be effected by the filing of a Registration Statement on Form S-3 (or any successor or similar short-form registration statement) shall be in connection with an underwritten offering, and if the managing underwriter(s) shall advise the Company that, in its (or their) good-faith opinion, the use of another form of Registration Statement is of material importance to the success of such proposed offering or is otherwise required by applicable law, then such registration shall be effected on such other form.

(j) Selection of Underwriters. If any of the CD&R Investors or their Affiliates that are Holders intends that the Registrable Securities requested to be covered by a Demand Registration or Take-Down Notice, as applicable, requested by such demanding Holder shall be distributed by means of an underwritten offering, such Holder shall so advise the Company as a part of the Demand Notice or Take-Down Notice, as applicable, and the Company shall include such information in the notice sent by the Company to the other Holders with respect to such Demand Registration or Shelf Underwritten Offering, as applicable. In such event, the lead underwriter to administer the offering shall be chosen by the demanding Holder, subject to the prior written consent, not to be unreasonably withheld or delayed, of the Company. If the offering is underwritten, the right of any Holder to registration pursuant to this Section 3 will be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting (unless otherwise agreed by the demanding Holder) and each such Holder will (together with the Company and the other Holders distributing their securities through such underwriting) enter into an underwriting agreement in customary form with the underwriter(s) selected for such underwriting (including, without limitation, pursuant to the terms of any underwriter option or “green shoe” option requested by the managing underwriter(s)), provided that (x) no Holder shall be required to sell more than the number of Registrable Securities that such Holder has requested the Company to include in any registration, (y) if any Holder disapproves of the terms of the underwriting, such Holder may elect to withdraw therefrom by written notice to the Company, the managing underwriter(s) and, in connection with an underwritten registration pursuant to this Section 3, the demanding Holder and (z) no such Person (other than the Company) shall be required to make any representations

 

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or warranties other than those related to title and ownership of, and power and authority to transfer, shares and as to the accuracy and completeness of statements made in a Registration Statement, Prospectus or other document in reliance upon, and in conformity with, written information prepared and furnished to the Company or the managing underwriter(s) by such Person pertaining exclusively to such Holder; provided, further, that no Holder shall be required to agree to any indemnification obligations on the part of such Holder that are greater than its obligations pursuant to Section 5.

4. Registration Procedures. If and whenever the Company is required to use its reasonable best efforts to effect the registration of any Registrable Securities under the Securities Act as provided in Section 2 and Section 3, the Company shall effect such registration to permit the sale of such Registrable Securities in accordance with the intended method or methods of disposition thereof, and, pursuant thereto, the Company shall cooperate in the sale of such Registrable Securities and shall, as expeditiously as possible:

(a) prepare and file, in each case as promptly as practicable, with the SEC a Registration Statement or Registration Statements on such form as shall be available for the sale of the Registrable Securities by the Holders thereof or by the Company in accordance with the intended method or methods of distribution thereof, make all required filings with FINRA, and, if such Registration Statement is not automatically effective upon filing, use its reasonable best efforts to cause such Registration Statement to be declared effective as soon as practicable and to remain effective as provided herein; provided that before filing a Registration Statement or Prospectus or any amendments or supplements thereto (including free writing prospectuses under Rule 433 (each a “Free Writing Prospectus”)) and, to the extent reasonably practicable, documents that would be incorporated by reference or deemed to be incorporated by reference in a Registration Statement filed pursuant to a Demand Notice (other than a Shelf Registration Statement), the Company shall (i) furnish or otherwise make available to the holders of the Registrable Securities covered by such Registration Statement, their counsel and the managing underwriter(s), if any, copies of all such documents proposed to be filed (including exhibits thereto), which documents will be subject to the reasonable review and comment of such counsel, and such other documents reasonably requested by such counsel, including any comment letter from the SEC and (ii) if requested by such counsel, provide such counsel (A) reasonable opportunity to participate in the preparation of such Registration Statement and each Prospectus included therein and (B) such other opportunities to conduct a reasonable investigation within the meaning of the Securities Act, including reasonable access to the Company’s books and records, officers, accountants and other advisors. The Company shall not file any such Registration Statement or Prospectus, or any amendments or supplements thereto (including such documents that, upon filing, would be incorporated or deemed incorporated by reference therein and including Free Writing Prospectuses), with respect to a Demand Registration to which the demanding Holder, the holders of a majority of the Registrable Securities covered by such Registration Statement (or their counsel) or the managing underwriter(s), if any, shall reasonably object, in writing, on a timely basis, unless, in the opinion of the Company, such filing is necessary to comply with applicable law;

 

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(b) (i) prepare and file with the SEC such amendments and supplements to such Registration Statement and the Prospectus used in connection therewith and such Free Writing Prospectuses and Exchange Act reports as may be necessary to keep such Registration Statement continuously effective during the period provided herein, (ii) comply in all material respects with the provisions of the Securities Act with respect to the disposition of all securities covered by such Registration Statement and (iii) cause the related Prospectus to be supplemented by any Prospectus supplement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of the securities covered by such Registration Statement, and as so supplemented, to be filed pursuant to Rule 424 (or any similar provisions then in force) under the Securities Act, in each case, until such time as all of such securities have been disposed of in accordance with the intended method or methods of disposition by the seller or sellers thereof set forth in such Registration Statement;

(c) notify each selling Holder, its counsel and the managing underwriter(s), if any, (i) when a Prospectus or any Prospectus supplement or post-effective amendment or any Free Writing Prospectus has been filed, and, with respect to a Registration Statement or any post-effective amendment, when the same has become effective, (ii) of any request by the SEC or any other federal or state governmental authority for amendments or supplements to a Registration Statement or related Prospectus or for additional information, (iii) of the issuance by the SEC of any stop order suspending the effectiveness of such Registration Statement or the initiation or threatening of any proceedings for that purpose, (iv) if at any time the Company has reason to believe that the representations and warranties of the Company contained in any agreement (including any underwriting agreement) contemplated by Section 4(n) cease to be true and correct, (v) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of such Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any proceeding for such purpose, and (vi) of the happening of any event that makes any statement made in such Registration Statement, related Prospectus, Free Writing Prospectus, amendment or supplement thereto, or any document incorporated or deemed to be incorporated therein by reference, as then in effect, untrue in any material respect or that requires the making of any changes in such Registration Statement, Prospectus or documents so that, in the case of the Registration Statement, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and that in the case of the Prospectus, it will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading (which notice shall notify the selling Holders only of the occurrence of such an event and shall provide no additional information regarding such event to the extent such information would constitute material, non-public information);

(d) use its reasonable best efforts to obtain the withdrawal of any order suspending the effectiveness of a Registration Statement or the lifting of any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction at the earliest date reasonably practical;

 

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(e) if requested by the managing underwriter(s), if any, a Holder making a Demand Notice or Take-Down Notice with respect to such offering or the holders of a majority of the then issued and outstanding Registrable Securities being sold in connection with an underwritten offering, promptly include in a Prospectus supplement or post-effective amendment such information as the managing underwriter(s), if any, or such Holder or Holders, as the case may be, may reasonably request in order to facilitate the disposition of the Registrable Securities in accordance with the intended method or methods of distribution of such securities set forth in the Registration Statement and make all required filings of such Prospectus supplement or such post-effective amendment as soon as practicable after the Company has received such request (provided that the Company shall not be required to take any actions under this Section 4(e) that are not, in the opinion of counsel for the Company, in compliance with applicable law);

(f) deliver to each selling Holder, its counsel, and the underwriter(s), if any, without charge, as many copies of the Prospectus or Prospectuses (including each form of Prospectus) and each amendment or supplement thereto (including any Free Writing Prospectus) as such Persons may reasonably request from time to time in order to facilitate the disposition of the Registrable Securities in accordance with the intended method or methods of disposition thereof (the Company, subject to the last paragraph of this Section 4, hereby consents to the use of such Prospectus and each amendment or supplement thereto by each of the selling Holders and the underwriter(s), if any, in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any such amendment or supplement thereto);

(g) prior to any public offering of Registrable Securities, use its reasonable best efforts to register or qualify or cooperate with the selling Holders, the underwriter(s), if any, and their respective counsel in connection with the registration or qualification (or exemption from such registration or qualification) of such Registrable Securities for offer and sale under the securities or blue sky laws of such jurisdictions within the United States as any seller or underwriter reasonably requests in writing and to keep each such registration or qualification (or exemption therefrom) effective during the period such Registration Statement is required to be kept effective and to take any other action that may be necessary or advisable to enable such Holders to consummate the disposition of such Registrable Securities in such jurisdiction in accordance with the intended method or methods of disposition thereof; 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 Section 4(g), (y) subject itself to taxation in any jurisdiction wherein it is not so subject or (z) take any action that would subject it to general service of process in any such jurisdiction where it is not then so subject (other than service of process in connection with such registration or qualification or any sale of Registrable Securities in connection therewith);

(h) cooperate with the selling Holders and the managing underwriter(s), if any, to facilitate the timely preparation and delivery of certificates (not bearing any legends, unless required by applicable law) or book-entry positions representing Registrable Securities to be sold after receiving written representations from such selling Holders that the Registrable Securities represented by the certificates or book-entry positions so delivered by such Holder will be transferred in accordance with the Registration Statement, and enable such Registrable Securities to be in such denominations and registered in such names as the managing underwriter(s), if any, or the selling Holders may request;

 

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(i) use its reasonable best efforts to cause the Registrable Securities covered by the Registration Statement to be registered with or approved by such other governmental agencies or authorities within the United States as may be necessary in light of the business or operations of the Company to enable the seller or sellers thereof or the managing underwriter(s), if any, to consummate the disposition of such Registrable Securities, in accordance with the intended method or methods thereof, except as may be required solely as a consequence of the nature of such selling Holder’s business, in which case the Company will cooperate in all reasonable respects with the filing of such Registration Statement and the granting of such approvals, as may be necessary to enable the seller or sellers thereof or the underwriter(s), if any, to consummate the disposition of such Registrable Securities in accordance with the intended method or methods thereof;

(j) upon the occurrence of any event contemplated by Section 4(c)(vi) above, promptly prepare a supplement or post-effective amendment to the Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, or file any other required document so that, as thereafter delivered to the purchasers of the Registrable Securities being sold thereunder, such Prospectus will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading;

(k) prior to the effective date of the Registration Statement relating to the Registrable Securities, provide a CUSIP number for the Registrable Securities;

(l) provide and cause to be maintained a transfer agent and registrar for all such Registrable Securities from and after the effective date of such Registration Statement (and in connection therewith, if required by the Company’s transfer agent, the Company will promptly after the effective date of the Registration Statement, cause an opinion of counsel as to the effectiveness of the Registration Statement to be delivered to and maintained with such transfer agent, together with any other authorizations, certificates and directions required by the transfer agent which authorize and direct the transfer agent to issue such Registrable Securities without any legend upon sale by the Holder or the underwriter(s) of an underwritten offering of Registrable Securities, if any, of such Registrable Securities under the Registration Statement);

(m) use its reasonable best efforts to cause all shares of Registrable Securities covered by such Registration Statement to be listed on a national securities exchange if shares of the particular class of Registrable Securities are at that time listed on such exchange prior to the effectiveness of such Registration Statement;

 

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(n) enter into such agreements (including an underwriting agreement in form, scope and substance as is customary in underwritten offerings) and take all such other actions reasonably requested by a Holder submitting a Demand Notice or Take-Down Notice with respect to such offering, or the holders of a majority of the Registrable Securities being sold in connection therewith (including those reasonably requested by the managing underwriter(s), if any) to expedite or facilitate the disposition of such Registrable Securities, and including, whether or not an underwriting agreement is entered into and whether or not the registration is an underwritten registration, (i) making such representations and warranties to the Holders and the underwriter(s), if any, with respect to the business of the Company and its material Subsidiaries, and the Registration Statement, Prospectus and documents, if any, incorporated or deemed to be incorporated by reference therein, in each case, in form, substance and scope as are customarily made by issuers to underwriters in underwritten offerings, and, if true, confirming the same if and when requested, (ii) using its reasonable best efforts to furnish to the selling Holders opinions of outside counsel to the Company and updates thereof (which counsel and opinions (in form, scope and substance) shall be reasonably satisfactory to the managing underwriter(s), if any, and counsels to the selling Holders), addressed to each selling Holder and each of the underwriters, if any, covering the matters customarily covered in opinions requested in underwritten offerings and such other matters as may be reasonably requested by such counsel and underwriters, (iii) using its reasonable best efforts to obtain “cold comfort” letters and updates thereof from an independent registered public accounting firm with respect to the Company (and, if necessary, any other independent certified public accountants of any material Subsidiary of the Company or of any business acquired by the Company for which financial statements and financial data are, or are required to be, included in the Registration Statement) who has certified the financial statements included in such Registration Statement, addressed to each selling Holder (unless such accountants shall be prohibited from so addressing such letters by applicable standards of the accounting profession) and each of the underwriters, if any, with such letters to be in customary form and covering matters of the type customarily covered in “cold comfort” letters in connection with underwritten offerings, (iv) if an underwriting agreement is entered into, causing such underwriting agreement to contain indemnification provisions and procedures that are customary for underwriting agreements in connection with underwritten offerings except as otherwise agreed by the parties thereto and (v) delivering such documents and certificates as may be reasonably requested by a Holder submitting a Demand Notice or Take-Down Notice with respect to such offering, the holders of a majority of the Registrable Securities being sold pursuant to such Registration Statement, its or their counsel, as the case may be, or the managing underwriter(s), if any, to evidence the continued validity of the representations and warranties made pursuant to Section 4(n)(i) above and to evidence compliance with any customary conditions contained in the underwriting agreement or other agreement entered into by the Company (it being understood that the above shall be done at each closing under such underwriting or similar agreement, or as and to the extent required thereunder);

 

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(o) upon reasonable notice, make available for inspection by a representative of the selling Holders, the underwriter(s) participating in any such disposition of Registrable Securities, if any, and any attorneys or accountants retained by such selling Holders or underwriter at the offices where normally kept, during reasonable business hours, all financial and other records, pertinent corporate documents and properties of the Company and its Subsidiaries, and cause the officers, directors, employees and associates of the Company and its Subsidiaries to supply all information in each case reasonably requested by any such representative, underwriter, attorney or accountant in connection with such Registration Statement (provided that any information that is not generally publicly available at the time of delivery of such information shall be kept confidential by such Persons unless (x) disclosure of such information is required by court or administrative order, (y) disclosure of such information, in the opinion of counsel to such Person, is required by applicable law or applicable legal process, or (z) such information becomes generally available to the public other than as a result of a disclosure or failure to safeguard by such Person; provided, further, that in the case of a proposed disclosure pursuant to clause (x) or (y) above, such Person shall be required to give the Company written notice of the proposed disclosure prior to such disclosure and, if requested by the Company, assist the Company in seeking to prevent or limit the proposed disclosure) (it being agreed, without limiting the foregoing, that no such information shall be used by such Person as the basis for any market transactions in securities of the Company or its Subsidiaries in violation of applicable law);

(p) cause its officers to use their reasonable best efforts to support the marketing of the Registrable Securities covered by the Registration Statement (including, without limitation, participation in such number of “road shows” and other customary marketing activities, including “one-on-one” meetings with prospective purchasers of the Registrable Securities, in each case as the underwriter(s) reasonably request);

(q) cooperate with each seller of Registrable Securities and each underwriter or agent participating in the disposition of such Registrable Securities and their respective counsel in connection with any filings required to be made with the FINRA;

(r) otherwise use its reasonable best efforts to comply with all applicable rules and regulations of the SEC, and make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve months beginning with the first day of the Company’s first full calendar quarter after the effective date of the Registration Statement, which earnings statement will satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 under the Securities Act; and

(s) cooperate with the Holders of Registrable Securities subject to the Registration Statement and with the underwriter(s) or agent participating in the distribution, if any, to facilitate any Charitable Gifting Event and to prepare and file with the SEC such amendments and supplements to such Registration Statement and the Prospectus used in connection therewith as may be necessary to permit any such recipient Charitable Organization to sell in the underwritten offering if it so elects.

The Company may require each holder of Registrable Securities as to which any registration is being effected to furnish to the Company in writing such information required in connection with such registration regarding such seller and the distribution of such Registrable Securities as the Company may, from time to time, reasonably request and the Company may exclude from such registration the Registrable Securities of any Holder who unreasonably fails to furnish such information within a reasonable time after receiving such request.

 

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The Company agrees not to file or make any amendment to any Registration Statement with respect to any Registrable Securities, or any amendment of or supplement to the Prospectus or any Free Writing Prospectus used in connection therewith, that refers to any Holder covered thereby by name, or otherwise identifies such Holder as the holder of any securities of the Company, without the consent of such Holder, such consent not to be unreasonably withheld or delayed, unless and to the extent such disclosure is required by applicable law, in which case the Company shall provide written notice to such Holder no less than five Business Days prior to the filing of such amendment to any Registration Statement or amendment of or supplement to the Prospectus or any Free Writing Prospectus.

If the Company files any Shelf Registration Statement for the benefit of the holders of any of its securities other than the Holders, the Company agrees that it shall use its reasonable best efforts to include in such registration statement such disclosures as may be required by Rule 430B under the Securities Act (referring to the unnamed selling security holders in a generic manner by identifying the initial offering of the securities to the Holders) in order to ensure that the Holders may be added to such Shelf Registration Statement at a later time through the filing of a Prospectus supplement rather than a post-effective amendment.

Each Holder agrees that if such Holder has Registrable Securities covered by such Registration Statement that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 4(c)(ii), 4(c)(iii), 4(c)(iv), 4(c)(v) and 4(c)(vi), such Holder will promptly discontinue disposition of such Registrable Securities covered by such Registration Statement or Prospectus until such Holder’s receipt of the copies of the supplemented or amended Prospectus contemplated by Section 4(j), or until it is advised in writing by the Company that the use of the applicable Prospectus may be resumed and has received copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such Prospectus; provided that the time periods under Section 3 with respect to the length of time that the effectiveness of a Registration Statement must be maintained shall automatically be extended by the amount of time the Holder is required to discontinue disposition of such securities.

Notwithstanding any provision hereof to the contrary, to the extent that any pro rata or other allocation or reduction of Registrable Securities is required pursuant to Sections 2(b), 3(b), 3(g)(ii) or any other section herein, (i) all Equity Securities transferred by a Holder to a Charitable Organization in connection with an underwritten offering for which such pro rata or other allocation is required shall be included in the number of Registrable Securities deemed to be held by each Holder (or deemed to be included in such Holder’s request for inclusion of Registrable Securities) for purposes of calculating such Holder’s pro rata allocation or reduction in such underwritten offering and (ii) the number of Registrable Securities that a Holder is otherwise entitled to include in such underwritten offering shall be reduced by the number of Equity Securities transferred by such Holder to a Charitable Organization in connection with such underwritten offering.

 

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5. Indemnification.

(a) Indemnification by the Company. The Company shall, without limitation as to time, indemnify and hold harmless, to the fullest extent permitted by applicable law, each Holder whose Registrable Securities are covered by a Registration Statement or Prospectus, the officers, directors, partners, members, managers, shareholders, accountants, attorneys, agents and employees of each of them, each Person who controls (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) each such Holder and the officers, directors, partners, members, managers, shareholders, accountants, attorneys, agents and employees of each such controlling person, each underwriter, if any, and each Person who controls (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) such underwriter (each such person being referred to herein as a “Covered Person”), from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, costs of preparation and reasonable attorneys’ fees and any legal or other fees or expenses incurred by such Person in connection with any investigation or proceeding), expenses, judgments, fines, penalties, charges and amounts paid in settlement (collectively, “Losses”), as incurred, arising out of or based upon any untrue or alleged untrue statement of a material fact contained in any Prospectus, offering circular, or other document (including any related Registration Statement, notification, or the like or Free Writing Prospectus or any amendment thereof or supplement thereto or any document incorporated by reference therein) incident to any such registration, qualification, or compliance, or based on any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or any violation by the Company of the Securities Act, the Exchange Act, any state securities law, or any rule or regulation thereunder applicable to the Company and relating to any action or inaction in connection with the related offering of Registrable Securities, and will reimburse each such Covered Person for any legal and any other expenses reasonably incurred in connection with investigating and defending or settling any such Loss; provided that the Company will not be liable in any such case to the extent that any such Loss arises out of or is based on any untrue statement or omission by such Covered Person relating to such Covered Person or its Affiliates (other than the Company or any of its Subsidiaries), but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such Registration Statement, Prospectus, offering circular, Free Writing Prospectus or any amendment thereof or supplement thereto, or any document incorporated by reference therein, or other document in reliance upon and in conformity with written information furnished to the Company by such Covered Person with respect to such Covered Person for use therein. It is agreed that the indemnity agreement contained in this Section 5(a) shall not apply to amounts paid in settlement of any such Loss or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld or delayed).

(b) Indemnification by Holder of Registrable Securities. As a condition to including any Registrable Securities in any Registration Statement filed in accordance with Section 4, the Company shall have received an undertaking reasonably satisfactory to it from the participating Holder of such Registrable Securities to indemnify, to the fullest extent permitted by applicable law, severally and not jointly with any other holders of Registrable Securities whose Registrable Securities are included in any such Registration Statement, the Company, its directors and officers and each Person who controls (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) the Company and any other Person selling

 

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securities in such Registration Statement, from and against all Losses arising out of or based on any untrue or alleged untrue statement of a material fact contained in any such Registration Statement, Prospectus, Free Writing Prospectus, offering circular, or other document, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse the Company, such directors and officers, and controlling persons for any legal or any other expenses reasonably incurred in connection with investigating or defending any such Loss, in each case to the extent, but only to the extent, that such untrue statement or omission is made in such Registration Statement, Prospectus, Free Writing Prospectus, offering circular, or other document in reliance upon and in conformity with written information furnished to the Company by such Holder with respect to such Holder for inclusion in such Registration Statement, Prospectus, offering circular or other document; provided that the obligations of such Holder hereunder shall not apply to amounts paid in settlement of any such Losses (or actions in respect thereof) if such settlement is effected without the consent of such Holder (which consent shall not be unreasonably withheld or delayed); provided, further, that the liability of such Holder shall be individual, not joint and several, for each Holder and shall be limited to the net proceeds received by such selling Holder from the sale of Registrable Securities covered by such Registration Statement (less the aggregate amount of any damages which the Holder has otherwise been required to pay in respect of such Loss or any substantially similar Loss arising from the sale of such Registrable Securities).

(c) Conduct of Indemnification Proceedings. If any Person shall be entitled to indemnity hereunder (an “Indemnified Party”), such Indemnified Party shall give prompt notice to the Party from which such indemnity is sought (the “Indemnifying Party”) of any claim or of the commencement of any proceeding with respect to which such Indemnified Party seeks indemnification or contribution pursuant hereto; provided that the delay or failure to so notify the Indemnifying Party shall not relieve the Indemnifying Party from any obligation or liability under this Section 5. The Indemnifying Party shall have the right, exercisable by giving written notice to an Indemnified Party promptly after the receipt of written notice from such Indemnified Party of such claim or proceeding, to, unless in the Indemnified Party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist in respect of such claim, assume, at the Indemnifying Party’s expense, the defense of any such claim or proceeding, with counsel reasonably satisfactory to such Indemnified Party; provided that an Indemnified Party shall have the right to employ separate counsel in any such claim or proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless (i) the Indemnifying Party agrees to pay such fees and expenses or (ii) the Indemnifying Party fails promptly to assume, or in the event of a conflict of interest cannot assume, the defense of such claim or proceeding or fails to employ counsel reasonably satisfactory to such Indemnified Party, in which case the Indemnified Party shall have the right to employ counsel and to assume the defense of such claim or proceeding at the Indemnifying Party’s expense; provided, further, that the Indemnifying Party shall not, in connection with any one such claim or proceeding or separate but substantially similar or related claims or proceedings in the same jurisdiction, arising out of the same general allegations or circumstances, be liable for the fees and expenses of more than one firm of attorneys (together with appropriate local counsel) at any time for all of the Indemnified Parties, or for fees and expenses that are not reasonable. Whether or not such defense is assumed by the Indemnifying Party, such Indemnifying Party will not be subject to any liability for any settlement made

 

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without its consent (but such consent will not be unreasonably withheld or delayed). Without the prior written consent of the Indemnified Party, the Indemnifying Party shall not consent to entry of any judgment or enter into any settlement that (x) does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release, in form and substance reasonably satisfactory to the Indemnified Party, from all liability in respect of such claim or litigation for which such Indemnified Party would be entitled to indemnification hereunder or (y) involves the imposition of equitable remedies or the imposition of any obligations on the Indemnified Party or adversely affects such Indemnified Party other than as a result of financial obligations for which such Indemnified Party would be entitled to indemnification hereunder.

(d) Contribution. If the indemnification provided for in this Section 5 is unavailable to an Indemnified Party in respect of any Losses (other than in accordance with its terms), then each applicable Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party, on the one hand, and such Indemnified Party, on the other hand, in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party, on the one hand, and Indemnified Party, on the other hand, shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, has been made (or omitted) by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent any such action, statement or omission.

The Parties agree that it would not be just and equitable if contribution pursuant to this Section 5(d) were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in the immediately preceding paragraph. Notwithstanding the provisions of this Section 5(d), the amount any Holder will be obligated to contribute pursuant to this Section 5(d) will be limited to an amount equal to the net proceeds to such Holder from the Registrable Securities sold pursuant to the Registration Statement which gives rise to such obligation to contribute (less the aggregate amount of any damages which the Holder has otherwise been required to pay in respect of such Loss or any substantially similar Loss arising from the sale of such Registrable Securities). No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. No selling Holder shall be liable for contribution under this Section 5(d), except under such circumstances as such selling Holder would have been liable for indemnification under this Section 5 if such indemnification were enforceable under applicable law.

Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with the underwritten offering are more favorable to the Holders than the foregoing provisions, the provisions in the underwriting agreement shall control.

 

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(e) Deemed Underwriter. To the extent that any of the Holders is, or would be expected to be, deemed to be an underwriter of Registrable Securities pursuant to any SEC comments or policies or any court of law or otherwise, the Company agrees that (i) the indemnification and contribution provisions contained in this Section 5 shall be applicable to the benefit of such Holder in its role as deemed underwriter in addition to its capacity as a Holder (so long as the amount for which any other Holder is or becomes responsible does not exceed the amount for which such Holder would be responsible if the Holder were not deemed to be an underwriter of Registrable Securities) and (ii) such Holder and its representatives shall be entitled to conduct the due diligence which would normally be conducted in connection with an offering of securities registered under the Securities Act, including receipt of customary opinions and comfort letters.

(f) Other Indemnification. Indemnification similar to that specified in the preceding provisions of this Section 5 (with appropriate modifications) shall be given by the Company and each seller of Registrable Securities with respect to any required registration or other qualification of securities under any federal or state law or regulation or governmental authority other than the Securities Act.

(g) Non-Exclusivity. The obligations of the Parties under this Section 5 shall be in addition to any liability that any Party may otherwise have to any other Party.

(h) Primacy of Indemnification. The Company hereby acknowledges that the CD&R Investors and their Affiliates that are Holders have certain rights to indemnification, advancement of expenses and/or insurance provided by certain of their Affiliates (collectively, the “Indemnitors”). The Company hereby agrees that (i) it is the indemnitor of first resort (i.e., its obligations to the CD&R Investors and their Affiliates that are Holders are primary and any obligation of the Indemnitors to advance expenses or to provide indemnification for the same Losses incurred by the CD&R Investors and their Affiliates that are Holders are secondary to any such obligation of the Company), (ii) that it shall be liable for the full amount of all Losses to the extent legally permitted and as required by the terms of this Agreement and the articles and other organizational documents of the Company (or any other agreement between the Company and the CD&R Investors or their Affiliates that are Holders), without regard to any rights the CD&R Investors and their Affiliates that are Holders may have against the Indemnitors, and (iii) it irrevocably waives, relinquishes and releases the Indemnitors from any and all claims (x) against the Indemnitors for contribution, indemnification, subrogation or any other recovery of any kind in respect thereof and (y) that the CD&R Investors and their Affiliates that are Holders must seek indemnification from any Indemnitor before the Company must perform its indemnification obligations under this Agreement. No advancement or payment by the Indemnitors on behalf of the CD&R Investors or their Affiliates that are Holders with respect to any claim for which the CD&R Investors or their Affiliates that are Holders has sought indemnification from the Company hereunder shall affect the foregoing. The Indemnitors shall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery which the CD&R Investors and their Affiliates that are Holders would have had against the Company if the Indemnitors had not advanced or paid any amount to or on behalf of the CD&R Investors and their Affiliates that are Holders. The Company and the CD&R Investors and their Affiliates that are Holders agree that the Indemnitors are express third-party beneficiaries of this Section 5.

 

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6. Registration Expenses. All reasonable fees and expenses incurred in the performance of or compliance with this Agreement by the Company including, without limitation, (i) all registration and filing fees (including, without limitation, fees and expenses (A) with respect to filings required to be made with the SEC, all applicable securities exchanges and/or FINRA and (B) with respect to compliance with securities or blue sky laws, including, without limitation, any fees and disbursements of counsel for the underwriters in connection with blue sky qualifications of the Registrable Securities pursuant to Section 4(g)), (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities in a form eligible for deposit with The Depository Trust Company and of printing Prospectuses if the printing of Prospectuses is requested by the managing underwriter(s), if any, or by a Holder submitting a Demand Notice or Take-Down Notice with respect to such offering or the holders of a majority of the Registrable Securities included in any Registration Statement), (iii) messenger, telephone and delivery expenses of the Company, (iv) fees and disbursements of counsel for the Company, (v) expenses of the Company incurred in connection with any road show, (vi) fees and disbursements of all independent registered public accounting firms referred to in Section 4(n) (including, without limitation, the expenses of any “cold comfort” letters required by this Agreement) and any other Persons, including special experts retained by the Company, (vii) fees and disbursements of separate counsel for the CD&R Investors and their Affiliates that are Holders if any of them is participating in the offering (which counsel shall be selected by such participating Holders) and one counsel for the other Holders whose Registrable Securities are included in a Registration Statement (which counsel shall be selected by the holders of a majority of the Registrable Securities included in such Registration Statement), (viii) all reasonable fees and disbursements of underwriters (other than those described in the next paragraph) customarily paid by issuers or sellers of securities and (ix) all other costs, fees and expenses incident to the Company’s performance or compliance with this Agreement, shall be borne by the Company whether or not any Registration Statement is filed or becomes effective. In addition, the Company shall pay its internal expenses (including, without limitation, all salaries and expenses of its officers, employees and associates performing legal or accounting duties), the expense of any annual audit, the fees and expenses incurred in connection with the listing of the securities to be registered on any securities exchange on which similar securities issued by the Company are then listed and rating agency fees and the fees and expenses of any Person, including special experts, retained by the Company.

The Company shall not be required to pay (i) fees and disbursements of any counsel retained by any Holder or by any underwriter (except as set forth above in this Section 6), (ii) any underwriter’s fees (including discounts, commissions or fees of underwriters, selling brokers, dealer managers or similar securities industry professionals) relating to the distribution of the Registrable Securities (other than with respect to Registrable Securities sold by the Company), or (iii) any other expenses of the Holders not specifically required to be paid by the Company pursuant to the first paragraph of this Section 6.

7. Rule 144. The Company covenants that it will file the reports required to be filed by it under the Securities Act and the Exchange Act (or, if the Company is not required to file such reports, it will, upon the request of any of the CD&R Investors or their Affiliates that are Holders, make publicly available such information so long as necessary to permit sales of Registrable Securities pursuant to Rule 144), and it will take such further action as any Holder (or, if the Company is not required to file reports as provided above, any of the CD&R Investors

 

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or their Affiliates that are Holders) may reasonably request, all to the extent required from time to time to enable such Holder to sell shares of Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by Rule 144. Upon the request of any Holder, the Company will deliver to such Holder a written statement as to whether it has complied with such requirements and, if not, the specific requirements with which it did not so comply.

8. Certain Additional Agreements. If any Registration Statement or comparable statement under state blue sky laws refers to any Holder by name or otherwise as the holder of any securities of the Company, then such Holder shall have the right to require (a) the insertion therein of language, in form and substance satisfactory to such Holder and the Company, to the effect that the holding by such Holder of such securities is not to be construed as a recommendation by such Holder of the investment quality of the Company’s securities covered thereby and that such holding does not imply that such Holder will assist in meeting any future financial requirements of the Company, or (b) in the event that such reference to such Holder by name or otherwise is not in the judgment of the Company required by the Securities Act or any similar federal statute or any state blue sky or securities law then in force, the deletion of the reference to such Holder.

9. Miscellaneous.

(a) Termination. The provisions of this Agreement (other than Sections 5 and 6) shall terminate upon the earliest to occur of (i) its termination by the written agreement of all Parties or their respective successors in interest, (ii) with respect to a Holder, the date on which all Equity Securities held by such Holder have ceased to be Registrable Securities, (iii) with respect to the Company, the date on which all Equity Securities have ceased to be Registrable Securities and (iv) the dissolution, liquidation or winding up of the Company. Nothing herein shall relieve any Party from any liability for the breach of any of the agreements set forth in this Agreement.

(b) Holdback Agreement. In consideration for the Company agreeing to its obligations under this Agreement, each Holder agrees in connection with any registration of the Company’s securities (whether or not such Holder is participating in such registration) upon the request of the Company and the underwriter(s) managing any underwritten offering of the Company’s securities, not to effect (other than pursuant to such registration) any public sale or distribution of Registrable Securities, including, but not limited to, any sale pursuant to Rule 144, or make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of, or enter into any swap or other arrangement that transfers to another Person any of the economic consequences of ownership of, any Registrable Securities, any other equity securities of the Company or any securities convertible into or exchangeable or exercisable for any equity securities of the Company without the prior written consent of the Company or such underwriters, as the case may be, during the Holdback Period.

 

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If any registration pursuant to Section 3 shall be in connection with any underwritten offering, the Company will not effect any public sale or distribution of any Equity Securities (other than a registration statement (i) on Form S-4, Form S-8 or any successor forms promulgated for similar purposes or (ii) filed in connection with any employee benefit or dividend reinvestment plan) for its own account, during the Holdback Period. Notwithstanding anything to the contrary set forth in this Section 10(b), in connection with an underwritten offering that is a Block Sale, (A) no Holder shall be subject to a lock-up agreement, other than, if requested by the managing underwriter for such offering, a Holder that is participating in such Block Sale and (B) such Holdback Period shall not exceed sixty calendar days in connection with any Block Sale.

(c) Amendments and Waivers. This Agreement may be amended and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if any such amendment, action or omission to act, has received the written consent of the Company and each of the CD&R Investors and their Affiliates that are Holders, or if no such Holders remain, the holders of a majority of the Registrable Securities; provided that this Agreement may not be amended in a manner that would, by its terms, adversely affect the rights or obligations of the CD&R Investors or their Affiliates that are Holders without the consent of such Holders. The failure of any Party to enforce any of the provisions of this Agreement shall in no way be construed as a waiver of such provisions and shall not affect the right of such Party thereafter to enforce each and every provision of this Agreement in accordance with its terms. Any Holder may waive (in writing) the benefit of any provision of this Agreement with respect to itself for any purpose. Any such waiver shall constitute a waiver only with respect to the specific matter described in such writing and shall in no way impair the rights of the Holder granting such waiver in any other respect or at any other time.

(d) Successors, Assigns and Transferees. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the Parties and their respective successors and assigns who agree in writing to be bound by the provisions of this Agreement. In addition, and whether or not any express assignment shall have been made, the provisions of this Agreement that are for the benefit of Holders shall also be for the benefit of and enforceable by any subsequent Holder, subject to the provisions contained herein.

(e) Notices. All notices, requests and other communications to any Party shall be in writing (including e-mail transmission) and shall be given as follows, or to such other address or e-mail as such Party may hereafter specify for the purpose by notice to the other Parties:

if to the Company, to:

Core & Main, Inc.

1830 Craig Park Court

St. Louis, Missouri 63146

Attention: General Counsel and Secretary

Email: X

 

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with a copy (which shall not constitute notice) to:

Debevoise & Plimpton LLP

919 Third Avenue

New York, New York 10022

Attention: Peter J. Loughran, Esq. and Paul M. Rodel, Esq.

Email: pjloughran@debevoise.com; pmrodel@debevoise.com

if to the CD&R Investors, to:

Clayton, Dubilier & Rice, LLC

375 Park Avenue

18th Floor

New York, New York 10152

Attention: Chief Financial Officer

Email: X

with a copy (which shall not constitute notice) to:

Debevoise & Plimpton LLP

919 Third Avenue

New York, New York 10022

Attention: Peter J. Loughran, Esq. and Paul M. Rodel, Esq.

Email: pjloughran@debevoise.com; pmrodel@debevoise.com

If to any other Holder, to the e-mail or address of such other Holder as shown in the stock record book of the Company.

All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:30 p.m. on a Business Day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed to have been received on the next succeeding Business Day in the place of receipt.

(f) Further Assurances. At any time or from time to time after the date hereof, the Parties agree to cooperate with each other, and at the request of any other Party, to execute and deliver any further instruments or documents and to take all such further action as the other Party may reasonably request in order to evidence or effectuate the consummation of the transactions contemplated hereby and to otherwise carry out the intent of the Parties hereunder.

(g) Certain Agreements. The Company shall not hereafter enter into any agreement with respect to its securities (i) that grants rights to any person that are pari passu with or (ii) that is inconsistent with or violates the rights granted to the Holders in this Agreement.

(h) Entire Agreement; No Third-Party Beneficiaries. This Agreement (i) except as may be provided in a Joinder Agreement, constitutes the entire agreement among the Parties with respect to the subject matter of this Agreement and supersedes any prior discussions, correspondence, negotiation, proposed term sheet, agreement, understanding or agreement and

 

27


there are no agreements, understandings, representations or warranties between the Parties other than those set forth or referred to in this Agreement and (ii) except as provided in Section 5 with respect to an Indemnified Party, is not intended to confer in or on behalf of any Person not a party to this Agreement (and their successors and assigns) any rights, benefits, causes of action or remedies with respect to the subject matter or any provision hereof.

(i) Governing Law; Jurisdiction and Forum; Waiver of Jury Trial.

(i) This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts executed and to be performed wholly within such State and without reference to the choice-of-law principles that would result in the application of the laws of a different jurisdiction.

(ii) Each Party irrevocably submits to the jurisdiction of the United States District Court for the Southern District of New York or any court of the State of New York located in such district any suit, action or other proceeding arising out of or relating to this Agreement, and hereby irrevocably agrees that all claims in respect of such suit, action or proceeding may be heard and determined in such court. Each Party hereby irrevocably waives, to the fullest extent that it may effectively do so, the defense of an inconvenient forum to the maintenance of such suit, action or other proceeding. The Parties further agree, to the extent permitted by applicable law, that final and unappealable judgment against any of them in any suit, action or other proceeding contemplated above shall be conclusive and may be enforced in any other jurisdiction within or outside the United States by suit on the judgment, a certified copy of which shall be conclusive evidence of the fact and amount of such judgment.

(iii) EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

(j) Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party. Upon such a determination, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.

(k) Enforcement. Each Party acknowledges that money damages would not be an adequate remedy in the event that any of the covenants or agreements in this Agreement are not performed in accordance with its terms, and it is therefore agreed that in addition to and without limiting any other remedy or right it may have, the non-breaching Party will have the right to an injunction, temporary restraining order or other equitable relief in any court of competent jurisdiction enjoining any such breach and enforcing specifically the terms and provisions hereof.

 

28


(l) Titles and Subtitles. The titles of the sections and subsections of this Agreement are for convenience of reference only and will not affect the meaning or interpretation of this Agreement.

(m) No Recourse. Notwithstanding anything that may be expressed or implied in this Agreement, the Company and each Holder (other than the CD&R Investors) covenant, agree and acknowledge that no recourse under this Agreement or any documents or instruments delivered in connection with this Agreement shall be had against any current or future director, officer, employee, shareholder, general or limited partner or member of the CD&R Investors or of any Affiliate or assignee thereof, whether by the enforcement of any assessment or by any legal or equitable proceeding, or by virtue of any statute, regulation or other applicable law, it being expressly agreed and acknowledged that no personal liability whatsoever shall attach to, be imposed on or otherwise be incurred by any current or future director, officer, employee, shareholder, general or limited partner or member of the CD&R Investors or of any Affiliate or assignee thereof, as such for any obligation of the CD&R Investors under this Agreement or any documents or instruments delivered in connection with this Agreement for any claim based on, in respect of or by reason of such obligations or their creation.

(n) Counterparts; Electronic Signatures. This Agreement may be executed in any number of counterparts (including via facsimile and electronic transmission), each of which shall be an original, but all of which together shall constitute one instrument. Delivery of an executed counterpart of this Agreement by one Party to the others may be made by facsimile, electronic mail, other electronic format (including any electronic signature complying with the New York Electronic Signatures and Records Act (N.Y. State Tech. §§ 301-309), as amended from time to time, or other applicable law) or other transmission method, and the parties hereto agree that any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

[Remainder of page intentionally left blank]

 

29


IN WITNESS WHEREOF, each of the undersigned has executed this Agreement or caused this Agreement to be duly executed on its behalf as of the date first written above.

 

CORE & MAIN, INC.
By:  

/s/ Stephen O. LeClair

  Name: Stephen O. LeClair
  Title:   Chief Executive Officer

[Signature Page – Registration Rights Agreement]


CD&R WATERWORKS HOLDINGS, LLC
By:   CD&R Waterworks Holdings, L.P., its manager
By:   CD&R Waterworks Holdings GP, Ltd., its general partner
By:  

/s/ Rima Simson

Name:   Rima Simson
Title:   Vice President, Treasurer and Secretary
CD&R FUND X ADVISOR WATERWORKS B, L.P.
By:   CD&R Waterworks Holdings GP, Ltd., its general partner
By:  

/s/ Rima Simson

Name:   Rima Simson
Title:   Vice President, Treasurer and Secretary
CD&R FUND X WATERWORKS B1, L.P.
By:   CD&R Waterworks Holdings GP, Ltd., its general partner
By:  

/s/ Rima Simson

Name:   Rima Simson
Title:   Vice President, Treasurer and Secretary
CD&R FUND X-A WATERWORKS B, L.P.
By:   CD&R Waterworks Holdings GP, Ltd., its general partner
By:  

/s/ Rima Simson

Name:   Rima Simson
Title:   Vice President, Treasurer and Secretary

[Signature Page – Registration Rights Agreement]


Exhibit A

JOINDER AGREEMENT

Reference is made to the Registration Rights Agreement, dated as of July 27, 2021 (as amended from time to time, the “Registration Rights Agreement”), by and among Core & Main, Inc. (the “Company”) and certain stockholders of the Company party thereto. The undersigned agrees, by execution hereof, to become a party to, and to be subject to the rights and obligations under, the Registration Rights Agreement.

 

[NAME]
By:  

 

  Name:
  Title:

Date:

Address:

Acknowledged by:

 

CORE & MAIN, INC.
By:  

 

  Name:
  Title:

Date:

 

A-1

EX-10.3 7 d185428dex103.htm EX-10.3 EX-10.3

Exhibit 10.3

Execution Version

 

 

 

STOCKHOLDERS AGREEMENT

of

CORE & MAIN, INC.

Dated as of July 22, 2021

 

 

 

 


TABLE OF CONTENTS

 

         Page  

ARTICLE I DEFINITIONS

     1  

1.1

  Certain Defined Terms      1  

1.2

  Other Definitional Provisions      5  

ARTICLE II CORPORATE GOVERNANCE

     5  

2.1

  Board Representation      5  

2.2

  Available Financial Information      7  

2.3

  Other Information      8  

2.4

  Access      9  

2.5

  Termination of Rights      9  

ARTICLE III MISCELLANEOUS

     9  

3.1

  Confidentiality      9  

3.2

  Amendments and Waivers      9  

3.3

  Successors, Assigns and Permitted Transferees      10  

3.4

  Notices      10  

3.5

  Further Assurances      10  

3.6

  Entire Agreement; No Third Party Beneficiaries      11  

3.7

  Restrictions on Other Agreements; By-laws      11  

3.8

  Governing Law      11  

3.9

  Jurisdiction and Forum; Waiver of Jury Trial      11  

3.10

  Severability      11  

3.11

  Enforcement      12  

3.12

  Titles and Subtitles      12  

3.14

  No Recourse      12  

3.15

  Counterparts; Facsimile Signatures      12  

Exhibit A – Joinder Agreement

 

 

- i -


This STOCKHOLDERS AGREEMENT is entered into as of July 22, 2021, by and among Core & Main, Inc., a Delaware corporation (and any successor in interest thereto, the “Company”), CD&R Waterworks Holdings, LLC, a Delaware limited liability company, CD&R Fund X Advisor Waterworks B, L.P., a Cayman Islands exempted limited partnership, CD&R Fund X Waterworks B1, L.P., a Cayman Islands exempted limited partnership, and CD&R Fund X-A Waterworks B, L.P., a Cayman Islands exempted limited partnership (in each case together with any successor in interest thereto, the “CD&R Investors”), and any Person who executes a Joinder Agreement in the form of Exhibit A hereto (each, a “Stockholder” and collectively, the “Stockholders”). Capitalized terms used herein without definition shall have the meanings set forth in Section 1.1.

RECITALS

WHEREAS, the Company intends to undertake an underwritten initial public offering (the “IPO”) of its Class A Common Stock (as defined below); and

WHEREAS, in connection with, and effective upon the date (the “Closing Date”) of the completion of, the IPO, the Company and the CD&R Investors wish to set forth their respective rights and obligations, including with respect to certain governance matters.

NOW, THEREFORE, in consideration of the mutual agreements contained herein, the parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS

1.1 Certain Defined Terms. As used herein, the following terms shall have the following meanings:

Affiliate” means, with respect to any Person, (i) any Person directly or indirectly controlling, controlled by or under common control with such Person, (ii) any Person directly or indirectly owning or controlling 10% or more of any class of outstanding voting securities of such Person or (iii) any officer, director, general partner or trustee of any such Person described in clause (i) or (ii).

Agreement” means this Stockholders Agreement, as amended from time to time in accordance with Section 3.2.

Annual Budget” has the meaning given to such term in Section 2.2(b).

Applicable Law” means all applicable provisions of (i) constitutions, treaties, statutes, laws (including the common law), rules, regulations, ordinances, codes or orders of any Governmental Entity, (ii) any consents or approvals of any Governmental Entity and (iii) any orders, decisions, injunctions, judgments, awards, decrees of or agreements with any Governmental Entity.


beneficial owner” or “beneficially own” has the meaning given such term in Rule 13d-3 under the Exchange Act and a Person’s beneficial ownership of Equity Securities or other voting securities of the Company shall be calculated in accordance with the provisions of such Rule.

Board” means the Board of Directors of the Company.

By-laws” means the Amended and Restated By-laws of the Company, as in effect on the date hereof and as the same may be amended, supplemented or otherwise modified from time to time in accordance with the terms thereof and the terms of the Charter.

CD&R Designee” has the meaning given to such term in Section 2.1(b).

CD&R Investors” has the meaning given to such term in the Preamble.

Chair” has the meaning given to such term in Section 2.1(e).

Charter” means the Amended and Restated Certificate of Incorporation of the Company, as in effect on the date hereof and as the same may be amended, supplemented or otherwise modified from time to time in accordance with the terms thereof.

Class A Common Stock” means the shares of Class A common stock, par value $0.01 per share, of the Company, including any shares of capital stock into which Class A Common Stock may be converted (as a result of recapitalization, share exchange or similar event) or are issued with respect to Class A Common Stock, including with respect to any stock split or stock dividend, or a successor security.

Class B Common Stock” means the shares of Class B common stock, par value $0.01 per share, of the Company, including any shares of capital stock into which Class B Common Stock may be converted (as a result of recapitalization, share exchange or similar event) or are issued with respect to Class B Common Stock, including with respect to any stock split or stock dividend, or a successor security.

Closing Date” has the meaning set forth in the Recitals.

Combined Voting Power” means the combined voting power of all classes and series of Voting Securities, according to the respective votes per share of each class or series, voting together as a single class.

Common Stock” means, collectively, the shares of Class A Common Stock and Class B Common Stock.

Company” has the meaning given to such term in the Preamble.

control” (including the terms “controlling”, “controlled by” and “under common control with”), with respect to the relationship between or among two or more Persons, means the possession, directly or indirectly, of the power to direct or cause the direction of the affairs or management of a Person, whether through the ownership of voting securities, as trustee or executor, by contract or otherwise.

 

2


Director” means any member of the Board.

Equity Securities” means (a) any and all shares of Common Stock or other equity securities of the Company (now owned or hereafter acquired), including any Common Stock issued or issuable (i) upon the exchange of any other securities of the Company or any of its Subsidiaries (including, for the avoidance of doubt, any shares of Class A Common Stock issued or issuable upon exchange of any Paired Interest pursuant to the Exchange Agreement) and (ii) in connection with the Reorganization Transactions, and (b) any securities of the Company convertible into, or exchangeable or exercisable for, such shares, and options, warrants or other rights to acquire such shares or other equity securities.

Exchange” means the New York Stock Exchange.

Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

Exchange Agreement” means the Exchange Agreement, dated as of July 22, 2021 (as amended and in effect from time to time), by and among the Company, Core & Main Holdings, LP, CD&R Waterworks Holdings, LLC and Core & Main Management Feeder, LLC.

GAAP” means generally accepted accounting principles, as in effect in the United States of America from time to time.

Governmental Entity” means any federal, state, local or foreign court, legislative, executive or regulatory authority or agency.

Group” has the meaning given to such term in Section 13(d)(3) of the Exchange Act.

Information” means all confidential information about the Company or any of its Subsidiaries that is or has been furnished to any Stockholder or any of its Representatives by or on behalf of the Company or any of its Subsidiaries, or any of their respective Representatives, whether written or oral or in electronic or other form and whether prepared by the Company, its Representatives or otherwise, together with all written or electronically stored documentation prepared by such Stockholder or its Representatives based on or reflecting, in whole or in part, such information; provided that the term “Information” does not include any information that (i) is or becomes generally available to the public through no action or omission by such Stockholder or its Representatives, (ii) is or becomes available to such Stockholder on a non-confidential basis from a source, other than the Company or any of its Subsidiaries, or any of their respective Representatives, that to such Stockholder’s knowledge, after reasonable inquiry, is not prohibited from disclosing such portions to such Stockholder by a contractual, legal or fiduciary obligation, (iii) is independently developed by a Stockholder or its Representatives or Affiliates on its own behalf without use of any of the confidential information or (iv) was in such Stockholder’s, its Affiliates’ or its Representatives’ possession prior to the date of this Agreement.

IPO” has the meaning set forth in the Recitals.

 

3


Issuer Competitor” means any Person that directly competes with the business of the Company and its direct and indirect Subsidiaries from time to time.

Paired Interest” has the meaning given to such term in the Exchange Agreement.

Permitted Transferee” means with respect to any Stockholder, an Affiliate of such Stockholder, including to any investment fund or other entity controlled or managed by, or under common control or management with, such Stockholder; provided, however, that any such transferee agrees in a writing in the form attached as Exhibit A hereto to be bound by and to comply with all applicable provisions of this Agreement. Any Stockholder shall also be a Permitted Transferee of the Permitted Transferees or itself.

Person” means any individual, corporation, limited liability company, limited or general partnership, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivisions thereof or any Group comprised of any two or more of the foregoing.

Reorganization Transactions” means the reorganization transactions taken in connection with the IPO, as described under the caption “The Reorganization Transactions” in the preliminary prospectus, dated July 13, 2021, relating to the Class A Common Stock to be issued and sold in connection with the IPO, filed as part of Company’s registration statement on Form S-1 (Registration No. 333-256382).

Representatives” means with respect to any Person, any of such Person’s, or its Affiliates’, directors, officers, employees, general partners, Affiliates, direct or indirect shareholders, members or limited partners, attorneys, accountants, financial and other advisers, and other agents and representatives, including in the case of the CD&R Investors, any person designated for nomination by the Board as a Director by the CD&R Investors.

Stockholder” and “Stockholders” have the meanings given to such terms in the Preamble.

Subsidiary” means, with respect to any Person, any corporation, entity or other organization whether incorporated or unincorporated, of which (i) such first Person directly or indirectly owns or controls at least a majority of the securities or other interests having by their terms ordinary voting power to elect a majority of the board of directors or others performing similar functions or (ii) such first Person is a general partner, managing member or otherwise exercises similar management control.

Voting Securities” means, at any time, outstanding shares of any class of Equity Securities which are then entitled to vote generally in the election of directors.

Transfer” means, directly or indirectly, to sell, transfer, assign, pledge, encumber, hypothecate or similarly dispose of, either voluntarily or involuntarily, or to enter into any contract, option or other arrangement or understanding with respect to the sale, transfer, assignment, pledge, encumbrance, hypothecation or similar disposition of, any shares of Common Stock beneficially owned by a Person or any interest in any shares of Common Stock beneficially owned by a Person.

 

4


1.2 Other Definitional Provisions.

(a) The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Article and Section references are to this Agreement unless otherwise specified. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.”

(b) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.

ARTICLE II

CORPORATE GOVERNANCE

2.1 Board Representation.

(a) Following the Closing Date, the CD&R Investors shall have the right, but not the obligation, to designate for nomination by the Board as Directors a number of designees equal to at least:

(i) a majority of the total number of Directors comprising the Board at such time as long as the CD&R Investors (together with their Affiliates) collectively beneficially own Equity Securities representing at least 50% of the Combined Voting Power;

(ii) 40% of the total number of Directors comprising the Board at such time as long as the CD&R Investors (together with their Affiliates) collectively beneficially own Equity Securities representing at least 40% but less than 50% of the Combined Voting Power;

(iii) 30% of the total number of Directors comprising the Board at such time as long as the CD&R Investors (together with their Affiliates) collectively beneficially own Equity Securities representing at least 30% but less than 40% of the Combined Voting Power;

(iv) 20% of the total number of Directors comprising the Board at such time as long as the CD&R Investors (together with their Affiliates) collectively beneficially own Equity Securities representing at least 20% but less than 30% of the Combined Voting Power; and

(v) 5% of the total number of Directors comprising the Board at such time as long as the CD&R Investors (together with their Affiliates) collectively beneficially own Equity Securities representing at least 5% but less than 20% of the Combined Voting Power.

For purposes of calculating the number of CD&R Designees that the CD&R Investors are entitled to designate for nomination pursuant to the formula outlined above, any fractional amounts shall be rounded up to the nearest whole number and the calculation shall be made on a pro forma basis after taking into account any increase in the size of the Board. For the avoidance of doubt, if the CD&R Investors (together with their Affiliates) collectively beneficially own Equity Securities representing less than 5% of the Combined Voting Power, the CD&R Investors shall no longer be entitled to designate any designees for nomination by the Board as Directors.

 

5


(b) In the event that the CD&R Investors have designated for nomination by the Board less than the total number of designees the CD&R Investors shall be entitled to designate for nomination pursuant to Section 2.1(a), the CD&R Investors shall have the right, at any time, to designate for nomination such additional designees to which they are entitled, in which case, the Company and the Directors shall take all necessary action, to the fullest extent permitted by Applicable Law (including with respect to any fiduciary duties under Delaware law), to (x) enable the CD&R Investors to designate for nomination and effect the election or appointment of such additional individuals, whether by increasing the size of the Board, or otherwise, and (y) to designate such additional individuals designated for nomination by the CD&R Investors to fill such newly-created vacancies or to fill any other existing vacancies. Each such individual whom the CD&R Investors shall actually designate for nomination pursuant to this Section 2.1 and who is thereafter elected to the Board to serve as a Director shall be referred to herein as a “CD&R Designee.”

(c) In the event that a vacancy is created at any time by the death, retirement or resignation of any Director designated by the CD&R Investors pursuant to this Section 2.1, the remaining Directors and the Company shall, to the fullest extent permitted by Applicable Law (including with respect to any fiduciary duties under Delaware law), cause the vacancy created thereby to be filled by a new designee of the CD&R Investors as soon as possible, and the Company hereby agrees to take, to the fullest extent permitted by Applicable Law (including with respect to any fiduciary duties under Delaware law), at any time and from time to time, all actions necessary to accomplish the same.

(d) The Company agrees, to the fullest extent permitted by Applicable Law (including with respect to any fiduciary duties under Delaware law) and notwithstanding any mandatory Director retirement age that may be adopted by the Company, to include in the slate of nominees recommended by the Board for election at any meeting of stockholders called for the purpose of electing Directors the individuals designated pursuant to this Section 2.1 and to nominate and recommend each such individual to be elected as a Director as provided herein, and to solicit proxies or consents in favor thereof. The Company is entitled to identify such individual as a CD&R Designee pursuant to this Agreement.

(e) For so long as the CD&R Investors (together with their Affiliates) collectively beneficially own Equity Securities representing at least 25% of the Combined Voting Power, a CD&R Designee shall serve as the Chair of the Board (“Chair”) and in such capacity as Chair shall preside over meetings of the Board and the stockholders, among other duties.

(f) Insofar as the Company is or becomes subject to requirements under Applicable Law or the regulations of any self-regulatory organization, including the Exchange or such other national securities exchange upon which the Class A Common Stock is listed to which the Company is then subject, relating to the composition of the Board or committees thereof, their respective responsibilities or the qualifications of their respective members, the CD&R Investors shall cooperate in good faith to select for nomination their designees to the Board under this Section 2.1 so as to permit the Company to comply with all such applicable legal or regulatory requirements.

 

6


(g) No CD&R Designee shall be paid any fee (or provided any equity-based compensation) for service as Director or member of any committee of the Board, unless otherwise determined by the Board; provided that each CD&R Designee shall be entitled to reimbursement by the Company for reasonable expenses incurred while traveling to and from Board and committee meetings as well as travel for other business related to his or her service on the Board or committees thereof, subject to any maximum reimbursement obligations as may be established by the Board from time to time. Notwithstanding the foregoing, any CD&R Designee whom the Board determines to be “independent” as defined under Exchange and Exchange Act rules and regulations shall be entitled to participate in the Company’s compensation arrangements in which non-CD&R Designees, or other “independent” Directors, participate.

2.2 Available Financial Information. Upon written request of the CD&R Investors, the Company will deliver, or cause to be delivered, to the CD&R Investors or their designated Representative:

(a) as soon as available after the end of each month and in any event within 30 days thereafter, a consolidated balance sheet of the Company and its Subsidiaries as of the end of such month and consolidated statements of operations, income, cash flows, retained earnings and stockholders’ equity of the Company and its Subsidiaries, for each month and for the current fiscal year of the Company to date, prepared in accordance with GAAP (subject to normal year-end audit adjustments and the absence of notes thereto), together with a comparison of such statements to the corresponding periods of the prior fiscal year and to the Company’s business plan then in effect and approved by the Board;

(b) an annual budget, a business plan and financial forecasts for the Company for the next fiscal year of the Company (the “Annual Budget”), no later than 30 days before the beginning of the Company’s next fiscal year, in such manner and form as approved by the Board, which shall include at least a projection of income and a projected cash flow statement for each fiscal quarter in such fiscal year and a projected balance sheet as of the end of each fiscal quarter in such fiscal year, in each case prepared in reasonable detail, with appropriate presentation and discussion of the principal assumptions upon which such budgets and projections are based, which shall be accompanied by the statement of the chief executive officer or chief financial officer or equivalent officer of the Company to the effect that such budget and projections are based on reasonable and good faith estimates and assumptions made by the management of the Company for the respective periods covered thereby; it being recognized by the CD&R Investors that such budgets and projections as to future events are not to be viewed as facts and that actual results during the period or periods covered by them may differ from the projected results. Any material changes in such Annual Budget shall be delivered to the CD&R Investors as promptly as practicable after such changes have been approved by the Board;

(c) as soon as available after the end of each fiscal year of the Company, and in any event within 90 days thereafter, (i) the annual financial statements required to be filed by the Company pursuant to the Exchange Act, (ii) a consolidated balance sheet of the Company and its Subsidiaries as of the end of such fiscal year, and consolidated statements of income, retained earnings and cash flows of the Company and its Subsidiaries for such year, prepared in accordance with GAAP and setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail and accompanied by the opinion of independent public accountants of recognized national standing selected by the Company and (iii) a Company-prepared comparison to the Annual Budget for such year as approved by the Board; and

 

7


(d) as soon as available after the end of the first, second and third quarterly accounting periods in each fiscal year of the Company, and in any event within 45 days thereafter, (i) the quarterly financial statements required to be filed by the Company pursuant to the Exchange Act, (ii) a consolidated balance sheet of the Company and its Subsidiaries as of the end of each such quarterly period, and consolidated statements of income, retained earnings and cash flows of the Company and its Subsidiaries for such period and for the current fiscal year to date, prepared in accordance with GAAP (subject to normal year-end audit adjustments and the absence of notes thereto) and (iii) a Company-prepared comparison to the corresponding periods of the previous fiscal year and to the Annual Budget then in effect as approved by the Board, all of the information to be provided pursuant to this Section 2.2(d) in reasonable detail and certified by the principal financial or accounting officer of the Company.

(e) Notwithstanding anything to the contrary in Sections 2.2(c) and (d), the Company may satisfy its obligations thereunder (other than its obligations under Sections 2.2(c)(iii) and 2.2(d)(iii)) by (i) providing the financial statements of any wholly-owned Subsidiary of the Company to the extent such financial statements reflect the entirety of the operations of the business or (ii) filing such financial statements of the Company or any wholly-owned Subsidiary of the Company whose financial statements satisfy the requirements of clause (i), as applicable, with the U.S. Securities and Exchange Commission on EDGAR or in such other manner as makes them publicly available. The Company’s obligation to furnish the materials described in Sections 2.2(c) and (d) shall be satisfied so long as it transmits such materials to the CD&R Investors within the time periods specified therein, notwithstanding that such materials may actually be received after the expiration of such periods.

2.3 Other Information. The Company covenants and agrees to deliver to the CD&R Investors, upon written request, with reasonable promptness, such other information and data (including such information and reports made available to any lender of the Company or any of its Subsidiaries under any credit agreement or otherwise) with respect to the Company and each of its Subsidiaries as from time to time may be reasonably requested by the CD&R Investors; provided that the Company reserves the right to withhold any information under this Section 2.3 or access under Section 2.4 from the CD&R Investors if the Board determines that providing such information or granting such access would reasonably be expected to materially adversely affect the Company on a competitive basis or otherwise. The CD&R Investors shall have access to such other information concerning the Company’s business or financial condition and the Company’s management as may be reasonably requested, including all information that is necessary for (x) each of the CD&R Investors and their Affiliates to comply with income tax reporting and regulatory requirements and (y) the CD&R Investors to prepare their quarterly and annual financial statements.

 

8


2.4 Access. Subject to Section 2.3, the Company shall, and shall cause its Subsidiaries, officers, Directors, employees, associates, auditors and other agents to (a) afford the CD&R Investors and their Representatives, during normal business hours and upon reasonable notice, reasonable access at all reasonable times to its officers, employees, associates, auditors, legal counsel, properties, offices and other facilities and to all books and records, and (b) afford the CD&R Investors the opportunity to discuss the affairs, finances and accounts of the Company and its Subsidiaries with their respective officers from time to time as the CD&R Investors may reasonably request upon reasonable notice.

2.5 Termination of Rights. This Agreement shall terminate on the earlier to occur of (a) such time as the CD&R Investors are no longer entitled to nominate a Director pursuant to Section 2.1(a) of this Agreement or (b) upon the delivery of a written notice by the CD&R Investors to the Company requesting that this Agreement terminate.

ARTICLE III

MISCELLANEOUS

3.1 Confidentiality. Each party hereto agrees to, and shall cause its Representatives to, keep confidential and not divulge any Information, and to use, and cause its Representatives to use, such Information only in connection with the operation of the Company and its Subsidiaries and monitoring and making voting and investment decisions with respect to the Company; provided that nothing herein shall prevent any party hereto from disclosing such Information (a) upon the order of any court or administrative agency, (b) upon the request or demand of any regulatory agency or authority having jurisdiction over such party, (c) to the extent required by law or legal process or required or requested pursuant to subpoena, interrogatories or other discovery requests, (d) to the extent necessary in connection with the exercise of any remedy hereunder, (e) to other Stockholders, (f) to such party’s Representatives that in the reasonable judgment of such party need to know such Information, (g) to any potential Permitted Transferee of a Stockholder to whom such proposed Transfer would be permitted in accordance with Section 3.3 as long as such potential Permitted Transferee agrees to be bound by the provisions of this Section 3.1 as if a Stockholder or (h) to any prospective purchaser of all of a Stockholder’s shares of the Common Stock, provided that (1) such prospective purchaser shall have been advised of this Agreement and shall have expressly agreed to be bound by the confidentiality provisions hereof, (2) such prospective purchaser is not an Issuer Competitor or a Person who controls any Issuer Competitor, and (3) such prospective purchaser shall be responsible for any breach of or failure to comply with the confidentiality provisions of this Agreement by any of its Affiliates and such prospective purchaser agrees, at its sole expense, to take reasonable measures (including but not limited to court proceedings) to restrain its Representatives and Affiliates from prohibited or unauthorized disclosure or use of any Information; provided further that, in the case of clause (a) or (c), such party shall notify the other parties hereto of the proposed disclosure as far in advance of such disclosure as practicable and use reasonable efforts to ensure that any Information so disclosed is accorded confidential treatment, when and if available.

3.2 Amendments and Waivers. This Agreement may be amended, supplemented or otherwise modified only by a written instrument executed by the Company and each of the CD&R Investors. Neither the failure nor delay on the part of any party hereto to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence. No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver.

 

9


3.3 Successors, Assigns and Permitted Transferees. This Agreement shall bind and inure to the benefit of and be enforceable by the parties hereto and their respective successors and permitted assigns. Any Stockholder may assign its rights and obligations hereunder to any Permitted Transferee.

3.4 Notices. All notices and other communications to be given to any party hereunder shall be sufficiently given for all purposes hereunder if in writing and delivered by hand, courier or overnight delivery service, or when received in the form of a facsimile or other electronic transmission (receipt confirmation requested), and shall be directed to the address set forth below (or at such other address or facsimile number as such party shall designate by like notice):

 

  (a)

if to the Company, to:

Core & Main, Inc.

1830 Craig Park Court

St. Louis, Missouri 63146

Attention: General Counsel and Secretary

Email: X

 

  (b)

if to the CD&R Investors, to:

Clayton, Dubilier & Rice, LLC

375 Park Avenue

18th Floor

New York, New York 10152

Attention: Chief Financial Officer

Email: X

 

  (c)

if to any other Stockholder, to the address of such other Stockholder as shown in the stock record book of the Company.

in each case, with a copy (which shall not constitute notice) to:

Debevoise & Plimpton LLP

919 Third Avenue

New York, New York 10022

Attention: Peter J. Loughran, Esq. and Paul M. Rodel, Esq.

Email: pjloughran@debevoise.com; pmrodel@debevoise.com

3.5 Further Assurances. At any time or from time to time after the date hereof, the parties agree to cooperate with each other, and at the request of any other party, to execute and deliver any further instruments or documents and to take all such further action as the other party may reasonably request in order to evidence or effectuate the consummation of the transactions contemplated hereby and to otherwise carry out the intent of the parties hereunder. To the fullest extent permitted by Applicable Law, the Company shall not directly or indirectly take any action that is intended to, or would reasonably be expected to result in, any Stockholder being deprived of the rights contemplated by this Agreement.

 

10


3.6 Entire Agreement; No Third Party Beneficiaries. This Agreement constitutes the entire agreement among the parties with respect to the subject matter of this Agreement and supersedes any prior discussions, correspondence, negotiation, proposed term sheet, agreement or understanding and there are no agreements, understandings, representations or warranties between the parties with respect to the subject matter of this Agreement other than those set forth or referred to in this Agreement, and this Agreement is not intended to confer in or on behalf of any Person not a party to this Agreement (and their successors and assigns) any rights, benefits, causes of action or remedies with respect to the subject matter or any provision hereof.

3.7 Restrictions on Other Agreements; By-laws. The provisions of this Agreement shall be controlling if any such provision or the operation thereof conflicts with the provisions of the By-laws. Each of the parties covenants and agrees to take, or cause to be taken, to the fullest extent permitted by Applicable Law (including with respect to any fiduciary duties under Delaware law), any action reasonably requested by the Company or any Stockholder, as the case may be, to amend the By-laws so as to avoid any conflict with the provisions hereof, including, in the case of the Stockholders, to vote their shares of Common Stock.

3.8 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to principles of conflicts of laws thereof to the extent that such principles would require or permit the application of laws of another jurisdiction.

3.9 Jurisdiction and Forum; Waiver of Jury Trial. In any judicial proceeding involving any dispute, controversy or claim arising out of or relating to this Agreement, each of the parties unconditionally accepts the jurisdiction and venue of or, if the Court of Chancery does not have subject matter jurisdiction over this matter, the Superior Court of the State of Delaware (Complex Commercial Division), or if jurisdiction over the matter is vested exclusively in federal courts, the United States District Court for the District of Delaware, and the appellate courts to which orders and judgments thereof may be appealed. In any such judicial proceeding, the parties agree that in addition to any method for the service of process permitted or required by such courts, to the fullest extent permitted by law, service of process may be made by delivery provided pursuant to the directions in Section 3.4. EACH OF THE PARTIES HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING ANY DISPUTE, CONTROVERSY OR CLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT.

3.10 Severability. If any provision of this Agreement, or the application of such provision to any Person or circumstance or in any jurisdiction, shall be held to be invalid or unenforceable to any extent, (a) the remainder of this Agreement shall not be affected thereby, and each other provision hereof shall be valid and enforceable to the fullest extent permitted by law, (b) as to such Person or circumstance or in such jurisdiction such provision shall be reformed to be valid and enforceable to the fullest extent permitted by law and (c) the application of such provision to other Persons or circumstances or in other jurisdictions shall not be affected thereby.

 

11


3.11 Enforcement. Each party hereto acknowledges that money damages would not be an adequate remedy in the event that any of the covenants or agreements in this Agreement are not performed in accordance with its terms, and it is therefore agreed that in addition to and without limiting any other remedy or right it may have, the non-breaching party will have the right to seek an injunction, temporary restraining order or other equitable relief in any court of competent jurisdiction enjoining any such breach and enforcing specifically the terms and provisions hereof.

3.12 Titles and Subtitles. The titles of the articles, sections and subsections of this Agreement are for convenience of reference only and will not affect the meaning or interpretation of this Agreement.

3.13 No Recourse. This Agreement may only be enforced against, and any claims or cause of action that may be based upon, arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement may only be made against the entities that are expressly identified as parties hereto and no past, present or future Affiliate, Director, officer, employee, incorporator, member, manager, partner, stockholder, agent, attorney or representative of any party hereto shall have any liability for any obligations or liabilities of the parties to this Agreement or for any claim based on, in respect of, or by reason of, the transactions contemplated hereby.

3.14 Counterparts; Facsimile Signatures. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument. Delivery of an executed counterpart of this Agreement by one party to the others may be made by facsimile, electronic mail, other electronic format (including any electronic signature complying with the Delaware Uniform Electronic Transactions Act, as amended from time to time, or other applicable law) or other transmission method, and the parties hereto agree that any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

[Remainder of page intentionally left blank]

 

12


IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date set forth in the first paragraph hereof.

 

CORE & MAIN, INC.
By:  

/s/ Stephen O. LeClair

  Name: Stephen O. LeClair
  Title: Chief Executive Officer

[Signature Page—Stockholders Agreement]


CD&R WATERWORKS HOLDINGS, LLC
By:   CD&R Waterworks Holdings, L.P.,
  its manager
By:   CD&R Waterworks Holdings GP, Ltd.,
  its general partner
By:  

/s/ Rima Simson

Name:   Rima Simson
Title:   Vice President, Treasurer and Secretary
CD&R FUND X ADVISOR WATERWORKS B, L.P.
By:   CD&R Waterworks Holdings GP, Ltd.,
  its general partner
By:  

/s/ Rima Simson

Name:   Rima Simson
Title:   Vice President, Treasurer and Secretary
CD&R FUND X WATERWORKS B1, L.P.
By:   CD&R Waterworks Holdings GP, Ltd.,
  its general partner
By:  

/s/ Rima Simson

Name:   Rima Simson
Title:   Vice President, Treasurer and Secretary
CD&R FUND X-A WATERWORKS B, L.P.
By:  

/s/ Rima Simson

Name:   Rima Simson
Title:   Vice President, Treasurer and Secretary

[Signature Page—Stockholders Agreement]


Exhibit A

JOINDER AGREEMENT

Reference is made to the Stockholders Agreement, dated as of July 22, 2021 (as amended from time to time, the “Stockholders Agreement”), by and among Core & Main, Inc. (the “Company”) and certain stockholders of the Company party thereto. The undersigned agrees, by execution hereof, to become a party to, and to be subject to the rights and obligations under, the Stockholders Agreement.

 

[NAME]

By:  

             

 

Name:

 

Title:

Date:

Address:

Acknowledged by:

 

CORE & MAIN, INC.

By:  

                 

 

Name:

 

Title:

Date:

 

A-1

EX-10.4 8 d185428dex104.htm EX-10.4 EX-10.4

Exhibit 10.4

Execution Version

TERMINATION AGREEMENT

This TERMINATION AGREEMENT (this “Agreement”) is entered into as of July 27, 2021, by and between Core & Main LP (f/k/a HD Supply Waterworks, Ltd.), a Florida limited partnership, and Clayton, Dubilier & Rice, LLC, a Delaware limited liability company.

WHEREAS, the parties hereto are party to a Consulting Agreement, dated as of August 1, 2017 (the “Consulting Agreement”); and

WHEREAS, the parties hereto wish to terminate the Consulting Agreement.

NOW, THEREFORE, in consideration of the mutual covenants, conditions and agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

Section 1. Termination of Consulting Agreement. Notwithstanding any provision of the Consulting Agreement to the contrary (including any provisions that purport to survive the termination thereof), effective as of the date hereof, the Consulting Agreement is hereby terminated without any obligation surviving such termination. Each party hereto hereby waives any notice, consent or other requirement in connection with such termination of the Consulting Agreement. As a matter of precaution, each party hereto waives, effective as of the date hereof, any claims it may have against the other party under the Consulting Agreement.

Section 2. Governing Law. This Agreement shall be governed by the laws of the State of New York, without regard to the principles of conflicts of law thereof.

Section 3. Binding on Successors. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

Section 4. Counterparts. This Agreement may be executed in counterparts (including via facsimile or scanned pages), each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

[Signature page follows]


IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first above written.

 

CLAYTON, DUBILIER & RICE, LLC
By:  

/s/ Rima Simson

  Name: Rima Simson
  Title: Vice President, Treasurer and Assistant Secretary
CORE & MAIN LP
By:  

/s/ Stephen O. LeClair

  Name: Stephen O. LeClair
  Title:   Chief Executive Officer

[Signature Page to Termination Agreement (for CD&R Consulting Agreement)]

EX-10.5 9 d185428dex105.htm EX-10.5 EX-10.5

Exhibit 10.5

Execution Version

TERMINATION AGREEMENT

This TERMINATION AGREEMENT (this “Agreement”) is entered into as of July 27, 2021, by and between Core & Main LP (f/k/a HD Supply Waterworks, Ltd.), a Florida limited partnership (“Opco”), Core & Main, Inc., a Delaware corporation (the “Company”), as successor in interest to CD&R Plumb Buyer, LLC (“CD&R Plumb Buyer”), and CD&R WW, LLC, a Delaware limited liability company (“CD&R WW”), as successor in interest to Core & Main GP, LLC (f/k/a HD Supply Waterworks Group, LLC), a Delaware limited liability company (“Core & Main GP”).

WHEREAS, Opco, CD&R Plumb Buyer and Core & Main GP entered into a Registration Rights Agreement, dated as of August 1, 2017 (the “Registration Rights Agreement”);

WHEREAS, in connection with the initial public offering of the Company’s Class A common stock, par value $0.01 per share, the Company undertook a series of reorganization transactions pursuant to which, among other things, through a series of merger transactions, (i) CD&R Plumb Buyer was merged with and into CD&R WW Holdings, LLC, a Delaware limited liability company, which merged with and into the Company, with the Company surviving, and (ii) Core & Main GP merged with and into CD&R WW, with CD&R WW surviving and becoming a wholly owned subsidiary of the Company; and

WHEREAS, Opco, the Company, as successor in interest to CD&R Plumb Buyer, and CD&R WW, as successor in interest to Core & Main GP, wish to terminate the Registration Rights Agreement.

NOW, THEREFORE, in consideration of the mutual covenants, conditions and agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

Section 1. Termination of Registration Rights Agreement. Notwithstanding any provision of the Registration Rights Agreement to the contrary (including any provisions that purport to survive the termination thereof), effective as of the date hereof, the Registration Rights Agreement is hereby terminated without any obligation surviving such termination. Each party hereto hereby waives any notice, consent or other requirement in connection with such termination of the Registration Rights Agreement. As a matter of precaution, each party hereto waives, effective as of the date hereof, any claims it may have against the other party under the Registration Rights Agreement.

Section 2. Governing Law. This Agreement shall be governed by the laws of the State of New York, without regard to the principles of conflicts of law thereof.

Section 3. Binding on Successors. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.


Section 4. Counterparts. This Agreement may be executed in counterparts (including via facsimile or scanned pages), each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

[Signature page follows]

 

2


IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first above written.

 

CORE & MAIN LP
By:  

/s/ Stephen O. LeClair

  Name: Stephen O. LeClair
  Title:   Chief Executive Officer
CORE & MAIN, INC.
By:  

/s/ Stephen O. LeClair

  Name: Stephen O. LeClair
  Title:   Chief Executive Officer
CD&R WW, LLC
By:  

/s/ Rima Simson

  Name: Rima Simson
  Title:   Vice President, Treasurer and Assistant Secretary

[Signature Page to Termination Agreement (for Opco Registration Rights Agreement)]

EX-10.6 10 d185428dex106.htm EX-10.6 EX-10.6

Exhibit 10.6

TAX RECEIVABLE AGREEMENT

among

CORE & MAIN, INC.,

CORE & MAIN HOLDINGS, LP

and

EACH STOCKHOLDER OF

CORE & MAIN, INC. LISTED ON ANNEX A

Dated as of July 22, 2021

 


ARTICLE I. DEFINITIONS

     1  

1.1.

  Definitions      1  

1.2.

  Terms Generally      12  

ARTICLE II. DETERMINATION OF CERTAIN REALIZED TAX BENEFITS

     13  

2.1.

  Tax Benefit Schedule      13  

2.2.

  Procedure, Amendments      15  

2.3.

  Consistency with Tax Returns      16  

ARTICLE III. TAX BENEFIT PAYMENTS

     16  

3.1.

  Payments      16  

3.2.

  Duplicative Payments      17  

3.3.

  Pro Rata Payments; Coordination of Benefits      17  

ARTICLE IV. TERMINATION

     18  

4.1.

  Early Termination, Change in Control and Breach of Agreement      18  

4.2.

  Early Termination Notice      20  

4.3.

  Payment upon Early Termination      21  

ARTICLE V. SUBORDINATION AND LATE PAYMENTS

     22  

5.1.

  Subordination      22  

5.2.

  Late Payments by Corporate Taxpayer      22  

ARTICLE VI. NO DISPUTES; CONSISTENCY; COOPERATION

     22  

6.1.

  Participation in Corporate Taxpayer’s and Holdings’ Tax Matters      22  

6.2.

  Consistency      23  

6.3.

  Cooperation      23  

ARTICLE VII. MISCELLANEOUS

     24  

7.1.

  Notices      24  

7.2.

  Counterparts      25  

7.3.

  Entire Agreement; Third Party Beneficiaries      25  

7.4.

  Severability      25  

7.5.

  Successors; Assignment; Amendments; Waivers      25  

7.6.

  Titles and Subtitles      26  

7.7.

  Governing Law; Jurisdiction; Waiver of Jury Trial      26  

7.8.

  Reconciliation      27  

 

i


7.9.

  Withholding      28  

7.10.

  Admission of Corporate Taxpayer into a Consolidated Group; Transfers of Corporate Assets      28  

7.11.

  Confidentiality      29  

7.12.

  Change in Law      30  

7.13.

  Independent Nature of Exchanged Owners’ Rights and Obligations      30  

 

 

ii


This TAX RECEIVABLE AGREEMENT (“Agreement”), dated as of July 22, 2021 and effective upon the consummation of the Reorganization Transactions (as defined in the Reorganization Agreement (as defined below)) and prior to the IPO Closing (as defined below), is hereby entered into by and among Core & Main, Inc., a Delaware corporation (“Corporate Taxpayer”), Core & Main Holdings, LP, a Delaware limited partnership (“Holdings”), each stockholder of Corporate Taxpayer listed on Annex A (each an “Exchanged Owner”, and, for the avoidance of doubt, such term shall include former Exchanged Owners entitled to current or future payments pursuant to this Agreement), and each of the successors and assigns thereto.

RECITALS

WHEREAS, each Exchanged Owner indirectly holds limited partnership interests in Holdings (the “Partnership Interests”), which is classified as a partnership for U.S. federal income tax purposes;

WHEREAS, in connection with the initial public offering of Class A Common Stock (as defined below) of Corporate Taxpayer (the “IPO”), Holdings, and certain of its direct and indirect owners, will, pursuant to the Reorganization Agreement, enter into a series of transactions to reorganize the ownership interests in Holdings;

WHEREAS, Corporate Taxpayer will be the general partner of Holdings on or about the date of the IPO Closing (as defined below), and holds or will hold on or about the date of the IPO Closing, directly or indirectly, Partnership Interests;

WHEREAS, each Exchanged Owner acquired or will acquire stock in Corporate Taxpayer as a result of a Merger (as defined below);

WHEREAS, the income, gain, loss, deduction and other Tax (as defined below) items of Corporate Taxpayer and its consolidated Subsidiaries may be affected by (i) the Exchanged Owner Basis (as defined below), (ii) any Interest Amount (as defined below) paid, (iii) the Imputed Interest (as defined below), (iv) the Pre-Merger Tax Attributes (as defined below), and (v) the Continuing Limited Partners Tax Receivable Agreement Items (as defined below);

NOW, THEREFORE, in consideration of the foregoing and the respective covenants and agreements set forth herein, and intending to be legally bound hereby, the parties hereto agree as follows:

ARTICLE I.

DEFINITIONS

1.1. Definitions. As used in this Agreement, the terms set forth in this ARTICLE I shall have the following meanings.

Acquisition Agreement” has the meaning set forth in the Preamble of this Agreement.

 

1


Advisory Firm” means any accounting firm or any law firm that, in either case, is nationally recognized as being expert in tax matters.

Affiliate” means, with respect to any specified Person, any Person that directly, or indirectly through one or more intermediaries, Controls, is Controlled by, or is under common Control with the specified Person.

Agreed Rate” means LIBOR plus 100 basis points.

Agreement” has the meaning set forth in the Preamble of this Agreement.

Amended Schedule” has the meaning set forth in Section 2.2(b) of this Agreement.

Blended Rate” means, with respect to any taxable year, the sum of the effective rates of tax imposed on the aggregate net income of Corporate Taxpayer in each state or local jurisdiction in which Corporate Taxpayer files Tax Returns for such taxable year, with the maximum effective rate in any state or local jurisdiction being equal to the product of: (i) the apportionment factor on the income or franchise Tax Return filed by Corporate Taxpayer in such jurisdiction for such taxable year, and (ii) the maximum applicable corporate tax rate in effect in such jurisdiction in such taxable year. As an illustration of the calculation of Blended Rate for a taxable year, if Corporate Taxpayer solely files Tax Returns in State 1 and State 2 in a taxable year, the maximum applicable corporate tax rates in effect in such states in such taxable year are 6.5% and 5.5%, respectively, and the apportionment factors for such states in such taxable year are 55% and 45%, respectively, then the Blended Rate for such taxable year is equal to 6.05% (i.e., 6.5% times 55% plus 5.5% times 45%).

Board” means the Board of Directors of Corporate Taxpayer.

Business Day” means any day excluding Saturday, Sunday and any day that is a legal holiday under the laws of the State of New York or is a day on which banking institutions located in New York are closed.

CD&R Representative” means Clayton, Dubilier & Rice, LLC or its designated successor.

A “Change in Control” shall be deemed to have occurred upon:

 

  (i)

the sale, lease or transfer, in one or a series of related transactions, of all or substantially all of Corporate Taxpayer’s assets (determined on a consolidated basis) to any “person” or “group” (as such term is used in Section 13(d)(3) of the Exchange Act) other than to any Subsidiary of Corporate Taxpayer; provided, that, for clarity and notwithstanding anything to the contrary, neither the approval of nor consummation of a transaction treated for U.S. federal income tax purposes as a liquidation into Corporate Taxpayer of its consolidated Subsidiaries or merger of such entities into one another or Corporate Taxpayer will constitute a “Change in Control”;

 

2


  (ii)

the merger or consolidation of Corporate Taxpayer with any other person, other than a merger or consolidation where both (A) such merger or consolidation would result in the Voting Securities of Corporate Taxpayer outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into Voting Securities of the surviving entity) more than 50% of the total voting power represented by the Voting Securities of Corporate Taxpayer or such surviving entity outstanding immediately after such merger or consolidation and (B) the Board immediately prior to the merger or consolidation constitutes at least a majority of the board of directors or Corporate Taxpayer or such surviving entity;

 

  (iii)

the shareholders of Corporate Taxpayer approve a plan of complete liquidation or dissolution of Corporate Taxpayer;

 

  (iv)

the acquisition, directly or indirectly, by any “person” or “group” (as such term is used in Section 13(d)(3) of the Exchange Act) (other than (a) a trustee or other fiduciary holding securities under an employee benefit plan of Corporate Taxpayer; (b) a corporation or other entity owned, directly or indirectly, by the stockholders of Corporate Taxpayer in substantially the same proportions as their ownership of stock of Corporate Taxpayer; or (c) Affiliates of Clayton, Dubilier & Rice Fund X, L.P.) of beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of more than 50% of the aggregate voting power of the Voting Securities of Corporate Taxpayer; or

 

  (v)

the following individuals cease for any reason to constitute a majority of the number of directors of Corporate Taxpayer then serving: individuals who, at the IPO Closing, constitute the Board and any new director whose appointment or election by the Board or nomination for election by Corporate Taxpayer’s shareholders was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the IPO Closing or whose appointment, election or nomination for election was previously so approved or recommended by the directors referred to in this clause (v).

Class A Common Stock” means the Class A common stock, par value $0.01 per share, of Corporate Taxpayer, having the rights to be set forth in the Amended and Restated Certificate of Incorporation.

Code” shall mean the U.S. Internal Revenue Code of 1986, as amended from time to time.

 

3


Continuing Limited Partners Tax Receivable Agreement” means the Tax Receivable Agreement entered into as of the date hereof by and among Corporate Taxpayer, Holdings, and certain limited partners of Holdings, as such agreement may be amended, restated, supplemented or otherwise modified from time to time.

Continuing Limited Partners Tax Receivable Agreement Items” means “Basis Adjustment” and “Common Basis” as defined in the Continuing Limited Partners Tax Receivable Agreement.

Contribution” means the contribution of Partnership Interests to Corporate Taxpayer by CD&R Waterworks Holdings, GP. Ltd. and CD&R Associates X Waterworks, L.P. in exchange for Class A Common Stock.

Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of Voting Securities, by contract or otherwise.

Corporate Taxpayer” has the meaning set forth in the Preamble of this Agreement and includes any predecessor entities.

Corporate Taxpayer Return” means the federal, state or local Tax Return, as applicable, of Corporate Taxpayer or any consolidated Subsidiary of Corporate Taxpayer (or any Tax Return filed for a consolidated, affiliated, combined or unitary group of which Corporate Taxpayer or any consolidated Subsidiary of Corporate Taxpayer is a member) filed with respect to Taxes of any taxable year.

Cumulative Net Realized Tax Benefit” means for a taxable year the cumulative amount of Realized Tax Benefits for all taxable years or portions thereof of (i) Corporate Taxpayer, (ii) its consolidated Subsidiaries, and (iii) without duplication, Holdings and its Subsidiaries, up to and including such taxable year, net of the cumulative amount of Realized Tax Detriments for the same period. The Realized Tax Benefit and Realized Tax Detriment for each taxable year or portion thereof shall be determined based on the most recent Tax Benefit Schedule or Amended Schedule, if any, in existence at the time of such determination. If a Cumulative Net Realized Tax Benefit is being calculated with respect to a portion of a taxable year, then calculations of the Cumulative Net Realized Tax Benefit (including determinations relating to Exchanged Owner Basis, Pre-Merger Tax Attributes, Continuing Limited Partners Tax Receivable Agreement Items and Imputed Interest to the extent applicable) shall be made as if there were an interim closing of the books of the relevant entity and its Subsidiaries and the taxable year had closed on the relevant date.

Default Rate” means LIBOR plus 500 basis points.

Determination” shall have the meaning ascribed to such term in Section 1313(a) of the Code or similar provision of state and local tax law, as applicable, or any other event (including the execution of IRS Form 870-AD) that finally and conclusively establishes the amount of any liability for Tax.

 

4


Early Termination Date” means the date of an Early Termination Notice for purposes of determining the Early Termination Payment.

Early Termination Effective Date” has the meaning set forth in Section 4.2 of this Agreement.

Early Termination Notice” has the meaning set forth in Section 4.2 of this Agreement.

Early Termination Payment” has the meaning set forth in Section 4.3(b) of this Agreement.

Early Termination Rate” means LIBOR plus 100 basis points.

Early Termination Schedule” has the meaning set forth in Section 4.2 of this Agreement.

Exchange” has the meaning set forth in the Continuing Limited Partners Tax Receivable Agreement.

Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.

Exchange Agreement” means the Exchange Agreement entered into by and among Corporate Taxpayer, Holdings, and certain holders of Partnership Interests, dated on or about the date hereof, as such agreement may be amended, restated, supplemented or otherwise modified from time to time.

Exchanged Owner” has the meaning set forth in the Recitals of this Agreement.

Exchanged Owner Basis” means, without duplication, IPO Basis and Transferred Basis.

Exchange Owner Schedule” has the meaning set forth in Section 2.1(c) of this Agreement.

Expert” has the meaning set forth in Section 7.8 of this Agreement.

Hypothetical Federal Tax Liability” means, with respect to any taxable year or portion thereof, the liability for U.S. federal income Taxes for such taxable year or portion thereof of (i) Corporate Taxpayer, (ii) its consolidated Subsidiaries and (iii) without duplication, Holdings, but only with respect to Corporate Taxpayer and its consolidated Subsidiaries’ pro rata shares of the U.S. federal income Tax liability of Holdings and its Subsidiaries for such taxable year or portion thereof, in each case using the same methods, elections, conventions and similar practices used on the relevant federal Corporate Taxpayer Return but (a) using the Non-Stepped Up Tax Basis, (b) excluding any deduction attributable to Imputed Interest for the taxable

 

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year, (c) excluding any deduction attributable to Continuing Limited Partners Tax Receivable Agreement Items, (d) without taking into account Pre-Merger Tax Attributes and (e) deducting the Hypothetical Other Tax Liability (in lieu of any amount for state or local tax liabilities, and only if such a deduction in respect of state and local tax liabilities is available with respect to the applicable taxable year or portion thereof). For the avoidance of doubt, the Hypothetical Federal Tax Liability shall be determined without taking into account the carryover or carryback of any Tax item (or portions thereof) that is attributable to or available as a result of any Exchanged Owner Basis, Pre-Merger Tax Attributes, Continuing Limited Partners Tax Receivable Agreement Items, Imputed Interest or any deduction in respect of the Hypothetical Other Tax Liability, as applicable. If a Hypothetical Federal Tax Liability is being calculated with respect to a portion of a taxable year, then calculations of the Hypothetical Federal Tax Liability (including determinations relating to Exchanged Owner Basis, Pre-Merger Tax Attributes, Continuing Limited Partners Tax Receivable Agreement Items and Imputed Interest to the extent applicable) shall be made as if there were an interim closing of the books of the relevant entity and its Subsidiaries and the taxable year had closed on the relevant date.

Hypothetical Other Tax Liability” means, with respect to any taxable year or portion thereof, the U.S. federal taxable income determined in connection with calculating the Hypothetical Federal Tax Liability for such Taxable Year (determined without regard to clause (e) thereof) multiplied by the Blended Rate for such taxable year.

Hypothetical Tax Liability” means, with respect to any taxable year, the Hypothetical Federal Tax Liability for such taxable year, plus the Hypothetical Other Tax Liability for such taxable year.

Imputed Interest” means any interest imputed under Section 1272, 1274 or 483 or other provision of the Code and any similar provision of state and local tax law with respect to Corporate Taxpayer’s payment obligations under this Agreement or the Continuing Limited Partners Tax Receivable Agreement.

Initial Debt Documents” has the meaning set forth in Section 4.1(b) of this Agreement.

Interest Amount” has the meaning set forth in Section 3.1(b) of this Agreement.

IPO” has the meaning set forth in the Recitals of this Agreement.

IPO Basis” means the Tax basis of the Reference Assets that are depreciable or amortizable for U.S. federal income tax purposes in respect of which Corporate Taxpayer may be entitled to the tax benefits or deductions as a result of Corporate Taxpayer’s acquisition of Partnership Interests with the net proceeds from the IPO, in a percentage equal to the percentage of Partnership Interests held by the Exchanged Owners immediately prior to the Reorganization.

 

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IPO Closing” means the closing of the sale of the shares of Class A Common Stock in the IPO (without giving effect to any exercise of the underwriters’ option to acquire additional shares of Class A Common Stock).

LIBOR” means during any period, an interest rate per annum equal to the one-year LIBOR reported, on the date two days prior to the first day of such period, on the Reuters Screen page “LIBOR01” (or if such screen shall cease to be publicly available, as reported by any other publicly available source of such market rate) for London interbank offered rates for U.S. dollar deposits for such period. If Corporate Taxpayer has made the determination (such determination to be conclusive absent manifest error) that (i) LIBOR is no longer a widely recognized benchmark rate for newly originated loans in the U.S. loan market in U.S. dollars or (ii) the applicable supervisor or administrator (if any) of LIBOR has made a public statement identifying a specific date after which LIBOR shall no longer be used for determining interest rates for loans in the U.S. loan market in U.S. dollars, then Corporate Taxpayer shall (as determined by Corporate Taxpayer to be consistent with market practice generally), establish a replacement interest rate (the “Replacement Rate”), in which case, the Replacement Rate shall, subject to the next two sentences, replace LIBOR for all purposes under this Agreement. In connection with the establishment and application of the Replacement Rate, this Agreement shall be amended solely with the consent of Corporate Taxpayer and Holdings, as may be necessary or appropriate, in the reasonable judgment of Corporate Taxpayer, to effect the provisions of this Section. The Replacement Rate shall be applied in a manner consistent with market practice; provided that, in each case, to the extent such market practice is not administratively feasible for Corporate Taxpayer, such Replacement Rate shall be applied as otherwise reasonably determined by Corporate Taxpayer.

Limited Partnership Agreement” means the Amended and Restated Limited Partnership Agreement of Holdings, dated on or about the date hereof, as such agreement may be amended, restated, supplemented or otherwise modified from time to time.

Market Value” shall mean the closing price per share of the Class A Common Stock on the applicable determination date on the national securities exchange or interdealer quotation system on which such Class A Common Stock is then traded or listed, as reported by the Wall Street Journal (or other mutually acceptable electronic or print publication); provided, that if the closing price is not reported by the Wall Street Journal (or such other mutually acceptable electronic or print publication) for the applicable determination date, then the “Market Value” shall mean the closing price of the Class A Common Stock on the Business Day immediately preceding such determination date on the national securities exchange or interdealer quotation system on which such Class A Common Stock is then traded or listed, as reported by the Wall Street Journal (or such other mutually acceptable electronic or print publication); provided further, that if the Class A Common Stock is not then listed on a national securities exchange or interdealer quotation system, “Market Value” shall mean the fair market value of the Class A Common Stock on the applicable determination date, as determined by the Board in good faith.

 

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Member of the Immediate Family” means, with respect to any Person who is an individual, (a) each parent, spouse (but not including a former spouse or a spouse from whom such Person is legally separated) or child (including those adopted) of such individual and (b) each trust naming only one or more of the Persons listed in sub-clause (a) as beneficiaries.

Merger” means the merger of any person in connection with the Reorganization Transactions with and into Corporate Taxpayer or any of its consolidated subsidiaries through which Corporate Taxpayer or any of its consolidated Subsidiaries acquired Partnership Interests from a person (other than Corporate Taxpayer or any of its consolidated Subsidiaries) who held a direct or indirect interest in Holdings.

Merger Date” means the date of any Merger.

Net Tax Benefit” means for any taxable year the amount equal to 85% of the sum of (i) the Cumulative Net Realized Tax Benefit, if any, as of the end of such taxable year (or portion thereof) and (ii) any Tax Refunds received by Corporate Tax Payer in the relevant taxable year.

Non-Stepped Up Tax Basis” means, with respect to any Reference Asset at any time, the Tax basis that such asset would have had at such time if the Exchanged Owner Basis were equal to zero.

Objection Notice” has the meaning set forth in Section 2.2(a) of this Agreement.

Partnership Interest Holders” has the meaning set forth in the Continuing Limited Partners Tax Receivable Agreement.

Partnership Interests” has the meaning set forth in the Recitals of this Agreement.

Payment Date” means any date on which a payment is required to be made pursuant to this Agreement.

Person” means an individual, a partnership (including a limited partnership), a corporation, a limited liability company, an association, a joint stock company, a trust, an unincorporated organization, association, or other entity or a governmental entity.

Pre-Merger Tax Attributes” means, without duplication, the net operating losses, capital losses, research and development credits, excess Section 163(j) limitations carryforwards, charitable deductions, foreign Tax credits and any Tax attributes subject to carryforward under Section 381 of the Code that Corporate Taxpayer may be entitled to utilize as a result of the Mergers that relate to periods (or portions thereof) prior to the applicable Merger. Notwithstanding the foregoing, the term “Pre-Merger Tax Attributes” shall not include any Tax attribute of any Person merged into Corporate Taxpayer in connection with a Merger that is used to offset Taxes of such Person attributable to a taxable period (or portion thereof) ending on or prior to the date of such Merger.

 

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Realized Tax Benefit” means, for a taxable year (or portion thereof), the excess, if any, of the Hypothetical Tax Liability for such taxable year (or portion thereof) over (x) the actual liability for Taxes for such taxable year (or portion thereof) of (i) Corporate Taxpayer, (ii) its consolidated Subsidiaries, and (iii) without duplication, Holdings and its Subsidiaries, but only with respect to Corporate Taxpayer and its consolidated Subsidiaries’ pro rata shares of the Tax liability of Holdings and its Subsidiaries for such taxable year (or portion thereof) plus (y) any amounts included in the definition of Tax Refunds that are required to be repaid to the applicable Taxing Authority. If all or a portion of the actual liability for such Taxes for the taxable year arises as a result of an audit by a Taxing Authority of any taxable year, such liability shall not be included in determining the Realized Tax Benefit unless and until there has been a Determination. If an “actual liability” for Taxes is being calculated with respect to a portion of a taxable year, then calculations of such actual liability (including determinations relating to Exchanged Owner Basis, Pre-Merger Tax Attributes, Continuing Limited Partners Tax Receivable Agreement Items and Imputed Interest to the extent applicable) shall be made as if there were an interim closing of the books of the relevant entity and its Subsidiaries and the taxable year had closed on the relevant date.

Realized Tax Detriment” means, for a taxable year (or portion thereof), (x) the excess, if any, of the actual liability for Taxes for such taxable year (or portion thereof) of (i) Corporate Taxpayer, (ii) its consolidated Subsidiaries, and (iii) without duplication, Holdings and its Subsidiaries, but only with respect to Corporate Taxpayer and its consolidated Subsidiaries’ pro rata shares of the Tax liability of Holdings and its Subsidiaries for such taxable year (or portion thereof) plus (y) any amounts included in the definition of Tax Refunds that are required to be repaid to the applicable Taxing Authority over the Hypothetical Tax Liability for such taxable year (or portion thereof). If all or a portion of the actual liability for such Taxes for the taxable year arises as a result of an audit by a Taxing Authority of any taxable year, such liability shall not be included in determining the Realized Tax Detriment unless and until there has been a Determination. If an “actual liability” for Taxes is being calculated with respect to a portion of a taxable year, then calculations of such actual liability (including determinations relating to Exchanged Owner Basis, Pre-Merger Tax Attributes, Continuing Limited Partners Tax Receivable Agreement Items and Imputed Interest to the extent applicable) shall be made as if there were an interim closing of the books of the relevant entity and its Subsidiaries and the taxable year had closed on the relevant date.

Reconciliation Dispute” has the meaning set forth in Section 7.8 of this Agreement.

Reconciliation Procedures” has the meaning set forth in Section 2.2(a) of this Agreement.

 

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Reference Asset” means (a) with respect to any Merger, an asset that was held by Holdings or by any of its Subsidiaries treated as a partnership or disregarded entity for purposes of the applicable Tax, at the time of such Merger and (b) any asset that is “substituted basis property” under Section 7701(a)(42) of the Code with respect to a Reference Asset.

Reorganization Agreement” means that certain Master Reorganization Agreement, dated as of July 22, 2021, by and among Corporate Taxpayer, Holdings, CD&R Associates X Waterworks, L.P., CD&R Waterworks Holdings GP, Ltd., CD&R WW Holdings, L.P., CD&R Waterworks Holdings, L.P., CD&R Waterworks Holdings, LLC, Core & Main Management Feeder, LLC, Core & Main GP, LLC, CD&R Plumb Buyer, LLC, CD&R Fund X Advisor Waterworks B, L.P., CD&R Fund X Waterworks B1, L.P., CD&R Fund X-A Waterworks B, L.P., CD&R WW Holdings, LLC, CD&R WW, LLC, CD&R WW Advisor, LLC, Brooks Merger Sub 1, Inc. and Brooks Merger Sub 2, Inc.

Schedule” means any of the following: (i) a Tax Benefit Schedule, or (ii) the Early Termination Schedule, and, in each case, any amendments thereto.

Senior Obligations” has the meaning set forth in Section 5.1 of this Agreement.

Subsidiary” means, with respect to any Person, any corporation, limited liability company, partnership, association or business entity of which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof, or (ii) if a limited liability company, partnership, association or other business entity (other than a corporation), a majority of partnership or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by any Person or one or more Subsidiaries of that Person or a combination thereof. For purposes hereof, a Person or Persons shall be deemed to have a majority ownership interest in a limited liability company, partnership, association or other business entity (other than a corporation) if such Person or Persons shall be allocated a majority of limited liability company, partnership, association or other business entity gains or losses or shall control the management of any such limited liability company, partnership, association or other business entity. For purposes hereof, references to a “Subsidiary” of any Person shall be given effect only at such times that such Person has one or more Subsidiaries.

Tax Benefit Payment” has the meaning set forth in Section 3.1(b) of this Agreement.

Tax Benefit Schedule” has the meaning set forth in Section 2.1(a) of this Agreement.

 

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Tax Refunds” means refunds of Taxes actually received by Corporate Taxpayer (net of any Taxes imposed with respect thereto and other out-of-pocket costs or expenses incurred by Corporate Taxpayer in connection with such refunds) as a result of a Merger in respect of Taxes for a taxable period prior to the applicable Merger to the extent such refunds do not result from the use of Corporate Taxpayer’s Tax assets attributable to a taxable period after such Merger. “Tax Return” means any return, declaration, election, report or similar statement filed or required to be filed with a Taxing Authority with respect to Taxes (including any attached schedules), including any information return, claim for refund, declaration of estimated Tax, and amendments of any of the foregoing.

Taxes” means any and all U.S. federal, state, local and foreign taxes, assessments or similar charges that are based on or measured with respect to net income or profits, and any interest related to such Tax.

Taxing Authority” shall mean any domestic, federal, national, state, county or municipal or other local government, any subdivision, agency, commission or authority thereof, or any quasi-governmental body exercising any taxing authority or any other authority exercising Tax regulatory authority.

Transferred Basis” means the tax basis of the Reference Assets that are depreciable or amortizable for United States federal income tax purposes, including the adjustment to such tax basis of a Reference Asset under Sections 732, 755 and 1012 of the Code and the Treasury Regulations promulgated thereunder (in situations where, following an Exchange, a Merger, or a merger or liquidation of Corporate Taxpayer’s consolidated Subsidiaries, Holdings becomes an entity that is disregarded as separate from its owner for U.S. federal income tax purposes) or under Sections 743(b), 754 and 755 of the Code and the Treasury Regulations promulgated thereunder (in situations where, following an Exchange, a Merger, or a merger or liquidation of Corporate Taxpayer’s consolidated Subsidiaries, Holdings is not an entity that is disregarded as separate from its owner for U.S. federal income tax purposes) and, in each case, comparable sections of state and local tax laws, in each case in respect of which Corporate Taxpayer may be entitled to the tax benefits or deductions as a result of a Merger or Contribution.

Treasury Regulations” means the final, temporary and (to the extent they can be relied upon) proposed regulations under the Code promulgated from time to time (including corresponding provisions and succeeding provisions) as in effect for the relevant taxable period.

Valuation Assumptions” shall mean, as of an Early Termination Date, the assumptions that (1) in each taxable year ending on or after such Early Termination Date, Corporate Taxpayer and its consolidated Subsidiaries will have taxable income sufficient to fully use the tax items arising from the Exchanged Owner Basis, Pre-Merger Tax Attributes, Continuing Limited Partners Tax Receivable Agreement Items and Imputed Interest during such taxable year (including, for the avoidance of doubt, Continuing Limited Partners Tax Receivable Agreement Items and Imputed Interest

 

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that would result from post-Early Termination Date Tax Benefit Payments that would be paid in accordance with the Valuation Assumptions) in which such deductions would become available, (2) the U.S. federal, state and local income tax rates (and, if applicable, foreign income tax rates) that will be in effect for each such taxable year will be those specified for each such taxable year by the Code and other law as in effect on the Early Termination Date (but taking into account for the applicable taxable years adjustments to the tax rates that have been enacted as of the Early Termination Date with a delayed effective date), (3) any Pre-Merger Tax Attributes and any loss carryovers generated by the Exchanged Owner Basis, Continuing Limited Partners Tax Receivable Agreement Items or Imputed Interest, in each case that are available as of the Early Termination Date will be used by Corporate Taxpayer on a pro rata basis from the Early Termination Date through the earlier of the scheduled expiration date of such loss carryovers and the fifth (5th) anniversary of the Early Termination Date, (4) any non-amortizable assets (other than stock of Corporate Taxpayer’s consolidated Subsidiaries with which Corporate Taxpayer files a consolidated return) will be disposed of in a taxable sale on the fifteenth anniversary of the IPO Date for an amount sufficient to use fully the Exchanged Owner Basis with respect to such assets and any short-term investments (including cash equivalents) will be disposed of 12 months following the Early Termination Date; provided that, in the event of a Change in Control which includes a taxable sale of any relevant asset, such non-amortizable assets shall be deemed disposed of at the time of the Change in Control (if earlier than such fifteenth anniversary), (5) if, on the Early Termination Date, a Partnership Interest Holder has Partnership Interests that have not been Exchanged, then each such Partnership Interest shall be deemed to be Exchanged for the Market Value of the Class A Common Stock on the Early Termination Date, and such Partnership Interest Holder shall be deemed to receive the amount of cash such Partnership Interest Holder would have been entitled to pursuant to the Continuing Limited Partners Tax Receivable Agreement had such Partnership Interests actually been Exchanged on the Early Termination Date, determined using the Valuation Assumptions and (6) any payment obligations pursuant to this Agreement will be satisfied on the date that any Tax Return to which such payment obligation relates is required to be filed excluding any extensions.

Voting Securities” shall mean any securities of Corporate Taxpayer which are entitled to vote generally on matters submitted for a vote of Corporate Taxpayer’s stockholders or generally in the election of the Board.

1.2. Terms Generally. In this Agreement, unless otherwise specified or where the context otherwise requires:

(a) the headings of particular provisions of this Agreement are inserted for convenience only and will not be construed as a part of this Agreement or serve as a limitation or expansion on the scope of any term or provision of this Agreement;

(b) words importing any gender shall include other genders;

 

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(c) words importing the singular only shall include the plural and vice versa;

(d) the words “include”, “includes” or “including” shall be deemed to be followed by the words “without limitation”;

(e) the words “hereof”, “herein” and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement;

(f) references to “Articles”, “Exhibits”, “Sections” or “Schedules” shall be to Articles, Exhibits, Sections or Schedules of or to this Agreement;

(g) references to any Person include the successors and permitted assigns of such Person;

(h) the use of the words “or”, “either” and “any” shall not be exclusive;

(i) the word “or” shall be construed to be used in the inclusive sense of “and/or”;

(j) wherever a conflict exists between this Agreement and any other agreement among parties hereto, this Agreement shall control but solely to the extent of such conflict;

(k) references to “$” or “dollars” means the lawful currency of the United States of America;

(l) references to any agreement, contract or schedule, unless otherwise stated, are to such agreement, contract or schedule as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof; and

(m) the parties hereto have participated collectively in the negotiation and drafting of this Agreement; accordingly, in the event an ambiguity or question of intent or interpretation arises, it is the intention of the parties that this Agreement shall be construed as if drafted collectively by the parties hereto, and that no presumption or burden of proof shall arise favoring or disfavoring any party hereto by virtue of the authorship of any provisions of this Agreement.

ARTICLE II.

DETERMINATION OF CERTAIN REALIZED TAX BENEFITS

2.1. Tax Benefit Schedule.

(a) Tax Benefit Schedule. Within one hundred and twenty (120) calendar days after the due date (taking into account valid extensions) of the U.S. federal income Tax Return of Corporate Taxpayer (or its consolidated Subsidiaries, as applicable) for any taxable year in which there is a Realized Tax Benefit or Realized

 

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Tax Detriment or in which a Tax Refund was received, Corporate Taxpayer shall provide to the CD&R Representative a schedule showing in reasonable detail the amount of any Tax Refund received in such taxable year and the calculation of the Realized Tax Benefit or Realized Tax Detriment for such taxable year and any Tax Benefit Payment in respect of each Exchanged Owner (a “Tax Benefit Schedule”). The Tax Benefit Schedules provided by Corporate Taxpayer will become final as provided in Section 2.2(a) and may be amended as provided in Section 2.2(b).

(b) Applicable Principles. If for whatever reason Corporate Taxpayer does not receive Exchanged Owner Basis with respect to a Reference Asset but Corporate Taxpayer is provided with a similar tax basis under another section of the Code, then the principles of and computation of payments pursuant to this Agreement shall apply mutatis mutandis to such tax basis. Subject to Section 3.3(a), the Realized Tax Benefit or Realized Tax Detriment for each taxable year is intended to measure the decrease or increase in the actual liability for Taxes of Corporate Taxpayer and its consolidated Subsidiaries (and Holdings and its Subsidiaries, as applicable and without duplication) for such taxable year (or portion thereof) attributable to the Exchanged Owner Basis, Pre-Merger Tax Attributes, Continuing Limited Partners Tax Receivable Agreement Items and Imputed Interest, determined using a “with and without” methodology. For the avoidance of doubt, the actual liability for Taxes of Corporate Taxpayer and its consolidated Subsidiaries (and Holdings and its Subsidiaries, as applicable and without duplication) will take into account any deduction in respect of Imputed Interest. Carryovers or carrybacks of any Tax item attributable to the Exchanged Owner Basis, Continuing Limited Partners Tax Receivable Agreement Items and Imputed Interest shall be considered to be subject to the rules of the Code and the Treasury Regulations or the appropriate provisions of U.S. state and local income and franchise tax law, as applicable, governing the use, limitation and expiration of carryovers or carrybacks of the relevant type. The parties agree that (i) all Tax Benefit Payments (other than the portion of the Tax Benefit Payments treated as Imputed Interest thereon) attributable to Exchanged Owner Basis or Pre-Merger Tax Attributes will be treated as other property or money for purposes of Section 351 or 356 of the Code received in a Merger and will not be treated as a dividend pursuant to Section 304 or 356(a)(2) of the Code to the extent permitted by law and (ii) the actual tax liability will take into account the deduction of the portion of the Tax Benefit Payment that must be accounted for as Imputed Interest.

(c) Exchange Basis Schedule. If requested by any Exchanged Owner no later than 30 days prior to the due date (without taking into account any permitted extensions) of the U.S. federal income Tax Return of Corporate Taxpayer (or its consolidated Subsidiaries, as applicable), Corporate Taxpayer shall, no later than the date the Tax Benefit Schedule for the applicable year is delivered, deliver to such Exchanged Owner a schedule (the “Exchanged Owner Schedule”) that shows, in reasonable detail necessary to perform the calculations required by this Agreement for such Exchanged Owner, (i) the Non-Stepped Up Tax Basis of the Reference Assets in respect of such Exchanged Owner as of each applicable Merger Date, (ii) the Exchanged Owner Basis with respect to the Reference Assets in respect of such Exchanged Owner as a result of a Merger effected in the taxable year (or, if requested, effected in prior taxable years) by such Exchanged Owner, calculated in the aggregate, (iii) the period (or periods) over which the Reference Assets in respect of such Exchanged Owner are amortizable and/or depreciable and (iv) the period (or periods) over which the Exchanged Owner Basis in respect of such Exchanged Owner is amortizable and/or depreciable.

 

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2.2. Procedure; Amendments.

(a) Procedure. Every time Corporate Taxpayer delivers to the CD&R Representative an applicable Schedule under this Agreement, including any Amended Schedule delivered pursuant to Section 2.2(b) and any Early Termination Schedule or amended Early Termination Schedule, Corporate Taxpayer shall also allow the CD&R Representative reasonable access, at Corporate Taxpayer’s sole cost, to the appropriate representatives, as determined by Corporate Taxpayer, at Corporate Taxpayer and the Advisory Firm that prepared the relevant Corporate Taxpayer Returns in connection with a review of such Schedule. Without limiting the application of the preceding sentence, Corporate Taxpayer shall, upon request, deliver to the CD&R Representative the relevant Corporate Taxpayer Returns as well as any other work papers and supporting schedules but shall be entitled to redact any information that it reasonably believes is unnecessary for purposes of the calculations contemplated by this Agreement. Without limiting the generality of the foregoing, Corporate Taxpayer shall ensure that any such Schedule, along with any supporting schedules and work papers, provides a reasonably detailed presentation of the calculation of the actual tax liability and the Hypothetical Tax Liability and identifies any material assumptions or operating procedures or principles that were used for purposes of such calculations. An applicable Schedule or amendment thereto shall, subject to the final sentence of this Section 2.2(a), become final and binding on each Exchanged Owner and the CD&R Representative thirty (30) calendar days from the first date on which Corporate Taxpayer sent the CD&R Representative the applicable Schedule or amendment thereto unless (a) the CD&R Representative within thirty (30) calendar days after the date Corporate Taxpayer sent such Schedule or amendment thereto provides Corporate Taxpayer with written notice of a material objection to such Schedule made in good faith (an “Objection Notice”) or (b) the CD&R Representative provides a written waiver of the right of the CD&R Representative to provide any Objection Notice with respect to such Schedule or amendment thereto within the period described in clause (i), in which case such Schedule or amendment thereto becomes binding on the date the waiver is received by Corporate Taxpayer. If the parties are unable to resolve the issues raised in such Objection Notice within thirty (30) calendar days after receipt by Corporate Taxpayer of the Objection Notice, the parties shall employ the reconciliation procedures described in Section 7.8 of this Agreement (the “Reconciliation Procedures”). If a Schedule (or any “Schedule” (as defined in the Continuing Limited Partners Tax Receivable Agreement)) relating to the calculation of payments payable to any Exchanged Owner or any of their respective Affiliates hereunder (or to any recipient under the Continuing Limited Partners Tax Receivable Agreement) is amended to reflect a revised calculation methodology that, if utilized in the calculation of amounts payable to one or more other Exchanged Owners, would change the amounts payable to such other Persons hereunder, Corporate Taxpayer shall utilize such revised methodology with respect to all Exchanged Owners and make additional payments (or reduce future payments), as applicable.

 

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(b) Amended Schedule. The applicable Schedule for any taxable year may be amended from time to time by Corporate Taxpayer (i) in connection with a Determination affecting such Schedule, (ii) to correct inaccuracies in the Schedule identified after the date the Schedule was provided to the CD&R Representative, (iii) to comply with an Expert’s determination under the Reconciliation Procedures applicable to this Agreement, (iv) to reflect a change in the Realized Tax Benefit or Realized Tax Detriment for such taxable year attributable to a carryback or carryforward of a loss or other tax item to such taxable year, (v) to reflect a change in the Realized Tax Benefit or Realized Tax Detriment for such taxable year attributable to an amended Tax Return filed for such taxable year, or (vi) to take into account payments made pursuant to this Agreement or under the Continuing Limited Partners Tax Receivable Agreement (any such Schedule, an “Amended Schedule”).

2.3. Consistency with Tax Returns. Notwithstanding anything to the contrary herein, all calculations and determinations hereunder, including Exchanged Owner Basis, Pre-Merger Tax Attributes, Tax Refunds, Continuing Limited Partners Tax Receivable Agreement Items, the Schedules and the determination of the Realized Tax Benefit or Realized Tax Detriment, shall be made in accordance with any elections, methodologies or positions taken on the relevant Corporate Taxpayer Returns.

ARTICLE III.

TAX BENEFIT PAYMENTS

3.1. Payments.

(a) Payments. Subject to Section 3.3, within five (5) Business Days after all the Tax Benefit Schedules with respect to the taxable year delivered to the CD&R Representative become final in accordance with Article II of this Agreement, Corporate Taxpayer shall pay or cause to be paid to each applicable Exchanged Owner for such taxable year such Exchanged Owner’s Tax Benefit Payment (if any) determined pursuant to Section 3.1(b). Each such payment shall be made, at the sole discretion of Corporate Taxpayer, by wire or Automated Clearing House transfer of immediately available funds to the bank account previously designated by the applicable Exchanged Owner to Corporate Taxpayer or as otherwise agreed by Corporate Taxpayer and the applicable Exchanged Owner. Notwithstanding anything herein to the contrary, the aggregate payments to an Exchanged Owner under this Agreement shall not exceed 100% of the Exchanged Owner Basis and Pre-Merger Tax Attributes allocable to such Exchanged Owner hereunder.

 

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(b) A “Tax Benefit Payment” in respect of an Exchanged Owner for a taxable year means an aggregate amount, not less than zero, which Corporate Taxpayer is required to pay or cause to be paid pursuant to Section 3.1 of this Agreement, equal to the sum of the Net Tax Benefit allocable to such Exchanged Owner and the Interest Amount in respect of such Exchanged Owner. For the avoidance of doubt, for Tax purposes, the Interest Amount shall not be treated as interest but instead shall be treated, to the extent permitted by law, as other property or money for purposes of Section 351 or 356 of the Code received in a Merger and will not be treated as a dividend pursuant to Section 304 or 356(a)(2) of the Code. The Net Tax Benefit allocable to such Exchanged Owner for a taxable year shall be an amount equal to the portion of such Net Tax Benefit derived from any Exchanged Owner Basis (including any Transferred Basis attributable to a Contribution where the Class A Common Stock received with respect to such Contribution is further contributed to such Exchanged Owner), Pre-Merger Tax Attributes or Imputed Interest that is attributable to such Exchanged Owner as of the end of such taxable year (or portion thereof) over the total amount of payments previously made under this Section 3.1 in respect of such Exchanged Owner (excluding payments of Interest Amounts); provided, for the avoidance of doubt, that an Exchanged Owner shall not be required to return any portion of any previously made Tax Benefit Payment except in the case of manifest error. The “Interest Amount” in respect of such Exchanged Owner for a taxable year (or portion thereof) shall equal the interest on the portion of the Net Tax Benefit allocable to such Exchanged Owner with respect to such taxable year (or portion thereof) calculated at the Agreed Rate compounded annually from the due date (without extensions) for filing the U.S. federal income Tax Return of Corporate Taxpayer for such taxable year until the earlier of (i) the Payment Date and (ii) the date on which Corporate Taxpayer makes the relevant Tax Benefit Payment due on such Payment Date. The Net Tax Benefit allocable to such Exchanged Owner and the Interest Amount shall be determined separately with respect to each Merger and Contribution.

3.2. Duplicative Payments. It is intended that the provisions of this Agreement will not result in a duplicative payment of any amount (including interest) required under this Agreement. It is also intended that the provisions of (i) this Agreement, subject to ARTICLE IV and Section 7.12 and (ii) the Continuing Limited Partners Tax Receivable Agreement, subject to Article IV and Section 7.12 of the Continuing Limited Partners Tax Receivable Agreement, will result in 85% of the Cumulative Net Realized Tax Benefit (but calculated taking into account all Mergers by all Exchanged Owners and all Exchanges by all Partnership Interest Holders as of any time) as of any determination date being paid in the aggregate to the Exchanged Owners pursuant to this Agreement and the Partnership Interest Holders pursuant to the Continuing Limited Partners Tax Receivable Agreement. The provisions of this Agreement shall be construed in the appropriate manner to ensure such intentions are realized.

3.3. Pro Rata Payments; Coordination of Benefits.

(a) Notwithstanding anything in Section 3.1 to the contrary, to the extent that the aggregate tax benefit of Corporate Taxpayer, or its consolidated Subsidiaries, as applicable, with respect to the Exchanged Owner Basis, Pre-Merger Tax Attributes, Continuing Limited Partners Tax Receivable Agreement Items and Imputed Interest is

 

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limited in a particular taxable year because Corporate Taxpayer or its consolidated Subsidiaries, as applicable, do not have sufficient taxable income to utilize the tax benefits with respect to the Exchanged Owner Basis, Pre-Merger Tax Attributes, Continuing Limited Partners Tax Receivable Agreement Items or Imputed Interest, or any other limitation prevents the use of such tax benefits, the Tax Benefit Payments and “Tax Benefit Payments” (as defined in the Continuing Limited Partners Tax Receivable Agreement) payable shall be allocated among all parties eligible for payments hereunder and under the Continuing Limited Partners Tax Receivable Agreement in proportion to the respective amounts of the Tax Benefit Payment or “Tax Benefit Payment” (as defined in the Continuing Limited Partners Tax Receivable Agreement) that would have been paid to each such party if Corporate Taxpayer and, as applicable, its consolidated Subsidiaries, had sufficient taxable income so that there were no such limitation (or such other limitations did not apply).

(b) After taking into account Section 3.3(a), if for any reason Corporate Taxpayer does not fully satisfy its payment obligations to make or cause to be made all Tax Benefit Payments due under this Agreement in respect of a particular taxable year, then Corporate Taxpayer and the parties agree that no Tax Benefit Payment shall be made in respect of any taxable year until all Tax Benefit Payments in respect of prior taxable years have been made in full. If for any reason the Tax Benefit Payments are to be partially but not fully satisfied with respect to a taxable year, such Tax Benefit Payments shall be made in the same proportion as the Tax Benefit Payments that would have been paid to each Exchanged Owner if Corporate Taxpayer were to satisfy its obligation in full.

ARTICLE IV.

TERMINATION

4.1. Early Termination, Change in Control and Breach of Agreement.

(a) Corporate Taxpayer may, with the consent of a majority of the disinterested members of the Board in accordance with the Delaware General Corporation Law, terminate this Agreement with respect to all amounts payable to all of the Exchanged Owners (including, for the avoidance of doubt, any transferee pursuant to Section 7.5(a)) at any time by paying or causing to be paid to each such Exchanged Owner an Early Termination Payment; provided, however, that this Agreement shall only terminate with respect to any such Exchanged Owner upon the payment of such Early Termination Payment to such Exchanged Owner, and provided, further, that Corporate Taxpayer may withdraw any notice to execute its termination rights under this Section 4.1(a) prior to the time at which any Early Termination Payment has been paid. Notwithstanding the foregoing, Corporate Taxpayer may not terminate this Agreement pursuant to this Section 4.1(a) unless (i) no further payments are required under the Continuing Limited Partners Tax Receivable Agreement or (2) the Continuing Limited Partners Tax Receivable Agreement is terminated pursuant to Section 4.1(a) of the Continuing Limited Partners Tax Receivable Agreement concurrently with the termination of this Agreement pursuant to this Section 4.1(a). Upon payment of an Early Termination

 

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Payment to an Exchanged Owner, neither such Exchanged Owner nor Corporate Taxpayer shall have any further payment obligations under this Agreement, other than for any Tax Benefit Payment (1) agreed to by Corporate Taxpayer and such Exchanged Owner as due and payable but unpaid as of the Early Termination Date, (2) that is the subject of an Objection Notice, which will be payable in accordance with resolution of the issues identified in such Objection Notice pursuant to this Agreement, and (3) due for the taxable year ending with or including the Early Termination Date (except to the extent that the amounts described in clauses (1), (2) and (3) are included in the calculation of the Early Termination Payment).

(b) In the event that there occurs a Change in Control or Corporate Taxpayer (1) breaches any of its material obligations under this Agreement, whether as a result of failure to make any payment when due, failure to honor any other material obligation required hereunder, under the Continuing Limited Partners Tax Receivable Agreement, or by operation of law as a result of the rejection of this Agreement in a case commenced under the United States Bankruptcy Code or otherwise or (2)(A) commences any case, proceeding or other action (i) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate a bankruptcy or insolvency, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts or (ii) seeking an appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets, or (B) there is commenced against Corporate Taxpayer any case, proceeding or other action of the nature described in clause (B) above that remains undismissed or undischarged for a period of sixty (60) calendar days, then all obligations hereunder shall be accelerated, and such obligations shall be calculated as if an Early Termination Notice had been delivered on the date of such Change in Control or breach, as applicable, to each Exchanged Owner and shall include (1) each Early Termination Payment calculated as if an Early Termination Notice had been delivered on the date of such Change in Control or breach (and Corporate Taxpayer shall provide each Exchanged Owner with an Early Termination Schedule, which shall become final in accordance with the procedures set forth in Section 4.2), (2) any Tax Benefit Payment agreed to by Corporate Taxpayer and any Exchanged Owner as due and payable but unpaid as of the date of such Change in Control or breach, as applicable, (3) any Tax Benefit Payment that is the subject of an Objection Notice, which will be payable in accordance with resolution of the issues identified in such Objection Notice pursuant to this Agreement, and (4) any Tax Benefit Payment due for the taxable year ending with or including the date of such Change in Control or breach, as applicable (except to the extent that the amounts described in clauses (2), (3) and (4) are included in the calculation of the amount described in clause (1)). Notwithstanding the foregoing, in the event that Corporate Taxpayer materially breaches this Agreement, each Exchanged Owner shall be entitled to elect to receive the amounts set forth in clauses (1), (2), (3) and (4) above or to seek specific performance of the terms hereof. The parties agree that it will not be considered to be a breach of a material obligation under this Agreement to make a payment due pursuant to this Agreement within three (3) months of the date such

 

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payment is due. Notwithstanding anything in this Agreement to the contrary, it shall not be a breach of this Agreement if Corporate Taxpayer fails to make or cause to be made any Tax Benefit Payment (or portion thereof) when due to the extent that the Board determines in good faith that Corporate Taxpayer has insufficient funds (taking into account funds of its consolidated Subsidiaries that are permitted to be distributed to Corporate Taxpayer (in contemplation of this Agreement or otherwise) pursuant to the terms of any applicable credit agreements or other documents evidencing indebtedness (each as interpreted by the Board in good faith), including any available funds under any revolving credit facility of Holdings or its consolidated Subsidiaries, but not taking into account funds of Subsidiaries that are not permitted to be distributed pursuant to the terms of such credit agreements or other documents and not taking into account funds reasonably reserved for reasonably expected liabilities or expenses) to make such payment; provided that the interest provisions of Section 5.2 shall apply to such late payment (unless the Board determines in good faith that (x) Corporate Taxpayer does not have sufficient cash to make such payment as a result of limitations imposed by credit agreements or any other documents evidencing indebtedness to which Holdings or any of its Subsidiaries is a party, guarantor or otherwise an obligor as of the date of this Agreement (the “Initial Debt Documents”) or any other document evidencing indebtedness to which Holdings or any of its Subsidiaries becomes a party, guarantor or otherwise an obligor thereafter to the extent the terms of such other documents are not materially more restrictive in respect of Corporate Taxpayer’s ability to receive from its Subsidiaries funds sufficient to make such payments compared to the terms of the Initial Debt Documents (as determined by the Board in good faith), provided, however, that Corporate Taxpayer uses good faith efforts to remove such limitations to the extent required to make such interest payments unless such efforts could have an adverse effect on Corporate Taxpayer, Holdings or their Subsidiaries, or (y) such payments could (I) be set aside as fraudulent transfers or conveyances or similar actions under fraudulent transfer laws or (II) could cause Corporate Taxpayer or its consolidated Subsidiaries to be undercapitalized, in which case Section 5.2 shall apply, but the Default Rate shall be replaced by the Agreed Rate).

(c) Refinancing of the Initial Debt Documents. Without the consent of the CD&R Representative, Corporate Taxpayer shall not incur additional indebtedness, enter into any new credit agreement or refinance any Initial Debt Document that, in each case, has terms more restrictive in respect of Corporate Taxpayer’s ability to make payments under this Agreement than the Initial Debt Documents.

4.2. Early Termination Notice. If Corporate Taxpayer chooses to exercise its right of early termination under Section 4.1 above, Corporate Taxpayer shall deliver to the CD&R Representative and each Exchanged Owner notice of such intention to exercise such right (“Early Termination Notice”) and a schedule (the “Early Termination Schedule”) specifying Corporate Taxpayer’s intention to exercise such right and showing in reasonable detail the calculation of the Early Termination Payment for each Exchanged Owner. The Early Termination Schedule provided to an Exchanged Owner shall become final and binding on each Exchanged Owner and the CD&R Representative thirty (30) calendar days from the first date on which

 

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Corporate Taxpayer sent the CD&R Representative such Early Termination Schedule unless (a) the CD&R Representative within thirty (30) calendar days after the date Corporate Taxpayer sent such Schedule or amendment thereto provides Corporate Taxpayer with an Objection Notice with respect to such Early Termination Schedule or (b) the applicable Exchanged Owner provides a written waiver of the right of the CD&R Representative to provide any Objection Notice with respect to such Schedule or amendment thereto within the period described in clause (a), in which case such Schedule or amendment thereto becomes binding on the date the waiver is received by Corporate Taxpayer. If Corporate Taxpayer and the CD&R Representative, for any reason, are unable to resolve the issues raised in such Objection Notice within thirty (30) calendar days after receipt by Corporate Taxpayer of the Objection Notice, Corporate Taxpayer and the CD&R Representative shall employ the Reconciliation Procedures. The date on which every Early Termination Schedule under this Agreement becomes final with respect to all Exchanged Owners in accordance with this Section 4.2 shall be the “Early Termination Effective Date”. If the Early Termination Schedule relating to the calculation of payments payable to any Exchanged Owner or any of its respective Affiliates hereunder or to any recipient under the Continuing Limited Partners Tax Receivable Agreement is amended to reflect a revised calculation methodology that, if utilized in the calculation of amounts payable to one or more other Exchanged Owners or such other recipient, would change the amounts payable to such other Persons hereunder or under the Continuing Limited Partners Tax Receivable Agreement, Corporate Taxpayer shall utilize such revised methodology with respect to all Exchanged Owners and make additional payments (or reduce payments, if any), as applicable.

4.3. Payment upon Early Termination.

(a) Within five (5) Business Days after the Early Termination Effective Date, Corporate Taxpayer shall pay or cause to be paid to each Exchanged Owner an amount equal to its Early Termination Payment. Such payment shall be made, at the sole discretion of Corporate Taxpayer, by wire or Automated Clearing House transfer of immediately available funds to a bank account or accounts designated by the applicable Exchanged Owner or as otherwise agreed by Corporate Taxpayer and the Exchanged Owner.

(b) An “Early Termination Payment” in respect of an Exchanged Owner shall equal the net present value, discounted at the Early Termination Rate as of the Early Termination Date, of all Tax Benefit Payments that would be required to be paid by Corporat