UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 4)*
LL Flooring Holdings, Inc.
(Name of Issuer)
Common Stock, par value $0.001 per share
(Title of Class of Securities)
55003T107
(CUSIP Number)
Avi Cohen
2350 W O Smith Street
Lawrenceburg, TN 38464
617-851-9635
(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)
November 14, 2023
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because § 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g) check the following box ☐.
Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See § 240.13d-7(b) for other parties to whom copies are to be sent.
* | The remainder of this cover page shall be filled out for a reporting persons initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. |
The information required on the remainder of this cover page shall not be deemed to be filed for the purpose of Section 18 of the Securities Exchange Act of 1934 (the Act) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
SCHEDULE 13D
CUSIP No. 55003T107
1 |
Names of Reporting Persons
F9 Investments, LLC (Single Member LLC with Thomas D. Sullivan Single Member) | |||||
2 | Check the Appropriate Box if a Member of a Group (a) ☒ (b) ☐
| |||||
3 | SEC Use Only
| |||||
4 | Source of Funds
PF | |||||
5 | Check Box if Disclosure of Legal Proceedings Is Required Pursuant to Item 2(d) or 2(e):
☐ | |||||
6 | Citizenship or Place of Organization
Florida |
Number of Shares Beneficially Owned by Each Reporting Person With:
|
7 | Sole Voting Power
0 | ||||
8 | Shared Voting Power
2,698,907 | |||||
9 | Sole Dispositive Power
0 | |||||
10 | Shared Dispositive Power
2,698,907 |
11 |
Aggregate Amount Beneficially Owned by Each Reporting Person
2,698,907 | |||||
12 | Check if the Aggregate Amount in Row (11) Excludes Certain Shares
☐ | |||||
13 | Percent of Class Represented by Amount in Row (11)
8.8% | |||||
14 | Type of Reporting Person
PN |
SCHEDULE 13D
CUSIP No. 55003T107
1 |
Names of Reporting Persons
Thomas D. Sullivan | |||||
2 | Check the Appropriate Box if a Member of a Group (a) ☒ (b) ☐
| |||||
3 | SEC Use Only
| |||||
4 | Source of Funds
PF | |||||
5 | Check Box if Disclosure of Legal Proceedings Is Required Pursuant to Item 2(d) or 2(e):
☐ | |||||
6 | Citizenship or Place of Organization
United States |
Number of Shares Beneficially Owned by Each Reporting Person With:
|
7 | Sole Voting Power
0 | ||||
8 | Shared Voting Power
1,100 | |||||
9 | Sole Dispositive Power
0 | |||||
10 | Shared Dispositive Power
1,100 |
11 |
Aggregate Amount Beneficially Owned by Each Reporting Person
1,100 | |||||
12 | Check if the Aggregate Amount in Row (11) Excludes Certain Shares
☐ | |||||
13 | Percent of Class Represented by Amount in Row (11)
Less than 1% | |||||
14 | Type of Reporting Person
IN |
SCHEDULE 13D
CUSIP No. 55003T107
1 |
Names of Reporting Persons
John Jason Delves | |||||
2 | Check the Appropriate Box if a Member of a Group (a) ☒ (b) ☐
| |||||
3 | SEC Use Only
| |||||
4 | Source of Funds
PF | |||||
5 | Check Box if Disclosure of Legal Proceedings Is Required Pursuant to Item 2(d) or 2(e):
☐ | |||||
6 | Citizenship or Place of Organization
United States |
Number of Shares Beneficially Owned by Each Reporting Person With:
|
7 | Sole Voting Power
0 | ||||
8 | Shared Voting Power
13,000 | |||||
9 | Sole Dispositive Power
0 | |||||
10 | Shared Dispositive Power
13,000 |
11 |
Aggregate Amount Beneficially Owned by Each Reporting Person
13,000 | |||||
12 | Check if the Aggregate Amount in Row (11) Excludes Certain Shares
☐ | |||||
13 | Percent of Class Represented by Amount in Row (11)
Less than 1% | |||||
14 | Type of Reporting Person
IN |
AMENDMENT NO. 4 TO SCHEDULE 13D
This Amendment No. 4 to Schedule 13D (this Amendment) relates to the common stock, par value $0.001 per share (the Common Stock), of LL Flooring Holdings, Inc., a Delaware corporation (LL). This Amendment is being filed to amend the Schedule 13D that was originally filed on May 25, 2023, as amended by Amendment No. 1 filed on May 30, 2023, Amendment No. 2 filed on June 12, 2023, and Amendment No. 3 filed on August 17, 2023 (collectively, the Schedule 13D). This Amendment is being filed to update Items 4 and 6 to the Schedule 13D. Other than information set forth on the cover pages and Items 4 and 6 below, no other information in the Schedule 13D is being amended. Unless otherwise indicated in this Amendment, all capitalized terms have the meanings ascribed to them in the Schedule 13D.
Item 4. Purpose of Transaction
On November 14, 2023, F9 delivered a letter to LL (the Letter) which contained a non-binding proposal (the Proposal) to acquire all of the outstanding Common Stock of the Company for all cash consideration valuing the Common Stock at $3.00 per share (the Proposed Transaction).
The Proposal is non-binding and, once structured and agreed upon, would be conditioned upon, among other things, confirmatory due diligence, including confirming the value and/or useful life of the current inventory, reviewing any potential off-balance sheet liabilities, including but not limited to the potential for future negative rulings related to antidumping and countervailing duties investigations, litigation liabilities and other commitments. The Proposal is not contingent on financing as F9 has the financial ability to consummate the Proposed Transaction with cash on hand and borrowing under its existing and immediately available revolving credit facility.
There can be no assurance that a definitive agreement with respect to the Proposal will be executed or, if executed, whether the transaction will be consummated. There is also no certainty as to whether, or when, LL may respond to the Letter, or as to the time table for execution of any definitive agreement. F9 reserves the right to withdraw the Proposal or modify the terms at any time including with respect to the amount or form of consideration. F9 may, directly or indirectly, take such additional steps as it may deem appropriate to further the Proposal.
If the Proposed Transaction is completed, the Common Stock would become eligible for termination of its registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934, as amended, and would be delisted from the New York Stock Exchange.
The foregoing description is qualified in its entirety by reference to the full text of the Letter, a copy of which is attached hereto as Exhibit A and is incorporated herein by reference.
Neither the Letter nor this Amendment is meant to be, nor should be construed as, an offer to buy or the solicitation of an offer to sell any of LLs securities.
By letter dated November 14, 2023 to LL, Mr. Sullivan nominated each of himself, Mr. Delves and Jill Witter (each, a Nominee and collectively, the Nominees) for election to LLs Board of Directors (the Board) at the 2024 annual meeting of stockholders of LL (the Annual Meeting) and in connection therewith, Mr. Sullivan intends to solicit proxies from the beneficial owners of the Common Stock to vote for the election of each of the Nominees as a director of LL. The biographies of the Nominees are set forth below:
Thomas D. Sullivan is a long-time businessman and entrepreneur and has been the sole owner and founder of F9 since 2008. F9 is a private equity company which owns, directly or indirectly, among other enterprises, F9 Brands, LLC (F9 Brands), Cabinets To Go, Southwind Building Products, Gracious Home, MSW Power, Inc., F9 Properties, LLC and Vignobles Sullivan, LLC. Mr. Sullivan founded Lumber Liquidators (currently known as LL Flooring Holdings, Inc.) in 1994, and served as its Chief Executive Officer and President from that time until 2006. Mr. Sullivan also served as Chairman of the Board of Directors of Lumber Liquidators (currently known as LL Flooring Holdings, Inc.)from 1994 to May 2015. In May 2015, at the request of the Board of Directors of Lumber Liquidators (currently known as LL Flooring Holdings, Inc.), he stepped down as Chairman to temporarily assume the position of interim Chief Executive Officer between May and November 2015. He continued to serve on the Board of Directors of Lumber Liquidators (currently known as LL Flooring Holdings, Inc.) through December 2016.
John Jason Delves is the President and Chief Executive Officer of F9 Brands, a wholly-owned subsidiary of F9. He was President of Cabinets To Go from July 2019 until June 2020, when he assumed the additional position of Chief Executive Officer. Mr. Delves was the President of Wood Fiber Technologies, Inc. from 2006 to June 2019, a hardwood floor manufacturer with national distribution, President of Beasley Flooring Products, Inc. from 2015 to 2019, a hardwood and engineering flooring products manufacturer and a supplier to LL during his tenure, and President of Beasley Flooring Products, LLC from 2003 to 2015, a manufacturer of engineered flooring and molding products.
Jill Witter has provided compliance and legal consulting services to F9 and its subsidiaries starting in April 2018. She has been employed by Park Street Management, Inc., a subsidiary of F9, since April 1, 2019. In such capacity, Ms. Witter has served as Chief Legal Officer and Secretary for F9-owned entities, including F9 Brands and Cabinets to Go, since 2019. Ms. Witter was the Chief Legal Officer of Lumber Liquidators (currently known as LL Flooring Holdings, Inc.) from July 2015 to August 2017. She is also the principal of J. Witter Consulting, a provider of alternative dispute, legal management and compliance services, and through which she provided services to Cabinets To Go from June 2018 to April 2019.
The Reporting Persons intends to review their investment in LL on a continuing basis. Depending on the factors discussed herein, the Reporting Persons may, from time to time, acquire additional shares of Common Stock and/or retain and/or sell all or a portion of the shares of the Common Stock held by the Reporting Persons in the open market or in privately negotiated transactions, and/or may distribute the Common Stock held by the Reporting Persons to other entities. Any actions the Reporting Persons might undertake will be dependent upon the Reporting Persons evaluation of numerous factors, including, among other things, the outcome of any discussions referenced in this Amendment, the price levels of the Common Stock, general market and economic conditions, ongoing evaluation of LLs business, financial condition, operations and prospects, the relative attractiveness of alternative business and investment opportunities, and other future developments.
From time to time, the Reporting Persons may engage in discussions with the Board and/or members of LLs management team concerning, including, without limitation, the Proposal, potential business combinations and strategic alternatives, the business, operations, capital structure, governance, management, strategy of LL and other matters concerning LL. The Reporting Persons may express their views to the Board and/or members of LLs management team and/or the public through social media or other channels with respect to LLs business, products and service offerings.
Except as set forth above, the Reporting Persons have no present plans or intentions which would result in or relate to any of the transactions described in subparagraphs (a) through (j) of Item 4 of Schedule 13D. However, the Reporting Persons reserve the right to change their plans at any time, as they deem appropriate, and in light of his ongoing evaluation of numerous factors, including, among other things, the price levels of the Common Stock, general market and economic conditions, ongoing evaluation of LLs business, financial condition, operations and prospects, the relative attractiveness of alternative business and investment opportunities, and other future developments.
IMPORTANT ADDITIONAL INFORMATION AND WHERE TO FIND IT
Mr. Sullivan intends to file a proxy statement with the United States Securities and Exchange Commission (the SEC) in connection with the solicitation of proxies for the Annual Meeting and furnish the definitive proxy statement to holders of the Common Stock, together with a proxy card. INVESTORS ARE STRONGLY ADVISED TO READ THE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) THAT MR. SULLIVAN FILES WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors may obtain a free copy of the proxy statement, any amendments or supplements to the proxy statement and other documents that Mr. Sullivan files with the SEC from the SECs website at www.sec.gov.
The Reporting Persons and the Nominees may be deemed to be participants in the solicitation of proxies from holders of the Common Stock in connection with the matters to be considered at the Annual Meeting. Information about such participants beneficial ownership of the Common Stock is set forth in the Schedule 13D. Additional information regarding the interests of participants in the solicitation of proxies in connection with the Annual Meeting will be included in the proxy statement that Mr. Sullivan may file with the SEC.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer
F9 has entered into an indemnification letter agreement with each Nominee (each an Indemnification Agreement), pursuant to which it has agreed to indemnify each such Nominee against claims arising from the solicitation of proxies from LLs stockholders in connection with the Annual Meeting and any related transactions. For the avoidance of doubt, such indemnification does not apply to any claims made against any such Nominee in his or her capacity or service as a director of LL if so elected. A form of the Indemnification Agreement is attached hereto as Exhibit B and is incorporated herein by reference.
Item 7. Material to Be Filed as Exhibits
Exhibit A | Letter from F9 to LL dated November 14, 2023 | |
Exhibit B | Form of Indemnification Agreement |
Signature
After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
Date: November 14, 2023 | F9 INVESTMENTS, LLC | |||||
By: | /s/ Thomas D. Sullivan | |||||
Name: Thomas D. Sullivan | ||||||
Title: Managing Member, Single Member | ||||||
/s/ Thomas D. Sullivan | ||||||
Name: Thomas D. Sullivan | ||||||
/s/ John Jason Delves | ||||||
Name: John Jason Delves |
Exhibit A
F9 INVESTMENTS, LLC
2350 WO Smith Drive
Lawrenceburg, TN 38464
CONFIDENTIAL
November 14, 2023
Nancy M. Taylor
Chairperson of the Board
LL Flooring Holdings, Inc.
4901 Bakers Mill Lane
Richmond, VA 23230
Charles Tyson
Chief Executive Officer
LL Flooring Holdings, Inc.
4901 Bakers Mill Lane
Richmond, VA 23230
Dear Ms. Taylor and Mr. Tyson:
On behalf of F9 Investments, LLC, together with Thomas D. Sullivan and Jason Delves (collectively, we or F9 Investments), we are writing today to reiterate our strong interest in pursuing an all-cash acquisition of LL Flooring Holdings, Inc. (the Company or LL) by an affiliate of F9 Investments. As current shareholders, we are dismayed to see third quarter results continue the pattern of declining sales, transaction volume and earnings, concurrent with significant negative free cash flow and a nearly 100% increase in leverage. As shown in the attached charts, while LLs peers have created significant value for shareholders, LL has generated substantial shareholder losses of 62% over the last twelve months, 89% over the past three years and 77% over the past five years. We believe our offer has strategic logic and presents your shareholders with immediate liquidity at a considerable and meaningful value for their shares.
We are prepared to offer $3.00 per share in cash for all of the issued and outstanding shares of common stock of the Company not owned by F9 Investments or its affiliates. Our offer is subject to confirmatory due diligence, including confirming the value and/or useful life of the current inventory, and to reviewing any potential off-balance sheet liabilities, including but not limited to the potential for future negative rulings related to antidumping and countervailing duties investigations, litigation liabilities and other commitments.
We believe our offer represents a compelling opportunity that your shareholders will find attractive, especially in light of the Companys deteriorating financial condition and declining stock price which, we believe, reflects the markets lack of confidence in the current Boards strategy.
Despite LLs substantial three-year decline in sales and earnings, we believe that a sale of the Company to F9 Investments is the most logical and strategic approach. We believe that our knowledge of the hard-surface flooring market positions us uniquely to address the Companys declining performance and represents the best means for LL shareholders to maximize the value of their shares.
Our offer is not contingent on financing and we want to make clear that we have the financial ability to consummate a transaction. We plan to fund the acquisition through cash on hand and borrowing under our existing revolving credit facility. Upon request, we will provide proof of funds evidencing that we have sufficient capital to complete this proposed transaction.
On May 26, 2023, F9 Investments presented the Board of Directors of the Company with a cash offer of $5.76 per share, which at that time represented a premium of over 100% of the stocks 52 week low of $2.75. The Board of Directors summarily rejected this proposal. We withdrew this offer following LLs continued underperformance in the quarter ended June 30, 2023, in which LL reported a $1.35 net loss per common share, continued deterioration of operations and increasing selling, general and administrative (SG&A) expenses. LLs downward trajectory continued into the following quarter ended September 30, 2023, with negative 20% year-over-year net sales growth, an additional net loss per share of $1.25 and a $37M increase in total debt (from $40M as of June 2023 to $77M as of September 2023). The challenging macroeconomic and retail environment, coupled with LLs sustained net sales declines, collective losses and increased leverage, have put LL in an even more precarious financial position than at the time of our previous offer, resulting in our revised proposal.
On August 14, 2023, the Company announced that the Board of Directors was initiating an exploration of strategic alternatives whereby the Board would consider a wide range of options for the Company including, among other things, a potential sale, merger or other strategic transaction. Despite our attempts to discuss a potential transaction, you refused to allow confirmatory due diligence that may have enabled us to resubmit our original offer unless and until we agreed to a standstill agreement that would have prevented us from nominating a slate of candidates for election to the Board of Directors at the next annual meeting of shareholders. Given the Board of Directors track record and repeated history of refusing to meaningfully engage with us, we were and continue to be unwilling to enter into a standstill agreement which prevents us from nominating candidates at the upcoming annual meeting.
In an effort to move forward with our offer, we are prepared to enter into a reasonable confidentiality agreement that would enable us to engage in confirmatory due diligence.
We and our advisors stand ready to move expeditiously and, assuming appropriate engagement from the Company, complete our confirmatory due diligence and get to a signed transaction in 30 days. To that end, we are committed to work collaboratively with the Company, its management and its Board of Directors. Of course, if, as a result of our confirmatory due diligence, we find evidence of significant additional value inherent in the Company based on matters we are not aware of, we may be willing to upwardly adjust the offer price.
It is Mr. Sullivans current intent to nominate a slate of qualified candidates for the election to the Board of Directors of the Company at the Companys 2024 annual meeting, and accordingly, Mr. Sullivan has submitted a Notice of Stockholder Nominations to the Company. Given the Companys declining performance and the Board of Directors refusal to meaningfully engage with us to maximize shareholder value, we view the nomination and election of our nominees as essential for the Company to bring the much-needed accountability, oversight and shareholder alignment to the boardroom to drive value for the benefit of all shareholders.
This proposal presents a non-binding offer and does not represent or create any legally binding or enforceable obligations. No such obligations will arise unless and until both parties (or their affiliates) execute mutually acceptable written definitive documentation with respect to a transaction. We reserve the right to withdraw or modify our proposal at any time.
We strongly urge the Board of Directors to engage with us regarding this proposal. We believe our proposal provides the Board of Directors the ability to attain the highest possible price for the Companys shareholders.
Very truly yours, |
/s/ Thomas D. Sullivan |
Thomas D. Sullivan |
As President of F9 Investments, LLC |
LL HAS SIGNIFICANTLY UNDERPERFORMED ITS PROXY PEER GROUP AND THE BROADER MARKET ⪠While its proxy peers and the market as a whole have created significant value for shareholders, LL has generated substantial shareholder losses over the past year (62%), three years (89%) and five years (77%) Shareholder Return (% Change) (a) 1 Year 3 Years 5 Years 11/14/2211/13/23 11/13/2011/13/23 11/14/1811/13/23 Peer Group (b) (3.8%) 8.3% 75.4% S&P Retail Select Industry Index (c) (7.9%) 10.6% 27.4% S&P 500 Index 11.5% 23.1% 63.3% Russell 2000 Index (8.4%) (2.2%) 13.5% Mean (excl. LL Flooring) (2.1%) 9.9% 44.9% Median (excl. LL Flooring) (5.9%) 9.5% 45.3% LL was dropped from major indices in June 2023, including the Russell 2000 Index and Russell 3000 Index Source: Capital IQ as of November 13, 2023. a) Excludes dividends / dividend reinvestment. b) Peer Group identified by LL in their 10-K for the period ending December 31, 2022. Peer Group returns are market-cap weighted and include The Home Depot, Inc., Lowes Companies, Inc., Floor & Decor Holdings, Inc., Tile Shop Holdings, Inc., The Sherwin-Williams Company, Hibbett Sports, Inc. and Haverty Furniture Companies, Inc. c) Effective December 31, 2022, LL elected to use the S&P Retail Select Industry Index as its new Published Industry Index in lieu of the previous Peer Group.
UNFOUNDED OPTIMISM DESPITE CONSISTENT & DRASTIC SHARE PRICE DECLINES HAS ERODED MANAGEMENTS CREDIBILITY 3/2/21: We see substantial opportunity ahead 5/5/21: We will continue to to continue to evolve our Company and pursue gross margin rate increase shareholder value over the long term. mitigation strategies and Charles Tyson 8/3/22: We feel good about the disciplined expense strength in home remodel trends as Current High Low management to optimize well as the demand for hard-surface profitability. flooring over the medium to long term. 11/13/23 12/22/20 10/5/23 Charles Tyson We remain committed to investing in $34.84 our six strategic pillars that will $2.82 $34.84 $2.74 $35 position us for long-term growth. 11/3/21: The Charles Tyson capabilities we are building and the investments we are 30 making in [our] multi- 5/4/22: We are 5/8/23: Looking beyond 2023, the year strategies will 11/8/23: I believe that excited about our 6 medium to long-term outlook for repair position LL Flooring to we are seeing promising strategic growth and remodel spending remains strong grow faster and gain signs that our strategic and we remain confident in the long-drivers [which] will initiatives are starting to market share. term fundamentals of our business. 25 position us for improve our capabilities, Charles Tyson Charles Tyson accelerated top line and this gives us and profitability growth confidence that we will over the next 3 years. return to growth... Charles Tyson 3/1/23: We believe we are Charles Tyson 20 11/2/20: [We] believe all of our successfully gaining traction on actions are repositioning the several of our operating Company for long-term success. 8/9/23: The strategies which gives us Charles Tyson work we are confidence in achieving long-term doing on our sustainable growth. 15 initiatives give us 8/4/21: As we look ahead, we are encouraged by the Charles Tyson confidence that increasing traction we are gaining on our transformation we will return to that will position us well for sustainable long-term growth. growth and drive Charles Tyson 10 long-term shareholder 2/23/22: We are excited to share today our target for $1.5 billion in net value. revenue with expanded operating margin by 2024. Our balance sheet is Charles Tyson strong, with no debt which enables us to invest in our organic growth Charles Tyson 5 11/2/22: We are confident in our long-term growth strategies and our unique positioning in the marketplace. $2.82 $2.74 Charles Tyson Jul-20 May-21 Mar-22 Jan-23 Nov-23 Source: Capital IQ and other publicly available information as of November 13, 2023.
Exhibit B
F9 INVESTMENTS, LLC
2350 WO Smith Drive
Lawrenceburg, TN 38464
_________________, 2023
[Nominee]
[Address]
Re: | LL Flooring Holdings, Inc. |
Dear [Nominee]:
Thank you for agreeing to serve as a nominee for election to the Board of Directors of LL Flooring Holdings, Inc. (the Company) in connection with the proxy solicitation that F9 Investments, LLC (F9) is considering undertaking to nominate and elect directors at the 2024 annual meeting of stockholders of the Company, including any other meeting of stockholders held in lieu thereof, and any adjournments, postponements, reschedulings or continuations thereof (the Solicitation). Your outstanding qualifications, we believe, will prove a valuable asset to the Company and all of its stockholders. This letter agreement (this Agreement) will set forth the terms of our agreement.
F9 agrees to indemnify and hold you harmless against any and all claims of any nature, whenever brought, arising from the Solicitation and any related transactions, irrespective of the outcome; provided, however, that you will not be entitled to indemnification for claims arising from your gross negligence, willful misconduct, intentional and material violations of law, criminal actions or material breach of the terms of this Agreement; provided further, that upon your becoming a director of the Company, this indemnification shall not apply to any claims made against you in your capacity as a director of the Company. This indemnification will include any and all losses, liabilities, damages, demands, claims, suits, actions, judgments, or causes of action, assessments, costs and expenses, including, without limitation, interest, penalties, reasonable attorneys fees, and any and all reasonable costs and expenses incurred in investigating, preparing or defending against any litigation, commenced or threatened, any civil, criminal, administrative or arbitration action, or any claim whatsoever, and any and all amounts paid in settlement of any claim or litigation asserted against, resulting, imposed upon, or incurred or suffered by you, directly or indirectly, as a result of or arising from the Solicitation and any related transactions (each, a Loss).
In the event of a claim against you pursuant to the prior paragraph or the occurrence of a Loss, you shall give F9 prompt written notice of such claim or Loss (provided that failure to promptly notify F9 shall not relieve us from any liability which we may have on account of this Agreement, except to the extent we shall have been materially prejudiced by such failure). Upon receipt of such written notice, F9 will provide you with counsel to represent you. Such counsel shall be reasonably acceptable to you. In addition, you will be reimbursed promptly for all Losses suffered by you and as incurred as provided herein. F9 may not enter into any settlement of loss or claim without your consent unless such settlement includes a release of you from any and all liability in respect of such claim.
You hereby agree to keep confidential and not disclose to any party, without the consent of F9, any confidential, proprietary or non-public information (collectively, Information) of F9, its affiliates or members of its Schedule 13D group, if any, which you have heretofore obtained or may obtain in connection with your service as a nominee hereunder. Notwithstanding the foregoing, Information shall not include any information that is publicly disclosed by F9, its affiliates or members of its Schedule 13D group, if any, or any information that you can demonstrate is now, or hereafter becomes, through no act or failure to act on your part, otherwise generally known to the public.
Notwithstanding the foregoing, if you are required by applicable law, rule, regulation or legal process to disclose any Information you may do so provided that you first promptly notify F9 so that F9 may seek a protective order or other appropriate remedy or, in F9 sole discretion, waive compliance with the terms of this Agreement. In the event that no such protective order or other remedy is obtained or F9 does not waive compliance with the terms of this Agreement, you may consult with counsel at the cost of F9 and you may furnish only that portion of the Information which you are advised by counsel is legally required to be so disclosed and you will request that the party(ies) receiving such Information maintain it as confidential.
All Information, all copies thereof, and any studies, notes, records, analysis, compilations or other documents prepared by you containing such Information, shall be and remain the property of F9 and, upon the request of a representative of F9, all such information shall be returned or, at F9 option, destroyed by you, with such destruction confirmed by you to F9 in writing.
This Agreement shall be governed by the laws of the State of Delaware, without regard to the principles of the conflicts of laws thereof.
If you agree to the foregoing terms, please sign below to indicate your acceptance.
Very truly yours, | ||
F9 INVESTMENTS, LLC | ||
By: | /s/ Thomas D. Sullivan | |
Thomas D. Sullivan | ||
President |
ACCEPTED AND AGREED: |
|
[Nominee] |
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