ANDG 8-K
Andersen Group Inc. (ANDG)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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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).
Item 1.01. Entry into a Material Definitive Agreement.
In connection with the initial public offering (“IPO”) of the Class A common stock, $0.0001 par value per share (the “Class A Common Stock”) of Andersen Group Inc. (the “Company”) described in the prospectus (the “Prospectus”) dated December 16, 2025, filed with the Securities and Exchange Commission pursuant to Rule 424(b) of the Securities Act of 1933, as amended (the “Securities Act”), which is deemed to be part of the registration statement on Form S-1 (File No. 333-290415) (as amended, the “Registration Statement”), the following agreements were entered into, which were previously filed as exhibits to the Registration Statement:
| • | the Limited Liability Company Agreement of AT Umbrella LLC, dated as of December 16, 2025, by and among the Company, AT Umbrella LLC, and Andersen Aggregator LLC, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated by reference herein; |
| • | the Managing Director Matters Agreement, dated as of December 16, 2025, by and between the Company and Andersen Aggregator LLC, which is filed as Exhibit 10.2 to this Current Report on Form 8-K and is incorporated by reference herein; |
| • | the Tax Receivable Agreement, dated as of December 16, 2025, by and between the Company and Andersen Aggregator LLC, which is filed as Exhibit 10.3 to this Current Report on Form 8-K and is incorporated by reference herein; |
| • | CA Promissory Notes, each dated as of December 16, 2025, issued by AT Umbrella LLC to Andersen Aggregator LLC, a form of which is filed as Exhibit 10.4 to this Current Report on Form 8-K and is incorporated by reference herein; and |
| • | the HO Promissory Note, dated as of December 16, 2025, issued by AT Umbrella LLC to Andersen Aggregator LLC, which is filed as Exhibit 10.5 to this Current Report on Form 8-K and is incorporated by reference herein. |
The terms of the foregoing agreements are substantially identical to the forms of such agreements filed as exhibits to the Registration Statement and described therein. Certain parties to certain of these agreements have various relationships with the Company. For further information, see the section titled “Certain Relationships and Related Party Transactions” in the Prospectus.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The descriptions in Item 1.01 above of the CA Promissory Notes and the HO Promissory Note are incorporated herein by reference.
Item 3.03. Material Modifications to Rights of Security Holders.
The description in Item 5.03 below of the Amended and Restated Bylaws is incorporated herein by reference.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On December 16, 2025, following the pricing of the IPO, Dorice Pepin and Joseph Karczewski were appointed to the board of directors of the Company. Ms. Pepin and Mr. Karczewski have entered into the Company’s standard form of indemnification agreement.
Except as set forth in the section titled “Certain Relationships and Related Person Transactions” in the Prospectus, Ms. Pepin and Mr. Karczewski have no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.
Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
On December 18, 2025, the Company amended and restated its Bylaws (the “Amended and Restated Bylaws”). A description of the material terms of the Company’s capital stock, after giving effect to the adoption of the Amended and Restated Bylaws, has previously been reported by the Company in the Registration Statement. The Amended and Restated Bylaws are filed as Exhibit 3.1 to this Current Report on Form 8-K and are incorporated herein by reference. The description and form of the Amended and Restated Bylaws are substantially the same as the description and form set forth in and filed as an exhibit to the Registration Statement.
Item 8.01. Other Events.
On December 18, 2025, the Company completed the IPO of 12,650,000 shares of its Class A Common Stock at a price to the public of $16.00 per share (the “IPO price per share”), which includes the exercise by the underwriters of their over-allotment option to purchase an additional 1,650,000 shares of the Company’s Class A Common Stock. As contemplated in the Prospectus, the Company has used the net proceeds from the IPO to acquire 12,650,000 Class X Umbrella Units of AT Umbrella LLC (“Class X Umbrella Units”), at a purchase price per Class X Umbrella Unit equal to the IPO price per share of Class A Common Stock after deducting underwriting discounts and commissions. The Company has caused AT Umbrella LLC and its subsidiaries to use the proceeds it received from the sale of Class X Umbrella Units to the Company to pay fees and expenses in connection with the IPO and the reorganization transactions and for other general corporate purposes. The Company also intends to cause AT Umbrella LLC to use the net proceeds for investments in technology, infrastructure, training and potential strategic acquisitions of, or investments in, other businesses or technologies that the Company believes will complement its current business and expansion strategies.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
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.
| ANDERSEN GROUP INC. | ||||||
| Date: December 22, 2025 | By: | /s/ Mark L. Vorsatz | ||||
| Name: | Mark L. Vorsatz | |||||
| Title: | Chief Executive Officer | |||||
Exhibit 3.2
ANDERSEN GROUP INC.
(a Delaware corporation)
AMENDED AND RESTATED BYLAWS
As Adopted August 14, 2025 and
As Effective December 18, 2025
TABLE OF CONTENTS
| Page | ||||||
| ARTICLE I STOCKHOLDERS |
1 | |||||
| Section 1.1 |
Annual Meetings | 1 | ||||
| Section 1.2 |
Special Meetings | 1 | ||||
| Section 1.3 |
Notice of Meetings | 1 | ||||
| Section 1.4 |
Adjournments | 1 | ||||
| Section 1.5 |
Quorum | 2 | ||||
| Section 1.6 |
Organization | 2 | ||||
| Section 1.7 |
Voting; Proxies | 2 | ||||
| Section 1.8 |
Fixing Date for Determination of Stockholders of Record | 3 | ||||
| Section 1.9 |
List of Stockholders Entitled to Vote | 4 | ||||
| Section 1.10 |
Inspectors of Elections | 4 | ||||
| Section 1.11 |
Conduct of Meetings | 5 | ||||
| Section 1.12 |
Notice of Stockholder Business; Nominations | 6 | ||||
| Section 1.13 |
Action by Written Consent of Stockholders | 14 | ||||
| Section 1.14 |
Delivery to the Corporation | 14 | ||||
| ARTICLE II BOARD OF DIRECTORS |
14 | |||||
| Section 2.1 |
Number; Qualifications | 14 | ||||
| Section 2.2 |
Election; Resignation; Removal; Vacancies | 14 | ||||
| Section 2.3 |
Regular Meetings | 15 | ||||
| Section 2.4 |
Special Meetings | 15 | ||||
| Section 2.5 |
Remote Meetings Permitted | 15 | ||||
| Section 2.6 |
Quorum; Vote Required for Action | 15 | ||||
| Section 2.7 |
Organization | 15 | ||||
| Section 2.8 |
Unanimous Action by Directors in Lieu of a Meeting | 15 | ||||
| Section 2.9 |
Powers | 15 | ||||
| Section 2.10 |
Compensation of Directors | 16 | ||||
| ARTICLE III COMMITTEES |
16 | |||||
| Section 3.1 |
Committees | 16 | ||||
| Section 3.2 |
Committee Rules | 16 | ||||
| ARTICLE IV OFFICERS; CHAIRPERSON; LEAD INDEPENDENT DIRECTOR |
16 | |||||
| Section 4.1 |
Generally | 16 | ||||
| Section 4.2 |
Chief Executive Officer | 17 | ||||
| Section 4.3 |
Chairperson of the Board | 17 | ||||
| Section 4.4 |
Lead Independent Director | 17 | ||||
| Section 4.5 |
President | 17 | ||||
| Section 4.6 |
Chief Financial Officer | 18 | ||||
| Section 4.7 |
Treasurer | 18 | ||||
| Section 4.8 |
Vice President | 18 | ||||
| Section 4.9 |
Secretary | 18 | ||||
| Section 4.10 |
Delegation of Authority | 18 | ||||
| Section 4.11 |
Removal | 18 | ||||
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TABLE OF CONTENTS
| Page | ||||||
| Section 4.12 |
Voting Shares in Other Business Entities | 19 | ||||
| Section 4.13 |
Execution of Corporate Contracts and Instruments | 19 | ||||
| ARTICLE V STOCK |
19 | |||||
| Section 5.1 |
Certificates; Uncertificated Shares | 19 | ||||
| Section 5.2 |
Lost, Stolen or Destroyed Stock Certificates; Issuance of New Certificates or Uncertificated Shares | 20 | ||||
| Section 5.3 |
Other Regulations | 20 | ||||
| ARTICLE VI INDEMNIFICATION |
20 | |||||
| Section 6.1 |
Indemnification of Officers and Directors | 20 | ||||
| Section 6.2 |
Advance of Expenses | 21 | ||||
| Section 6.3 |
Non-Exclusivity of Rights | 21 | ||||
| Section 6.4 |
Indemnification Contracts | 21 | ||||
| Section 6.5 |
Right of Indemnitee to Bring Suit | 21 | ||||
| Section 6.6 |
Nature of Rights | 22 | ||||
| Section 6.7 |
Insurance | 22 | ||||
| ARTICLE VII NOTICES |
22 | |||||
| Section 7.1 |
Notice | 22 | ||||
| Section 7.2 |
Waiver of Notice | 24 | ||||
| ARTICLE VIII INTERESTED DIRECTORS |
24 | |||||
| Section 8.1 |
Interested Directors | 24 | ||||
| Section 8.2 |
Quorum | 24 | ||||
| ARTICLE IX MISCELLANEOUS |
25 | |||||
| Section 9.1 |
Fiscal Year | 25 | ||||
| Section 9.2 |
Seal | 25 | ||||
| Section 9.3 |
Form of Records | 25 | ||||
| Section 9.4 |
Reliance Upon Books and Records | 25 | ||||
| Section 9.5 |
Certificate of Incorporation Governs | 25 | ||||
| Section 9.6 |
Severability | 25 | ||||
| Section 9.7 |
Time Periods | 26 | ||||
| ARTICLE X AMENDMENT |
26 | |||||
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ANDERSEN GROUP INC.
(a Delaware corporation)
AMENDED AND RESTATED BYLAWS
As Adopted August 14, 2025 and
As Effective December 18, 2025
ARTICLE I
STOCKHOLDERS
Section 1.1 Annual Meetings. If required by applicable law or as otherwise determined by the Board of Directors (the “Board”) of Andersen Group Inc. (the “Corporation”), an annual meeting of stockholders shall be held for the election of directors at such date and time as the Board shall each year fix. The meeting may be held either at a place, within or without the State of Delaware as permitted by the Delaware General Corporation Law (the “DGCL”), or by means of remote communication as the Board in its sole discretion may determine. Any other proper business may be transacted at the annual meeting. The Corporation may postpone, reschedule or cancel any annual meeting of stockholders previously scheduled by the Board.
Section 1.2 Special Meetings. Special meetings of stockholders for any purpose or purposes shall be called in the manner set forth in the Amended and Restated Certificate of Incorporation of the Corporation (as the same may be amended and/or restated from time to time, the “Certificate of Incorporation”). The special meeting may be held either at a place, within or without the State of Delaware, or by means of remote communication as the Board in its sole discretion may determine. Business transacted at any special meeting of stockholders shall be limited to matters relating to the purpose or purposes stated in the notice of the meeting. The Corporation may postpone, reschedule or cancel any special meeting of stockholders previously scheduled by the Board.
Section 1.3 Notice of Meetings. Notice of all meetings of stockholders shall be given in writing or by electronic transmission in the manner provided by applicable law (including, without limitation, as set forth in Section 7.1.1 of these Bylaws) stating the date, time and place, if any, of the meeting, 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, and 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). In the case of a special meeting, such notice shall also set forth the purpose or purposes for which the meeting is called. Unless otherwise required by applicable law or the Certificate of Incorporation, notice of any meeting of stockholders shall be given not less than ten (10), nor more than sixty (60), days before the date of the meeting to each stockholder of record entitled to vote at such meeting as of the record date for determining the stockholders entitled to notice of the meeting.
Section 1.4 Adjournments. Notwithstanding Section 1.5 of these Bylaws, the chairperson of the meeting shall have the power to recess or adjourn any meeting of stockholders,
annual or special, to another time, date and place (if any) regardless of whether a quorum is present, at any time and for any reason. Any meeting of stockholders, annual or special, may be adjourned from time to time, and notice need not be given of any such adjourned meeting if the time, date and place (if any) 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 adjourned meeting are (i) announced at the meeting at which the adjournment is taken, (ii) displayed, during the time scheduled for the meeting, on the same electronic network used to enable stockholders and proxyholders to participate in the meeting by means of remote communication, (iii) set forth in the notice of meeting, or (iv) provided in any other manner permitted by the DGCL; provided, however, that if (x) the adjournment is for more than thirty (30) days, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting or (y) 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 meeting. At the adjourned meeting, the Corporation may transact any business that might have been transacted at the original meeting.
Section 1.5 Quorum. Except as otherwise provided by applicable law, the Certificate of Incorporation or these Bylaws, at each meeting of stockholders the holders of a majority of the voting power of the shares of stock issued and outstanding and entitled to vote at the meeting, present in person or represented by proxy, shall constitute a quorum for the transaction of business; provided, however, that where a separate vote by a class or classes or series of stock is required by applicable law or the Certificate of Incorporation, the holders of a majority of the voting power of the shares of such class or classes or series of the stock issued and outstanding and entitled to vote on such matter, present in person or represented by proxy at the meeting, shall constitute a quorum entitled to take action with respect to the vote on such matter. If a quorum shall fail to attend any meeting, the chairperson of the meeting or, if directed to be voted on by the chairperson of the meeting, the holders of a majority of the voting power of the shares entitled to vote who are present in person or represented by proxy at the meeting may adjourn the meeting. A quorum, once established at a meeting, shall not be broken by the withdrawal of enough votes to leave less than a quorum.
Section 1.6 Organization. Meetings of stockholders shall be presided over by (a) a director or officer of the Corporation as the Board may designate, or (b) in the absence of such a person, the Chairperson of the Board, or (c) in the absence of such person, the Chief Executive Officer of the Corporation, or (d) in the absence of such person, the Chief Legal Officer of the Corporation, or (e) in the absence of such person, the Lead Independent Director, or (f) in the absence of such person, by a Vice President. The Secretary of the Corporation or such other person as may be designated by the Board shall act as secretary of the meeting; provided that, in the absence of the Secretary or such other person, the chairperson of the meeting may appoint any other person to act as secretary of the meeting.
Section 1.7 Voting; Proxies. Each stockholder of record entitled to vote at a meeting of stockholders, or to take corporate action by written consent without a meeting, may authorize another person or persons to act for such stockholder by proxy, but no such proxy shall be voted
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or acted upon after three years from its date, unless the proxy provides for a longer period. Such a proxy may be prepared, transmitted and delivered in any manner permitted by applicable law. Except as may be required in the Certificate of Incorporation, at all meetings of stockholders for the election of directors at which a quorum is present, directors shall be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors. At all meetings of stockholders at which a quorum is present, unless a different or minimum vote is required by applicable law, rule or regulation applicable to the Corporation or its securities, the rules or regulations of any stock exchange applicable to the Corporation, the Certificate of Incorporation or these Bylaws, in which case such different or minimum vote shall be the applicable vote on the matter, every matter other than the election of directors shall be decided by the affirmative vote of the holders of a majority of the voting power of the shares of stock entitled to vote on such matter that are present in person or represented by proxy at the meeting and are voted for or against the matter.
Section 1.8 Fixing Date for Determination of Stockholders of Record.
1.8.1 Meetings. In order that the Corporation may determine the stockholders entitled to notice of any meeting of stockholders or any adjournment thereof, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which record date shall, unless otherwise required by law, not be more than sixty (60) nor less than ten (10) days before the date of such meeting. If the Board so fixes a date, such date shall also be the record date for determining the stockholders entitled to vote at such meeting unless the Board determines, at the time it fixes such record date, that a later date on or before the date of the meeting shall be the date for making such determination. If no record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders is fixed by the Board, the record date for determining stockholders entitled to notice of or to vote at the meeting shall be at the close of business on the day next preceding the day on which notice 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. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board may fix a new record date for determination of stockholders entitled to vote at the adjourned meeting, and in such case shall also fix as the record date for stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote in accordance herewith at the adjourned meeting.
1.8.2 Stockholder Action by Consent in Lieu of a Meeting. If stockholders are not prohibited from acting by consent in lieu of a meeting pursuant to the Certificate of Incorporation, in order that the Corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which date shall not be more than ten (10) days after the date upon which the resolution fixing the record date is adopted by the Board. If no record date has been fixed by the Board pursuant to the first sentence of this Section 1.8.2, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting (if stockholders are not prohibited from acting by consent in lieu of a meeting pursuant to the Certificate of Incorporation), when no prior action by the Board is required by applicable law, shall be the first date on which a signed consent setting forth the action taken or proposed to be taken is delivered to the Corporation in accordance with Section
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228 of the DGCL. If no record date has been fixed by the Board pursuant to the first sentence of this Section 1.8.2, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting if prior action by the Board is required by applicable law shall be at the close of business on the date on which the Board adopts the resolution taking such prior action.
1.8.3 Dividends, Distributions, or Rights. In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board may fix, in advance, a record date, which shall not precede the date upon which the resolution fixing the record date is adopted by the Board and which shall not be more than sixty (60) days prior to such action. If no such record date is fixed by the Board, then the record date for determining stockholders for any such purpose shall be at 5:00 p.m. Pacific Time on the day on which the Board adopts the resolution relating thereto.
Section 1.9 List of Stockholders Entitled to Vote. The Corporation shall prepare, no later than the tenth (10th) day before every meeting of stockholders, a complete list of stockholders entitled to vote at the meeting (provided, however, if the record date for determining the stockholders entitled to vote is less 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 shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, for a period of ten (10) days ending on the day before the meeting date, (a) on a reasonably accessible electronic network as permitted by applicable law (provided that the information required to gain access to the list is provided with the notice of the meeting), or (b) during ordinary business hours, at the principal place of business of the Corporation. Except as otherwise provided by law, the stock ledger shall be the only evidence as to who are the stockholders entitled to examine the list of stockholders required by this Section 1.9 or to vote in person or by proxy at any meeting of stockholders.
Section 1.10 Inspectors of Elections.
1.10.1 Applicability. Unless otherwise required by the Certificate of Incorporation or by applicable law, the following provisions of this Section 1.10 shall apply only if and when the Corporation has a class of voting stock that is: (a) listed on a national securities exchange; (b) authorized for quotation on an interdealer quotation system of a registered national securities association; or (c) held of record by more than two thousand (2,000) stockholders. In all other cases, observance of the provisions of this Section 1.10 shall be optional, and at the discretion of the Board.
1.10.2 Appointment. The Corporation shall, in advance of any meeting of stockholders, appoint one or more inspectors of election to act at the meeting and make a written report thereof. The Corporation may designate one or more persons as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting of stockholders, the person presiding at the meeting shall appoint one or more inspectors to act at the meeting.
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1.10.3 Inspector’s Oath. Each inspector of election, before entering upon the discharge of his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of such inspector’s ability.
1.10.4 Duties of Inspectors. At a meeting of stockholders, the inspectors of election shall (a) ascertain the number of shares outstanding and the voting power of each share, (b) determine the shares represented at a meeting and the validity of proxies and ballots, (c) count all votes and ballots, (d) determine and retain for a reasonable period of time a record of the disposition of any challenges made to any determination by the inspectors, and (e) certify their determination of the number of shares represented at the meeting, and their count of all votes and ballots. The inspectors may appoint or retain other persons or entities to assist the inspectors in the performance of the duties of the inspectors.
1.10.5 Opening and Closing of Polls. The date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at a meeting shall be announced by the chairperson of the meeting at the meeting. No ballot, proxies or votes, nor any revocations thereof or changes thereto, shall be accepted by the inspectors after the closing of the polls unless the Court of Chancery upon application by a stockholder shall determine otherwise.
1.10.6 Determinations. In determining the validity and counting of proxies and ballots, the inspectors shall be limited to an examination of the proxies, any envelopes submitted with those proxies, any information provided in connection with proxies pursuant to Section 211(a)(2)b.(i) of the DGCL, or in accordance with Sections 211(e) or 212(c)(2) of the DGCL, ballots and the regular books and records of the Corporation, except that the inspectors may consider other reliable information for the limited purpose of reconciling proxies and ballots submitted by or on behalf of banks, brokers, their nominees or similar persons which represent more votes than the holder of a proxy is authorized by the record owner to cast or more votes than the stockholder holds of record. If the inspectors consider other reliable information for the limited purpose permitted herein, the inspectors at the time they make their certification of their determinations pursuant to this Section 1.10 shall specify the precise information considered by them, including the person or persons from whom they obtained the information, when the information was obtained, the means by which the information was obtained and the basis for the inspectors’ belief that such information is accurate and reliable.
Section 1.11 Conduct of Meetings. The Board may adopt by resolution such rules and regulations for the conduct of the meeting of stockholders as it shall deem appropriate. Except to the extent inconsistent with such rules and regulations as adopted by the Board, the person presiding over any meeting of stockholders shall have the right and authority to convene and (for any or no reason) to recess and/or adjourn the meeting, to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such presiding person, are appropriate for the proper conduct of the 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 entitled to vote at the meeting, 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
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commencement thereof; (v) limitations on the time allotted to questions or comments by participants; (vi) restricting the use of audio/video recording devices and cell phones; and (vii) complying with any state and local laws and regulations concerning safety and security. 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 consistent with the provisions of these Bylaws, applicable laws and regulations or other requirements provided to the stockholders in accordance with applicable law, 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.
Section 1.12 Notice of Stockholder Business; Nominations.
1.12.1 Annual Meeting of Stockholders.
(a) Nominations of persons for election to the Board and the proposal of other business to be considered by the stockholders may be made at an annual meeting of stockholders only: (i) pursuant to the Corporation’s notice of such meeting (or any supplement thereto), (ii) by or at the direction of the Board or any committee thereof or (iii) by any stockholder of the Corporation who was a stockholder of record at the time of giving of the notice provided for in this Section 1.12 (the “Record Stockholder”), who is entitled to vote at such meeting and who complies with the notice and other procedures set forth in this Section 1.12 in all applicable respects. For the avoidance of doubt, the foregoing clause (iii) shall be the exclusive means for a stockholder to make nominations or propose business (other than business included in the Corporation’s proxy materials pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended (such act, and the rules and regulations promulgated thereunder, the “Exchange Act”)), at an annual meeting of stockholders, and such stockholder must fully comply with the notice and other procedures set forth in this Section 1.12 to make such nominations or propose business before an annual meeting.
(b) For nominations or other business to be properly brought before an annual meeting by a Record Stockholder pursuant to Section 1.12.1(a) of these Bylaws:
(i) the Record Stockholder must have given timely notice thereof in writing to the Secretary of the Corporation and provide any updates or supplements to such notice at the times and in the forms required by this Section 1.12;
(ii) such other business (other than the nomination of persons for election to the Board) must otherwise be a proper matter for stockholder action;
(iii) if the Proposing Person (as defined below) has provided the Corporation with a Solicitation Notice (as defined below), such Proposing Person must, in the case of a proposal other than the nomination of persons for election to the Board, have delivered a proxy statement and form of proxy to holders of at least the percentage of the Corporation’s voting shares
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required under the Certificate of Incorporation and applicable law to carry any such proposal, or, in the case of a nomination or nominations, have delivered a proxy statement and form of proxy to holders of a percentage of the Corporation’s voting shares reasonably believed by such Proposing Person to be sufficient to elect the nominee or nominees proposed to be nominated by such Record Stockholder, and must, in either case, have included in such materials the Solicitation Notice; and
(iv) if no Solicitation Notice relating thereto has been timely provided pursuant to this Section 1.12, the Proposing Person proposing such business or nomination must not have solicited a number of proxies sufficient to have required the delivery of such a Solicitation Notice under this Section 1.12. To be timely, a Record Stockholder’s notice must be delivered to the Secretary at the principal executive offices of the Corporation not later than 5:00 p.m. Pacific Time on the ninetieth (90th) day nor earlier than 5:00 p.m. Pacific Time on the one hundred and twentieth (120th) day prior to the first anniversary 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 Common Stock (as defined in the Certificate of Incorporation) are first publicly traded, be deemed to have occurred on May 30 2025); provided, however, that in the event that the date of the annual meeting is more than thirty (30) days before or more than seventy (70) days after such anniversary date, notice by the Record Stockholder to be timely must be so delivered (A) no earlier than 5:00 p.m. Pacific Time on the one hundred and twentieth (120th) day prior to such annual meeting and (B) no later than 5:00 p.m. Pacific Time on the later of the ninetieth (90th) day prior to such annual meeting or 5:00 p.m. Pacific Time on the tenth (10th) day following the day on which Public Announcement (as defined below) of the date of such meeting is first made by the Corporation. In no event shall an adjournment or postponement of an annual meeting commence a new time period (or extend any time period) for providing the Record Stockholder’s notice.
(c) As to each person whom the Record Stockholder proposes to nominate for election or reelection as a director, in addition to the matters set forth in paragraph (e) below, such Record Stockholder’s notice shall set forth:
(i) the name, age, business address and residence address of such person;
(ii) the principal occupation or employment of such nominee;
(iii) the class, series and number of any shares of stock of the Corporation that are beneficially owned or owned of record by such person or any Associated Person (as defined below);
(iv) the date or dates such shares were acquired and the investment intent of such acquisition;
(v) all other information relating to such person that would be required to be disclosed in solicitations of proxies for election of directors in an election contest (even if an election contest is not involved), or would be otherwise required, in each case pursuant
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to and in accordance with Section 14(a) (or any successor provision) under the Exchange Act and the rules and regulations thereunder;
(vi) such person’s written consent to being named in the Corporation’s proxy statement as a nominee, to the public disclosure of information regarding or related to such person provided to the Corporation by such person or otherwise pursuant to this Section 1.12 and to serving as a director if elected;
(vii) whether such person meets the independence requirements of the stock exchange upon which any class of the Corporation’s Common Stock is primarily traded;
(viii) a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three (3) years, and any other material relationships, between or among such Proposing Person or any of its respective affiliates and associates, on the one hand, and each proposed nominee, and his or her respective affiliates and associates, on the other hand, including all information that would be required to be disclosed pursuant to Rule 404 promulgated under Regulation S-K if the Proposing Person or any of its respective affiliates and associates were the “registrant” for purposes of such rule and the nominee were a director or executive officer of such registrant; and
(ix) a completed and signed questionnaire, representation and agreement required by Section 1.12.2 of these Bylaws.
(d) As to any business other than the nomination of a director or directors that the Record Stockholder proposes to bring before the meeting, in addition to the matters set forth in paragraph (e) below, such Record Stockholder’s notice shall set forth:
(i) 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 the Bylaws, the text of the proposed amendment), the reasons for conducting such business at the meeting and any material interest in such business of such Proposing Person, including any anticipated benefit to any Proposing Person therefrom; and
(ii) a description of all agreements, arrangements and understandings between or among any such Proposing Person and any of its respective affiliates or associates, on the one hand, and any other person or persons, on the other hand, (including their names) in connection with the proposal of such business by such Proposing Person;
(e) As to each Proposing Person giving the notice, such Record Stockholder’s notice shall set forth:
(i) the current name and address of such Proposing Person, including, if applicable, the name and address of the Proposing Person as they appear on the Corporation’s stock ledger, if different;
(ii) the class or series and number of shares of stock of the Corporation that are directly or indirectly owned of record or beneficially owned by such
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Proposing Person, including any shares of any class or series of stock of the Corporation as to which such Proposing Person has a right to acquire beneficial ownership at any time in the future;
(iii) whether and the extent to which any derivative interest in the Corporation’s equity securities (including without limitation any option, warrant, convertible security, stock appreciation right, or similar right with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any class or series of shares of stock of the Corporation or with a value derived in whole or in part from the value of any class or series of shares of stock of the Corporation, whether or not such instrument or right shall be subject to settlement in the underlying class or series of shares of the Corporation or otherwise, and any cash-settled equity swap, total return swap, synthetic equity position or similar derivative arrangement (any of the foregoing, a “Derivative Instrument”), as well as any rights to dividends on the shares of any class or series of shares of stock of the Corporation that are separated or separable from the underlying shares of the Corporation) or any short interest in any security of the Corporation (it being understood that, for purposes of this Bylaw, a person shall be deemed to have a short interest in a security if such person directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has the opportunity to profit or share in any profit derived from any increase or decrease in the value of the subject security, including through performance-related fees) is held directly or indirectly by or for the benefit of such Proposing Person, including without limitation, whether and the extent to which any ongoing hedging or other transaction or series of transactions has been entered into by or on behalf of, or any other agreement, arrangement or understanding (including without limitation any short position or any borrowing or lending of shares) has been made, the effect or intent of which is to mitigate loss to or manage risk or benefit of share price changes for, or to increase or decrease the voting power of, such Proposing Person with respect to any share of stock of the Corporation (any of the foregoing, a “Short Interest”);
(iv) any proportionate interest in shares of stock of the Corporation or Derivative Instruments held, directly or indirectly, by a general or limited partnership in which such Proposing Person or any of its respective affiliates or associates is a general partner or, directly or indirectly, beneficially owns an interest in a general partner of such general or limited partnership;
(v) any direct or indirect material interest in any material contract or agreement with the Corporation, any affiliate of the Corporation or any Competitor (as defined below) (including, in any such case, any employment agreement, collective bargaining agreement or consulting agreement);
(vi) any significant equity interests or any Derivative Instruments or Short Interests in any Competitor held by such Proposing Person and/or any of its respective affiliates or associates;
(vii) any other material business or financial relationship between such Proposing Person, on the one hand, and the Corporation, any affiliate of the Corporation or any Competitor, on the other hand;
(viii) all information that would be required to be set forth in a Schedule 13D filed pursuant to Rule 13d-1(a) or an amendment pursuant to Rule 13d-2(a) if such
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a statement were required to be filed under the Exchange Act and the rules and regulations promulgated thereunder by such Proposing Person and/or any of its respective affiliates or associates;
(ix) any other information relating to such Proposing Person that would be required to be disclosed in a proxy statement or other filing required to be made in connection with solicitations of proxies or consents by such Proposing Person in support of the business proposed to be brought before the meeting pursuant to Section 14(a) (or any successor provision) under the Exchange Act and the rules and regulations thereunder;
(x) such Proposing Person’s written consent to the public disclosure of information provided to the Corporation pursuant to this Section 1.12;
(xi) a representation that the Record Stockholder is a holder of record of stock of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to propose such business or nomination;
(xii) a representation whether such Proposing Person will or is part of a group that will (x) deliver, in the case of a proposal of business other than nominations, through means satisfying each of the conditions that would be applicable to the Corporation under either Exchange Act Rule 14a-16(a) or Exchange Act Rule 14a-16(n), a proxy statement and/or form of proxy to holders (including any beneficial owners pursuant to Rule 14b-1 and Rule 14b-2 of the Exchange Act) of at least the percentage of the voting power of the Corporation’s outstanding capital stock required to approve or adopt the proposal or in the case of any non-exempt solicitation made with respect to any director nomination, confirming that such person or group will deliver, through means satisfying each of the conditions that would be applicable to the Corporation under either Rule 14a-16(a) under the Exchange Act or Rule 14a-16(n) under the Exchange Act, a proxy statement and form of proxy to holders (including any beneficial owners pursuant to Rule 14b-1 and Rule 14b-2 of the Exchange Act) of at least sixty-seven percent (67%) of the voting power of the Corporation’s stock entitled to vote generally in the election of directors, and/or (y) otherwise solicit proxies or votes from stockholders in support of such proposal or nomination; and
(xiii) any proxy, contract, arrangement, or relationship pursuant to which the Proposing Person has a right to vote, directly or indirectly, any shares of any security of the Corporation.
The disclosures to be made pursuant to the foregoing clauses (ii), (iii), (iv) and (vi) shall not include any information with respect to the ordinary course business activities of any broker, dealer, commercial bank, trust company or other nominee who is a Proposing Person solely as a result of being the stockholder directed to prepare and submit the notice required by these Bylaws on behalf of a beneficial owner.
(f) A stockholder providing written notice required by this Section 1.12 shall update such notice in writing, if necessary, so that the information provided or required to be provided in such notice is true and correct in all material respects as of (i) the record date for determining the stockholders entitled to notice of the meeting and (ii) 5:00 p.m. Pacific Time on the tenth (10th) business day prior to the meeting or any adjournment or postponement thereof. In
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the case of an update pursuant to clause (i) of the foregoing sentence, such update shall be received by the Secretary of the Corporation at the principal executive office of the Corporation not later than five (5) business days after the record date for determining the stockholders entitled to notice of the meeting, and in the case of an update and supplement pursuant to clause (ii) of the foregoing sentence, such update and supplement shall be received by the Secretary of the Corporation at the principal executive office of the Corporation not later than eight (8) business days prior to the date for the meeting, and, if practicable, any adjournment or postponement thereof (and, if not practicable, on the first practicable date prior to the date to which the meeting has been adjourned or postponed). For the avoidance of doubt, the obligation to update as set forth in this paragraph shall not limit the Corporation’s rights with respect to any deficiencies in any notice provided by a stockholder, extend any applicable deadlines hereunder or enable or be deemed to permit a stockholder who has previously submitted notice hereunder to amend or update any proposal or nomination or to submit any new proposal, including by changing or adding nominees, matters, business and/or resolutions proposed to be brought before a meeting of the stockholders.
1.12.2 Submission of Questionnaire, Representation and Agreement. To be eligible to be a nominee of any stockholder for election or reelection as a director of the Corporation, the person proposed to be nominated must deliver (in accordance with the time periods prescribed for delivery of notice under Section 1.12 of these Bylaws) to the Secretary at the principal executive offices of the Corporation a completed and signed questionnaire in the form required by the Corporation (which form the stockholder shall request in writing from the Secretary of the Corporation and which the Secretary shall provide to such stockholder within ten (10) days of receiving such request) with respect to the background and qualification of such person to serve as a director of the Corporation and the background of any other person or entity on whose behalf, directly or indirectly, the nomination is being made and a signed representation and agreement (in the form available from the Secretary upon written request) that such person: (a) is not and will not become a party to (i) any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity as to how such person, if elected as a director of the Corporation, will act or vote on any issue or question (a “Voting Commitment”) that has not been disclosed to the Corporation or (ii) any Voting Commitment that could reasonably be expected to limit or interfere with such person’s ability to comply, if elected as a director of the Corporation, with such person’s fiduciary duties under applicable law, (b) is not and will not become a party to any Compensation Arrangement (as defined below) that has not been disclosed to the Corporation, (c) if elected as a director of the Corporation, subject to fiduciary duties as a director, will comply with all informational and similar requirements of applicable insurance policies and laws and regulations in connection with service or action as a director of the Corporation, (d) if elected as a director of the Corporation, subject to fiduciary duties as a director, will comply with all corporate governance, conflict of interest, stock ownership requirements, confidentiality and trading policies and guidelines of the Corporation publicly disclosed from time to time, (e) consents to being named as a nominee in the Corporation’s proxy statement pursuant to Rule 14a-4(d) under the Exchange Act and any associated proxy card of the Corporation and agrees to serve if elected as a director and (f) intends to serve as a director for the full term for which such individual is to stand for election.
1.12.3 Special Meetings of Stockholders. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of such meeting. Nominations of persons for election to the Board may be
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made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation’s notice of such meeting (a) by or at the direction of the Board or any committee thereof or (b) provided that the Board has determined that directors shall be elected at such meeting, by any stockholder of the Corporation who is a stockholder of record at the time of giving of notice of the special meeting, who shall be entitled to vote at the meeting and who complies with the notice and other procedures set forth in this Section 1.12 in all applicable respects. In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the Board, any such stockholder may nominate a person or persons (as the case may be), for election to such position(s) as specified in the Corporation’s notice of meeting, if the stockholder’s notice required by Section 1.12.1(b) of these Bylaws shall be delivered to the Secretary of the Corporation at the principal executive offices of the Corporation (i) no earlier than the one hundred and twentieth (120th) day prior to such special meeting and (ii) no later than 5:00 p.m. Pacific Time 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 and of the nominees proposed by the Board to be elected at such meeting. In no event shall an adjournment or postponement of a special meeting commence a new time period (or extend any time period) for providing such notice.
1.12.4 General.
(a) Except as otherwise expressly provided in any applicable rule or regulation promulgated under the Exchange Act, only such persons who are nominated in accordance with the procedures set forth in this Section 1.12 shall be eligible to be elected at a meeting of stockholders and serve as directors and only such business shall be conducted at a 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 law or these Bylaws, the chairperson of the meeting shall have the power and duty to determine whether a nomination or any other business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with the procedures set forth in this Section 1.12 (including whether each Proposing Person solicited (or is part of a group which solicited) or did not so solicit, as the case may be, proxies or votes in support of such Proposing Person’s nominee or proposal in compliance with the representation required by Section 1.12.1(e)(vii)) and, if any proposed nomination or business is not in compliance herewith, to declare that such defective proposal or nomination shall be disregarded. Notwithstanding the foregoing provisions of this Section 1.12, unless otherwise required by law, if the stockholder (or a Qualified Representative of the stockholder (as defined below)) does not appear at the annual or special meeting of stockholders of the Corporation to present a nomination or proposed business, such nomination shall be disregarded and such proposed business shall not be transacted, notwithstanding that proxies in respect of such vote may have been received by the Corporation. Notwithstanding anything to the contrary in these Bylaws, unless otherwise required by law, if any Proposing Person (i) provides notice pursuant to Rule 14a-19(b) promulgated under the Exchange Act with respect to any proposed nominee and (ii) subsequently fails to comply with the requirements of Rule 14a-19 promulgated under the Exchange Act (or fails to timely provide reasonable evidence sufficient to satisfy the Corporation that such Proposing Person has met the requirements of Rule 14a-19(a)(3) promulgated under the Exchange Act in accordance with the following sentence), then the nomination of each such proposed nominee shall be disregarded, notwithstanding that the nominee is included as a nominee in the Corporation’s proxy statement, notice of meeting or other proxy
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materials for any annual meeting (or any supplement thereto) and notwithstanding that proxies or votes in respect of the election of such proposed nominees may have been received by the Corporation (which proxies and votes shall be disregarded). If any Proposing Person provides notice pursuant to Rule 14a-19(b) promulgated under the Exchange Act, such stockholder shall deliver to the Corporation, no later than five (5) business days prior to the date of the meeting and any adjournment or postponement thereof, reasonable evidence that it or such Proposing Person has met the requirements of Rule 14a-19(a)(3) promulgated under the Exchange Act.
(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 thereunder with respect to the matters set forth herein. Nothing in this Section 1.12 shall be deemed to affect any rights of (a) stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act or (b) the holders of any series of Preferred Stock to elect directors pursuant to any applicable provisions of the Certificate of Incorporation.
1.12.5 For purposes of these Bylaws the following definitions shall apply:
(A) “affiliate” and “associate” shall have the meanings ascribed thereto in Rule 405 under the Securities Act of 1933, as amended (the “Securities Act”); provided, however, that the term “partner” as used in the definition of “associate” shall not include any limited partner that is not involved in the management of the relevant partnership;
(B) “Associated Person” shall mean, with respect to any subject stockholder or other person (including any proposed nominee), (1) any person directly or indirectly controlling, controlled by or under common control with such stockholder or other person, (2) any beneficial owner of shares of stock of the Corporation owned of record or beneficially by such stockholder or other person, (3) any associate of such stockholder or other person, and (4) any person directly or indirectly controlling, controlled by or under common control with any such Associated Person;
(C) “Compensation Arrangement” shall mean any direct or indirect compensatory payment or other financial agreement, arrangement or understanding with any person or entity other than the Corporation, including any agreement, arrangement or understanding with respect to any direct or indirect compensation, reimbursement or indemnification in connection with candidacy, nomination, service or action as a nominee or as a director of the Corporation;
(D) “Competitor” shall mean any entity that provides products or services that compete with or are alternatives to the principal products produced or services provided by the Corporation or its affiliates;
(E) “Proposing Person” shall mean (1) the Record Stockholder providing the notice of business proposed to be brought before an annual meeting or nomination of persons for election to the Board at a stockholder meeting, (2) the beneficial owner or beneficial owners, if different, on whose behalf the notice of business proposed to be brought before the annual meeting or nomination of persons for election to the Board at a stockholder meeting is made, and (3) any Associated Person
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on whose behalf the notice of business proposed to be brought before the annual meeting or nomination of persons for election to the Board at a stockholder meeting is made;
(F) “Public Announcement” shall mean disclosure in a press release reported by a 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
(G) to be considered a “Qualified Representative” of a stockholder, a person must be a duly authorized officer, manager, trustee or partner of such stockholder or must be authorized by a writing executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as a proxy at the meeting of stockholders and such person must produce such writing or electronic transmission, or a reliable reproduction thereof, at the meeting. The Secretary of the Corporation, or any other person who shall be appointed to serve as secretary of the meeting, may require, on behalf of the Corporation, reasonable and appropriate documentation to verify the status of a person purporting to be a “Qualified Representative” for purposes hereof.
Section 1.13 Delivery to the Corporation. Whenever this Article I, Section 1.12 requires one or more persons (including a record or beneficial owner of stock) to deliver a document or information to the Corporation or any officer, employee or agent thereof (including any notice, request, questionnaire, revocation, representation or other document or agreement), unless the Corporation elects otherwise, such document or information shall be in writing exclusively (and not in an electronic transmission) and shall be delivered exclusively by hand (including, without limitation, overnight courier service) or by certified or registered mail, return receipt requested, and the Corporation shall not be required to accept delivery of any document not in such written form or so delivered.
ARTICLE II
BOARD OF DIRECTORS
Section 2.1 Number; Qualifications. The total number of directors constituting the Whole Board shall be fixed from time to time in the manner set forth in the Certificate of Incorporation and the term “Whole Board” shall have the meaning specified in the Certificate of Incorporation. No decrease in the authorized number of directors constituting the Whole Board shall shorten the term of any incumbent director. Directors need not be stockholders of the Corporation.
Section 2.2 Election; Resignation; Removal; Vacancies. Election of directors need not be by written ballot. Unless otherwise provided by the Certificate of Incorporation and subject to the special rights of holders of any outstanding series of Preferred Stock to elect directors, immediately following the Triggering Event, the Board shall be divided into three classes, designated as Class I, Class II and Class III. For purposes of these Bylaws, “Triggering Event” has the meaning ascribed to such term in the Certificate of Incorporation. Each director shall hold office until the annual meeting at which such director’s term expires and until such director’s successor is elected and qualified or until such director’s earlier death, resignation, disqualification or removal. Any director may resign by delivering a resignation in writing or by electronic transmission to the Corporation at its principal office or to the Chairperson of the Board, the Chief Executive Officer, or the Secretary. Such resignation shall be effective upon delivery unless it is
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specified to be effective at a later time or upon the happening of an event. Subject to the special rights of holders of any outstanding series of Preferred Stock to elect directors, directors may be removed as provided by the Certificate of Incorporation and applicable law. All vacancies occurring in the Board and any newly created directorships resulting from any increase in the authorized number of directors shall be filled in the manner set forth in the Certificate of Incorporation.
Section 2.3 Regular Meetings. Regular meetings of the Board may be held at such places, if any, within or without the State of Delaware, and at such times as the Board may from time to time determine. Notice of regular meetings need not be given if the date, times and places, if any, thereof are fixed by resolution of the Board.
Section 2.4 Special Meetings. Special meetings of the Board may be called by the Chairperson of the Board, the Chief Executive Officer, the Lead Independent Director or a majority of the members of the Board then in office and may be held at any time, date or place, if any, within or without the State of Delaware, as the person or persons calling the meeting shall fix. Notice of the time, date and place, if any, of such meeting shall be given, orally, in writing or by electronic transmission (including electronic mail), by the person or persons calling the meeting to all directors at least four (4) days before the meeting if the notice is mailed, or at least twenty-four (24) hours before the meeting if such notice is given by telephone, hand delivery, facsimile, electronic mail or other means of electronic transmission; provided, however, that if, under the circumstances, the Chairperson of the Board, the Lead Independent Director or the Chief Executive Officer calling a special meeting deems that more immediate action is necessary or appropriate, notice may be delivered on the day of such special meeting. Unless otherwise indicated in the notice, any and all business may be transacted at a special meeting.
Section 2.5 Remote Meetings Permitted. Members of the Board, or any committee of the Board, may participate in a meeting of the Board or such committee 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 conference telephone or other communications equipment shall constitute presence in person at such meeting.
Section 2.6 Quorum; Vote Required for Action. At all meetings of the Board, directors representing a majority of the Whole Board shall constitute a quorum for the transaction of business. If a quorum shall fail to attend any meeting, a majority of those present may adjourn the meeting to another place, date or time. Except as otherwise provided herein or in the Certificate of Incorporation, or required by law, the vote of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board.
Section 2.7 Organization. Meetings of the Board shall be presided over by (a) the Chairperson of the Board, or (b) in the absence of such person, the Lead Independent Director, or (c) in such person’s absence, by the Chief Executive Officer (if also a director), or (d) in such person’s absence, by a chairperson chosen by the Board at the meeting. Unless otherwise determined by the Board, the Secretary shall act as secretary of the meeting, but in such person’s absence the chairperson of the meeting may appoint any person to act as secretary of the meeting.
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Section 2.8 Unanimous Action by Directors in Lieu of a Meeting. Any action required or permitted to be taken at any meeting of the Board, or of any committee thereof, may be taken without a meeting if all members of the Board or such committee, as the case may be, consent thereto in writing or by electronic transmission, and any consent may be documented, signed and delivered in any manner permitted by Section 116 of the DGCL. After an action is taken, the consent or consents relating thereto shall be filed with the minutes of proceedings of the Board or committee, as applicable. 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 2.9 Powers. Except as otherwise provided by the Certificate of Incorporation or the DGCL, the business and affairs of the Corporation shall be managed by or under the direction of the Board.
Section 2.10 Compensation of Directors. Members of the Board, as such, may receive, pursuant to a duly approved director compensation policy or other resolution of the Board or duly authorized committee of the Board, fees and other compensation for their services as directors, including without limitation their services as members of committees of the Board.
ARTICLE III
COMMITTEES
Section 3.1 Committees. The Board may designate one or more committees, each committee to consist of one or more of the directors of the Corporation. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of the committee, the member or members thereof present at any meeting of such committee who are 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 place of any such absent or disqualified member. Any such committee, to the extent provided in a resolution of the Board, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation and may authorize the seal of the Corporation to be affixed to all papers that may require it; but no such committee shall have the power or authority in reference to the following matters: (a) approving, adopting, or recommending to the stockholders any action or matter (other than the election or removal of members of the Board) expressly required by the DGCL to be submitted to stockholders for approval or (b) adopting, amending or repealing any bylaw of the Corporation.
Section 3.2 Committee Rules. Each committee shall keep records of its proceedings and make such reports as the Board may from time to time request. Unless the Board otherwise provides, each committee designated by the Board may make, alter and repeal rules for the conduct of its business. In the absence of such rules, each committee shall conduct its business in the same manner as the Board conducts its business pursuant to Article II of these Bylaws. Except as otherwise provided in the Certificate of Incorporation, these Bylaws or the resolution of the Board designating the committee, any committee may create one or more subcommittees, each subcommittee to consist of one or more members of the committee, and may delegate to any such subcommittee any or all of the powers and authority of the committee.
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ARTICLE IV
OFFICERS; CHAIRPERSON; LEAD INDEPENDENT DIRECTOR
Section 4.1 Generally. The officers of the Corporation shall consist of a Chief Executive Officer, a Chief Financial Officer, a Secretary and a Treasurer and may consist of such other officers as may from time to time be appointed by the Board. All officers shall be elected by the Board; provided, however, that the Board may empower the Chief Executive Officer of the Corporation to appoint any officer other than the Chief Executive Officer, the Chief Financial Officer or the Treasurer. Except as otherwise provided by law, by the Certificate of Incorporation or these Bylaws, each officer shall hold office until such officer’s successor is duly elected and qualified or until such officer’s earlier resignation, death, disqualification or removal. Any number of offices may be held by the same person. Any officer may resign by delivering a resignation in writing or by electronic transmission to the Corporation at its principal office or to the Chairperson of the Board, the Chief Executive Officer, or the Secretary. Such resignation shall be effective upon delivery unless it is specified to be effective at some later time or upon the happening of some later event. Any vacancy occurring in any office of the Corporation by death, resignation, removal or otherwise may be filled by the Board and the Board may, in its discretion, leave unfilled, for such period as it may determine, any offices. Each such successor shall hold office for the unexpired term of such officer’s predecessor and until a successor is duly elected and qualified or until such officer’s earlier resignation, death, disqualification or removal.
Section 4.2 Chief Executive Officer. Except as may be otherwise determined by the Board from time to time and subject to the provisions of these Bylaws, the powers and duties of the Chief Executive Officer of the Corporation are:
(a) to act as the general manager and, subject to the control of the Board, to have general supervision, direction and control of the business and affairs of the Corporation;
(b) subject to Section 1.6 of these Bylaws, to preside at all meetings of the stockholders;
(c) subject to Section 1.2 of these Bylaws, to call special meetings of the stockholders to be held at such times and, subject to the limitations prescribed by law or by these Bylaws, at such places as he or she shall deem proper;
(d) to affix the signature of the Corporation to all deeds, conveyances, mortgages, guarantees, leases, obligations, bonds, certificates and other papers and instruments in writing which have been authorized by the Board or which, in the judgment of the Chief Executive Officer, should be executed on behalf of the Corporation; to sign certificates for shares of stock of the Corporation (if any); and, subject to the direction of the Board, to have general charge of the property of the Corporation and to supervise and control all officers, agents and employees of the Corporation; and
(e) all other duties and powers that are commonly incident to the office of the Chief Executive Officer.
Section 4.3 Chairperson of the Board. Subject to the provisions of Section 2.7 of these Bylaws, the Chairperson of the Board shall have the power to preside at all meetings of the Board
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and shall have such other powers and duties as provided in these Bylaws and as the Board may from time to time prescribe. The Chairperson of the Board may or may not be an officer of the Corporation.
Section 4.4 Lead Independent Director. The Board may, if the Chief Executive Officer of the Corporation is also the Chairperson of the Board or at any other time at its discretion, elect a lead independent director from among its members that are Independent Directors (as defined below) (such director, the “Lead Independent Director”). The Lead Independent Director shall preside at all meetings at which the Chairperson of the Board is not present and shall exercise such other powers and duties as may from time to time be assigned to him or her by the Board or as prescribed by these Bylaws. For purposes of these Bylaws, “Independent Director” has the meaning ascribed to such term under the rules of the exchange upon which the Corporation’s Class A Common Stock is primarily traded.
Section 4.5 President. Unless otherwise determined by the Board, the person holding the office of Chief Executive Officer shall be the President of the Corporation to the extent such position is deemed necessary or advisable with respect to any corporate requirements or similar governance matters. Subject to the provisions of these Bylaws and as otherwise may be determined by the Board, the President shall perform all duties and have all powers that are commonly incident to the office of President or that are delegated to the President by the Board.
Section 4.6 Chief Financial Officer. Subject to the direction of the Board and the Chief Executive Officer, the Chief Financial Officer shall perform all duties and have all powers that are commonly incident to the office of Chief Financial Officer, or as the Board or the Chief Executive Officer may from time to time prescribe.
Section 4.7 Treasurer. The person holding the office of Chief Financial Officer shall be the Treasurer of the Corporation unless the Board shall have designated another person as the Treasurer of the Corporation. The person holding the office of Treasurer shall have custody of all monies and securities of the Corporation. The Treasurer shall make such disbursements of the funds of the Corporation as are authorized and shall render from time to time an account of all such transactions. The Treasurer shall also perform such other duties and have such other powers as are commonly incident to the office of Treasurer, or as the Board, the Chief Executive Officer or the Chief Financial Officer may from time to time prescribe.
Section 4.8 Vice President. Each Vice President shall have all such powers and duties as are commonly incident to the office of Vice President or that are delegated to him or her by the Board or the Chief Executive Officer.
Section 4.9 Secretary. The Secretary shall issue or cause to be issued all authorized notices for, and shall keep, or cause to be kept, minutes of all meetings of the stockholders and the Board. The Secretary shall have charge of the corporate minute books and similar records and shall perform such other duties and have such other powers as are commonly incident to the office of Secretary, or as the Board or the Chief Executive Officer may from time to time prescribe.
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Section 4.10 Delegation of Authority. The Board may from time to time delegate the powers or duties of any officer of the Corporation to any other officers or agents of the Corporation, notwithstanding any provision hereof.
Section 4.11 Removal. Any officer of the Corporation shall serve at the pleasure of the Board and may be removed at any time, with or without cause, by the Board; provided that if the Board has empowered the Chief Executive Officer to appoint any officer of the Corporation, then such officer may also be removed by the Chief Executive Officer. Such removal shall be without prejudice to the contractual rights of such officer, if any, with the Corporation.
Section 4.12 Voting Shares in Other Business Entities. The Chairperson, the Chief Executive Officer, the Chief Financial Officer, the Secretary, or any other person authorized by the Board may vote, and otherwise exercise on behalf of the Corporation any and all rights and powers incident to the ownership of, any and all shares of stock or other equity interests held by the Corporation in any other corporation or other business entity. The authority granted herein may be exercised either by such person directly or by any other person authorized to do so by proxy or power of attorney duly executed by the person having such authority.
Section 4.13 Execution of Corporate Contracts and Instruments. Except as otherwise determined by the Board or otherwise provided in these Bylaws, the Chief Executive Officer, Chief Financial Officer, Secretary and Chief Legal Officer, and any other officers, employees or agents of the Corporation designated by the Board or Chief Executive Officer, or other officers, employees or agents of the Corporation specifically delegated authority by the foregoing authorized persons, shall have power to enter into any contract or execute any instrument in the name of and on behalf of the Corporation. Such delegation may be by resolution or otherwise and the authority granted shall be general or confined to specific matters. In the absence of such designation referred to above, the officers of the Corporation shall have such power to the extent incident to the normal performance of their duties.
ARTICLE V
STOCK
Section 5.1 Certificates; Uncertificated Shares. The shares of capital stock of the Corporation shall be uncertificated shares (and the Board’s adoption of these Bylaws shall constitute a resolution of the Board that the shares of capital stock of the Corporation shall be uncertificated shares); provided, however, that the resolution of the Board that the shares of capital stock of the Corporation shall be uncertificated shares shall not apply to shares represented by a certificate until such certificate is surrendered to the Corporation (or the transfer agent or registrar, as the case may be). Notwithstanding the foregoing, the Board may provide by resolution or resolutions that some or all of any or all classes or series of its stock shall be certificated shares. Every holder of stock represented by certificates shall be entitled to have a certificate signed by, or in the name of the Corporation by, any two authorized officers of the Corporation (it being understood that each of the Chairperson of the Board, the Vice-Chairperson of the Board, the Chief Executive Officer, the President, any Vice President, the Treasurer, any Assistant Treasurer, the Secretary, and any Assistant Secretary shall be an authorized officer for such purpose), representing the number of shares registered in certificate form. Any or all of the signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or
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whose facsimile 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 such person were an officer, transfer agent or registrar at the date of issue.
Section 5.2 Lost, Stolen or Destroyed Stock Certificates; Issuance of New Certificates or Uncertificated Shares. The Corporation may issue a new certificate of stock or uncertificated shares in the place of any certificate previously issued by it, alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed, and the Corporation may require the owner of the lost, stolen or destroyed certificate, or such owner’s legal representative, to agree to indemnify the Corporation and/or to give the Corporation a bond sufficient to indemnify it, 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 such new certificate or uncertificated shares.
Section 5.3 Other Regulations. Subject to applicable law, the Certificate of Incorporation and these Bylaws, the issue, transfer, conversion and registration of shares represented by certificates and of uncertificated shares shall be governed by such other regulations as the Board may establish.
ARTICLE VI
INDEMNIFICATION
Section 6.1 Indemnification of Officers and Directors. Each person who was or is made a party to, or is threatened to be made a party to, or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, legislative or any other type whatsoever (a “Proceeding”), by reason of the fact that such person (or a person of whom such person is the legal representative), is or was a director or officer of the Corporation or, while serving as a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee, agent or trustee of another corporation, or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans (for purposes of this Article VI, an “Indemnitee”), shall be indemnified and held harmless by the Corporation to the fullest extent permitted by the DGCL as the same exists or may hereafter be amended, against all expenses, liability and loss (including attorneys’ fees, judgments, fines, ERISA excise taxes and penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith, provided such Indemnitee acted in good faith and in a manner that the Indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal Proceeding, had no reasonable cause to believe the Indemnitee’s conduct was unlawful; provided that to the extent a present or former director or officer has been successful on the merits or otherwise in defense of any Proceeding or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorney’s fees) actually and reasonably incurred by such person in connection therewith without regard to whether such Indemnitee met the standard of conduct otherwise necessary to demonstrate an entitlement to indemnification. Such indemnification shall continue as to an Indemnitee who has ceased to be a director or officer of the Corporation and shall inure to the benefit of such Indemnitees’ heirs, executors and administrators. Notwithstanding the foregoing, subject to Section 6.5 of these Bylaws, the Corporation shall indemnify any such
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Indemnitee seeking indemnity in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Board or such indemnification is authorized by an agreement approved by the Board.
Section 6.2 Advance of Expenses. The Corporation shall to the fullest extent permitted by applicable law pay all expenses (including attorneys’ fees) incurred by an Indemnitee in defending any Proceeding in advance of its final disposition; provided, however, that the advancement of such expenses shall be made only upon delivery to the Corporation of an undertaking, by or on behalf of such Indemnitee, to repay such amounts if it shall ultimately be determined that such Indemnitee is not entitled to be indemnified under this Article VI or otherwise.
Section 6.3 Non-Exclusivity of Rights. The rights conferred on any person in this Article VI shall not be exclusive of any other right that such person may have or hereafter acquire under any statute, provision of the Certificate of Incorporation, agreement, vote or consent of stockholders or disinterested directors, or otherwise. Additionally, nothing in this Article VI shall limit the ability of the Corporation, in its discretion, to indemnify or advance expenses to persons whom the Corporation is not obligated to indemnify or advance expenses pursuant to this Article VI.
Section 6.4 Indemnification Contracts. The Board is authorized to cause the Corporation to enter into indemnification contracts with any director, officer, employee or agent of the Corporation, or any person serving at the request of the Corporation as a director, officer, employee, agent or trustee of another corporation, partnership, joint venture, trust or other enterprise, including employee benefit plans, providing indemnification or advancement rights to such person. Such rights may be greater than those provided in this Article VI.
Section 6.5 Right of Indemnitee to Bring Suit. The following shall apply to the extent not in conflict with any indemnification contract provided for in Section 6.4 of these Bylaws.
6.5.1 Right to Bring Suit. If a claim under Section 6.1 or 6.2 of these Bylaws is not paid in full by the Corporation within sixty (60) days after a written claim has been received by the Corporation, except in the case of a claim for an advancement of expenses, in which case the applicable period shall be twenty (20) days, the Indemnitee may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the Indemnitee shall be entitled to be paid, to the fullest extent permitted by law, the expense of prosecuting or defending such suit. In any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an advancement of expenses) it shall be a defense that the Indemnitee has not met any applicable standard of conduct which makes it permissible under the DGCL (or other applicable law) for the Corporation to indemnify the Indemnitee for the amount claimed.
6.5.2 Effect of Determination. The absence of a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met the applicable standard of conduct set forth in applicable law shall
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not create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such suit.
6.5.3 Burden of Proof. In any suit brought by the Indemnitee to enforce a right to indemnification or to an advancement of expenses hereunder, or brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified, or to such advancement of expenses, under this Article VI, or otherwise, shall be on the Corporation.
Section 6.6 Nature of Rights. The rights conferred upon Indemnitees in this Article VI shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be a director or officer and shall inure to the benefit of the Indemnitee’s heirs, executors and administrators. Any amendment, repeal or modification of any provision of this Article VI that adversely affects any right of an Indemnitee or an Indemnitee’s successors shall be prospective only, and shall not adversely affect any right or protection conferred on a person pursuant to this Article VI with respect to any Proceeding involving any occurrence or alleged occurrence of any action or omission to act that took place prior to such amendment, repeal or modification. Any reference to an officer of the Corporation in this Article VI shall be deemed to refer exclusively to the Chief Executive Officer, President, Treasurer, Chief Financial Officer, and Secretary of the Corporation appointed pursuant to Article IV of these Bylaws, and to any Vice President, Assistant Secretary, Assistant Treasurer or other officer of the Corporation appointed by the Board of Directors or by the Chief Executive Officer pursuant to Article IV of these Bylaws, and any reference to an officer of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise shall be deemed to refer exclusively to an officer appointed by the board of directors or equivalent governing body of such other entity pursuant to the certificate of incorporation and bylaws or equivalent organizational documents of such other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise. The fact that any person who is or was an employee of the Corporation or an employee of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, but not an officer thereof as described in the preceding sentence, has been given or has used the title of “Vice President” or any other title that could be construed to suggest or imply that such person is or may be such an officer of the Corporation or of such other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise shall not result in such person being constituted as, or being deemed to be, such an officer of the Corporation or of such other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise for purposes of this Article VI.
Section 6.7 Insurance. The Corporation may purchase and maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the DGCL.
ARTICLE VII
NOTICES
Section 7.1 Notice.
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7.1.1 Form and Delivery. Except as otherwise specifically required in these Bylaws (including, without limitation, Section 7.1.2 of these Bylaws) or by applicable law, all notices required to be given pursuant to these Bylaws may (a) in every instance in connection with any delivery to a member of the Board, be effectively given by hand delivery (including use of a delivery service), by depositing such notice in the mail, postage prepaid, or by sending such notice by overnight express courier, facsimile, electronic mail or other form of electronic transmission and (b) be effectively delivered to a stockholder when given by hand delivery, by depositing such notice in the mail, postage prepaid, or by courier service or electronic mail in the manner provided in Section 232 of the DGCL or, if specifically consented to by the stockholder as described in Section 7.1.2 of these Bylaws, by sending such notice by a form of electronic transmission other than electronic mail in the manner prescribed by Section 232 of the DGCL. Any such notice shall be addressed to the person to whom notice is to be given at such person’s address as it appears on the records of the Corporation. The notice shall be deemed given (a) in the case of hand delivery, when received by the person to whom notice is to be given or by any person accepting such notice on behalf of such person, (b) in the case of delivery by mail, upon deposit in the mail, postage prepaid, (c) in (i) the case of delivery by overnight express courier to a director, when dispatched or (ii) the case of delivery by courier service to a stockholder, the earlier of when the notice is received or left at such stockholder’s address, and (d) in (i) the case of delivery by electronic mail, when directed to the director’s or stockholder’s electronic mail address unless, in the case of a stockholder, 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 the last sentence of Section 7.1.2 of these Bylaws or (ii) the case of delivery via facsimile or other form of electronic transmission (other than electronic mail) at the time provided in Section 7.1.2 of these Bylaws.
7.1.2 Electronic Transmission. Without limiting the manner by which notice otherwise may be given effectively to stockholders, any notice to stockholders given by the Corporation under any provision of the DGCL, the Certificate of Incorporation, or these Bylaws shall be effective if given by a form of electronic transmission (other than electronic mail) consented to by the stockholder to whom the notice is given in accordance with Section 232 of the DGCL. Notice given pursuant to this Section 7.1.2 shall be deemed given: (i) if by facsimile telecommunication, when directed to a number at which the stockholder has consented to receive notice; (ii) if by a posting on an electronic network together with separate notice to the stockholder of such specific posting, upon the later of such posting and the giving of such separate notice; and (iii) if by any other form of electronic transmission (other than electronic mail), when directed to the stockholder. Notwithstanding the foregoing, a notice may not be given to stockholders by an electronic transmission from and after the time that (a) the Corporation is unable to deliver by such electronic transmission two (2) consecutive notices given by the Corporation, (b) such inability becomes known to the Secretary or an Assistant Secretary or to the transfer agent, or other person responsible for the giving of notice; provided, however, the inadvertent failure to discover such inability shall not invalidate any meeting or other action.
7.1.3 Affidavit of Giving Notice. 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 in writing or by a form of electronic transmission shall, in the absence of fraud, be prima facie evidence of the facts stated therein.
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Section 7.2 Waiver of Notice. Whenever notice is required to be given under any provision of the DGCL, the Certificate of Incorporation or these Bylaws, a written waiver of notice, signed by the person entitled to notice, or waiver by electronic transmission by such person, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders, directors or members of a committee of directors need be specified in any waiver of notice.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Fiscal Year. The fiscal year of the Corporation shall be the calendar year, unless otherwise determined by resolution of the Board.
Section 8.2 Seal. The Board may provide for a corporate seal, which may have the name of the Corporation inscribed thereon and shall otherwise be in such form as may be approved from time to time by the Board.
Section 8.3 Form of Records. Any records administered by or on behalf of the Corporation in the regular course of its business, including its stock ledger, books of account and minute books, may be kept on or by means of, or be in the form of any other information storage device, method or one or more electronic networks or databases (including one or more distributed electronic networks or databases), electronic or otherwise, provided that the records so kept can be converted into clearly legible paper form within a reasonable time and otherwise comply with the DGCL. The Corporation shall so convert any records so kept upon the request of any person entitled to inspect such records pursuant to any provision of the DGCL.
Section 8.4 Certificate of Incorporation Governs. In the event of any conflict between the provisions of the Certificate of Incorporation and Bylaws, the provisions of the Certificate of Incorporation shall govern.
Section 8.5 Severability. If any provision of these Bylaws shall be held to be invalid, illegal, unenforceable or in conflict with the provisions of the Certificate of Incorporation, then such provision shall nonetheless be enforced to the maximum extent possible consistent with such holding and the remaining provisions of these Bylaws (including without limitation, all portions of any section of these Bylaws containing any such provision held to be invalid, illegal, unenforceable or in conflict with the Certificate of Incorporation, that are not themselves invalid, illegal, unenforceable or in conflict with the Certificate of Incorporation) shall remain in full force and effect.
Section 8.6 Time Periods. In applying any provision of these Bylaws which requires that an act be done or not be done a specified number of days prior to an event or that an act be done during a period of a specified number of days prior to an event, unless otherwise specifically provided, calendar days shall be used, the day of the doing of the act shall be excluded, and the day of the event shall be included.
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ARTICLE IX
AMENDMENT
Subject to the terms of the Certificate of Incorporation and applicable law, these Bylaws may be altered, amended or repealed, and new bylaws may be adopted, by the Board or the stockholders.
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CERTIFICATION OF AMENDED AND RESTATED BYLAWS
OF
ANDERSEN GROUP INC.
(a Delaware corporation)
I, William Deckelman certify that I am Secretary of Andersen Group Inc., a Delaware corporation (the “Corporation”), that I am duly authorized to make and deliver this certification, that the attached Bylaws are a true and complete copy of the Amended and Restated Bylaws of the Corporation in effect as of the date of this certificate.
Dated: December 16, 2025
| /s/ William Deckelman |
| William Deckelman Secretary |
Exhibit 10.1
LIMITED LIABILITY COMPANY AGREEMENT
OF
AT UMBRELLA LLC
December 16, 2025
TABLE OF CONTENTS
| Page | ||||||
| ARTICLE I DEFINITIONS AND USAGE |
1 | |||||
| Section 1.01. |
Definitions | 1 | ||||
| Section 1.02. |
Other Definitional and Interpretive Provisions | 13 | ||||
| ARTICLE II THE COMPANY |
14 | |||||
| Section 2.01. |
Formation | 14 | ||||
| Section 2.02. |
Name | 14 | ||||
| Section 2.03. |
Term | 14 | ||||
| Section 2.04. |
Registered Agent and Registered Office | 14 | ||||
| Section 2.05. |
Purposes | 14 | ||||
| Section 2.06. |
Powers of the Company | 15 | ||||
| Section 2.07. |
Partnership Tax Status | 15 | ||||
| Section 2.08. |
Regulation of Internal Affairs | 15 | ||||
| Section 2.09. |
Ownership of Property | 15 | ||||
| Section 2.10. |
Subsidiaries | 15 | ||||
| Section 2.11. |
Qualification in Other Jurisdictions | 15 | ||||
| ARTICLE III UNITS; MEMBERS; BOOKS AND RECORDS; REPORTS |
15 | |||||
| Section 3.01. |
Units; Admission of Members | 15 | ||||
| Section 3.02. |
Substitute Members and Additional Members | 16 | ||||
| Section 3.03. |
Tax and Accounting Information | 17 | ||||
| Section 3.04. |
Books and Records | 18 | ||||
| ARTICLE IV OWNERSHIP; RESTRICTIONS ON PUBCO STOCK |
19 | |||||
| Section 4.01. |
Pubco Ownership | 19 | ||||
| Section 4.02. |
Restrictions on Pubco Common Stock | 20 | ||||
| Section 4.03. |
Aggregator Ownership; Restrictions on Aggregator Equity Securities | 22 | ||||
| ARTICLE V CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS; DISTRIBUTIONS; ALLOCATIONS |
24 | |||||
| Section 5.01. |
Capital Contributions | 24 | ||||
| Section 5.02. |
Capital Accounts | 24 | ||||
| Section 5.03. |
Amounts and Priority of Distributions | 26 | ||||
| Section 5.04. |
Allocations | 30 | ||||
| Section 5.05. |
Other Allocation Rules | 33 | ||||
| Section 5.06. |
Tax Withholding; Withholding Advances | 34 | ||||
| ARTICLE VI CERTAIN TAX MATTERS |
35 | |||||
| Section 6.01. |
Company Representative | 35 | ||||
| Section 6.02. |
Section 754 Elections | 36 | ||||
| Section 6.03. |
Debt Allocation | 36 | ||||
| Section 6.04. |
Code Section 83 Safe Harbor Election | 36 | ||||
| ARTICLE VII MANAGEMENT OF THE COMPANY |
37 | |||||
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| Section 7.01. |
Management by the Managing Member | 37 | ||||
| Section 7.02. |
Withdrawal of the Managing Member | 38 | ||||
| Section 7.03. |
Decisions by the Members | 38 | ||||
| Section 7.04. |
Duties | 39 | ||||
| Section 7.05. |
Officers | 39 | ||||
| ARTICLE VIII TRANSFERS OF INTERESTS |
40 | |||||
| Section 8.01. |
Restrictions on Transfers | 40 | ||||
| Section 8.02. |
Certain Permitted Transfers | 40 | ||||
| Section 8.03. |
Distributions | 41 | ||||
| Section 8.04. |
Registration of Transfers | 41 | ||||
| ARTICLE IX CERTAIN OTHER AGREEMENTS |
41 | |||||
| Section 9.01. |
Non-Disparagement | 41 | ||||
| Section 9.02. |
Company Call Right | 42 | ||||
| Section 9.03. |
Preemptive Rights | 43 | ||||
| ARTICLE X REDEMPTION AND EXCHANGE RIGHTS |
43 | |||||
| Section 10.01. |
Redemption Right of a Member | 43 | ||||
| Section 10.02. |
Election and Contribution of Pubco | 47 | ||||
| Section 10.03. |
Exchange Right of Pubco | 47 | ||||
| Section 10.04. |
Tender Offers and Other Events with Respect to Pubco | 48 | ||||
| Section 10.05. |
Reservation of Shares of Class A Common Stock; Certificate of Pubco | 49 | ||||
| Section 10.06. |
Effect of Exercise of Redemption Right | 49 | ||||
| Section 10.07. |
Tax Treatment | 49 | ||||
| Section 10.08. |
Exchange of LTIP Units | 49 | ||||
| Section 10.09. |
Additional Exchange Restrictions | 51 | ||||
| ARTICLE XI LIMITATION ON LIABILITY, EXCULPATION AND INDEMNIFICATION |
52 | |||||
| Section 11.01. |
Limitation on Liability | 52 | ||||
| Section 11.02. |
Exculpation and Indemnification | 52 | ||||
| ARTICLE XII DISSOLUTION AND TERMINATION |
55 | |||||
| Section 12.01. |
Dissolution | 55 | ||||
| Section 12.02. |
Winding Up of the Company | 55 | ||||
| Section 12.03. |
Termination | 57 | ||||
| Section 12.04. |
Survival | 57 | ||||
| ARTICLE XIII MISCELLANEOUS |
57 | |||||
| Section 13.01. |
Expenses | 57 | ||||
| Section 13.02. |
Further Assurances | 58 | ||||
| Section 13.03. |
Notices | 58 | ||||
| Section 13.04. |
Binding Effect; Benefit; Assignment | 58 | ||||
| Section 13.05. |
Jurisdiction | 59 | ||||
| Section 13.06. |
Counterparts | 59 | ||||
| Section 13.07. |
Entire Agreement | 59 | ||||
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| Section 13.08. |
Severability | 59 | ||||
| Section 13.09. |
Amendment | 59 | ||||
| Section 13.10. |
Confidentiality | 60 | ||||
| ARTICLE XIV ARBITRATION |
62 | |||||
| Section 14.01. |
Arbitration | 62 | ||||
| ARTICLE XV REPRESENTATIONS OF MEMBERS |
63 | |||||
| Section 15.01. |
Representations of Members | 63 | ||||
| SCHEDULE A |
Member Schedule | |
| ANNEX A |
LTIP Units |
iii
AT UMBRELLA LLC
LIMITED LIABILITY COMPANY AGREEMENT
LIMITED LIABILITY COMPANY AGREEMENT (this “Agreement”) OF AT Umbrella LLC, a Delaware limited liability company (the “Company”), dated as of December 16, 2025 by and among the Company, Andersen Group Inc., a Delaware corporation (“Pubco”), and the other Persons listed on the signature pages hereto.
RECITALS
WHEREAS, the Company has been heretofore formed as a limited liability company under the Delaware Act (as defined below) pursuant to a certificate of formation which was executed and filed with the Secretary of State of the State of Delaware on August 6, 2025;
WHEREAS, in connection with the IPO, the Company was and is a party to a series of reorganization transactions with Pubco and various other parties pursuant to which, among other matters, (i) Pubco will be admitted as the Managing Member of the Company, (ii) the Company will issue Class X Umbrella Units to Andersen Aggregator LLC, a Delaware limited liability company (“Aggregator”), (iii) the Company will accept a contribution of interests in Andersen Tax Holdings LLC, a Delaware limited liability company (“Andersen Tax Holdings LLC”), from Aggregator, resulting in the Company directly owning one hundred percent (100%) of the issued and outstanding equity interests in Andersen Tax Holdings LLC, (iv) the Company will issue LTIP Units to Aggregator in connection with the issuance of Aggregator LTIP Units by Aggregator, and (v) the Company will issue Class X Umbrella Units to Pubco concurrent with a contribution of the net proceeds received by Pubco from the issuance of Class A Common Stock (as defined below) in the IPO; and
WHEREAS, the parties listed on the signature pages hereto and listed on Schedule A (as defined below) represent all of the holders of limited liability company interests in the Company (the “Members”) as of the Effective Time.
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein made and other good and valuable consideration, the Members hereby agree as follows:
ARTICLE I
DEFINITIONS AND USAGE
Section 1.01. Definitions.
(a) The following terms shall have the following meanings for the purposes of this Agreement:
“Additional Member” means any Person admitted as a Member of the Company pursuant to Section 3.02 in connection with the new issuance of Units to such Person.
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“Adjusted Capital Account Deficit” means, with respect to any Member, the deficit balance, if any, in such Member’s Capital Account as of the end of the relevant Fiscal Year, after giving effect to the following adjustments:
(i) Credit to such Capital Account any amounts that such Member is deemed to be obligated to restore pursuant to the penultimate sentences in Treasury Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5); and
(ii) Debit to such Capital Account the items described in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) and 1.704-1(b)(2)(ii)(d)(6).
The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the provisions of Treasury Regulations Section 1.704-1(b) (2)(ii)(d) and shall be interpreted consistently therewith.
“Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with such Person; provided that no Member nor any Affiliate of any Member shall be deemed to be an Affiliate of any other Member or any of its Affiliates solely by virtue of such Members’ Units.
“Aggregator” means Andersen Aggregator LLC, a Delaware limited liability company (or any successor in interest thereto designated as such by Andersen Aggregator LLC in a notice to the Company) formed as a special purpose investment vehicle through which employees, consultants or services providers of the Company or its Subsidiaries will indirectly hold Units.
“Aggregator LLCA” means the Amended and Restated Limited Liability Company Agreement of Aggregator, as may be amended from time to time, by and among Aggregator and the other Persons signatory thereto.
“Aggregator LTIP Unit” means an Aggregator LTIP Unit as defined in the Aggregator LLCA.
“Aggregator Member” means any holder of Equity Securities in Aggregator.
“Applicable Law” means, with respect to any Person, any federal, state or local law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling or other similar requirement enacted, adopted, promulgated or applied by a Governmental Authority that is binding upon or applicable to such Person or its assets, as amended unless expressly specified otherwise.
“Business” means any current or actively planned business of the Company or any of its Affiliates.
“Business Day” means a day, other than Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by Applicable Law to close.
“Capital Account” means the capital account established and maintained for each Member pursuant to Section 5.02.
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“Capital Account Notes” means those certain Promissory Notes by and between the Company and Aggregator with payments corresponding to obligations under certain Promissory Notes by and between Aggregator and certain of its Members, with terms of one (1), two (2), three (3), four (4), five (5), six (6), and seven (7) years, respectively.
“Capital Contribution” means, with respect to any Member, the amount of money and the initial Carrying Value of any Property (other than money) contributed to the Company.
“Carrying Value” means with respect to any Property (other than money), such Property’s adjusted basis for U.S. federal income tax purposes, except as follows:
(i) The initial Carrying Value of any such Property contributed by a Member to the Company shall be the gross fair market value of such Property, as reasonably determined by the Managing Member;
(ii) The Carrying Values of all such Properties shall be adjusted to equal their respective gross fair market values (taking Section 7701(g) of the Code into account), as reasonably determined by the Managing Member, at the time of any Revaluation pursuant to Section 5.02(c);
(iii) The Carrying Value of such Property distributed to any Member shall be adjusted to equal the gross fair market value (taking Section 7701(g) of the Code into account) of such Property on the date of distribution as reasonably determined by the Managing Member; and
(iv) The Carrying Values of such Properties shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such Properties pursuant to Sections 734(b) or 743(b) of the Code, but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m) and subparagraph (vi) of the definition of “Net Income” and “Net Loss” or Section 5.04(b)(iv); provided, however, that Carrying Values shall not be adjusted pursuant to this subparagraph (iv) to the extent that an adjustment pursuant to subparagraph (ii) is required in connection with a transaction that would otherwise result in an adjustment pursuant to this subparagraph (iv). If the Carrying Value of such Property has been determined or adjusted pursuant to subparagraph (i), (ii) or (iv), such Carrying Value shall thereafter be adjusted by the Depreciation taken into account with respect to such Property, for purposes of computing Net Income and Net Loss.
“Catch-Up Unit” means an LTIP Unit designated as a “Catch-Up Unit” on the Member Schedule or in the applicable Vesting Agreement or other agreement between the holder of such LTIP Unit and the Company and/or Aggregator with respect to the issuance of such LTIP Unit.
“Class A Common Stock” means Class A common stock, $0.0001 par value per share, of Pubco.
“Class B Common Stock” means Class B common stock, $0.0001 par value per share, of Pubco.
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“Class H Notes” means those certain Promissory Notes issued by the Company to Aggregator with payments corresponding to obligations under the Class H Aggregator Units (as defined in the Aggregator LLCA), with terms of four (4), five (5), six (6), seven (7), and eight (8) years, respectively.
“Class X Aggregator Unit” means a Class X Aggregator Unit as defined in the Aggregator LLCA.
“Class X Member” means any Member holding Class X Umbrella Units and/or LTIP Units; provided that, for the avoidance of doubt, if a Member holds Class X Umbrella Units and/or LTIP Units and holds another Economic Interest in the Company (e.g., a Capital Account Note or Class H Note), then such Member shall be deemed a Class X Member solely in respect of its Class X Umbrella Units and/or LTIP Units.
“Class X Umbrella Unit” means the Units of the Company designated as the “Class X Umbrella Units” herein and having the rights, powers and duties pertaining thereto as are set forth in this Agreement.
“Code” means the Internal Revenue Code of 1986, as amended from time to time.
“Company Minimum Gain” means “partnership minimum gain,” as defined in Treasury Regulations Sections 1.704-2(b)(2) and 1.704-2(d).
“Company Notes” means all of the Capital Account Notes and the Class H Notes. The Company Notes are hereby incorporated as, and shall be treated as, part of this Agreement, as described in Section 761(c) of the Code and Treasury Regulations Sections 1.704-1(b)(2)(ii)(h) and 1.761-1(c).
“Covered Person” means (i) each Member, (ii) each officer, director, stockholder, member, partner, employee, representative, agent or trustee of a Member (other than Pubco) or an Affiliate thereof, in all cases in such capacity, and (iii) each officer, director, stockholder (other than any public stockholder of Pubco that is not a Member), member, partner, employee, representative, agent or trustee of the Managing Member, Pubco (in the event Pubco is not the Managing Member), the Company or an Affiliate controlled thereby, in all cases in such capacity.
“Delaware Act” means the Delaware Limited Liability Company Act, 6 Del. C. §§ 18-101 et seq., as amended from time to time.
“Depreciation” means, for each Fiscal Year, an amount equal to the depreciation, amortization, or other cost recovery deduction allowable with respect to an asset for such Fiscal Year, except that if the Carrying Value of an asset differs from its adjusted basis for U.S. federal income tax purposes at the beginning of such Fiscal Year, Depreciation shall be an amount that bears the same ratio to such beginning Carrying Value as the U.S. federal income tax depreciation, amortization, or other cost recovery deduction for such Fiscal Year bears to such beginning adjusted tax basis; provided, however, that if the adjusted basis for U.S. federal income tax purposes of an asset at the beginning of such Fiscal Year is zero, Depreciation shall be determined with reference to such beginning Carrying Value using any reasonable method selected by the Managing Member.
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“Effective Time” means a time that is substantially concurrent with, but immediately prior to, the closing of the IPO.
“Equity Securities” means, with respect to any Person, any (i) membership interests or shares of capital stock, (ii) equity, ownership, voting, profit or participation interests, other than the Company Notes, or (iii) similar rights or securities in such Person or any of its Subsidiaries, or any rights or securities convertible into or exchangeable for, options or other rights to acquire from such Person or any of its Subsidiaries, or obligation on the part of such Person or any of its Subsidiaries to issue, any of the foregoing.
“Fiscal Year” means the Company’s fiscal year, which shall initially be the calendar year and which may be changed from time to time as determined by the Managing Member if permitted by the Code and the applicable Treasury Regulations.
“Governmental Authority” means any transnational, domestic or non-U.S. federal, state or local governmental, regulatory or administrative authority, department, court, agency or official, including any political subdivision thereof.
“Hurdle Amount” has the meaning set forth in Section 2 of Annex A hereto.
“Indebtedness” means (i) all indebtedness for borrowed money (including capitalized lease obligations, sale-leaseback transactions or other similar transactions, however evidenced), (ii) any other indebtedness that is evidenced by a note, bond, debenture, draft or similar instrument, (iii) notes payable and (iv) lines of credit and any other agreements relating to the borrowing of money or extension of credit.
“Involuntary Transfer” means any Transfer of Units by a Member resulting from (i) any seizure under levy of attachment or execution, (ii) any bankruptcy (whether voluntary or involuntary), (iii) any Transfer to a state or to a public officer or agency pursuant to any statute pertaining to escheat or abandoned property, (iv) any divorce or separation agreement or a final decree of a court in a divorce action or (v) death or permanent disability.
“IPO” means the initial underwritten public offering of Pubco.
“Liens” means any pledge, encumbrance, security interest, purchase option, conditional sale agreement, call or similar right.
“LTIP Unit” means the Units of the Company issued to Aggregator (or such other Person as the Managing Member may designate) and designated as an “LTIP Unit,” having the rights, powers, privileges, restrictions, qualifications and limitations set forth in Annex A hereto, in this Agreement, or other documentation pursuant to which such LTIP Unit is granted or issued.
“Managing Member” means (i) Pubco so long as Pubco has not withdrawn as the Managing Member pursuant to Section 7.02 and (ii) any successor thereof appointed as Managing Member in accordance with Section 7.02.
“Member” means any Person named as a Member of the Company on the Member Schedule and the books and records of the Company, as the same may be amended from time to
5
time to reflect any Person admitted as an Additional Member or a Substitute Member, for so long as such Person continues to be a Member of the Company.
“Member Nonrecourse Debt” has the same meaning as the term “partner nonrecourse debt” in Treasury Regulations Section 1.704-2(b)(4).
“Member Nonrecourse Debt Minimum Gain” means an amount with respect to each “partner nonrecourse debt” (as defined in Treasury Regulations Section 1.704-2(b)(4)) equal to the Company Minimum Gain that would result if such partner nonrecourse debt were treated as a nonrecourse liability (as defined in Treasury Regulations Section 1.752-1(a)(2)) determined in accordance with Treasury Regulations Section 1.704-2(i)(3).
“Member Nonrecourse Deductions” has the same meaning as the term “partner nonrecourse deductions” in Treasury Regulations Sections 1.704-2(i)(1) and 1.704-2(i)(2).
“Net Income” and “Net Loss” mean, for each Fiscal Year or other period, an amount equal to the Company’s taxable income or loss for such Fiscal Year or period, determined in accordance with Section 703(a) of the Code (for this purpose, all items of income, gain, loss, or deduction required to be stated separately pursuant to Section 703(a)(1) of the Code shall be included in taxable income or loss), with the following adjustments (without duplication):
(i) Any income of the Company that is exempt from U.S. federal income tax and not otherwise taken into account in computing Net Income or Net Loss pursuant to this definition of “Net Income” and “Net Loss” shall be added to such taxable income or loss;
(ii) Any expenditures of the Company described in Section 705(a)(2)(B) of the Code or treated as Section 705(a) (2)(B) of the Code expenditures pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Net Income and Net Loss pursuant to this definition of “Net Income” and “Net Loss,” shall be treated as deductible items;
(iii) In the event the Carrying Value of any Company asset is adjusted pursuant to subparagraphs (ii) or (iii) of the definition of “Carrying Value,” the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the Carrying Value of the asset) or an item of loss (if the adjustment decreases the Carrying Value of the asset) from the disposition of such asset and shall be taken into account, immediately prior to the event giving rise to such adjustment, for purposes of computing Net Income and/or Net Loss;
(iv) Gain or loss resulting from any disposition of Property with respect to which gain or loss is recognized for U.S. federal income tax purposes shall be computed by reference to the Carrying Value of the Property disposed of, notwithstanding that the adjusted tax basis of such Property differs from its Carrying Value;
(v) In lieu of the depreciation, amortization, and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account Depreciation for such Fiscal Year, computed in accordance with the definition of Depreciation;
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(vi) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) of the Code is required, pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital Accounts as a result of a distribution other than in liquidation of a Member’s interest in the Company, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) from the disposition of such asset and shall be taken into account for purposes of computing Net Income or Net Loss; and
(vii) Notwithstanding any other provision of this definition, any items that are specially allocated pursuant to Section 5.04(b), Section 5.04(c), and Section 5.04(d) shall not be taken into account in computing Net Income and Net Loss.
The amounts of the items of Company income, gain, loss, or deduction available to be specially allocated pursuant to Section 5.04(b), Section 5.04(c), and Section 5.04(d) shall be determined by applying rules analogous to those set forth in subparagraphs (i) through (vi) above.
“New Class X Umbrella Units” means, with respect to any Exchanged LTIP Units, a number of Class X Umbrella Units equal to the quotient of (i) the amount to which the holder of such Exchanged LTIP Units would be entitled to receive if an amount equal to the fair market value of the Company as of the date of the Exchange (as reasonably determined by the Managing Member) were distributed in cash to the Members in accordance with Section 12.02 (taking into account the relevant Hurdle Amount and any adjustments required to be made to distributions on account of Catch-Up Units pursuant to Section 12.02), divided by (ii) the Per Class X Umbrella Unit Equity Value on the date of the Exchange; provided, such quotient will be rounded down to the nearest whole number of Class X Umbrella Units.
“Non-Pubco Member” means any Member that is not a Pubco Member.
“Nonrecourse Deductions” has the meaning set forth in Treasury Regulations Sections 1.704-2(b)(1) and 1.704-2(c).
“Other Agreements” means the Tax Receivable Agreement.
“Paired Interest” means each Unit, share of stock, or other Equity Security that are redeemable for one or more other Units, shares of stock, or other Equity Security, which shall include those certain Class X Umbrella Units owned, directly or indirectly, by Aggregator and those certain Class B Common Stock shares which are together redeemable in a one-to-one ratio for Class A Common Stock, and such shares of Class A Common Stock.
“Per Class X Umbrella Unit Equity Value” means, as of any particular time, the amount to which a Class X Umbrella Unit held by Pubco would be entitled in respect of such Class X Umbrella Unit if an amount equal to the fair market value of the Company as of such time (as reasonably determined by the Managing Member) were distributed to the Members in accordance with Section 12.02.
“Partnership Tax Audit Rules” means Sections 6221 through 6241 of the Code, as amended, together with any final or temporary Treasury Regulations, Revenue Rulings, and case
7
law interpreting Sections 6221 through 6241 of the Code, as amended (and any analogous provision of state or local tax law).
“Percentage Interest” means, with respect to any Member, a fractional amount, expressed as a percentage: (i) the numerator of which is the aggregate number of Class X Umbrella Units and LTIP Units owned of record thereby and (ii) the denominator of which is the aggregate number of Class X Umbrella Units and LTIP Units issued and outstanding. The sum of the outstanding Percentage Interests of all Members shall at all times equal one hundred percent (100%).
“Permitted Exchange” means an Exchange of Class X Umbrella Units or LTIP Units by an Exchanging Member except as otherwise prohibited or restricted by (i) this Agreement, (ii) any underwriter lock-up agreement applicable to such Exchanging Member, or (iii) any admissions agreement, purchase agreement, or other applicable agreement by and between the Exchanging Member and the Company, Pubco, or Aggregator.
“Permitted Participant Transferee” means a holder of Equity Securities in Aggregator where (i) such holder has delivered written notice to Aggregator exercising their right to participate in a Pubco Offer (as defined below), (ii) Aggregator has delivered written notice to the Company indicating its intent to facilitate such participation by the transfer of all or a portion of Aggregator’s Units to such holder, and (iii) such holder has delivered a notice to the Company with the information required for a notice pursuant to Section 10.04(a) regarding such Pubco Offer, which notice shall, unless mutually agreed by such holder, Aggregator and the Managing Member, be effective as notice of exchange of a Member delivered on the date first received by the Company in connection with the Pubco Offer. For the avoidance of doubt, such notices shall be contingent upon such Pubco Offer and not be effective if such Pubco Offer is not consummated.
“Permitted Redeeming Transferee” means a holder of Equity Securities in Aggregator where (i) such holder has delivered written notice to Aggregator exercising their right to receive Class X Umbrella Units from Aggregator (the “Exchange Notice”), (ii) such holder has delivered a copy to the Company of the Exchange Notice which notice shall, unless mutually agreed by such holder, Aggregator and the Managing Member, be effective as a Redemption Notice of a Member delivered on the date first received by the Company in connection with the aforementioned redemption by such holder of the transferred Units, and (iii) Aggregator intends to transfer one or more of Aggregator’s Class X Umbrella Units to such holder.
“Permitted Transferee” means, other than with respect to Pubco, (i) any Member, (ii) any Permitted Redeeming Transferee (who will, for the avoidance of doubt, become a member following such Transfer), and (iii) (a) in the case of any Member that is not a natural person, any Person that is an Affiliate of such Member or, solely in regards to Aggregator, its beneficial owners, and (b) in the case of any Member that is a natural person, (1) any Person to whom Class X Umbrella Units are Transferred from such Member (x) by will or the laws of descent and distribution or (y) by gift without consideration of any kind; provided that, in the case of clause (y), such transferee is the spouse, the lineal descendant, sibling, parent, heir, executor, administrator, testamentary trustee, legatee or beneficiary of such Member, (2) a trust, family-partnership or estate-planning vehicle that is for the exclusive benefit of such Member or its Permitted Transferees under (1) above or (3) any institution qualified as tax-exempt under Section 501(c)(3) of the Code.
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“Person” means any individual, firm, corporation, partnership, limited liability company, trust, estate, joint venture, governmental authority or other entity.
“Prime Rate” means the rate of interest from time to time identified by JP Morgan Chase, N.A. as being its “prime” or “reference” rate.
“Profits Interest” means an interest in the Company that is classified as a partnership profits interest within the meaning of Internal Revenue Service Revenue Procedures 93-27 and 2001-43 (or the corresponding requirements of any subsequent guidance promulgated by the Internal Revenue Service or other Applicable Law).
“Property” means an interest of any kind in any real, personal or intellectual (or mixed) property, including cash, and any improvements thereto, and shall include both tangible and intangible property.
“Pubco Common Stock” means all classes and series of common stock of Pubco, including the Class A Common Stock and Class B Common Stock.
“Pubco Member” means (i) Pubco and (ii) any Subsidiary of Pubco (other than the Company and its Subsidiaries) that is or becomes a Member.
“Qualifying Offering” means any public or private offering of shares of Class A Common Stock by Pubco following the date hereof.
“Redeemed Units Equivalent” means the product of (i) the number of Redeemed Units, multiplied by (ii) the applicable Unit Redemption Price.
“Relative Percentage Interest” means, with respect to any Member relative to another Member or Members, a fractional amount, expressed as a percentage, the numerator of which is the Percentage Interest of such Member; and the denominator of which is the sum of (x) the Percentage Interest of such Member plus (y) the aggregate Percentage Interest of such other Member or Members. The calculation by the Managing Member shall be final and binding absent manifest error.
“Restricted Person” means (i) each Non-Pubco Member, and (ii) in the case of a Non-Pubco Member that is an entity, each direct or indirect owner of Equity Securities of such Non-Pubco Member that agrees (by executing a joinder to this Agreement or other agreement with the Company or Pubco) to be a Restricted Person hereunder.
“Restricted Unit” means any Unit that is subject to vesting or that is designated as a Restricted Unit by an agreement under which such Unit was issued, including in the Annexes to this Agreement.
“SEC” means the United States Securities and Exchange Commission.
“Specified Income Tax Payment” means an amount computed for any relevant period, as of the last day thereof, that is paid by Aggregator to a state of the United States, a political subdivision of any such state or the District of Columbia (each, a “Domestic Jurisdiction”) to
9
satisfy its liability for income taxes imposed by such Domestic Jurisdiction on Aggregator, where the amount of such tax imposed on Aggregator is measured in whole or in part by reference to the tax elections made by one or more of the Aggregator Members, the residency of one or more of the Aggregator Members or other tax characteristics or tax status of one or more of the Aggregator Members (for the avoidance of doubt, a state or local income tax that is based on income sourcing rules that look to the location of where the services are provided, including services of Aggregator Members, shall not solely by reason of such sourcing rule be treated hereunder as a tax that is measured by reference to the residency, tax elections or other tax characteristics or tax status of the Members or assignees). For the avoidance of doubt, any payments made pursuant to Cal. Rev. & Tax. Cd. Section 19900; N.Y. Tax Law Section 861 or Mass. Gen. Laws, Chapter 63D, each as may be amended from time to time, will be treated as Specified Income Tax Payments.
“Subsidiary” means, with respect to any Person, any corporation, partnership, limited liability company, association, joint venture or other business entity of which more than fifty percent (50%) of the total voting power of Equity Securities or other ownership interests entitled (without regard to the occurrence of any contingency) to vote in the election of the Person or Persons (whether directors, managers, trustees or other Persons performing similar functions) having the power to direct or cause the direction of the management and policies 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.
“Substitute Member” means any Person admitted as a Member of the Company pursuant to Section 3.02 in connection with the Transfer of then-existing Units to such Person.
“Tax Distribution” means a distribution made by the Company pursuant to Section 5.03(e)(i).
“Tax Distribution Amount” means, with respect to any Member with respect to any Fiscal Year (or portion thereof) ending after the Effective Time, an amount equal to the product of (i) the Tax Rate multiplied by (ii) the estimated or actual net taxable income or gain of the Company, as determined for U.S. federal income tax purposes, allocated to such Member for such Fiscal Year (or portion thereof), as determined by the Managing Member; provided that for purposes of this determination, the first Fiscal Year ending after the Effective Time shall be deemed to have commenced on the day during which the Effective Time occurs. The Tax Distribution Amounts of the Members shall be determined without taking into account the effects of Section 743(b) of the Code. The Tax Distribution Amount (i) with respect to Pubco for a fiscal year shall in no event be less than an amount that will enable Pubco to meet both its tax obligations and Pubco’s obligations pursuant to the Tax Receivable Agreement for the relevant fiscal year and (ii) with respect to each Economic Interest held by Aggregator, shall in no event be less than an amount necessary to enable Aggregator to make any Specified Income Tax Payments for the relevant fiscal year with respect to each such Economic Interest, unless, in each case, determined otherwise by the Managing Member. Furthermore, with the consent of Aggregator (not to be unreasonably withheld, conditioned or delayed), the Managing Member may reduce the Tax Distribution Amounts of the Members; provided that any reduction of the Tax Distribution Amounts of the Members attributable to the Class X Umbrella Units held by such Members in respect of a fiscal year are made pro rata in accordance with the Members’ respective Percentage Interests
10
(determined solely in respect of Class X Umbrella Units and the Tax Distribution Amounts attributable thereto).
“Tax Rate” means the highest marginal tax rate for an individual or corporation resident in any state of the United States which has the highest individual income or corporate income tax rates (but, for the avoidance of doubt, taking into account the extent to which such individual or corporation is subject to state or local income tax in other jurisdictions in respect of the net taxable income of the Company allocated to such individual or corporation, as determined by the Managing Member in good faith) applicable to ordinary income, qualified dividend income or capital gains, as appropriate, taking into account the holding period of any assets disposed of and the year in which the taxable net income is recognized by the Company, which Tax Rate shall be the same for all Members for any year.
“Tax Receivable Agreement” means the Tax Receivable Agreement, dated as of the date hereof, as may be amended from time to time, by and among Pubco, the Company and each of the TRA Parties (as defined in the Tax Receivable Agreement) thereto.
“Trading Day” means a day on which the principal U.S. securities exchange on which the Class A Common Stock is listed or admitted to trading is open for the transaction of business (unless such trading shall have been suspended for the entire day).
“Transfer” means any sale, assignment, transfer, exchange, gift, bequest, pledge, hypothecation or other disposition or encumbrance, direct or indirect, in whole or in part, by operation of law or otherwise, and shall include all matters deemed to constitute a Transfer under Article VIII. The terms “Transferred”, “Transferring”, “Transferor”, “Transferee” and “Transferable” have meanings correlative to the foregoing.
“Treasury Regulations” mean the regulations promulgated under the Code, as amended from time to time.
“Unit Redemption Price” means the arithmetic average of the volume weighted average prices for a share of Class A Common Stock on the principal U.S. securities exchange or automated or electronic quotation system on which the Class A Common Stock trades, as reported by The Wall Street Journal or its successor, for each of the three (3) consecutive full Trading Days ending on and including the last full Trading Day immediately prior to the date of Redemption (or the date of the Call Notice, as applicable), subject to appropriate and equitable adjustment for any stock splits, reverse splits, stock dividends or similar events affecting the Class A Common Stock. If the Class A Common Stock no longer trades on a securities exchange or automated or electronic quotation system, then the Unit Redemption Price shall be determined in good faith by a committee of the board of directors of Pubco composed of a majority of the directors of Pubco that do not have an interest in the Class X Umbrella Units being redeemed.
“Units” means Class X Umbrella Units, LTIP Units or any other class of limited liability interests in the Company designated by the Company after the date hereof in accordance with this Agreement; provided that any type, class or series of Units shall have the designations, preferences and/or special rights set forth or referenced in this Agreement, and the membership interests of the
11
Company represented by such type, class or series of Units shall be determined in accordance with such designations, preferences and/or special rights.
“Vesting Agreement” has the meaning set forth in Section 3 of Annex A.
(b) Each of the following terms is defined in the Section set forth opposite such term:
| 100 Partner Safe Harbor |
Section 8.01(c) | |||
| AAA |
Section 14.01(a) | |||
| Aggregator Member Action |
Section 4.03(a) | |||
| Aggregator Member Interests |
Section 4.03(a) | |||
| Aggregator Paired Interest |
Section 4.03(a)v | |||
| Agreement |
Preamble | |||
| Arbitration Notice Date |
Section 14.01(b) | |||
| Call Member |
Section 9.02(a) | |||
| Call Notice |
Section 9.02(a) | |||
| Call Units |
Section 9.02(a) | |||
| Cash Settlement |
Section 10.01(d) | |||
| Company |
Preamble | |||
| Company Parties |
Section 9.01(a) | |||
| Company Representative |
Section 6.01(a) | |||
| Confidential Information |
Section 13.10(b) | |||
| Contribution Notice |
Section 10.01(d) | |||
| Controlled Entities |
Section 11.02(e) | |||
| Direct Exchange |
Section 10.03(a) | |||
| Discount |
Section 13.01 | |||
| Disposition Transaction |
Section 5.06(e) | |||
| Dissolution Event |
Section 12.01(c) | |||
| Economic Pubco Security |
Section 4.01(a) | |||
| Exchange |
Section 10.01(a) | |||
| Exchange Election Notice |
Section 10.03(b) | |||
| Exchanged LTIP Units |
Section 10.08(a) | |||
| Economic Interest |
Section 5.02 | |||
| Expenses |
Section 11.02(e) | |||
| |
Section 13.03 | |||
| GAAP |
Section 3.03(b) | |||
| Indemnitee-Related Entities |
Section 11.02(e)(i) | |||
| Jointly Indemnifiable Claims |
Section 11.02(e)(ii) | |||
| LTIP Exchange |
Section 10.08(a) | |||
| LTIP Exchange Date |
Section 10.08(a) | |||
| LTIP Exchange Notice |
Section 10.08(a) | |||
| LTIP Exchange Right |
Section 10.08(a) | |||
| LTIP Exchanging Member |
Section 10.08(a) | |||
| Member Parties |
Section 13.10(a) | |||
| Member Schedule |
Section 3.01(b) | |||
| Members |
Recitals |
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| Non-Foreign Person Certificate |
Section 5.06(e) | |
| Officers |
Section 7.05(a) | |
| Permitted Transfers |
Section 8.02 | |
| Prospective Participants |
Section 10.04(a) | |
| Proposed Regulations |
Section 6.04 | |
| Pubco |
Preamble | |
| Pubco Certificate of Incorporation |
Section 8.02 | |
| Pubco Offer |
Section 10.04(a) | |
| Redeemed Units |
Section 10.01(b)(i) | |
| Redeeming Member |
Section 10.01(b) | |
| Redemption |
Section 10.01(a) | |
| Redemption Date |
Section 10.01(b)(ii) | |
| Redemption Notice |
Section 10.01(b) | |
| Redemption Right |
Section 10.01(a) | |
| Regulatory Allocations |
Section 5.04(c) | |
| Retraction Notice |
Section 10.01(b)(iii) | |
| Revaluation |
Section 5.02(c) | |
| Seller Member |
Section 5.06(e) | |
| Share Settlement |
Section 10.01(d) | |
| Specified Exchange Date |
Section 10.09(c)(i) | |
| Transferor Member |
Section 5.02(b) | |
| Withholding Advances |
Section 5.06(b) |
Section 1.02. Other Definitional and Interpretive Provisions. The words “hereof”, “herein” and “hereunder” and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof. References to Articles, Annexes, Sections and Schedules are to Articles, Annexes, Sections and Schedules of this Agreement unless otherwise specified. All Annexes and Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein. Any capitalized terms used in any Annex or Schedule and not otherwise defined therein, shall have the meaning as defined in this Agreement. Any singular term in this Agreement shall be deemed to include the plural, and any plural term the singular. Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”, whether or not they are in fact followed by those words or words of like import. “Writing”, “written” and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form. References to any statute shall be deemed to refer to such statute as amended from time to time and to any rules or regulations promulgated thereunder. References to any agreement or contract are to that agreement or contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof. References to any Person include the successors and permitted assigns of that Person. References from or through any date mean, unless otherwise specified, from and including or through and including, respectively. References to “law”, “laws” or to a particular statute or law shall be deemed also to include any Applicable Law. As used in this Agreement, all references to “majority in interest” or some other percentage or fraction in interest, and phrases of similar import shall be deemed to refer to such percentage or fraction of
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interest based on the Relative Percentage Interests of the Members subject to such determination. Unless otherwise expressly provided herein, when any approval, consent or other matter requires any action or approval of any group of Members, including any holders of any class of Units, such approval, consent or other matter shall require the approval of a majority in interest of such group of Members. Except to the extent otherwise expressly provided herein, all references to any Member shall be deemed to refer solely to such Person in its capacity as such Member and not in any other capacity.
ARTICLE II
THE COMPANY
Section 2.01. Formation. The Company was formed upon the filing of the certificate of formation of the Company with the Secretary of State of the State of Delaware on August 6, 2025. The authorized officer or representative, as an “authorized person” within the meaning of the Delaware Act, shall file and record any amendments and/or restatements to the certificate of formation of the Company and such other certificates and documents (and any amendments or restatements thereof) as may be required under the laws of the State of Delaware and of any other jurisdiction in which the Company may conduct business. The authorized officer or representative shall, on request, provide any Member with copies of each such document as filed and recorded. The Members hereby agree that the Company and its Subsidiaries shall be governed by the terms and conditions of this Agreement and, except as provided herein, the Delaware Act.
Section 2.02. Name. The name of the Company shall be AT Umbrella LLC; provided that the Managing Member may change the name of the Company to such other name as the Managing Member shall determine, and shall have the authority to execute, acknowledge, deliver, file and record such further certificates, amendments, instruments and documents, and to do all such other acts and things, as may be required by Applicable Law or as, in the reasonable judgment of the Managing Member, may be necessary or advisable to effect such change.
Section 2.03. Term. The Company shall have perpetual existence unless sooner dissolved and its affairs wound up as provided in Article XII.
Section 2.04. Registered Agent and Registered Office. The name of the registered agent of the Company for service of process on the Company in the State of Delaware shall be Corporation Service Company, and the address of such registered agent and the address of the registered office of the Company in the State of Delaware shall be Corporation Service Company, 251 Little Falls Drive, Wilmington, New Castle County, Delaware 19808. Such office and such agent may be changed to such place within the State of Delaware and any successor registered agent, respectively, as may be determined from time to time by the Managing Member in accordance with the Delaware Act.
Section 2.05. Purposes. The Company has been formed for the object and purpose of engaging, and the nature of the business to be conducted and promoted by the Company is to initially engage, in the Business and to carry on any other lawful business act or activities for which limited liability companies may be organized under the Delaware Act.
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Section 2.06. Powers of the Company. The Company shall have the power and authority to take any and all actions necessary, appropriate or advisable to or for the furtherance of the purposes set forth in Section 2.05.
Section 2.07. Partnership Tax Status. The Members intend that the Company shall be treated as a partnership for U.S. federal, state and local income tax purposes to the extent such treatment is available, and agree to take (or refrain from taking) such actions as may be necessary to receive and maintain such treatment and refrain from taking any actions inconsistent thereof.
Section 2.08. Regulation of Internal Affairs. The internal affairs of the Company and the conduct of its business shall be regulated by this Agreement, and to the extent not provided for herein, shall be determined by the Managing Member.
Section 2.09. Ownership of Property. Legal title to all Property, conveyed to, or held by the Company or its Subsidiaries shall reside in the Company or its Subsidiaries and shall be conveyed only in the name of the Company or its Subsidiaries and no Member or any other Person, individually, shall have any ownership of such Property.
Section 2.10. Subsidiaries. The Company shall cause the business and affairs of each of the Subsidiaries to be managed by the Managing Member in accordance with and in a manner consistent with this Agreement.
Section 2.11. Qualification in Other Jurisdictions. The Managing Member shall execute, deliver and file certificates (and any amendments and/or restatements thereof) necessary for the Company to qualify to do business in the jurisdictions in which the Company may wish to conduct business. In those jurisdictions in which the Company may wish to conduct business in which qualification or registration under assumed or fictitious names is required or desirable, the Managing Member shall cause the Company to be so qualified or registered in compliance with Applicable Law.
ARTICLE III
UNITS; MEMBERS; BOOKS AND RECORDS; REPORTS
Section 3.01. Units; Admission of Members.
(a) Each Member’s interest in the Company, including such Member’s interest, if any, in the capital, income, gain, loss, deduction and expense of the Company and the right to vote, if any, on certain Company matters as provided in this Agreement, shall be represented by Units. The ownership by a Member of Units shall entitle such Member to allocations of profits and losses and other items and distributions of cash and other property as is set forth in Article V. Units shall be issued in non-certificated form.
(b) The Company shall maintain a schedule setting forth the names and the number of Units and any other Economic Interests owned by each Member (the “Member Schedule”), which shall be maintained by the Managing Member on behalf of the Company in accordance with this Agreement. Notwithstanding anything to the contrary contained herein or in the Delaware Act, neither the Managing Member nor the Company shall be required to disclose an unredacted Member Schedule to any Non-Pubco Member, or any other information showing
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the identity of the other Non-Pubco Members or the number of Units or shares of any class of Pubco Common Stock owned by another Non-Pubco Member. For each Non-Pubco Member, the Company shall provide such Member, upon request, a redacted copy of the Member Schedule revealing only such Member’s Units, the total issued and outstanding Units, and such Member’s Percentage Interest. When any Units or other Equity Securities of the Company are issued, repurchased, redeemed, converted or Transferred in accordance with this Agreement, the Member Schedule shall be amended by the Managing Member to reflect such issuance, repurchase, redemption or Transfer, the admission of additional or substitute Members and the resulting Percentage Interest of each Member. Following the date hereof, no Person shall be admitted as a Member and no additional Units shall be issued except as expressly provided herein.
(c) The Managing Member may cause the Company to authorize and issue from time to time such other Units or other Equity Securities of any type, class or series, including an unlimited number of Class X Umbrella Units and an unlimited number of LTIP Units, in both cases subject to the limitations herein, and having the designations, preferences and/or special rights as may be determined by the Managing Member. Such Units or other Equity Securities may be issued pursuant to such agreements as the Managing Member shall approve, including with respect to Persons employed by or otherwise performing services for the Company or any of its Subsidiaries, other equity compensation agreements, options, warrants, or other comparable instruments. When any such other Units or other Equity Securities are authorized and issued, the Member Schedule and this Agreement shall be amended by the Managing Member to reflect such additional issuances and resulting dilution, which shall be borne by all Members in proportion to their respective Percentage Interests.
Section 3.02. Substitute Members and Additional Members.
(a) No Transferee of any Units or Person to whom any Units are issued pursuant to this Agreement shall be admitted as a Member hereunder or acquire any rights hereunder, including any voting rights or the right to receive distributions and allocations in respect of the Transferred or issued Units, as applicable, unless (i) such Units are Transferred (with respect to a Substitute Member) or issued (with respect to an Additional Member) in compliance with the provisions of this Agreement, (ii) such Transferee or recipient shall have executed and delivered to the Company such instruments as the Managing Member deems necessary or desirable, in its reasonable discretion, to effectuate the admission of such Transferee or recipient as a Member and to confirm the agreement of such Transferee or recipient to be bound by all the terms and provisions of this Agreement, (iii) the Managing Member shall have received the opinion of counsel, if any, required by Section 3.02(b) in connection with such Transfer and (iv) all necessary instruments reflecting such Transfer and/or admission shall have been filed in each jurisdiction in which such filling is necessary in order to qualify the company to conduct business or to preserve the limited liability of the Members. Upon complying with the immediately preceding sentence, without the need for any further action of any Person, a Transferee or recipient shall be deemed admitted to the Company as a Substitute Member or Additional Member, as the case may be. A Substitute Member shall enjoy the same rights, and be subject to the same obligations, as the Transferor; provided that such Transferor shall not be relieved of any obligation or liability hereunder arising prior to the consummation of such Transfer but shall be relieved of all future obligations with respect to the Units so Transferred. As promptly as practicable after the admission of any Person as a Member, the books and records of the Company shall be changed to reflect such
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admission of a Substitute Member or Additional Member. In the event of any admission of a Substitute Member or Additional Member pursuant to this Section 3.02(a), this Agreement shall be deemed amended to reflect such admission, and any formal amendment of this Agreement (including the Member Schedule) in connection therewith shall only require execution by the Company and such Substitute Member or Additional Member, as applicable, to be effective.
(b) As a further condition to any Transfer of all or any part of a Member’s Units, the Managing Member may, in its discretion, require a written opinion of counsel to the transferring Member reasonably satisfactory to the Managing Member, obtained at the sole expense of the transferring Member, reasonably satisfactory in form and substance to the Managing Member, as to such matters as are customary and appropriate in transactions of this type, including, without limitation (or, in the case of any Transfer made to a Permitted Transferee, limited to an opinion) to the effect that such Transfer will not result in a violation of the registration or other requirements of the Securities Act or any other federal or state securities laws. No such opinion, however, shall be required in connection with a Transfer made pursuant to Article X of this Agreement.
(c) If a Member shall Transfer all (but not less than all) of its Units, the Member shall thereupon cease to be a Member of the Company.
(d) All reasonable costs and expenses incurred by the Managing Member and the Company in connection with any Transfer of a Member’s Units, including any filing and recording costs and the reasonable fees and disbursements of counsel for the Company, shall be paid by the transferring Member. In addition, the transferring Member hereby indemnifies the Managing Member and the Company against any losses, claims, damages or liabilities to which the Managing Member, the Company, or any of their Affiliates may become subject arising out of or based upon any false representation or warranty made by, or breach or failure to comply with any covenant or agreement of, such transferring Member or such transferee in connection with such Transfer.
(e) In connection with any Transfer of any portion of a Member’s Units pursuant to Article X of this Agreement, the Managing Member shall cause the Company to take any action as may be required under Article X of this Agreement or requested by any party thereto to effect such Transfer promptly.
Section 3.03. Tax and Accounting Information.
(a) Accounting Decisions and Reliance on Others. All decisions as to accounting matters, except as otherwise specifically set forth herein, shall be made by the Managing Member in accordance with Applicable Law and with accounting methods followed for U.S. federal income tax purposes. In making such decisions, the Managing Member may rely upon the advice of the independent accountants of the Company.
(b) Records and Accounting Maintained. The books and records of the Company shall be kept, and the financial position and the results of its operations recorded, in all material respects in accordance with United States generally accepted accounting principles as in
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effect from time to time (“GAAP”). The Fiscal Year of the Company shall be used for financial reporting and for U.S. federal income tax purposes.
(c) Financial Reports. The books and records of the Company shall be audited as of the end of each Fiscal Year by the same accounting firm that audits the books and records of Pubco (or, if such firm declines to perform such audit, by an accounting firm selected by the Managing Member).
(d) Tax Returns.
(i) The Company shall timely prepare or cause to be prepared by an accounting firm selected by the Managing Member all U.S. federal, state, local and non-U.S. tax returns (including information returns) of the Company and its Subsidiaries, which may be required by a jurisdiction in which the Company and its Subsidiaries operate or conduct business for each year or period for which such returns are required to be filed and shall cause such returns to be timely filed. Upon reasonable request of any Member, the Company shall furnish to such Member a copy of each such tax return; and
(ii) The Company shall furnish to each Member (A) as soon as reasonably practical after the end of each Fiscal Year, all information concerning the Company and its Subsidiaries reasonably required for the preparation of tax returns of such Members (or any beneficial owner(s) of such Member), including a report (including Schedule K-1), indicating each Member’s share of the Company’s taxable income, gain, credits, losses and deductions for such year, in sufficient detail to enable such Member to prepare its federal, state and other tax returns; provided that unless otherwise agreed by the Managing Member estimates of such information believed by the Managing Member in good faith to be reasonable shall be provided as soon as reasonably practicable after the close of the relevant fiscal period, (B) as soon as reasonably possible after the close of the relevant fiscal period, such information concerning the Company as is required to enable such Member (or any beneficial owner of such Member) to pay estimated taxes and (C) as soon as reasonably possible after a request by such Member, such other information concerning the Company and its Subsidiaries that is reasonably requested by such Member for compliance with its tax obligations (or the tax obligations of any beneficial owner(s) of such Member) or for tax planning purposes.
(e) Inconsistent Positions. No Member shall take a position on its income tax return with respect to any item of Company income, gain, deduction, loss or credit that is different from the position taken on the Company’s income tax return with respect to such item unless such Member notifies the Company of the different position the Member desires to take and the Company’s regular tax advisors, after consulting with the Member, are unable to provide an opinion that (after taking into account all of the relevant facts and circumstances) the arguments in favor of the Company’s position outweigh the arguments in favor of the Member’s position.
Section 3.04. Books and Records. The Company shall keep full and accurate books of account and other records of the Company at its principal place of business.
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ARTICLE IV
OWNERSHIP; RESTRICTIONS ON PUBCO STOCK
Section 4.01. Pubco Ownership.
(a) Except as otherwise determined by Pubco, if at any time Pubco issues a share of Class A Common Stock or any other Equity Security of Pubco entitled to any economic rights (including in the IPO) (together, an “Economic Pubco Security”) with regard thereto (which does not include Class B Common Stock or any other Equity Security of Pubco not entitled to any economic rights with respect thereto), (i) the Company shall issue to Pubco one (1) Class X Umbrella Unit (if Pubco issues a share of Class A Common Stock) or such other Equity Security of the Company (if Pubco issues an Economic Pubco Security other than Class A Common Stock) corresponding to the Economic Pubco Security, and with substantially the same rights to dividends and distributions (including distributions upon liquidation) and other economic rights as those of such Economic Pubco Security and (ii) the net proceeds received by Pubco with respect to the corresponding Economic Pubco Security, if any, shall be concurrently contributed to the Company; provided, however, that if Pubco issues any Economic Pubco Securities, some or all of the net proceeds of which are to be used to fund expenses or other obligations of Pubco for which Pubco would be permitted a distribution pursuant to Section 5.03(d), then Pubco shall not be required to transfer such net proceeds to the Company which are used or will be used to fund such expenses or obligations and provided, further, that if Pubco issues any shares of Class A Common Stock (including in the IPO) in order to purchase or fund the purchase from a Non-Pubco Member of a number of Class X Umbrella Units or to purchase or fund the purchase of shares of Class A Common Stock, in each case equal to the number of shares of Class A Common Stock issued, then the Company shall not issue any new Class X Umbrella Units in connection therewith and Pubco shall not be required to transfer such net proceeds to the Company (it being understood that such net proceeds shall instead be transferred to such Non-Pubco Member or transferor of Class A Common Stock, as applicable, as consideration for such purchase).
(b) For the avoidance of doubt, this Article IV shall apply to the issuance and distribution to holders of shares of Pubco Common Stock of rights to purchase Equity Securities of Pubco under a “poison pill” or similar stockholders’ rights plan (it also being understood that upon redemption or exchange of Class X Umbrella Units (including any such right to purchase Class X Umbrella Units in the Company) for shares of Class A Common Stock, such Class A Common Stock will be issued together with a corresponding right to purchase Equity Securities of Pubco).
(c) If at any time Pubco issues one (1) or more shares of Class A Common Stock in connection with an equity incentive program, whether such share or shares are issued upon exercise of an option, settlement of a restricted stock unit, as restricted stock or otherwise, the Company shall issue to Pubco a corresponding number of Class X Umbrella Units; provided that Pubco shall be required to concurrently contribute the net proceeds (if any) received by Pubco from or otherwise in connection with such corresponding issuance of one or more shares of Class A Common Stock, including the exercise price of any option exercised, to the Company. If any such shares of Class A Common Stock so issued by Pubco in connection with an equity incentive program are subject to vesting or forfeiture provisions, then the Class X Umbrella Units that are
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issued by the Company to Pubco in connection therewith in accordance with the preceding provisions of this Section 4.01(c) shall be subject to vesting or forfeiture on the same basis; if any, of such shares of Class A Common Stock vest or are forfeited, then a corresponding number of the Class X Umbrella Units issued by the Company in accordance with the preceding provisions of this Section 4.01(c) shall automatically vest or be forfeited, as applicable. Any cash or property held by either Pubco or the Company or on either’s behalf in respect of dividends paid on restricted Class A Common Stock that fails to vest shall be returned to the Company upon the forfeiture of such restricted Class A Common Stock.
Section 4.02. Restrictions on Pubco Common Stock.
(a) Except as otherwise determined by the Managing Member in accordance with Section 4.02(f), (i) the Company may not issue any additional Class X Umbrella Units to Pubco or any of its Subsidiaries unless substantially simultaneously therewith Pubco or such Subsidiary issues or sells an equal number of shares of Class A Common Stock to another Person, (ii) the Company may not issue any additional Class X Umbrella Units to Aggregator unless simultaneously therewith Pubco issues or sells an equal number of shares of Class B Common Stock to Aggregator, (iii) Pubco may not issue any Class B Common Stock to any Person other than Aggregator unless otherwise agreed by Aggregator, and (iv) the Company may not issue any other Equity Securities of the Company to Pubco or any of its Subsidiaries unless substantially simultaneously therewith, Pubco or such Subsidiary issues or sells, to another Person, an equal number of shares of a new class or series of Equity Securities of Pubco or such Subsidiary with substantially the same rights to dividends and distributions (including distributions upon liquidation) and other economic rights as those of such Equity Securities of the Company.
(b) Except as otherwise determined by the Managing Member in accordance with Section 4.02(f)(i) (i) Pubco and its Subsidiaries may not redeem, repurchase or otherwise acquire any shares of Class A Common Stock unless substantially simultaneously therewith the Company redeems, repurchases or otherwise acquires from Pubco or any of its Subsidiaries an equal number of Class X Umbrella Units for the same price per security and (ii) Pubco and its Subsidiaries may not redeem or repurchase any other Equity Securities of Pubco unless substantially simultaneously therewith the Company redeems or repurchases from Pubco or any of its Subsidiaries an equal number of Equity Securities of the Company of a corresponding class or series with substantially the same rights to dividends and distributions (including distributions upon liquidation) or other economic rights as those of such Equity Securities of Pubco for the same price per security (for the sake of clarity, such prohibition shall not apply to a cancellation of Class B Common Stock as contemplated pursuant to Section 10.01(c)).
(c) Except as otherwise determined by the Managing Member in accordance with Section 4.02(f), (x) the Company may not redeem, repurchase or otherwise acquire Class X Umbrella Units from Pubco or any of its Subsidiaries unless substantially simultaneously Pubco or such Subsidiary redeems, repurchases or otherwise acquires an equal number of Class A Common Stock for the same price per security from holders thereof and (y) the Company may not redeem, repurchase or otherwise acquire any other Equity Securities of the Company from Pubco or any of its Subsidiaries unless substantially simultaneously Pubco or such Subsidiary redeems, repurchases or otherwise acquires for the same price per security an equal number of Equity Securities of Pubco of a corresponding class or series with substantially the same rights to
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dividends and distributions (including dividends and distributions upon liquidation) and other economic rights as those of such Equity Securities of Pubco. Notwithstanding the immediately preceding sentence, to the extent that any consideration payable to Pubco in connection with the redemption or repurchase of any shares or other Equity Securities of Pubco or any of its Subsidiaries consists (in whole or in part) of shares or such other Equity Securities (including, for the avoidance of doubt, in connection with the cashless exercise of an option or warrant), then redemption or repurchase of the corresponding Class X Umbrella Units or other Equity Securities of the Company shall be effectuated in an equivalent manner.
(d) Except as otherwise determined by the Managing Member in accordance with Section 4.02(f), the Company, the Managing Member and Pubco shall not undertake any subdivision (by any Unit split, stock split, Unit distribution, stock distribution, reclassification, division, recapitalization or similar event) or combination (by reverse Unit split, reverse stock split, reclassification, division, recapitalization or similar event) of the Units, stock, or other Equity Securities, as applicable, that are included in a Paired Interest that is not accompanied by a subdivision or combination of the applicable Paired Interest as equitably required to maintain the ratio between the Units, stock, or other Equity Interests specified for such Paired Interest.
(e) Notwithstanding anything to the contrary herein, except to the extent described in Section 4.02(a)-(d), from time to time at its sole discretion:
(i) Pubco may make loans to the Company and its Subsidiaries
(ii) Pubco may contribute property (including cash and/or the loans described in the foregoing clause (i)) to the Company. Upon each contribution described in the foregoing sentence, after giving proper effect to all related transactions and unless otherwise agreed by Managing Member and Aggregator, the Company shall (x) issue to Pubco such number of Class X Umbrella Units or Equity Securities of the Company as necessary to maintain the economic parity between one share of Class A Common Stock and one Class X Umbrella Unit and (y) cancel such number of Class X Umbrella Units or Equity Securities of the Company held by Members other than Pubco on a pro rata basis (based on the number of Class X Umbrella Units held by each such Member) as necessary to maintain the economic parity between one share of Class A Common Stock and one Class X Umbrella Unit.
(f) Notwithstanding anything to the contrary in this Article IV:
(i) if at any time the Managing Member shall determine that any debt instrument of Pubco, the Company or its Subsidiaries shall not permit Pubco or the Company to comply with the provisions of Section 4.02(a), Section 4.02(b), or Section 4.02(c) in connection with the issuance, redemption or repurchase of any shares of Class A Common Stock or other Equity Securities of Pubco or any of its Subsidiaries or any Units or other Equity Securities of the Company, then the Managing Member may in good faith implement an economically equivalent alternative arrangement without complying with such provisions; provided that, in the case that any such alternative arrangement is implemented because of restrictions in any debt instrument, such arrangement shall also be subject to the prior written consent (not to be unreasonably withheld) of Aggregator; and
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(ii) if (x) Pubco incurs any indebtedness and desires to transfer the proceeds of such indebtedness to the Company and (y) Pubco is unable to lend the proceeds of such indebtedness to the Company on an equivalent basis because of restrictions in any debt instrument of Pubco, the Company or its Subsidiaries, then notwithstanding Section 4.02(a) or Section 4.02(b), the Managing Member may in good faith implement an economically equivalent alternative arrangement in connection with the transfer of proceeds to the Company using non- participating preferred Equity Securities of the Company without complying with such provisions; provided that, in the case that any such alternative arrangement is implemented because of restrictions in any debt instrument, such arrangement shall also be subject to the prior written consent (not to be unreasonably withheld) of Aggregator.
(iii) if Pubco acquires or holds any amount of cash in excess of any monetary obligations it reasonably anticipates (including as a result of the receipt of distributions pursuant to Section 5.03(e) for any period that are in excess of Pubco’s liabilities for such period), Pubco may use such excess cash amount in such manner, and make such adjustments to, or take such other actions with respect to, the capitalization of Pubco and the Company, as Pubco (including in its capacity as the Managing Member of the Company) determines to be fair and reasonable to the stockholders of Pubco and to the Members and to preserve the intended economic effect of Section 4.01, this Section 4.02, Article X, and the other provisions of this Agreement. Without limiting the foregoing, Pubco shall be entitled to use any such excess cash to purchase Class X Umbrella Units (or to loan such excess cash to the Company from time to time and convert such loans into Class X Umbrella Units) (“Excess Cash Unit Acquisitions”), with such Excess Cash Unit Acquisitions occurring on or as promptly as commercially feasible following any Tax Distribution Date at a price per Class X Umbrella Unit equal to the Unit Redemption Price determined as of the date of such Excess Cash Unit Acquisition. Following such Excess Cash Unit Acquisition, the Managing Member shall be entitled to cause the Company to undertake a reverse split of its Class X Umbrella Units and LTIP Units as necessary to maintain a one-to-one ratio of the number of shares of Class A Common Stock outstanding and the number of Class X Umbrella Units held by Pubco. In connection with any Excess Cash Unit Acquisitions, the Company shall be entitled to issue additional Class X Umbrella Units without a corresponding issuance of additional shares of Class A Common Stock by Pubco and, in the event of a reverse split of Class X Umbrella Units and LTIP Units, Pubco shall be entitled to cancel the number of shares of Class B Common Stock that corresponds to the reduction in Class X Umbrella Units and LTIP Units as necessary to maintain a one-to-one ratio of the number of shares of Class B Common Stock outstanding and the number of Class X Umbrella Units and LTIP Units held by all holders of shares of Class B Common Stock, such that Paired Interests maintain a one-to-one exchange ratio.
Section 4.03. Aggregator Ownership; Restrictions on Aggregator Equity Securities.
(a) By virtue of their ownership of Class X Aggregator Units and Aggregator LTIP Units (each as defined in the Aggregator LLCA), certain of the Aggregator Members indirectly hold interests in the Company (the “Aggregator Member Interests”). In applying the provisions of this Agreement and in order to determine equitably the rights and obligations of Aggregator and Aggregator Members holding Aggregator Member Interests, the Managing Member, the Company and/or Aggregator may treat (i) the Units held by Aggregator as if they were hypothetically directly held by the Aggregator Members having an indirect economic interest therein and (ii) any Aggregator Member as if it were hypothetically a Member with a
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corresponding interest in a proportionate portion of the Units owned by Aggregator. Accordingly, upon (x) any issuance of Class X Aggregator Units or Aggregator LTIP Units to an Aggregator Member approved by the Managing Member (an “Aggregator Paired Interest”) or the withdrawal of an Aggregator Member holding Class X Aggregator Units or Aggregator LTIP Units from Aggregator (or the occurrence of any other event that causes the cancellation, repurchase or failure to vest of any Class X Aggregator Unit or Aggregator LTIP Unit), (y) the Transfer of Class X Aggregator Units and Aggregator LTIP Units in compliance with the Aggregator LLCA or (z) at such other times as may be reasonably determined by the Managing Member (each, an “Aggregator Member Action”), the Managing Member, the Company and/or Aggregator, as applicable, shall take any action or make any adjustment to cause the Company and Aggregator as a Member thereof to replicate, as closely as possible, such Aggregator Member Action (including the effects thereof) at the Company level, and the Members shall take all actions reasonably requested by the Managing Member in connection with any Aggregator Member Action and this Section 4.03(a).
(b) If any Unit or other Equity Security of the Company is issued in connection with issuance of an Equity Security of Aggregator that is subject to vesting or forfeiture provisions, or other terms and conditions, then the Units or Equity Securities that are issued by the Company to Aggregator shall be subject to vesting or forfeiture on the same basis, such that if any of such Equity Securities of Aggregator vest or are forfeited, then the corresponding number of the Units or Equity Securities issued by the Company to Aggregator shall automatically vest or be forfeited, as applicable, and, in the case of forfeiture, shares of Class B Common Stock associated with such forfeited Units or Equity Securities shall be surrendered to Pubco and cancelled.
(c) Except as otherwise determined by Aggregator and the Managing Member, if at any time Aggregator issues an Aggregator Paired Interest as permitted by this Agreement, (i) the Company shall issue to Aggregator one (1) Class X Umbrella Unit (if Aggregator issues a Class X Aggregator Unit) or one (1) LTIP Unit (if Aggregator issues an Aggregator LTIP Unit) corresponding to the Aggregator Paired Interest, and with substantially the same rights to dividends and distributions (including distributions upon liquidation) and other economic rights as those of such Aggregator Paired Interest, (ii) Pubco shall issue to Aggregator one (1) share of Class B Common Stock (if Aggregator issues a Class X Aggregator Unit) or a number of shares of Class B Common Stock equal to the maximum number of Class X Umbrella Units that the LTIP Unit granted to Aggregator could convert into (if Aggregator issues an Aggregator LTIP Unit), and (iii) the net proceeds received by Aggregator with respect to the corresponding Aggregator Paired Interest, if any, shall be concurrently contributed to the Company.
(d) Except as otherwise determined by the Managing Member, (i) Aggregator may not issue any additional Class X Aggregator Units unless substantially simultaneously therewith the Company issues or sells an equal number of Class X Umbrella Units to Aggregator, (ii) Aggregator may not issue any other Equity Securities intended to be exchangeable, directly or indirectly, into an interest in the Company unless substantially simultaneously therewith the Company issues to Aggregator an equal number of Units or a new class or series of Equity Securities of the Company with substantially the same rights to dividends and distributions (including distributions upon liquidation) and other economic rights as those of such Equity Securities of Aggregator, and (iii) Aggregator may not modify or waive the vesting or transfer
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restrictions applicable to any Class X Aggregator Units, Aggregator LTIP Units, or other Equity Securities of Aggregator without the prior written approval of the Managing Member.
(e) Except as otherwise determined by the Managing Member, (i) Aggregator may not redeem, repurchase or otherwise acquire any Class X Aggregator Units unless substantially simultaneously therewith the Company redeems, repurchases or otherwise acquires from Aggregator an equal number of Class X Umbrella Units for the same price per security and (ii) Aggregator may not redeem or repurchase any other Equity Securities of Aggregator, other than Class H Aggregator Units, unless substantially simultaneously therewith (A) the Company redeems or repurchases from Aggregator an equal number of Equity Securities of the Company of a corresponding class or series with substantially the same rights to dividends and distributions (including distributions upon liquidation) or other economic rights as those of such Equity Securities of Aggregator for the same price per security or (B) the Company or any of its Subsidiaries agree to enter into or modify an arrangement under which Aggregator receives economic rights corresponding to the economic rights of such Equity Securities of Aggregator.
(f) Aggregator shall not undertake any subdivision (by any Unit split, stock split, Unit distribution, stock distribution, reclassification, division, recapitalization or similar event) or combination (by reverse Unit split, reverse stock split, reclassification, division, recapitalization or similar event) of the Units or other Equity Securities, as applicable, that are included in a Paired Interest that is not accompanied by such a subdivision or combination of the applicable Paired Interest as equitably required to maintain the ratio between the Units, stock, or other Equity Interests specified for such Paired Interest.
ARTICLE V
CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS; DISTRIBUTIONS; ALLOCATIONS
Section 5.01. Capital Contributions.
(a) From and after the date hereof, no Member shall have any obligation to the Company, to any other Member or to any creditor of the Company to make any further Capital Contribution, except as expressly provided in Section 4.01(a), Section 4.01(c) or Section 10.02.
(b) Except as expressly provided herein, no Member, in its capacity as a Member, shall have the right to receive any cash or any other property of the Company.
Section 5.02. Capital Accounts.
(a) Maintenance of Capital Accounts. The Company shall maintain a Capital Account for each Member on the books of the Company in accordance with the provisions of Treasury Regulations Section 1.704-1(b)(2)(iv) and, to the extent consistent with such provisions, the following provisions:
(i) The Member Schedule shall be amended by the Managing Member after the closing of the IPO and from time to time to reflect adjustments to the Members’ Capital
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Accounts made in accordance with Sections 5.02(a)(ii), 5.02(a)(iii), 5.02(a)(iv), or 5.02(c) or otherwise.
(ii) To each Member’s Capital Account there shall be credited: (A) such Member’s Capital Contributions, (B) such Member’s distributive share of Net Income and any item in the nature of income or gain that is allocated pursuant to Section 5.04 and (C) the amount of any Company liabilities assumed by such Member or that are secured by any Property distributed to such Member.
(iii) From each Member’s Capital Account there shall be debited: (A) the amount of money and the Carrying Value of any Property distributed to such Member pursuant to any provision of this Agreement, (B) such Member’s distributive share of Net Loss and any items in the nature of expenses or losses that are allocated to such Member pursuant to Section 5.04 and (C) the amount of any liabilities of such Member assumed by the Company or that are secured by any Property contributed by such Member to the Company.
(iv) In determining the amount of any liability for purposes of subparagraphs (ii) and (iii) above there shall be taken into account Section 752(c) of the Code and any other applicable provisions of the Code and the Treasury Regulations.
The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Treasury Regulations Section 1.704-1(b) and shall be interpreted and applied in a manner consistent with such Treasury Regulations. In the event that the Managing Member shall reasonably determine that it is prudent to modify the manner in which the Capital Accounts or any debits or credits thereto are maintained (including debits or credits relating to liabilities that are secured by contributed or distributed Property or that are assumed by the Company or the Members), the Managing Member may make such modification so long as such modification will not have any effect on the amounts distributed to any Person pursuant to Article XII upon the dissolution of the Company. The Managing Member also shall (i) make any adjustments that are necessary or appropriate to maintain equality between Capital Accounts of the Members and the amount of capital reflected on the Company’s balance sheet, as computed for book purposes, in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv) (g), and (ii) make any appropriate modifications in the event unanticipated events might otherwise cause this Agreement not to comply with Treasury Regulations Section 1.704-1(b).
To the extent a Member holds more than one economic interest in the Company (e.g., a Member holds Class X Umbrella Units and holds various Company Notes) (each, an “Economic Interest”) then such Member’s interest in the Company shall be deemed to be separated into two or more interests (e.g., one attributable to its Class X Umbrella Units and the others attributable to each other Economic Interest such Member holds). In furtherance thereof, a wholly separate Capital Account shall be maintained for each such Member in respect of each such Economic Interest (e.g., one Capital Account in respect of its Class X Umbrella Units and a wholly separate Capital Account in respect of each Company Note). In addition, for purposes of this Agreement, allocations and distributions (including Tax Distributions) made to a Member in respect of one Economic Interest shall not be treated as having been made to or received by such Member in respect of any other Economic Interest.
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(b) Succession to Capital Accounts. In the event any Person becomes a Substitute Member in accordance with the provisions of this Agreement, such Substitute Member shall succeed to the Capital Account of the former Member (the “Transferor Member”) to the extent such Capital Account relates to the transferred Units.
(c) Adjustments of Capital Accounts. The Company shall revalue the Capital Accounts of the Members in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(f) (a “Revaluation”) at the following times: (i) immediately prior to the contribution of more than a de minimis amount of money or other property to the Company by a new or existing Member as consideration for one or more Units; (ii) the distribution by the Company to a Member of more than a de minimis amount of property in respect of one or more Units; (iii) the issuance by the Company of more than a de minimis amount of Units as consideration for the provision of services to or for the benefit of the Company (as described in Treasury Regulations Section 1.704-1(b)(2)(iv)(f)(5)(iii)); and (iv) the liquidation of the Company within the meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(g); provided, however, that adjustments pursuant to clauses (i), (ii) and (iii) above shall be made only if the Managing Member reasonably determines that such adjustments are necessary or appropriate to reflect the relative economic interest of the Members.
(d) No Member shall be entitled to withdraw capital or receive distributions except as specifically provided herein. A Member shall have no obligation to the Company, to any other Member or to any creditor of the Company to restore any negative balance in the Capital Account of such Member. Except as expressly provided elsewhere herein, no interest shall be paid on the balance in any Member’s Capital Account.
(e) Whenever it is necessary for purposes of this Agreement to determine a Member’s Capital Account on a per Unit basis, such amount shall be determined by dividing the Capital Account of such Member attributable to the applicable class of Units held of record by such Member by the number of Units of such class held of record by such Member.
Section 5.03. Amounts and Priority of Distributions.
(a) Distributions Generally; Priority of Distributions. Except as otherwise provided in Section 12.02, distributions shall be made to the Members as set forth in this Section 5.03, at such times and in such amounts as the Managing Member, in its sole discretion, shall determine. Each time the Company makes distributions to its Members, the Company shall make such distributions in the following manner and order of priority:
(i) First, (other than distributions in connection with the liquidation of the Company pursuant to Section 12.02) to the Members as Tax Distributions pursuant to Section 5.03(e);
(ii) Second, to the Members in respect of the Class H Notes as set forth in Section 5.03(c)(i);
(iii) Third, to the Members in respect of the Capital Account Notes as set forth in Section 5.03(c)(ii); and
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(iv) Thereafter, to the Class X Members as set forth in Section 5.03(b).
(b) Distributions in Respect of Class X Umbrella Units and LTIP Units. Subject to Sections 5.03(c), 5.03(d), 5.03(e), 5.03(f), and 5.03(g), to the extent permitted by Applicable Law and consistent with the Company’s obligations to its creditors as reasonably determined by the Managing Member, at such times and in such amounts as the Managing Member, in its sole discretion, shall determine, distributions shall be made to the Members in proportion to their respective Percentage Interests; provided, however, that notwithstanding anything in this Section 5.03 to the contrary, distributions prior to those distributions pursuant to Section 12.02, shall be made with respect to an LTIP Unit only to the extent that the aggregate amount of distributions made by the Company in respect of such LTIP Unit from and after the issuance of any such LTIP Unit is no greater than the cumulative operating income allocable to such LTIP Unit that is realized after the issuance of such LTIP Unit. Any amounts that are not distributed to holders of such LTIP Units by virtue of the foregoing proviso shall instead be retained by the Company and distributed to such LTIP Units when sufficient operating income has been allocated to such LTIP Units.
(c) Distributions in Respect of Company Notes. The Company shall make (i) distributions to the Members holding Class H Notes in accordance with the terms set forth in the Class H Notes (as incorporated herein) and (ii) distributions to the Members holding Capital Account Notes in accordance with the terms set forth in the Capital Account Notes (as incorporated herein). For the avoidance of doubt and notwithstanding anything to the contrary set forth herein, holders of Company Notes are not entitled to any other distributions pursuant to this Agreement in respect of such Company Notes other than as set forth in Section 5.03(e) and such Company Notes.
(d) Pubco Distributions. Notwithstanding the provisions of Section 5.03(b), the Managing Member, in its sole discretion, may authorize that cash be paid to Pubco or any of its Subsidiaries (which payment shall be made without pro rata distributions to the other Members) in exchange for the redemption, repurchase or other acquisition of Units held by Pubco or any of its Subsidiaries to the extent that such cash payment is used to redeem, repurchase or otherwise acquire an equal number of shares of Class A Common Stock in accordance with Section 4.02(b).
(e) Tax Distributions.
(i) Notwithstanding any other provision of this Section 5.03 to the contrary, to the extent permitted by Applicable Law and consistent with the Company’s obligations to its creditors as reasonably determined by the Managing Member, the Company shall make cash distributions by wire transfer of immediately available funds pursuant to this Section 5.03(e)(i) to each Member with respect to its Units and other Economic Interests at least five (5) Business Days prior to the date on which any U.S. federal corporate estimated tax payments are due, in an amount equal to such Member’s Tax Distribution Amount (estimated on a quarterly basis by the Managing Member, taking into account estimated taxable income or loss of the Company). A final accounting for Tax Distributions shall be made after the allocation of the Company’s actual net taxable income or loss has been determined for a fiscal year (or applicable portion thereof) and any shortfall in the amount of Tax Distributions a Member received for such fiscal year based on such final accounting shall, to the extent permitted by law and consistent with the Company’s obligations to its creditors
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as determined by the Managing Member, be promptly distributed to such Member; provided that the Managing Member shall have no liability to any Member in connection with any underpayment of estimated taxes, so long as cash distributions are made in accordance with this Section 5.03(e)(i) and the Tax Distribution Amounts are determined as provided in the definition of Tax Distribution Amount. Notwithstanding anything to the contrary, the Managing Member shall be entitled to make reasonable simplifying assumptions in making determinations contemplated by this Section 5.03(e), and shall be permitted to determine the Tax Distribution Amounts on the basis of good faith estimates of the amount of net taxable income, loss, deduction and/or credit allocable to any Member.
(ii) To the extent a Class X Member otherwise would be entitled to receive less than its Percentage Interest (for this purpose, determined solely in respect of Class X Umbrella Units) of the aggregate Tax Distributions to be paid pursuant to this Section 5.03(e) in respect of Class X Umbrella Units on any given date, then the Tax Distributions to such Class X Member in respect of its Class X Umbrella Units shall be increased to ensure that all such Tax Distributions made pursuant to this Section 5.03(e) are made pro rata in accordance with the Class X Members’ respective Percentage Interests (determined solely in respect of Class X Umbrella Units). If, on a Tax Distribution date, as determined by the Managing Member in its discretion, there are insufficient funds on hand to distribute to the Members the full amount of the Tax Distributions to which such Members are otherwise entitled, Tax Distributions pursuant to this Section 5.03(e) shall be made to the Members to the extent of available funds in accordance with the Tax Distributions that would have been paid to them had no such limitation existed and the Company shall make future Tax Distributions (pro rata in accordance with the Tax Distributions that would have been paid to the Members had no applicable limitation existed) as soon as funds become available sufficient to pay the remaining portion of Tax Distributions to which such Members would have been entitled had sufficient funds been available, as determined by the Managing Member in its discretion.
(iii) Tax Distributions with respect to income or gain allocations made for periods (or portions thereof) beginning after the Effective Time shall be treated as advances of amounts otherwise distributable to any Member pursuant to this Section 5.03 (other than this Section 5.03(e)) or Section 12.02(b)(ii), and accordingly shall be applied against and reduce (without duplication) the next amounts that would otherwise be payable to such Member pursuant to such provisions; provided that Tax Distributions to a Member with respect to one Economic Interest held by such Member shall in no event be treated as advances of amounts otherwise distributable to such Member pursuant to this Section 5.03 (other than this Section 5.03(e)) in respect of other Economic Interests held by such Member. Furthermore, unless determined otherwise by the Managing Member, cash distributions to a Member effected pursuant to the provisions of Section 5.03 (other than this Section 5.03(e)) with respect to income and gain recognized during any Fiscal Year shall reduce the distributions otherwise permitted by Section 5.03(e) with respect to income and gain recognized during such Fiscal Year; provided, however, that cash distributed to a Member pursuant to Section 5.03 (other than this Section 5.03(e)) with respect to one Economic Interest held by such Member shall in no event reduce the Tax Distributions that such Member is entitled to receive pursuant to Section 5.03(e) in respect of its other Economic Interests.
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(iv) Notwithstanding the foregoing, Tax Distributions pursuant to this Section 5.03(e), if any, shall be made to a Member only to the extent all previous Tax Distributions to such Member pursuant to Section 5.03(e) with respect to the Fiscal Year are less than the Tax Distributions such Member otherwise would have been entitled to receive with respect to such Fiscal Year pursuant to this Section 5.03(e).
(f) Limitations on Liquidating Distributions in respect of LTIP Units. It is the intention of the parties to this Agreement that distributions to holders of LTIP Units be limited to the extent necessary so that each LTIP Unit constitutes a Profits Interest, and accordingly, a holder of an LTIP Unit shall not be entitled to receive distributions pursuant to Section 12.02 in respect thereof unless and until the aggregate amount of distributions made by the Company pursuant to Section 12.02 from and after the issuance of any such LTIP Unit in respect of a Class X Umbrella Unit that was outstanding on the date of issuance of such LTIP Unit exceeds the Hurdle Amount of such LTIP Unit (and for the avoidance of doubt, such LTIP Unit shall only be entitled to participate in the portion of any such distribution that constitutes such excess). Any portion of any distribution pursuant to Section 12.02 that is not made to a holder of an LTIP Unit by virtue of this Section 5.03(f) shall instead be distributed to the Class X Members pursuant to Section 12.02.
(g) Special Distributions to Facilitate Acquisitions. The Managing Member shall be permitted to cause a distribution, loan, or other transfer of cash by the Company or one or more of its Subsidiaries to be made solely to Pubco (such distribution, loan or other transfer satisfying the following proviso, a “M&A Distribution”); provided, however, that (i) each such distribution, loan or other transfer is (A) made at or following such time as the Managing Member reasonably determines that a specific acquisition is reasonably likely to be consummated and (B) used solely to facilitate the consummation of an acquisition by Pubco or its Subsidiary (other than the Company and its Subsidiaries) within the time reasonably specified therefor by the Managing Member at the time of such M&A Distribution (with any interest accrued thereon for the benefit of the Company), and (ii) Pubco or such Subsidiary (x) contributes (in the case of an M&A Distribution that was a distribution), (y) transfers in repayment of the applicable M&A Distribution that was a loan, or (z) sells solely in exchange for the applicable previously made M&A Distribution that was not a distribution or a loan, or causes to be contributed (in the case of an M&A Distribution that was a distribution), transferred in repayment of the applicable M&A Distribution that was a loan, or sold solely in exchange for the applicable previously made M&A Distribution that was not a distribution or a loan, as soon as practicable thereafter, to the Company or the applicable Subsidiary of the Company the assets directly or indirectly acquired with such distribution, loan or other transfer, as directed by the Managing Member. If the M&A Distribution is not used solely to facilitate the consummation of an acquisition in accordance with the foregoing clause (i) within the time specified therefor by the Managing Member, Pubco (or its Subsidiaries (other than the Company and its Subsidiaries)) will contribute (in the case of an M&A Distribution that was a distribution), transfer in repayment of the applicable M&A Distribution that was a loan, or retransfer (in the case of an M&A Distribution that was not a distribution or a loan) the full amount of such M&A Distribution and any interest accrued thereon to the Company or the applicable Subsidiaries of the Company at or prior to 5:00 pm New York time on the applicable date. During any time period between the time of the M&A Distribution and the contribution, repayment or sale contemplated by the foregoing clause (ii) of the immediately foregoing sentence, Pubco (or its Subsidiary, as applicable) shall hold such cash, and operate any acquired assets, for the benefit of the Company. The number of Units held by Pubco and its Subsidiaries (other than
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the Company and its Subsidiaries) in the aggregate shall not change as a result of any M&A Distribution or the re-contribution, repayment or retransfer of such M&A Distribution (together with any interest accrued thereon) or contribution, repayment or sale of any assets directly or indirectly acquired with such M&A Distribution, in each case as described in this Section 5.03(g). For purposes of this Agreement, the amount of any M&A Distribution that has not been repaid to the Company or the applicable Subsidiaries of the Company (including, to the extent an acquisition has been consummated with the proceeds of such M&A Distribution but the assets so acquired have not yet been contributed, repaid or sold to the Company or the applicable Subsidiaries of the Company as required hereby, the value of the assets so acquired) shall be treated as an asset owned by the Company or the applicable Subsidiaries of the Company and not by Pubco or its Subsidiaries (other than the Company and its Subsidiaries). To the extent that any fees, costs and expenses are incurred in connection with the pursuit of an acquisition described in this Section 5.03(g), such fees, costs and expenses will be subject to the reimbursement provisions in Section 13.01.
(h) Assignment. Each Member and its Permitted Transferees shall have the right to assign to any Transferee of Units, pursuant to a Transfer made in compliance with this Agreement, the right to receive any portion of the amounts distributable or otherwise payable to such Member pursuant to Section 5.03.
Section 5.04. Allocations.
(a) Net Income and Net Loss. Except as otherwise provided in this Agreement, and after giving effect to the special allocations set forth in Section 5.04(b), Section 5.04(c) and Section 5.04(d), Net Income and Net Loss (and, to the extent necessary, individual items of income, gain, loss, deduction or credit) of the Company shall be allocated among the Members in a manner such that the Capital Account of each Member, immediately after making such allocation, is, as nearly as possible, equal to (i) the distributions that would be made to such Member if the Company were dissolved, its affairs wound up and its assets sold for cash equal to their Carrying Value, all Company liabilities were satisfied (limited with respect to each nonrecourse liability to the Carrying Value of the assets securing such liability), and the net assets of the Company were distributed, in accordance with Section 12.02, to the Members immediately after making such allocation, minus (ii) such Member’s share of Company Minimum Gain and Member Nonrecourse Debt Minimum Gain, computed immediately prior to the hypothetical sale of assets; provided that, notwithstanding the foregoing, unless determined otherwise by the Managing Member, with respect to each Fiscal Year (or other accounting period) prior to the period in which a liquidation of the Company occurs, in no event shall the allocation of operating income and loss to a Member in respect of LITP Units held by such Member be greater than such Member’s Percentage Interest with respect to such LTIP Units of such operating income and loss allocable to Class X Umbrella Units and LTIP Units.
(b) Special Allocations. The following special allocations shall be made in the following order:
(i) Minimum Gain Chargeback. Except as otherwise provided in Treasury Regulations Section 1.704-2(f), notwithstanding any other provision of this Article V, if there is a net decrease in Company Minimum Gain during any Fiscal Year, each Member shall be specially allocated items of Company income and gain for such Fiscal Year (and, if necessary,
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subsequent Fiscal Years) in an amount equal to such Member’s share of the net decrease in Company Minimum Gain, determined in accordance with Treasury Regulations Section 1.704-2(g). Allocations pursuant to the immediately preceding sentence shall be made in proportion to the respective amounts required to be allocated to each Member pursuant thereto. The items to be so allocated shall be determined in accordance with Treasury Regulations Sections 1.704-2(f)(6) and 1.704-2(j)(2). This Section 5.04(b)(i) is intended to comply with the minimum gain chargeback requirement in Treasury Regulations Section 1.704-2(f) and shall be interpreted consistently therewith.
(ii) Member Minimum Gain Chargeback. Except as otherwise provided in Treasury Regulations Section 1.704-2(i)(4), notwithstanding any other provision of this Article V, if there is a net decrease in Member Nonrecourse Debt Minimum Gain attributable to a Member Nonrecourse Debt during any Fiscal Year, each Member who has a share of the Member Nonrecourse Debt Minimum Gain attributable to such Member Nonrecourse Debt, determined in accordance with Treasury Regulations Section 1.704-2(i)(5), shall be specially allocated items of Company income and gain for such Fiscal Year (and, if necessary, subsequent Fiscal Years) in an amount equal to such Member’s share of the net decrease in Member Nonrecourse Debt Minimum Gain attributable to such Member Nonrecourse Debt, determined in accordance with Treasury Regulations Section 1.704-2(i)(4). Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Member pursuant thereto. The items to be so allocated shall be determined in accordance with Treasury Regulations Sections 1.704-2(i)(4) and 1.704-2(j)(2). This Section 5.04(b)(ii) is intended to comply with the minimum gain chargeback requirement in Treasury Regulations Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(iii) Qualified Income Offset. In the event any Member unexpectedly receives any adjustments, allocations, or distributions described in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) or Section 1.704-1(b)(2)(ii)(d)(6), items of Company income and gain shall be specially allocated to such Member in an amount and manner sufficient to eliminate, to the extent required by the Treasury Regulations, the Adjusted Capital Account Deficit of the Member as promptly as possible; provided that an allocation pursuant to this Section 5.04(b)(iii) shall be made only if and to the extent that the Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article V have been tentatively made as if this Section 5.04(b)(iii) were not in the Agreement.
(iv) Nonrecourse Deductions. Nonrecourse Deductions for any Fiscal Year shall be specially allocated to the Members in a manner determined by the Managing Member consistent with Treasury Regulations Sections 1.704-2(b) and 1.704-2(c).
(v) Member Nonrecourse Deductions. Any Member Nonrecourse Deductions for any Fiscal Year shall be specially allocated to the Member who bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulations Sections 1.704-2(i)(1) and 1.704-2(j)(1).
(vi) Section 754 Adjustments. (A) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Sections 734(b) or 743(b) of the Code is
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required pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv) (m)(4) to be taken into account in determining Capital Accounts as a result of a distribution other than in liquidation of a Member’s interest in the Company or as a result of a Transfer of a Member’s interest in the Company, as the case may be, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the basis of such asset) or loss (if the adjustment decreases the basis of such asset) from the disposition of the asset and shall be taken into account for purposes of computing Net Income and Net Loss. (B) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Sections 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(2) or Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital Accounts as the result of a distribution to a Member in complete liquidation of such Member’s interest in the Company, the amount of such adjustment to Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) and such gain or loss shall be specially allocated to such Members in accordance with their interests in the Company in the event Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(2) applies, or to the Member to whom such distribution was made in the event Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.
(c) Curative Allocations. The allocations set forth in Section 5.04(b)(i) through Section 5.04(b)(iv) and Section 5.04(d) (the “Regulatory Allocations”) are intended to comply with certain requirements of the Treasury Regulations. It is the intent of the Members that, to the extent possible, all Regulatory Allocations shall be offset either with other Regulatory Allocations or with special allocations of other items of Company income, gain, loss, or deduction pursuant to this Section 5.04(c). Therefore, notwithstanding any other provision of this Article V (other than the Regulatory Allocations), the Managing Member shall make such offsetting special allocations of Company income, gain, loss, or deduction in whatever manner it determines appropriate so that, after such offsetting allocations are made, each Member’s Capital Account balance is, to the extent possible, equal to the Capital Account balance such Member would have had if the Regulatory Allocations were not part of the Agreement and all Company items were allocated pursuant to Section 5.04.
(d) Loss Limitation. Net Loss (or individual items of loss or deduction) allocated pursuant to Section 5.04 hereof shall not exceed the maximum amount of Net Loss (or individual items of loss or deduction) that can be allocated without causing any Member to have an Adjusted Capital Account Deficit at the end of any Fiscal Year. In the event some but not all of the Members would have Adjusted Capital Account Deficits as a consequence of an allocation of Net Loss (or individual items of loss or deduction) pursuant to Section 5.04 hereof, the limitation set forth in this Section 5.04(d) shall be applied on a Member by Member basis and Net Loss (or individual items of loss or deduction) not allocable to any Member as a result of such limitation shall be allocated to the other Members in accordance with the positive balances in such Member’s Capital Accounts so as to allocate the maximum permissible Net Loss to each Member under Treasury Regulations Section 1.704-1(b)(2)(ii)(d). Any reallocation of Net Loss pursuant to this Section 5.04(d) shall be subject to chargeback pursuant to the curative allocation provision of Section 5.04(c).
(e) Forfeiture Allocation. In the event that the Units held by any Member are forfeited, then for the Fiscal Year of such forfeiture or other period (as determined by the Managing Member):
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(i) items of income, gain, loss, and deduction shall be excluded from the calculation of Profits and Losses and shall be specially allocated to the Member whose Units have been forfeited so as to cause such Member’s Capital Account to equal such Member’s distribution entitlements under Section 5.03(a) after giving effect to the adjustment in the Member’s Percentage Interest resulting from the applicable forfeiture;
(ii) the Managing Member may elect to apply another allocation or Capital Account adjustment method to a Unit forfeiture as it reasonably deems appropriate in lieu of the method set forth in this Section 5.04(e).
Section 5.05. Other Allocation Rules.
(a) Interim Allocations Due to Percentage Adjustment. If an Economic Interest is the subject of a Transfer or the Members’ interests in the Company change pursuant to the terms of the Agreement during any Fiscal Year, the amount of Net Income and Net Loss (or items thereof) to be allocated to the Members for such entire Fiscal Year shall be allocated to the portion of such Fiscal Year which precedes the date of such Transfer or change (and if there shall have been a prior Transfer or change in such Fiscal Year, which commences on the date of such prior Transfer or change) and to the portion of such Fiscal Year which occurs on and after the date of such Transfer or change (and if there shall be a subsequent Transfer or change in such Fiscal Year, which precedes the date of such subsequent Transfer or change), in accordance with any method permitted by Section 706 of the Code and the regulations thereunder as determined by the Managing Member, and the amounts of the items so allocated to each such portion shall be credited or charged to the Members in accordance with Section 5.04 as in effect during each such portion of the Fiscal Year in question. Such allocation shall be in accordance with Section 706 of the Code and the Treasury Regulations thereunder and made without regard to the date, amount or receipt of any distributions that may have been made with respect to the transferred Percentage Interest to the extent consistent with Section 706 of the Code and the Treasury Regulations thereunder. As of the date of such Transfer, the Transferee Member shall succeed to the Capital Account of the Transferor Member with respect to the transferred Units.
(b) Tax Allocations: Section 704(c) of the Code. 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 Company and with respect to reverse Section 704(c) of the Code allocations described in Treasury Regulations Section 1.704-3(a)(6) shall, solely for tax purposes, be allocated among the Members so as to take account of any variation between the adjusted basis of such Property to the Company for U.S. federal income tax purposes and its initial Carrying Value or its Carrying Value determined pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(f) (computed in accordance with the definition of Carrying Value) using the traditional allocation method without curative allocations under Treasury Regulations Section 1.704-3(b). Any elections or other decisions relating to such allocations shall be made by the Managing Member in any manner that reasonably reflects the purpose and intention of this Agreement. Allocations pursuant to this Section 5.05(b), Section 704(c) of the Code (and the principles thereof), and Treasury Regulations Section 1.704-1(b)(4)(i) are solely for purposes of federal, state, and local taxes and shall not affect, or in any way be taken into account in computing, any Member’s Capital Account or share of Net Income, Net Loss, other items, or
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distributions pursuant to any provision of this Agreement (except for, in the case of reverse Section 704(c) of the Code allocations, Tax Distributions).
Section 5.06. Tax Withholding; Withholding Advances.
(a) Tax Withholding.
(i) If requested by the Managing Member, each Member shall, if able to do so, deliver to the Managing Member: (A) an affidavit in form satisfactory to the Company that the applicable Member (or its partners, as the case may be) is not subject to withholding under the provisions of any U.S. federal, state, local, non-U.S. or other law; (B) any certificate that the Company may reasonably request with respect to any such laws; and/or (C) any other form or instrument reasonably requested by the Company relating to any Member’s status under such law. In the event that a Member fails or is unable to deliver to the Company an affidavit described in subclause (A) of this clause (i), the Company may withhold amounts from such Member in accordance with Section 5.06(b).
(ii) After receipt of a reasonable written request of any Member, the Company shall provide such information to such Member and take such other action as may be reasonably necessary to assist such Member in making any necessary filings, applications or elections to obtain any available exemption from, or any available refund of, any withholding imposed by any non-U.S. taxing authority with respect to amounts distributable or items of income allocable to such Member hereunder to the extent not adverse to the Company or any Member. In addition, the Company shall, at the reasonable request of any Member, make or cause to be made (or cause the Company to make) any such filings, applications or elections; provided that any such requesting Member shall cooperate with the Company, with respect to any such filing, application or election to the extent reasonably determined by the Company and that any filing fees, taxes or other out-of-pocket expenses reasonably incurred and related thereto shall be paid and borne by such requesting Member or, if there is more than one requesting Member, by such requesting Members in accordance with their Relative Percentage Interests.
(b) Withholding Advances. To the extent the Company, the Managing Member or Pubco is required by Applicable Law to withhold or to make tax payments on behalf of or with respect to any Member (in connection with the delivery of consideration in connection with an Exchange, backup withholding, Section 1445 of the Code, Section 1446 of the Code or an “imputed underpayment” under Section 6225 of the Code that is attributable to such Member or, in each case, any similar provisions of state, local or other tax law) (“Withholding Advances”), the Company, the Managing Member or Pubco may withhold such amounts and make such tax payments as so required.
(c) Repayment of Withholding Advances. All Withholding Advances made on behalf of a Member, plus interest thereon at a rate equal to the Prime Rate as of the date of such Withholding Advances plus two percent (2.0%) per annum, shall (i) be paid on demand by the Member on whose behalf such Withholding Advances were made (it being understood that no such payment shall increase such Member’s Capital Account), or (ii) with the consent of the Managing Member and the affected Member be repaid by reducing the amount of the current or next succeeding distribution or distributions that would otherwise have been made to such Member
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or, if such distributions are not sufficient for that purpose, by so reducing the proceeds of liquidation otherwise payable to such Member. Whenever repayment of a Withholding Advance by a Member is made as described in clause (ii) of this Section 5.06(c), for all other purposes of this Agreement such Member shall be treated as having received all distributions (whether before or upon any Dissolution Event) unreduced by the amount of such Withholding Advance and interest thereon.
(d) Withholding Advances—Reimbursement of Liabilities. Each Member hereby agrees to reimburse the Company and Pubco for any liability with respect to Withholding Advances (including interest thereon) required or made on behalf of or with respect to such Member (including penalties imposed with respect thereto). The obligation of a Member to reimburse the Company for taxes pursuant to this Section 5.06 shall survive the termination, liquidation, winding up and dissolution of the Company and will survive the partial or complete Transfer or redemption of interests of a Member in the Company.
(e) Withholding Certificates. In connection with any Exchange, repurchase of Units by the Company pursuant to Section 9.02 or any other transfer or redemption of Units (a “Disposition Transaction”), the Member (the “Selling Member”) disposing of Units shall, to the extent it is legally entitled to deliver such form, deliver to the Company or Pubco, as applicable, a certificate in a form reasonably acceptable to Company or Pubco, as applicable, certifying as to such Selling Member’s taxpayer identification number and that such Selling Member is a not a foreign person for purposes of Section 1445 and Section 1446(f) of the Code (which certificate may be an Internal Revenue Service Form W-9 if then sufficient for such purposes under applicable law) (such certificate a “Non-Foreign Person Certificate”). If a Selling Member is unable to provide a Non-Foreign Person Certificate in connection with an Exchange, then the Selling Member shall provide upon the Company’s request, to the extent it is legally able to do so, a certificate in compliance with Section 1446(f) of the Code and the Treasury Regulations thereunder in a form reasonably acceptable to the Company or Pubco, as applicable. Without limiting the foregoing, the Company shall reasonably cooperate upon the reasonable request and at the expense of the Selling Member to provide such certifications or other information that the Company is legally permitted to provide to the extent necessary to reduce or eliminate any withholding with respect to a Disposition Transaction (including the certificate described in Treasury Regulations Section 1.1445-11T(d)(2)).
(f) Survival. References in this Section 5.06 to “Member” or “Members” shall be deemed to refer to a Member or Members, a former Member or former Members, to a Transferee or Transferees and to an assignee or assignees. The provisions contained in this Section 5.06 shall survive the termination of the Company and the withdrawal of any Member.
ARTICLE VI
CERTAIN TAX MATTERS
Section 6.01. Company Representative.
(a) The Managing Member shall designate a Person who shall be authorized to act as the “partnership representative” (the “Company Representative”), of the Company, which
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initially shall be Pubco, under Section 6223 of the Code. The Company authorizes the Company Representative (acting in its capacity as “partnership representative”) to appoint a “designated individual” (as defined in Treasury Regulations Section 301.6223-1(b)(3)) to act on behalf of the Company Representative in such capacity. The Company shall not be obligated to pay any fees or other compensation to the Company Representative in its capacity as such, but the Company shall reimburse the Company Representative for all reasonable out-of-pocket costs and expenses (including attorneys’ and other professional fees) incurred by it in its capacity as Company Representative. The Company shall defend, indemnify, and hold harmless the Company Representative against any and all liabilities sustained or incurred as a result of any act or decision concerning Company tax matters and within the scope of such Person’s responsibilities as Company Representative, so long as such act or decision was done or made in good faith and does not constitute gross negligence or willful misconduct.
(b) The Company Representative may retain, at the Company’s expense, such outside counsel, accountants and other professional consultants as it may reasonably deem necessary in the course of fulfilling its obligations as the Company Representative. The Company Representative is authorized to take, and shall determine in its sole discretion whether or not the Company will take, such actions and execute and file all statements and forms on behalf of the Company that are approved by the Managing Member and are permitted or required by the applicable provisions of the Partnership Tax Audit Rules (including a “push-out” election under Section 6226 of the Code or any analogous election under state or local tax Law). Each Member agrees to cooperate with the Company Representative and to use commercially reasonable efforts to do or refrain from doing any or all things requested by the Company Representative (including paying any and all resulting taxes, additions to tax, penalties and interest in a timely fashion) in connection with any examination of the Company’s affairs by any federal, state, or local tax authorities, including resulting administrative and judicial proceedings. The Managing Member shall have the authority to amend this Section 6.01 to give effect to the Partnership Tax Audit Rules, and each Member agrees to be bound by the provisions of any such amendment.
(c) References in this Section 6.01 to “Member” or “Members” shall be deemed to refer to a Member or Members, a former Member or former Members, and to an assignee or assignees. The provisions contained in this Section 6.01 shall survive the termination of the Company and the withdrawal of any Member.
Section 6.02. Section 754 Elections. The Company shall make, and shall cause any Subsidiary of the Company that is treated as a partnership for U.S. federal income tax purposes to make, a timely election under Section 754 of the Code (and a corresponding election under state and local law) effective starting with the first taxable year during which an Exchange occurs, and the Managing Member shall not take any action to revoke such elections.
Section 6.03. Debt Allocation. Indebtedness of the Company treated as “excess nonrecourse liabilities” (as defined in Treasury Regulations Section 1.752-3(a)(3)) shall be allocated among the Members based on their Percentage Interests.
Section 6.04. Code Section 83 Safe Harbor Election. The Company and the Managing Member are authorized to follow the proposed Treasury Regulations that were issued on May 24, 2005 regarding the issuance of partnership equity for services (including Proposed Treasury
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Regulations Sections §§1.83-3, 1.83-6, 1.704-1, 1.706-3, 1.721-1 and 1.761-1), as such regulations may be subsequently amended (the “Proposed Regulations”), upon the issuance of a Company interest for services rendered or to be rendered to or for the benefit of the Company or a subsidiary of the Company, until final Treasury Regulations regarding such matters are issued. The Managing Member is expressly authorized by each Member to elect to apply the safe harbor set forth in the Proposed Regulations if the provisions of the Proposed Regulations and the proposed Revenue Procedure described in IRS Notice 2005-43, or provisions similar thereto, are adopted as final (or temporary) regulations. If the Managing Member determines that the Company should make such election, then the Managing Member is hereby authorized to amend this Agreement without the consent of any other Member to provide that (i) the Company is authorized and directed to elect the safe harbor, (ii) the Company and each of its Members (including any person to whom a partnership interest is transferred in connection with the performance of services) will comply with all requirements of the safe harbor with respect to all Company interests transferred in connection with the performance of services while such election remains in effect and (iii) the Company and each of its Members will take all actions necessary, including providing the Company with any required information, to permit the Company to comply with the requirements set forth or referred to in the applicable Proposed Regulations for such election to be effective until such time (if any) as the Managing Member determines, in its discretion, that the Company should terminate such election. The Managing Member is further authorized to amend this Agreement to the extent the Managing Member determines in its discretion that such modification is necessary or desirable as a result of the issuance of such Treasury Regulations relating to the tax treatment of the transfer of a partnership interest in connection with the performance of services. Notwithstanding anything to the contrary in this Agreement, each Member expressly confirms and agrees that such Member will be legally bound by any such amendment.
ARTICLE VII
MANAGEMENT OF THE COMPANY
Section 7.01. Management by the Managing Member. Except as otherwise specifically set forth in this Agreement, the Managing Member shall be deemed to be a “manager” for purposes of applying the Delaware Act. Except as expressly provided in this Agreement or the Delaware Act, the day-to-day business and affairs of the Company and its Subsidiaries shall be managed, operated and controlled by the Managing Member in accordance with the terms of this Agreement and no other Member shall have management authority or rights over the Company or its Subsidiaries. The Managing Member is, to the extent of its rights and powers set forth in this Agreement, an agent of the Company for the purpose of the Company’s and its Subsidiaries’ business, and the actions of the Managing Member taken in accordance with such rights and powers, shall bind the Company (and no other Members shall have such right). Except as expressly provided in this Agreement, the Managing Member shall have all necessary powers to carry out the purposes, business, and objectives of the Company and its Subsidiaries. The Managing Member shall have the power and authority to delegate to one (1) or more other Persons the Managing Member’s rights and powers to manage and control the business and affairs of the Company, including to delegate to agents and employees of a Member or the Company (including any officers or Subsidiary thereof), and to delegate by a management agreement or another agreement with, or otherwise to, other Persons. The Managing Member may authorize any Person
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(including any Member or officer of the Company) to enter into and perform any document on behalf of the Company or any Subsidiary thereof.
Section 7.02. Withdrawal of the Managing Member. Pubco may withdraw as the Managing Member and appoint as its successor, at any time upon written notice to the Company, (a) any wholly-owned Subsidiary of Pubco, (b) any Person of which Pubco is a wholly-owned Subsidiary, (c) any Person into which Pubco is merged or consolidated or (d) any transferee of all or substantially all of the assets of Pubco, which withdrawal and replacement shall be effective upon the delivery of such notice. No appointment of a Person other than Pubco (or its successor, as applicable) as Managing Member shall be effective unless Pubco (or its successor, as applicable) and the new Managing Member (as applicable) provide all other Members with contractual rights, directly enforceable by such other Members against the new Managing Member, to cause the new Managing Member to comply with all the Managing Member’s obligations under this Agreement and the Other Agreements.
Section 7.03. Decisions by the Members.
(a) Other than the Managing Member, the Members shall take no part in the management of the Company’s business and shall transact no business for the Company and shall have no power to act for or to bind the Company. The Managing Member shall not (i) engage in any non-Business activity or (ii) own any material assets other than Units and/or any cash or other property or assets distributed by, or otherwise received from, the Company, without the prior written consent of Aggregator, unless the Managing Member determines in good faith that such actions or ownership are in the best interest of the Company; provided, however, that the Company may engage any Member or principal, partner, member, stockholder or interest holder thereof as an employee, independent contractor or consultant to the Company, in which event the duties and liabilities of such individual or firm with respect to the Company as an employee, independent contractor or consultant shall be governed by the terms of such engagement with the Company.
(b) Except as expressly provided herein, the Members shall not have the power or authority to vote, approve or consent to any matter or action taken by the Company. Except as otherwise provided herein, any proposed matter or action subject to the vote, approval or consent of the Members shall require the approval of (i) Members holding a majority in interest of the Units or such class of Units, as the case may be (by (x) resolution at a duly convened meeting of the Members, or (y) written consent of such Members). Except as expressly provided herein, all Units shall vote together as a single class on any matter subject to the vote, approval or consent of the Members. In the case of any such approval, Members holding a majority in interest of the Units may call a meeting of the Members at such time and place or by means of telephone or other communications facility that permits all persons participating in such meeting to hear and speak to each other for the purpose of a vote thereon. Notice of any such meeting shall be required, which notice shall include a brief description of the action or actions to be considered by the Members. Unless waived by any such Member in writing, notice of any such meeting shall be given to each Member at least seven (7) days prior thereto. Attendance or participation of a Member at a meeting shall constitute a waiver of notice of such meeting, except when such Member attends or participates in the meeting for the express purpose of objecting at the beginning thereof to the transaction of any business because the meeting is not properly called or convened. Any action required or permitted to be taken at any meeting of the Members may be taken without a meeting,
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if a consent in writing, setting forth the actions so taken, shall be signed by Members sufficient to approve such action pursuant to this Section 7.03(b). A copy of any such consent in writing will be provided to the Members promptly thereafter.
Section 7.04. Duties.
The parties acknowledge that the Managing Member will take action through its board of directors and officers, and that the members of the Managing Member’s board of directors and its officers will owe fiduciary duties to the stockholders of the Managing Member. The Managing Member will use all commercially reasonable and appropriate efforts and means, as determined in good faith by the Managing Member, to minimize any conflict of interest between the Members, on the one hand, and the stockholders of the Managing Member, on the other hand, and to effectuate any transaction that involves or affects any of the Company, the Managing Member, the Members and/or the stockholders of the Managing Member in a manner that does not (i) disadvantage the Members or their interests relative to the stockholders of the Managing Member, (ii) advantage the stockholders of the Managing Member relative to the Members or (iii) treat the Members and the stockholders of the Managing Member differently; provided that in the event of a conflict between the interests of the stockholders of the Managing Member and the interests of the Members other than the Managing Member, such other Members agree that the Managing Member shall discharge its fiduciary duties to such other Members by acting in the best interests of the Managing Member’s stockholders.
Section 7.05. Officers.
(a) Appointment of Officers. The Managing Member may appoint individuals as officers (“Officers”) of the Company, which may include such officers as the Managing Member determines are necessary and appropriate. No Officer need be a Member. An individual may be appointed to more than one (1) office. If an Officer is also an officer of the Managing Member, then Section 7.04 shall apply to such Officer in the same manner as it applies to the Managing Member.
(b) Authority of Officers. The Officers shall have the duties, rights, powers and authority as may be prescribed by the Managing Member from time to time.
(c) Removal, Resignation and Filling of Vacancy of Officers. The Managing Member may remove any Officer, for any reason or for no reason, at any time. Any Officer may resign at any time by giving written notice to the Company, and such resignation shall take effect at the date of the receipt of that notice or any later time specified in that notice; provided that, unless otherwise specified in that notice, the acceptance of the resignation shall not be necessary to make it effective. Any such resignation shall be without prejudice to the rights, if any, of the Company or such Officer under this Agreement. A vacancy in any office because of death, resignation, removal or otherwise shall be filled by the Managing Member.
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ARTICLE VIII
TRANSFERS OF INTERESTS
Section 8.01. Restrictions on Transfers.
(a) Except as expressly permitted by Section 8.02, and subject to Section 8.01(b), Section 8.01(c), Section 8.01(d), and any underwriter lock-up agreement applicable to such Member and/or any other agreement between such Member and the Company, Pubco or any of their controlled Affiliates, without the prior written approval of the Managing Member, no Member shall directly or indirectly Transfer all or any part of its Units or any right or economic interest pertaining thereto, including the right to vote or consent on any matter or to receive or have any economic interest in distributions or advances from the Company pursuant thereto. Any such Transfer which is not in compliance with the provisions of this Agreement shall be deemed a Transfer by such Member of Units in violation of this Agreement (and a breach of this Agreement by such Member) and shall be null and void ab initio. Notwithstanding anything to the contrary in this Article VIII, (i) Section 10.03 of this Agreement shall govern the exchange of Class X Umbrella Units for shares of Class A Common Stock, and (ii) any other Transfer of shares of Class A Common Stock shall not be considered a “Transfer” for purposes of this Agreement.
(b) Except as otherwise expressly provided herein, it shall be a condition precedent to any Transfer otherwise permitted or approved pursuant to this Article VIII that:
(i) the Transferor shall have provided to the Company prior notice of such Transfer;
(ii) the Transfer shall comply with all Applicable Laws and the Managing Member shall be reasonably satisfied that such Transfer will not result in a violation of the Securities Act; and
(c) Notwithstanding any other provision of this Agreement to the contrary, no Member shall directly or indirectly Transfer all or any part of its Units or any right or economic interest pertaining thereto if such Transfer, (i) would result in the Company failing to satisfy the “safe harbor” requirements under Treasury Regulations Section 1.7704-1(h) (the “100 Partner Safe Harbor”) or (ii) in the reasonable discretion of the Managing Member, would cause the Company to be classified as a “publicly traded partnership” as that term is defined in Section 7704 of the Code and the Treasury Regulations promulgated thereunder.
(d) Any Transfer of Units pursuant to this Agreement, including this Article VIII, shall be subject to the provisions of Section 3.01 and Section 3.02.
Section 8.02. Certain Permitted Transfers. Notwithstanding anything to the contrary herein but subject to Section 8.01(b), Section 8.01(c), Section 8.01(d), the final sentence of this Section 8.02, any underwriter lock-up agreement applicable to such Member and/or any other agreement between such Member and the Company, Pubco, Aggregator or any of the controlled Affiliates of the Company, and any additional restrictions applicable to the Transferor or the Units held by the Transferor, the following Transfers shall be permitted (such transfers, “Permitted Transfers”):
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(a) The Transfer of all or any portion of a Member’s Units that are not Restricted Units in connection with a Permitted Exchange;
(b) The Transfer by any Member of any of its Units pursuant to a Disposition Event (as such term is defined in the Amended and Restated Certificate of Incorporation of Pubco as amended from time to time (the “Pubco Certificate of Incorporation”));
(c) Any grant of a bona fide security interest in, or a bona fide pledge of, Units to any financial institution that is approved by the Managing Member as collateral to secure indebtedness and any Transfer pursuant to the enforcement of such collateral;
(d) At any time, any Transfer by any Member of Units to any Transferee approved in advance in writing by the Managing Member (not to be unreasonably withheld);
(e) Any Transfer of Units to a Permitted Transferee; provided, that a subsequent Transfer by a Permitted Transferee shall constitute a permitted Transfer hereunder only if such further Transfer would have been a Permitted Transfer if made by the original Transferor.
Notwithstanding the foregoing, unless the Managing Member determines otherwise, a Transfer shall not be treated as a Permitted Transfer if such Transfer does not constitute a private transfer described in Treasury Regulations Section 1.7704-1(e) or if such Transfer would otherwise pose a material risk that the Company would be a “publicly traded partnership” as that term is defined in Section 7704 of the Code and the Treasury Regulations promulgated thereunder, in each case, as determined by the Board of Directors in its reasonable discretion.
Section 8.03. Distributions. Notwithstanding anything in this Article VIII or elsewhere in this Agreement to the contrary, if a Member Transfers all or any portion of its Units after the designation of a record date and declaration of a distribution pursuant to Article V and before the payment date of such distribution, the transferring Member (and not the Person acquiring all or any portion of its Class X Umbrella Units) shall be entitled to receive such distribution in respect of such transferred Class X Umbrella Units.
Section 8.04. Registration of Transfers. When any Units are Transferred in accordance with the terms of this Agreement, the Company shall cause such Transfer to be registered on the books of the Company.
ARTICLE IX
CERTAIN OTHER AGREEMENTS
Section 9.01. Non-Disparagement. Each Restricted Person agrees for the benefit of the Company and Pubco that:
(a) The Restricted Person shall not take, and the Restricted Person shall take reasonable steps to cause its Affiliates not to take, any action or make any public statement, whether or not in writing, that disparages or denigrates the Company or any of its Subsidiaries (the “Company Parties”) or their respective directors, officers, employees, members, representatives and agents.
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(b) Each Restricted Person agrees that (i) the agreements and covenants contained in this Section 9.01 are reasonable in scope and duration, an integral part of the transactions contemplated by this Agreement and the Other Agreements, and necessary to protect and preserve the Members’ and Company Parties’ legitimate business interests and to prevent any unfair advantage conferred on such Restricted Person taking into account and in specific consideration of the undertakings and obligations of the parties under the Agreement and the Other Agreements, (ii) but for each Restricted Person’s agreement to be bound by the agreements and covenants contained under this Section 9.01, the Members and the Company Parties would not have entered into or consummated those transactions contemplated in the Agreement and the Other Agreements and (iii) that irreparable harm would result to the Members and the Company Parties as a result of a violation or breach (or potential violation or breach) by such Restricted Person (or its Affiliates) of this Section 9.01. In addition, each Member agrees that Pubco and the Company shall have the right to specifically enforce the provisions of this Section 9.01 in any state or federal court located in any jurisdiction deemed necessary by Pubco or the Company to enforce such covenants, in addition to any other remedy to which such parties are entitled at law or in equity. If a final judgment of a court of competent jurisdiction or other Governmental Authority determines that any term, provision, covenant or restriction contained in this Section 9.01 is invalid or unenforceable, then the parties hereto agree that the court of competent jurisdiction or other Governmental Authority will have the power to modify this Section 9.01 (including by reducing the scope, duration or geographic area of the term or provision, deleting specific words or phrases or replacing any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision) so as to effect the original intention of the invalid or unenforceable term or provision. To the fullest extent permitted by law, in the event that any proceeding is brought under or in connection with this Section 9.01, the prevailing party in such proceeding (whether at final or on appeal) shall be entitled to recover from the other party all costs, expenses, and reasonable attorneys’ fees incident to any such proceeding. The term “prevailing party” as used herein means the party in whose favor the final judgment or award is entered in any such proceeding.
(c) Notwithstanding anything to the contrary, this Section 9.01 is in addition to, and does not supplant, supersede, modify or limit in any manner, any other non-competition, non-solicitation, non-piracy or other similar obligations imposed on a Restricted Person, whether imposed by law (including the Restricted Person’s fiduciary duties to the Company) or by contract (including contracts entered into prior to or concurrently with the Restricted Person’s execution of this Agreement).
Section 9.02. Company Call Right.
(a) In connection with any Involuntary Transfer by any Non-Pubco Member, the Company or the Managing Member may, in the Managing Member’s sole discretion, elect to purchase from such Member and/or such Transferee(s) in such Involuntary Transfer (each, a “Call Member”) any or all of the Units so Transferred (“Call Units”), at any time by delivery of a written notice (a “Call Notice”) to such Call Member. The Call Notice shall set forth the Unit Redemption Price and the proposed closing date of such purchase of such Call Units; provided that such closing date shall occur within ninety (90) days following the date of such Call Notice. At the closing of any such sale, in exchange for the payment by the Company or the Managing Member to such Call Members of the Unit Redemption Price (as may be adjusted to take into
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account the Hurdle Amounts for such LTIP Units, and any adjustments required to be made to distributions on account of Catch-Up Units pursuant to Section 12.02) in cash, (i) each Call Member shall deliver its Call Units, duly endorsed, or accompanied by written instruments of transfer in form satisfactory to the Company or the Managing Member, as applicable, duly executed by such Call Member and accompanied by all requisite transfer taxes, if any, (ii) such Call Units shall be free and clear of any Liens and (iii) each Call Member shall so represent and warrant and further represent and warrant that it is the sole beneficial and record owner of such Call Units. Following such closing, any such Call Member shall no longer be entitled to any rights in respect of its Call Units, including any distributions of the Company or Pubco thereupon (other than the payment of the Unit Redemption Price at such closing), and, to the extent any such Call Member does not hold any Units thereafter, shall thereupon cease to be a Member of the Company and, to the extent any such Call Member does not hold any shares of Pubco Common Stock thereafter, shall thereupon cease to be a stockholder of Pubco.
Section 9.03. Preemptive Rights. No Person shall have any preemptive, preferential or other similar right with respect to (a) additional Capital Contributions; (b) issuances or sales by the Company of any class or series of Units, whether unissued or hereafter created; (c) issuances of any obligations, evidences of indebtedness or other securities of the Company convertible into or exchangeable for, or carrying or accompanied by any rights to receive, purchase or subscribe to, any Units; (d) issuances of any right of subscription to or right to receive, or any warrant or option for the purchase of, any Units; or (e) issuances or sales of any other securities that may be issued or sold by the Company.
ARTICLE X
REDEMPTION AND EXCHANGE RIGHTS
Section 10.01. Redemption Right of a Member.
(a) Redemption and Exchange Right. Notwithstanding any provision to the contrary in the Agreement but subject to the terms of Section 10.09 and any other agreement between such Member and the Company, Pubco or any of their controlled Affiliates, and without the need for approval by the Managing Member or consent by any other Members, each Member (other than the Pubco Members) (and each of its Permitted Redeeming Transferees, with the terms and conditions of Section 10.01 and 10.02 to apply mutatis mutandis to such Permitted Redeeming Transferee) shall be entitled to cause the Company to redeem (a “Redemption”, and, together with a Direct Exchange, as defined below, an “Exchange”) all or any portion of its vested Class X Umbrella Units (the “Redemption Right”) at any time following the expiration of any contractual lock-up period relating to the shares of Pubco that may be applicable to such Member; provided that the Managing Member may force a Member to exercise its Redemption Right at any time following the expiration of such contractual lock-up period if such Member holds fewer than one hundred (100) Class X Umbrella Units.
(b) Redemption Notice. A Member desiring to exercise its Redemption Right (the “Redeeming Member”) shall exercise such right by giving written notice (the “Redemption Notice”) to the Company with a copy to Pubco. Such Redemption Notice may not be conditioned, revoked or modified except as described hereunder. If such Redeeming Member is a Permitted
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Redeeming Transferee, the Exchange Notice delivered to Aggregator in which the Company was copied shall, unless mutually agreed by such Permitted Redeeming Transferee, Aggregator and the Managing Member, be effective as a Redemption Notice of a Member delivered on the date first received by the Company in connection with the Exchange of such Permitted Redeeming Transferee’s Redeemed Units (as defined below).
(i) Redeemed Units. The Redemption Notice shall specify the number of Class X Umbrella Units (the “Redeemed Units”) that the Redeeming Member intends to have the Company redeem. If such Redeeming Member is a Permitted Redeeming Transferee, the Class X Umbrella Units that the Permitted Redeeming Transferee receives from Aggregator shall be deemed such Permitted Redeeming Transferee’s Redeemed Units.
(ii) Redemption Date. The Redemption Notice shall specify the date (the “Redemption Date”) on which the exercise of the Redemption Right shall be completed. The Redemption Date shall not be less than ten (10) Business Days after delivery of such Redemption Notice (unless and to the extent that the Managing Member in its sole discretion agrees in writing to waive such time period).
(iii) Retraction of Redemption Notice. Except by delivering written notice (the “Retraction Notice”) to each of the Company and the Managing Member (with a copy to Aggregator if such Redeeming Member is a Permitted Redeeming Transferee) in the circumstances described in Section 10.01(b)(iii)A or Section 10.01(b)(iii)B below, a Member may not revoke a Redemption Notice delivered in accordance with Section 10.01(b) without the consent of the Company, which consent may be provided or withheld, or made subject to such conditions, limitations or restrictions as reasonably determined by the Managing Member in good faith. The timely delivery of a Retraction Notice as permitted below shall terminate all of the Redeeming Member’s, the Company’s and Pubco’s rights and obligations under this Section 10.01 arising from the Redemption Notice.
A. If Pubco elects to effectuate the Redemption through a Cash Settlement (as defined below), the Redeeming Member shall be entitled to deliver a Retraction Notice within ten (10) Business Days of delivery of the Contribution Notice (as defined below).
B. In the event that Pubco elects to effectuate the Redemption through a Share Settlement (as defined below), a Redeeming Member shall be entitled to deliver a Retraction Notice or, in the case of a Member other than a Permitted Redeeming Transferee, delay the consummation of a Redemption until the fifth (5th) Business Day following the date on which the conditions giving rise to such delay cease to exist (or such earlier day as Pubco, the Company, and such Redeeming Member may agree in writing) if any of the following conditions exists; provided, that in no event shall the Redeeming Member seeking to deliver a Retraction Notice and relying on any of the matters contemplated in clauses (1) through (8) below have controlled or intentionally materially influenced any facts, circumstances, or Persons in connection therewith (except in the good faith performance of his or her duties as an officer or director of Pubco) in order to provide such Redeeming Member with a basis for such delay or revocation:
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1. any registration statement pursuant to which the resale of the Class A Common Stock to be registered for such Redeeming Member at or immediately following the consummation of the Redemption shall have ceased to be effective pursuant to any action or inaction by the SEC or no such resale registration statement has yet become effective;
2. Pubco shall have failed to cause any related prospectus to be supplemented by any required prospectus supplement necessary to effect such Redemption;
3. Pubco shall have exercised its right to defer, delay or suspend the filing or effectiveness of a registration statement and such deferral, delay or suspension shall affect the ability of such Redeeming Member to have its Class A Common Stock registered at or immediately following the consummation of the Redemption;
4. Pubco shall have disclosed to such Redeeming Member any material non-public information concerning Pubco, the receipt of which results in such Redeeming Member being prohibited or restricted from selling Class A Common Stock at or immediately following the Redemption without disclosure of such information (and Pubco does not permit disclosure);
5. any stop order relating to the registration statement pursuant to which the Class A Common Stock was to be registered by such Redeeming Member at or immediately following the Redemption shall have been issued by the SEC;
6. there shall have occurred a material disruption in the securities markets generally or in the market or markets in which the Class A Common Stock is then traded;
7. there shall be in effect an injunction, a restraining order or a decree of any nature of any Governmental Authority that restrains or prohibits the Redemption; or
8. the Redemption Date would occur three (3) Business Days or less prior to, or during, any “black-out” or similar period under Pubco’s policies covering trading in Pubco’s securities to which the applicable Redeeming Member is subject, which period restricts the ability of such Redeeming Member to immediately resell shares of Class A Common Stock to be delivered to such Redeeming Member in connection with a Share Settlement.
C. Notwithstanding the foregoing, if the Redeeming Member is a Permitted Redeeming Transferee, such Redeeming Member shall be only entitled to deliver a Retraction Notice pursuant to the provisions of Section 10.01(b)(iii)A or Section 10.01(b)(iii)B with the prior written consent of Aggregator.
(iv) Modification of Redemption Notice. The Company, Pubco, the Redeeming Member and, in the case of a Permitted Redeeming Transferee, Aggregator may
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change the number of Redeemed Units and/or the Redemption Date specified in such Redemption Notice to another number and/or date by mutual agreement signed in writing by each of them.
(c) Terms of Redemption. Unless the Redeeming Member has timely delivered a Retraction Notice as provided in Section 10.01(b), on the Redemption Date (to be effective immediately prior to the close of business on the Redemption Date) (i) the Redeeming Member shall transfer and surrender the Redeemed Units to the Company, free and clear of all Liens, and (ii) the Company shall (x) cancel the Redeemed Units, (y) transfer to the Redeeming Member the consideration to which the Redeeming Member is entitled under Section 10.01(d), and (z), if the Units are certificated, issue to the Redeeming Member a certificate for a number of Units equal to the difference (if any) between the number of Units evidenced by the certificate surrendered by the Redeeming Member pursuant to clause (i) of this Section 10.01(c) and the Redeemed Units. Upon the Exchange of any Redeemed Units that are Paired Interests, an equal number of Class B Common Stock held, if at all, by the Redeeming Member shall be cancelled.
(d) Redemption Consideration. Pubco shall have the option as provided in Section 10.02 to elect to have the Redeemed Units be redeemed in consideration for one (1) share of Class A Common Stock per Class X Umbrella Unit Redeemed (the “Share Settlement”) or the immediately available funds in U.S. dollars in an amount equal to the Redeemed Units Equivalent (the “Cash Settlement”); provided, for the avoidance of doubt, that Pubco may elect to have the Redeemed Units be redeemed in consideration for a Cash Settlement only to the extent that Pubco has cash available in an amount equal to at least the Redeemed Units Equivalent. Pubco shall give written notice (the “Contribution Notice”) to the Company (with a copy to the Redeeming Member and, if such Redeeming Member is a Permitted Redeeming Transferee, Aggregator) of such election on the earlier of (i) three (3) Business Days of receiving the Redemption Notice and (ii) the Redemption Date specified in the Redemption Notice; provided, that if Pubco does not timely deliver a Contribution Notice, Pubco shall be deemed to have elected the Share Settlement method. The number of shares of Class A Common Stock or the Redeemed Units Equivalent that a Redeeming Member is entitled to receive under this Section 10.01(d) (whether through a Share Settlement or Cash Settlement) shall not be adjusted on account of any distributions previously made with respect to the Redeemed Units or dividends previously paid with respect to Class A Common Stock; provided, however, that if a Redeeming Member causes the Company to redeem Redeemed Units and the Redemption Date occurs subsequent to the record date for any distribution with respect to the Redeemed Units but prior to payment of such distribution, the Redeeming Member shall be entitled to receive such distribution with respect to the Redeemed Units on the date that it is made notwithstanding that the Redeeming Member transferred and surrendered the Redeemed Units to the Company prior to such date. In the event of a reclassification or other similar transaction as a result of which the shares of Class A Common Stock are converted into another security, then in exercising its Redemption Right a Redeeming Member shall be entitled to receive the amount of such security that the Redeeming Member would have received if such Redemption Right had been exercised and the Redemption Date had occurred immediately prior to the record date of such reclassification or other similar transaction.
(e) The Managing Member may adopt reasonable procedures, guidelines, and practices consistent with the terms and conditions of this Agreement for communicating the Redemption Date, the implementation of the Redemption and Exchange provisions set forth in this Article X, including procedures for the giving of a Redemption Notice. None of such procedures
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shall be adopted with a principal purpose of restricting or otherwise impairing in any material respect the Members’ rights to consummate Exchanges.
Section 10.02. Election and Contribution of Pubco. In connection with the exercise of a Redeeming Member’s Redemption Rights under Section 10.01(a), Pubco shall contribute to the Company the consideration the Redeeming Member is entitled to receive under Section 10.01(d). Pubco, at its option, shall determine whether to contribute, pursuant to Section 10.01(d), the Share Settlement or the Cash Settlement. Unless the Redeeming Member has timely delivered a Retraction Notice as provided in Section 10.01(b), on the Redemption Date (to be effective immediately prior to the close of business on the Redemption Date) (i) Pubco shall make its Capital Contribution to the Company (in the form of the Share Settlement or the Cash Settlement) required under this Section 10.02, and (ii) the Company shall issue to Pubco a number of Units equal to the number of Redeemed Units surrendered by the Redeeming Member. Notwithstanding any other provisions of this Agreement to the contrary, but subject to Section 10.01, in the event that Pubco elects a Cash Settlement, Pubco shall only be obligated to contribute to the Company an amount in respect of such Cash Settlement equal to the net proceeds (after deduction of any underwriters’ discounts or commissions and brokers’ fees or commissions) from the sale by Pubco of a number of shares of Class A Common Stock equal to the number of Redeemed Units to be redeemed with respect to such Cash Settlement, provided that Pubco’s Capital Account shall be increased by an amount equal to any discount relating to such sale of shares of Class A Common Stock. The timely delivery of a Retraction Notice shall terminate all of the Company’s and Pubco’s rights and obligations under this Section 10.02 arising from the Redemption Notice.
Section 10.03. Exchange Right of Pubco
(a) Notwithstanding anything to the contrary in this Article X, but subject to the terms of Section 10.09, Pubco may, in its sole and absolute discretion, elect to effect on the Redemption Date the exchange of Redeemed Units for the Share Settlement or Cash Settlement, as the case may be, through a direct exchange of such Redeemed Units and such consideration between the Redeeming Member and Pubco (a “Direct Exchange”). Upon such Direct Exchange pursuant to this Section 10.03, Pubco shall acquire the Redeemed Units and shall be treated for all purposes of this Agreement as the owner of such Units.
(b) Pubco may, at any time prior to a Redemption Date, deliver written notice (an “Exchange Election Notice”) to the Company and the Redeeming Member setting forth its election to exercise its right to consummate a Direct Exchange; provided that such election does not prejudice the ability of the parties to consummate a Redemption or Direct Exchange on the Redemption Date. An Exchange Election Notice may be revoked by Pubco at any time; provided that any such revocation does not prejudice the ability of the parties to consummate a Redemption or Direct Exchange on the Redemption Date. The right to consummate a Direct Exchange in all events shall be exercisable for all the Redeemed Units that would have otherwise been subject to a Redemption. Except as otherwise provided by this Section 10.03, a Direct Exchange shall be consummated pursuant to the same timeframe and in the same manner as the relevant Redemption would have been consummated if Pubco had not delivered an Exchange Election Notice.
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Section 10.04. Tender Offers and Other Events with Respect to Pubco
(a) In the event that a tender offer, share exchange offer, issuer bid, take-over bid, recapitalization or similar transaction with respect to Class A Common Stock (a “Pubco Offer”) is proposed by Pubco or is proposed to Pubco or its stockholders and approved by the board of directors of Pubco or is otherwise effected or to be effected with the consent or approval of the board of directors of Pubco, the holders of Class X Umbrella Units (other than the Pubco Members) and Permitted Participant Transferees (the “Prospective Participants”) shall be permitted to participate in such Pubco Offer by delivery of a notice of exchange to the Company and, for a Permitted Participant Transferee, to Aggregator (which notice of exchange shall be effective immediately prior to the consummation of such Pubco Offer (and, for the avoidance of doubt, shall be contingent upon such Pubco Offer and not be effective if such Pubco Offer is not consummated)). In the case of a Pubco Offer proposed by Pubco, Pubco will use its reasonable efforts expeditiously and in good faith to take all such actions and do all such things as are necessary or desirable to enable and permit the Prospective Participants to participate in such Pubco Offer to the same extent or on an economically equivalent basis as the holders of shares of Class A Common Stock without discrimination; provided, that without limiting the generality of this sentence, Pubco will use its reasonable efforts expeditiously and in good faith to ensure that such Prospective Participants may participate in each such Pubco Offer without being required to exchange Class X Umbrella Units to the extent such participation is practicable. For the avoidance of doubt (but subject to Section 10.04(c)), in no event shall the holders of Class X Umbrella Units be entitled to receive in such Pubco Offer aggregate consideration for each Class X Umbrella Unit that is greater than the consideration payable in respect of each share of Class A Common Stock in connection with a Pubco Offer.
(b) Notwithstanding any other provision of this Agreement, if a Disposition Event (as such term is defined in the Pubco Certificate of Incorporation) is approved by the board of directors of Pubco and consummated in accordance with Applicable Law, at the request of the Company (or following such Disposition Event, its successor) or Pubco (or following such Disposition Event, its successor), each of the holders of Class X Umbrella Units shall be required to exchange with Pubco, at any time and from time to time after, or simultaneously with, the consummation of such Disposition Event, all of such holder’s Class X Umbrella Units for aggregate consideration for each Class X Umbrella Unit that is equivalent to the consideration payable in respect of each share of Class A Common Stock in connection with the Disposition Event, provided, however, that in the event of a Disposition Event intended to qualify as a reorganization within the meaning of Section 368(a) of the Code or as a transfer described in Section 351(a) or Section 721 of the Code, a holder shall not be required to exchange Class X Umbrella Units pursuant to this Section 10.04(b) unless, as a part of such transaction, the holders are permitted to exchange their Class X Umbrella Units for securities in a transaction that is expected to permit such exchange without current recognition of gain or loss, for U.S. and non-U.S. tax purposes, for the direct and indirect holders of Class X Umbrella Units (except to the extent that property other than securities is received in such exchange), based on a “should” or “will” level opinion from independent tax counsel of recognized standing and expertise. If an exchange by a holder of Class X Umbrella Units is required under this Section 10.04(b), the Managing Member may require such holder to exchange such Class X Umbrella Units pursuant to the terms of any applicable agreement with the Company, Aggregator, or Pubco to which the holder is a party except as otherwise modified herein.
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(c) Notwithstanding any other provision of this Agreement, (i) in a Disposition Event where the consideration payable in connection therewith includes Equity Securities, the aggregate consideration for any Class X Umbrella Unit shall be deemed to be equivalent to the consideration payable in respect of each share of Class A Common Stock if the only difference in the per share distribution to the holders of Class X Umbrella Units is that the Equity Securities distributed to Aggregator and/or its members have not more than ten (10) times the voting power of any Equity Securities distributed to the holder of a share of Class A Common Stock (so long as such Equity Securities issued to such holders of the Class X Umbrella Units remain subject to cancellation on terms substantially comparable to those set forth in Section 6.2 of the Pubco Certificate of Incorporation) and (ii) in a Disposition Event, payments under or in respect of the Tax Receivable Agreement shall not be considered part of the consideration payable in respect of any Class X Umbrella Unit or share of Class A Common Stock in connection with such Disposition Event for the purposes of Section 10.04(a) and Section 10.04(b).
Section 10.05. Reservation of Shares of Class A Common Stock; Certificate of Pubco. At all times Pubco shall reserve and keep available out of its authorized but unissued Class A Common Stock, solely for the purpose of issuance upon a Redemption or Direct Exchange, such number of shares of Class A Common Stock as shall be issuable upon any such Redemption or Direct Exchange pursuant to Share Settlements; provided that nothing contained herein shall be construed to preclude Pubco from satisfying its obligations in respect of any such Redemption or Direct Exchange by delivery of purchased Class A Common Stock (which may or may not be held in the treasury of Pubco) or the delivery of cash pursuant to a Cash Settlement. Pubco shall deliver Class A Common Stock that has been registered under the Securities Act with respect to any Redemption or Direct Exchange to the extent a registration statement is effective and available for such shares. Pubco covenants that all Class A Common Stock issued upon a Redemption or Direct Exchange will, upon issuance, be validly issued, fully paid and non-assessable. The provisions of this Article X shall be interpreted and applied in a manner consistent with the corresponding provisions of Pubco’s certificate of incorporation.
Section 10.06. Effect of Exercise of Redemption Right. This Agreement shall continue notwithstanding the consummation of a Redemption or Direct Exchange and all governance or other rights set forth herein shall be exercised by the remaining Members and the Redeeming Member (to the extent of such Redeeming Member’s remaining interest in the Company). No Redemption or Direct Exchange shall relieve such Redeeming Member of any prior breach of this Agreement.
Section 10.07. Tax Treatment. Unless otherwise required by Applicable Law, the parties hereto acknowledge and agree a Redemption or a Direct Exchange, as the case may be, shall be treated as a direct exchange between Pubco and the Redeeming Member for U.S. federal and applicable state and local income tax purposes.
Section 10.08. Exchange of LTIP Units.
(a) Each Member (other than Pubco) shall be entitled to cause the Company to exchange its vested LTIP Units (an “LTIP Exchange”), in whole or in part (the “LTIP Exchange Right”) for Class X Umbrella Units only in connection with the Exchange of all of such Class X Umbrella Units pursuant to Section 10.01 (or, in the case of Aggregator, an Exchange by a
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Permitted Redeeming Transferee of the same number of such Class X Umbrella Units) or in connection with a Pubco Offer or a Disposition Event as contemplated by Section 10.04(a) and Section 10.04(b). A Member desiring to exercise its LTIP Exchange Right (an “LTIP Exchanging Member”) shall exercise such right by giving written notice (the “LTIP Exchange Notice”) to the Company and Pubco. The LTIP Exchange Notice shall specify the number of LTIP Units (the “Exchanged LTIP Units”) that the LTIP Exchanging Member intends to have the Company exchange and a date, less than ten (10) Business Days after delivery of such LTIP Exchange Notice (unless and to the extent that the Managing Member in its sole discretion agrees in writing to waive such time periods), on which exercise of the LTIP Exchange Right shall be completed (the “LTIP Exchange Date”); provided, that the Company and the LTIP Exchanging Member may change the number of Exchanged LTIP Units and/or the LTIP Exchange Date specified in such LTIP Exchange Notice to another number and/or date by mutual agreement signed in writing by each of them. If the Company receives a notice from Aggregator in connection with a Redemption that indicates that the Permitted Redeeming Transferee holds Aggregator LTIP Units, such notice shall be deemed effective as an LTIP Exchange Notice by Aggregator. Notwithstanding the foregoing, in the event of a Pubco Offer or a Disposition Event as contemplated by Section 10.04(a) and Section 10.04(b) the Managing Member may adopt reasonable procedures, guidelines, and practices consistent with the terms and conditions of this Agreement in regards to the exchange of LTIP Units in connection with such Pubco Offer or Disposition Event.
(b) On the LTIP Exchange Date (to be effective immediately prior to the close of business on the LTIP Exchange Date or, in the case of an LTIP Exchange by Aggregator, immediately prior to the transfer of Class X Umbrella Units corresponding to the Exchanged LTIP Units from Aggregator to a Permitted Redeeming Transferee):
(i) The LTIP Exchanging Member shall Transfer and surrender, free and clear of all liens and encumbrances, the Exchanged LTIP Units to the Company.
(ii) The Company shall:
A. cancel the Exchanged LTIP Units;
B. issue to the LTIP Exchanging Member the New Class X Umbrella Units applicable to the Exchanged LTIP Units; and
C. if the Exchanged LTIP Units are certificated, issue to the LTIP Exchanging Member a certificate for a number of LTIP Units equal to the difference (if any) between the number of LTIP Units evidenced by the certificate surrendered by the LTIP Exchanging Member pursuant to this Section and the Exchanged LTIP Units.
(iii) If the LTIP Exchanging Member is Aggregator, Pubco shall cancel a number of shares of Class B Common Stock (and in such event, the LTIP Exchanging Member shall surrender to Pubco such shares for cancellation) such that the number of shares of Class B Common Stock held by such LTIP Exchanging Member immediately after the LTIP Exchange on account of the ownership of the New Class X Umbrella Units is equal to the number of such New Class X Umbrella Units being issued to the LTIP Exchanging Member.
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(c) Upon issuance of the New Class X Umbrella Units, such New Class X Umbrella Units shall immediately be subject to all of the provisions herein applicable to Class X Umbrella Units, including the Redemption provisions contained in this Article X, and notwithstanding anything herein to the contrary, immediately upon consummation of any LTIP Exchange, the LTIP Exchanging Member shall be required to exercise its Redemption Right with respect to the New Class X Umbrella Units received in such an LTIP Exchange, and therefore the provisions of the foregoing Section 10.01 shall be deemed to apply as though the applicable Member had sent a Redemption Notice thereunder on the date that it sent the LTIP Exchange Notice under this Section 10.08, such that the Redemption occurs on the same day as, and immediately following, the LTIP Exchange.
Section 10.09. Additional Exchange Restrictions. Notwithstanding anything to the contrary herein:
(a) No Exchange or LTIP Exchange shall be permitted unless such Exchange is a Permitted Exchange.
(b) No Exchange or LTIP Exchange shall be permitted (and, if attempted, shall be void ab initio) if, in the good faith determination of the Managing Member or the Company, such an Exchange and/or LTIP Exchange would pose a material risk that the Company would be a “publicly traded partnership” as that term is defined in Section 7704 of the Code and the Treasury Regulations promulgated thereunder.
(c) If the Managing Member determines at any time, in its sole discretion after consultation with the Company’s tax advisors, either (i) that the Company does not then satisfy the 100 Partner Safe Harbor, or (ii) there is a reasonable possibility that the Company will not satisfy the 100 Partner Safe Harbor at any time during the current or next taxable year, the Managing Member and the Company may impose such restrictions on, and impose such requirements on and procedures with respect to, Exchanges, LTIP Exchanges, transfers and redemptions of Units and Economic Interests pursuant to this Agreement from time to time as the Managing Member and/or the Company may determine, in their sole discretion, to be necessary or advisable so that the Company is not treated as a “publicly traded partnership” under Section 7704 of the Code and such restrictions, requirements and procedures shall remain in effect unless and until the Managing Member determines otherwise. Without limiting the discretion of the Managing Member and/or the Company under this Section 10.09(c) to impose any restrictions, requirements or procedures on Exchanges and LTIP Exchanges, such restrictions, requirements and procedures may include one or more of the following:
(i) providing that Members are permitted to effect Exchanges during a taxable year of the Company only on one or more of up to four specified dates determined by the Managing Member (each a “Specified Exchange Date”);
(ii) requiring a Member seeking to effect an Exchange to give the Company irrevocable written notice of an election to effect an Exchange on a date that is at least sixty (60) calendar days prior to the Specified Exchange Date on which such Exchange is to occur; and
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(iii) providing that the number of Units that may be Exchanged or otherwise transferred or redeemed during the taxable year of the Company (other than in private transfers described in Treasury Regulations Section 1.7704-1(e)) cannot exceed ten percent (10%) of the total interest in the Company’s capital or profits (as determined pursuant to Treasury Regulations Section 1.7704-1(k)).
ARTICLE XI
LIMITATION ON LIABILITY, EXCULPATION AND INDEMNIFICATION
Section 11.01. Limitation on Liability. The debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and no Covered Person shall be obligated personally for any such debt, obligation or liability of the Company; provided that the foregoing shall not alter a Member’s obligation to return funds wrongfully distributed to it.
Section 11.02. Exculpation and Indemnification.
(a) Subject to the duties of the Managing Member and Officers set forth in Section 7.01, neither the Managing Member nor any other Covered Person described in clause (iii) of the definition thereof shall be liable, including under any legal or equitable theory of fiduciary duty or other theory of liability, to the Company or to any other Covered Person for any losses, claims, damages or liabilities incurred by reason of any act or omission performed or omitted by such Covered Person in good faith on behalf of the Company. There shall be, and each Covered Person shall be entitled to, a presumption that such Covered Person acted in good faith.
(b) A Covered Person shall be fully protected in relying in good faith upon the records of the Company and upon such information, opinions, reports or statements presented to the Company by any Person as to matters the Covered Person reasonably believes are within such Person’s professional or expert competence.
(c) The Company shall indemnify, defend and hold harmless each Covered Person against any losses, claims, damages, liabilities, expenses (including all reasonable out-of-pocket fees and expenses of counsel and other advisors), judgments, fines, settlements and other amounts arising from any and all claims, demands, actions, suits or proceedings, in which such Covered Person may be involved or become subject to, in connection with any matter arising out of or in connection with the Company’s business or affairs, or this Agreement or any related document, unless such loss, claim, damage, liability, expense, judgment, fine, settlement or other amount (i) is a result of a Covered Person not acting in good faith on behalf of the Company or arose as a result of the willful commission by such Covered Person of any act that is dishonest and materially injurious to the Company, (ii) results from its contractual obligations under any Other Agreements to be performed in a capacity other than as a Covered Person or from the breach by such Covered Person of Section 9.01 or (iii) results from the breach by any Member (in such capacity) of its contractual obligations under this Agreement. If any Covered Person becomes involved in any capacity in any action, suit, proceeding or investigation in connection with any matter arising out of or in connection with the Company’s business or affairs, or this Agreement or any related document (other than any Other Agreement), other than (x) by reason of any act or
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omission performed or omitted by such Covered Person that was not in good faith on behalf of the Company or constituted a willful commission by such Covered Person of an act that is dishonest and materially injurious to the Company or (y) as a result of any breach by such Covered Person of Section 9.01, the Company shall reimburse such Covered Person for its reasonable legal and other reasonable out-of-pocket expenses (including the cost of any investigation and preparation) as they are incurred in connection therewith; provided that such Covered Person shall promptly repay to the Company the amount of any such reimbursed expenses paid to it if it shall be finally judicially determined that such Covered Person was not entitled to indemnification by, or contribution from, the Company in connection with such action, suit, proceeding or investigation. If for any reason (other than the bad faith of a Covered Person or the willful commission by such Covered Person of an act that is dishonest and materially injurious to the Company) the foregoing indemnification is unavailable to such Covered Person, or insufficient to hold it harmless, then the Company shall contribute to the amount paid or payable by such Covered Person as a result of such loss, claim, damage, liability, expense, judgment, fine, settlement or other amount in such proportion as is appropriate to reflect any relevant equitable considerations. There shall be, and each Covered Person shall be entitled to, a rebuttable presumption that such Covered Person acted in good faith.
(d) The obligations of the Company under Section 11.02(c) shall be satisfied solely out of and to the extent of the Company’s assets, and no Covered Person shall have any personal liability on account thereof.
(e) Given that certain Jointly Indemnifiable Claims may arise by reason of the service of a Covered Person to the Company and/or as a director, trustee, officer, partner, member, manager, employee, consultant, fiduciary or agent of other corporations, limited liability companies, partnerships, joint ventures, trusts, employee benefit plans or other enterprises controlled by the Company (collectively, the “Controlled Entities”), or by reason of any action alleged to have been taken or omitted in any such capacity, the Company acknowledges and agrees that the Company shall, and to the extent applicable shall cause the Controlled Entities to, be fully and primarily responsible for the payment to the Covered Person in respect of indemnification or advancement of all out-of-pocket costs of any type or nature whatsoever (including, without limitation, all attorneys’ fees and related disbursements) in each case, actually and reasonably incurred by or on behalf of a Covered Person in connection with either the investigation, defense or appeal of a claim, demand, action, suit or proceeding or establishing or enforcing a right to indemnification under this Agreement or otherwise incurred in connection with a claim that is indemnifiable hereunder (collectively, “Expenses”) in connection with any such Jointly Indemnifiable Claim, pursuant to and in accordance with (as applicable) the terms of (i) the Delaware Act, (ii) this Agreement, (iii) any other agreement between the Company or any Controlled Entity and the Covered Person pursuant to which the Covered Person is indemnified, (iv) the laws of the jurisdiction of incorporation or organization of any Controlled Entity and/or (v) the certificate of incorporation, certificate of organization, bylaws, partnership agreement, operating agreement, certificate of formation, certificate of limited partnership, certificate of qualification or other organizational or governing documents of any Controlled Entity ((i) through (v) collectively, the “Indemnification Sources”), irrespective of any right of recovery the Covered Person may have from the Indemnitee-Related Entities. Under no circumstance shall the Company or any Controlled Entity be entitled to any right of subrogation or contribution by the Indemnitee-Related Entities and no right of advancement or recovery the Covered Person may have from the
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Indemnitee-Related Entities shall reduce or otherwise alter the rights of the Covered Person or the obligations of the Company or any Controlled Entity under the Indemnification Sources. In the event that any of the Indemnitee-Related Entities shall make any payment to the Covered Person in respect of indemnification or advancement of Expenses with respect to any Jointly Indemnifiable Claim, (i) the Company shall, and to the extent applicable shall cause the Controlled Entities to, reimburse the Indemnitee-Related Entity making such payment to the extent of such payment promptly upon written demand from such Indemnitee-Related Entity, (ii) to the extent not previously and fully reimbursed by the Company and/or any Controlled Entity pursuant to clause (i), the Indemnitee-Related Entity making such payment shall be subrogated to the extent of the outstanding balance of such payment to all of the rights of recovery of the Covered Person against the Company and/or any Controlled Entity, as applicable, and (iii) the Covered Person shall execute all papers reasonably required and shall do all things that may be reasonably necessary to secure such rights, including the execution of such documents as may be necessary to enable the Indemnitee-Related Entities effectively to bring suit to enforce such rights. The Company and the Covered Person agree that each of the Indemnitee-Related Entities shall be third-party beneficiaries with respect to this Section 11.02(e), entitled to enforce this Section 11.02(e) as though each such Indemnitee-Related Entity were a party to this Agreement. The Company shall cause each of the Controlled Entities to perform the terms and obligations of this Section 11.02(e) as though each such Controlled Entity was the “Company” under this Agreement. For purposes of this Section 11.02(e), the following terms shall have the following meanings:
(i) The term “Indemnitee-Related Entities” means any corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise (other than the Company, any Controlled Entity or the insurer under and pursuant to an insurance policy of the Company or any Controlled Entity) from whom a Covered Person may be entitled to indemnification or advancement of Expenses with respect to which, in whole or in part, the Company or any Controlled Entity may also have an indemnification or advancement obligation.
(ii) The term “Jointly Indemnifiable Claims” shall be broadly construed and shall include, without limitation, any claim, demand, action, suit or proceeding for which the Covered Person shall be entitled to indemnification or advancement of Expenses from both (A) the Company and/or any Controlled Entity pursuant to the Indemnification Sources, on the one hand, and (B) any Indemnitee-Related Entity pursuant to any other agreement between any Indemnitee-Related Entity and the Covered Person pursuant to which the Covered Person is indemnified, the laws of the jurisdiction of incorporation or organization of any Indemnitee- Related Entity and/or the certificate of incorporation, certificate of organization, bylaws, partnership agreement, operating agreement, certificate of formation, certificate of limited partnership or other organizational or governing documents of any Indemnitee-Related Entity, on the other hand.
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ARTICLE XII
DISSOLUTION AND TERMINATION
Section 12.01. Dissolution.
(a) The Company shall not be dissolved by the admission of Additional Members or Substitute Members pursuant to Section 3.02.
(b) No Member shall (i) resign from the Company prior to the dissolution and winding up of the Company except in connection with a Transfer of Units pursuant to the terms of this Agreement or (ii) take any action to dissolve, terminate or liquidate the Company or to require apportionment, appraisal or partition of the Company or any of its assets, or to file a bill for an accounting, except as specifically provided in this Agreement, and each Member, to the fullest extent permitted by Applicable Law, hereby waives any rights to take any such actions under Applicable Law, including any right to petition a court for judicial dissolution under Section 18-802 of the Delaware Act.
(c) The Company shall be dissolved and its business wound up only upon the earliest to occur of any one (1) of the following events (each a “Dissolution Event”):
(i) the expiration of forty-five (45) days after the sale or other disposition of all or substantially all the assets of the Company;
(ii) upon the approval of the Managing Member;
(iii) upon the entry of a decree of dissolution of the Company under §18-802 of the Delaware Act; or
(iv) at any time there are no members of the Company, unless the Company is continued in accordance with the Delaware Act.
(d) The death, retirement, resignation, expulsion, bankruptcy, insolvency or dissolution of a Member or the occurrence of any other event that terminates the continued membership of a Member of the Company shall not in and of itself cause dissolution of the Company.
Section 12.02. Winding Up of the Company.
(a) The Managing Member shall promptly notify the other Members of any Dissolution Event. Upon dissolution, the Company’s business shall be liquidated in an orderly manner. The Managing Member shall appoint a liquidating trustee to wind up the affairs of the Company pursuant to this Agreement. In performing its duties, the liquidating trustee is authorized to sell, distribute, exchange or otherwise dispose of the assets of the Company in accordance with the Delaware Act and in any reasonable manner that the liquidating trustee shall determine to be in the best interest of the Members.
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(b) The proceeds of the liquidation of the Company shall be distributed in the following order and priority:
(i) first, to the creditors (including any Members or their respective Affiliates that are creditors) of the Company in satisfaction of all of the Company’s liabilities (whether by payment or by making reasonable provision for payment thereof, including the setting up of any reserves which are, in the judgment of the liquidating trustee, reasonably necessary therefor); and
(ii) second, to the Members in the same manner as distributions under Section 5.03 (other than Section 5.03(e)); provided, however, that notwithstanding anything in Section 5.03 or this Section 12.02 to the contrary (other than Section 5.03(f)), distributions pursuant to this Section 12.02 shall be made with respect to an LTIP Unit solely to the extent that the aggregate amount of distributions made by the Company pursuant to this Section 12.02 in respect of each Class X Umbrella Unit that was outstanding on the date of issuance of such LTIP Unit from and after the issuance of any such LTIP Unit exceeds the Hurdle Amount of such LTIP Unit (and for the avoidance of doubt, such LTIP Unit shall only be entitled to participate in the portion of any such distribution that constitutes such excess); provided that, if an LTIP Unit is a Catch-Up Unit, then the Managing Member shall, after the Hurdle Amount of such Catch-Up Unit is satisfied, make adjustments to distributions in respect of the Class X Umbrella Units and the LTIP Units pursuant to this Section 12.02 so that the holder of such Catch-Up Unit is distributed, on a cumulative basis, the amount to which such Class X Member would have been entitled pursuant to this Section 12.02 in respect of such Catch-Up Unit had the Hurdle Amount not been in effect (or such lesser amount as set forth on the Member Schedule or in the applicable Vesting Agreement or other agreement between the holder of such LTIP Unit and the Company and/or Aggregator); provided, further, unless determined otherwise by the Managing Member, distributions pursuant to this Section 12.02(b)(ii) to a Member with respect to an LTIP Unit will be limited so that, with respect to each Fiscal Year (or other accounting period), such Member does not participate in operating income of the Company allocable to Class X Umbrella Units and LTIP Units in excess of such Member’s Percentage Interest with respect to such LTIP Unit of such operating income (i.e., so that the “catch up” entitlement of a Catch-Up Unit is limited to such Member’s allocable share of net appreciation in the assets of the Company). Any amounts that are not distributed to holders of such LTIP Units by virtue of the foregoing provisos shall instead be distributed to the Class X Members in accordance with this Section 12.02 (and Section 5.03(b)).
(c) Distribution of Property. In the event it becomes necessary in connection with the liquidation of the Company to make a distribution of Property in-kind, subject to the priority set forth in Section 12.02, the liquidating trustee shall have the right to compel each Member to accept a distribution of any Property in-kind, with such distribution being based upon the amount of cash that would be distributed to such Members if such Property were sold for an amount of cash equal to the fair market value of such Property, as determined by the liquidating trustee in good faith.
(d) In the event of a dissolution pursuant to Section 12.01(c), the relative economic rights of each class of Units immediately prior to such dissolution shall be preserved to the greatest extent practicable with respect to distributions made to Members pursuant to Section 12.02(b) in connection with such dissolution, taking into consideration tax and other legal
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constraints that may adversely affect one or more parties to such dissolution and subject to compliance with Applicable Laws.
Section 12.03. Termination. The Company shall terminate when all of the assets of the Company, after payment of or reasonable provision for the payment of all debts and liabilities of the Company, shall have been distributed to the Members in the manner provided for in this Article XII and the certificate of formation of the Company shall have been cancelled in the manner required by the Delaware Act.
Section 12.04. Survival. Termination, dissolution, liquidation or winding up of the Company for any reason shall not release any party from any liability which at the time of such termination, dissolution, liquidation or winding up already had accrued to any other party or which thereafter may accrue in respect to any act or omission prior to such termination, dissolution, liquidation or winding up.
ARTICLE XIII
MISCELLANEOUS
Section 13.01. Expenses. The Managing Member shall not be compensated for its services as the Managing Member of the Company except as expressly provided in this Agreement. Other than as set forth in the Tax Receivable Agreement, the Company shall (a) pay, or cause to be paid, all costs, fees, operating expenses, administrative expenses and other expenses of the Company (including the costs, fees and expenses of attorneys, accountants or other professionals and the compensation of all personnel providing services to the Company) incurred in pursuing and conducting, or otherwise related to, the business of the Company and (b) reimburse the Managing Member for any out-of-pocket costs, fees and expenses incurred by it in connection therewith (as reasonably determined by the Managing Member in good faith). The Members acknowledge and agree that, upon consummation of the IPO, the Managing Member’s Class A Common Stock will be publicly traded and, therefore, the Managing Member will have access to the public capital markets and that such status and the services performed by the Managing Member will inure to the benefit of the Company and all Members; therefore, the Managing Member shall be reimbursed by the Company for any reasonable out-of-pocket expenses incurred on behalf of the Company, including, without limitation, all fees, expenses and costs associated with the IPO and all fees, expenses and costs of being a public company (including, without limitation, public reporting obligations, proxy statements, stockholder meetings, Stock Exchange fees, transfer agent fees, legal fees, SEC and FINRA filing fees and offering expenses) and maintaining its corporate existence. In the event that shares of Class A Common Stock are sold to underwriters in the IPO (or in any Qualifying Offering) at a price per share that is lower than the price per share for which such shares of Class A Common Stock are sold to the public in the IPO (or in such Qualifying Offering), after taking into account underwriters’ discounts or commissions and brokers’ fees or commissions (such difference, the “Discount”) (i) the Managing Member shall be deemed to have contributed to the Company in exchange for newly-issued Class X Umbrella Units the full amount for which such shares of Class A Common Stock were sold to the public and (ii) the Company shall be deemed to have paid the Discount as an expense. To the extent practicable, expenses incurred by the Managing Member on behalf of or for the benefit of the Company shall be billed directly to and paid by the Company and, if and to the extent any reimbursements to the Managing
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Member or any of its Affiliates by the Company pursuant to this Section 13.01 constitute gross income to such Person (as opposed to the repayment of advances made by such Person on behalf of the Company), such amounts shall be treated as “guaranteed payments” within the meaning of Section 707(c) of the Code (unless otherwise required by the Code and Treasury Regulations) and shall not be treated as distributions for purposes of computing the Members’ Capital Accounts. Notwithstanding the foregoing, the Company shall not bear any obligations with respect to income tax of the Managing Member or any payments made pursuant to the Tax Receivable Agreement other than in a manner that is expressly contemplated under this Agreement or the Tax Receivable Agreement.
Section 13.02. Further Assurances. Each Member agrees to execute, acknowledge, deliver, file and record such further certificates, amendments, instruments and documents, and to do all such other acts and things, as may be required by Applicable Law or as, in the reasonable judgment of the Managing Member, may be necessary or advisable to carry out the intent and purposes of this Agreement.
Section 13.03. Notices. All notices, requests and other communications to any party hereunder shall be in writing (including facsimile transmission and electronic mail (“e-mail”) transmission, so long as a receipt of such e-mail is requested and received) and shall be given to such party at the address, facsimile number or e-mail address specified for such party on the Member Schedule hereto, or to such other address or facsimile number as such party may hereafter specify for the purpose by notice to the other parties hereto. All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 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. All such notices, requests and other communications to any party hereunder shall be given to such party as follows:
If to Pubco or the Company:
Andersen Group Inc.
333 Bush Street, Suite 1700
San Francisco, California 94104
Attn: CEO, Chief Legal Officer, and General Counsel
With copies (which shall not constitute actual notice) to:
Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP
One Marina Park Drive, Suite 900
Boston, MA 02210
Attn: Jay K. Hachigian and Richard R. Hesp
Section 13.04. Binding Effect; Benefit; Assignment.
(a) The provisions of this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. Except as expressly
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set forth herein, no provision of this Agreement is intended to confer any rights, benefits, remedies, obligations or liabilities hereunder upon any Person other than the parties hereto and their respective successors and assigns.
(b) Except as provided in Article VIII, no Member may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the prior written consent of the Managing Member.
Section 13.05. Jurisdiction. This Agreement and its interpretation shall be governed exclusively by the Delaware Act and the other laws of the State of Delaware, without reference to conflict of law principles thereof.
Section 13.06. Counterparts. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. Counterparts may be delivered via electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes. Until and unless each party has received a counterpart hereof signed by the other party hereto, this Agreement shall have no effect and no party shall have any right or obligation hereunder (whether by virtue of any other oral or written agreement or other communication).
Section 13.07. Entire Agreement. This Agreement and the Other Agreements constitute the entire agreement among the parties with respect to the subject matter of this Agreement and supersede all prior agreements and understandings, both oral and written, among the parties with respect to the subject matter of this Agreement. Nothing in this Agreement shall create any third- party beneficiary rights in favor of any Person or other party, except to the extent provided herein with respect to Indemnitee- Related Entities, each of whom are intended third-party beneficiaries of those provisions that specifically related to them with the right to enforce such provisions as if they were a party hereto.
Section 13.08. Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other Governmental 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 an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the fullest extent possible.
Section 13.09. Amendment.
(a) This Agreement can be amended at any time and from time to time by written instrument signed by Members constituting a majority in interest of all Members, which majority must include Aggregator prior to the occurrence of the Triggering Event (as such term is defined in the certificate of incorporation of Pubco), provided that no amendment to this
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Agreement may adversely modify in any material respect the Units (or the rights, preferences or privileges of the Units) then held by any Members in any materially disproportionate manner to those then held by any other Members without the prior written consent of a majority in interest of such disproportionately affected Member or Members.
(b) For the avoidance of doubt: (i) the Managing Member, acting alone, may amend this Agreement, including the Member Schedule, (x) to reflect the admission of new Members or Transfers of Units, each as provided by and in accordance with, the terms of this Agreement and (y) to effect any subdivisions or combinations of Units made in compliance with Section 4.02(d) and (z) to issue additional Class X Umbrella Units, LTIP Units, or any new class of Units (whether or not pari passu with the Class X Umbrella Units) in accordance with the terms of this Agreement and to provide that the Members being issued such new Units be entitled to the rights provided to Members; and (ii) any merger, consolidation or other business combination that constitutes a Disposition Event (as such term is defined in the certificate of incorporation of Pubco) in which the Non-Pubco Members are required to exchange all of their Class X Umbrella Units pursuant to Section 10.04(b) of this Agreement and receive consideration in such Disposition Event in accordance with the terms of this Agreement and Section 10.04(b) of this Agreement shall not be deemed an amendment hereof; provided, that such amendment is only effective upon consummation of such Disposition Event.
(c) No waiver of any provision or default under, nor consent to any exception to, the terms of this Agreement or any agreement contemplated hereby shall be effective unless in writing and signed by the party to be bound and then only to the specific purpose, extent and instance so provided.
Section 13.10. Confidentiality.
(a) Each Member shall, and shall direct those of its Affiliates and their respective directors, officers, members, stockholders, partners, employees, attorneys, accountants, consultants, trustees and other advisors (the “Member Parties”) who have access to Confidential Information to, keep confidential and not disclose any Confidential Information to any Person other than a Member Party who agrees to keep such Confidential Information confidential in accordance with this Section 13.10, in each case without the express consent, in the case of Confidential Information acquired from the Company, of the Managing Member or, in the case of Confidential Information acquired from another Member, such other Member, unless:
(i) such disclosure shall be required by Applicable Law;
(ii) such disclosure is reasonably required in connection with any tax audit involving the Company or any Member or its Affiliates;
(iii) such disclosure is reasonably required in connection with any litigation against or involving the Company or any Member;
(iv) such disclosure is reasonably required in connection with any proposed Transfer of all or any part of such Member’s Units in the Company; provided that with respect to any such use of any Confidential Information referred to in this clause (iv), advance notice must be given to the Managing Member so that it may require any proposed Transferee that
60
is not a Member to enter into a confidentiality agreement with terms substantially similar to the terms of this Section 13.10 (excluding this clause (iv)) prior to the disclosure of such Confidential Information; or
(v) such disclosure is of financial and other information of the type typically disclosed to limited partners and limited liability company members (and prospective transferees or investors thereof) and is made to the partners or members of, and/or prospective investors in, Affiliates of the Members and such partner, Member or prospective investor is bound by the confidentiality provisions of a customary non-disclosure agreement entered into with the disclosing party that covers the Confidential Information so disclosed.
(b) “Confidential Information” means any information related to the activities of the Company, the Members and their respective Affiliates that a Member may acquire from the Company or the Members, other than information that (i) is already available through publicly available sources of information (other than as a result of disclosure by such Member in violation of this Agreement or another confidentiality agreement with the Company), (ii) was available to a Member on a non-confidential basis prior to its disclosure to such Member by the Company, or (iii) becomes available to a Member on a non-confidential basis from a third party, provided such third party is not known by such Member, after reasonable inquiry, to be bound by this Agreement or another confidentiality agreement with the Company. Such Confidential Information may include information that pertains or relates to the business and affairs of any other Member or any other Company matters. Confidential Information may be used by a Member and its Member Parties only in connection with Company matters and in connection with the maintenance of its interest in the Company.
(c) In the event that any Member or any Member Party of such Member is required to disclose any of the Confidential Information, such Member shall use reasonable efforts to provide the Company with prompt written notice so that the Company may seek a protective order or other appropriate remedy and/or waive compliance with the provisions of this Agreement, and such Member shall use reasonable efforts to cooperate with the Company in any effort any such Person undertakes to obtain a protective order or other remedy. In the event that such protective order or other remedy is not obtained, or that the Company waives compliance with the provisions of this Section 13.10, such Member and its Member Parties shall furnish only that portion of the Confidential Information that is legally required and shall exercise all reasonable efforts to obtain reasonably reliable assurance that the Confidential Information shall be accorded confidential treatment.
(d) Notwithstanding anything in this Agreement to the contrary, each Member may disclose to any persons the U.S. federal income tax treatment and tax structure of the Company and the transactions set out in the Other Agreements. For this purpose, “tax structure” is limited to any facts relevant to the U.S. federal income tax treatment of the Company and does not include information relating to the identity of the Company or any Member.
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ARTICLE XIV
ARBITRATION
Section 14.01. Arbitration.
(a) Any dispute, controversy, or claim arising out of, relating to, involving, or having any connection with this Agreement, including any question regarding the validity, interpretation, scope, performance, or enforceability of this dispute resolution provision, shall be exclusively and finally settled by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association (“AAA”).
(b) The arbitration shall be conducted in San Francisco, California unless, within thirty (30) days after the initial notice of a party of its intention to commence arbitration (the “Arbitration Notice Date”), the parties agree on another location.
(c) The arbitration shall be conducted by three (3) arbitrators. Each party to the dispute, controversy or claim shall appoint an arbitrator, obtain its appointee’s acceptance of such appointment, and deliver written notification of such appointment and acceptance to the other party within forty-five (45) days of the Arbitration Notice Date. The two (2) party-appointed arbitrators shall jointly agree upon and appoint a third (3rd) arbitrator who shall be knowledgeable with regard to the type of issues in dispute and who shall serve as the chairperson of the arbitral panel. The party arbitrators shall obtain the chairperson’s acceptance of such appointment and notify the parties in writing of said appointment and acceptance within thirty (30) days after their appointment and acceptance as party arbitrators. If the two (2) party-appointed arbitrators are unable to agree upon the selection and appointment of the chairperson within that time frame, they shall so notify the parties in writing. Upon such notice, one or both of the parties may request in writing that the chairperson be appointed by AAA in accordance with the AAA Rules. The AAA shall notify the parties in writing of the appointment and acceptance of the chairperson within twenty-one (21) days of receiving such request.
(d) The parties shall be entitled to engage in reasonable discovery, including requests for production of relevant non-privileged documents. Depositions and interrogatories may be ordered by the arbitral panel upon a showing of need.
(e) All decisions, rulings, and awards of the arbitral panel shall be made pursuant to majority vote of the three arbitrators. The award shall be in accordance with the applicable law, shall be in writing, and shall state the reasons upon which it is based. The arbitrators shall have no power to modify or abridge the terms of this Agreement. The arbitrators shall have no power to award, and the parties hereby waive any claim to, damages (including punitive or exemplary damages) in excess of compensatory damages.
(f) Costs incurred in the arbitration proceeding, including attorneys’ fees and expenses, shall be borne in the manner determined by the arbitral panel.
(g) Subject to this Section 14.01(g) and Section 14.01(h), the parties agree to renounce all recourse to litigation with regard to matters covered by this Agreement to the extent
62
not inconsistent with applicable law. The award of the arbitrators shall be final, and judgment on the award may be entered by any court having jurisdiction to do so.
(h) Nothing in this Agreement shall prevent the parties, prior to the formation of the arbitral panel, from applying to a court of competent jurisdiction for provisional or interim measures or injunctive relief as may be necessary to safeguard the property or rights that are the subject matter of the arbitration. Once the arbitral panel is in place, it shall have exclusive jurisdiction to hear applications for such relief, except that any interim measures or injunctive relief ordered by the arbitral panel may be immediately and specifically enforced by a court of competent jurisdiction.
(i) Unless otherwise agreed by the parties or required by law, the parties, the arbitrators, any consultants retained by the arbitrators, and AAA shall maintain the confidentiality of all documents, communications, proceedings, and awards provided, produced, or exchanged pursuant to an arbitration conducted under this Section 14.01.
ARTICLE XV
REPRESENTATIONS OF MEMBERS
Section 15.01. Representations of Members. Each Member (unless otherwise noted) to which a Unit is issued as of the date of this Agreement represents and warrants to the Company as follows:
(a) The Units issued to such Member, if any, are being acquired for investment for such Member’s own account, not as a nominee or agent, and not with a view to or for sale in connection with the distribution thereof.
(b) Such Member has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of the Member’s investment in the Units; such Member has the ability to bear the economic risks of such investment; such Member has the capacity to protect its own interests in connection with the transactions contemplated by this Agreement; and such Member has had an opportunity to ask questions and to obtain such financial and other information regarding the Company as such Member deems necessary or appropriate in connection with evaluating the merits of the investment in the Units. Such Member acknowledges that the Units have not been and will not be registered under the Securities Act or under any state securities act and may not be transferred except in compliance with the Securities Act and all applicable state laws.
(c) Each Member qualifies as an Accredited Investor within the meaning of Regulation D promulgated under the Securities Act or the acquisition of its interest otherwise qualifies under an applicable exemption from registration under the Securities Act.
[Signature pages follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Limited Liability Company Agreement to be duly executed as of the day and year first written above.
| MEMBERS: |
ANDERSEN GROUP INC. | |||||
| By: |
/s/ Mark L. Vorsatz | |||||
| Name: |
Mark L. Vorsatz | |||||
| Title: |
Authorized Person | |||||
| Address: |
| |||||
|
| ||||||
| ANDERSEN AGGREGATOR LLC | ||||||
| By: |
/s/ Mark L. Vorsatz | |||||
| Name: |
Mark L. Vorsatz | |||||
| Title: |
Authorized Person | |||||
| Address: |
| |||||
|
| ||||||
[SIGNATURE PAGE TO AT UMBRELLA LLC LLC AGREEMENT]
SCHEDULE A
Member Schedule
As of the Effective Time
| Member |
Admission Date |
Class X Umbrella Units |
LTIP Units |
Schedule A-1
ANNEX A
LTIP Units
1. Applicability. The provisions of this Annex A shall apply to holders of LTIP Units.
2. LTIP Units. The LTIP Units are intended to qualify as Profits Interests. The number of LTIP Units that may be issued by the Company shall not be limited.
3. Hurdle Amount. Each LTIP Unit shall be subject to a hurdle amount (the “Hurdle Amount”), which shall be: (a) as of the date hereof with respect to each outstanding LTIP Unit, as set forth on the Member Schedule or (b) with respect to each subsequently issued LTIP Unit that is intended to constitute a Profits Interest for U.S. federal income tax purposes, an amount not less than the amount determined by the Managing Member to be necessary to cause such LTIP Unit to constitute a Profits Interest, as set forth on the Member Schedule. The Hurdle Amount may be adjusted by the Managing Member in good faith to account for any reverse split pursuant to Section 4.02(f) or for any Capital Contributions and distributions made pursuant to Section 5.03(b) or in connection with any other change in the Company’s capital structure to prevent such changed capital structure from changing the economic rights represented by the LTIP Unit in a manner that is disproportionately favorable or unfavorable in relation to the economic rights of other outstanding LTIP Units or Class X Umbrella Units. Each subsequently issued LTIP Unit that is intended to constitute a Profits Interest shall have an initial Capital Account at the time of its issuance equal to zero dollars ($0.00).
4. Vesting. LTIP Units may, in the sole discretion of the Managing Member, be issued subject to vesting, forfeiture and additional restrictions on transfer pursuant to the terms of an award, admission, vesting or other similar agreement (a “Vesting Agreement”). The terms of any Vesting Agreement may be modified by the Managing Member from time to time in its sole discretion, subject to any restrictions on amendment imposed by the relevant Vesting Agreement or by the terms of any equity incentive plan pursuant to which the LTIP Units are issued, if applicable.
5. Forfeiture or Transfer of Unvested LTIP Units. Unless otherwise specified in the relevant Vesting Agreement, upon the occurrence of any event specified in a Vesting Agreement resulting in either the forfeiture of any LTIP Units or the repurchase thereof by the Company at a specified purchase price, then, upon the occurrence of the circumstances resulting in such forfeiture or repurchase by the Company, the relevant LTIP Units shall immediately, and without any further action, be treated as cancelled and no longer outstanding for any purpose. Unless otherwise specified in the relevant Vesting Agreement, no consideration or other payment shall be due with respect to any LTIP Units that have been forfeited; provided that with respect to any distribution declared with a record date prior to the effective date of such forfeiture, such forfeited LTIP Units shall be included in calculating the applicable holder’s Percentage Interest.
6. Legend. Any certificate evidencing an LTIP Unit shall bear an appropriate legend indicating that additional terms, conditions and restrictions on transfer, including provisions set forth in the Vesting Agreement, apply to the LTIP Unit.
Annex A-1
Exhibit 10.2
MANAGING DIRECTOR MATTERS AGREEMENT
AMONG
ANDERSEN AGGREGATOR LLC
And
ANDERSEN GROUP INC.
Dated as of December 16, 2025
TABLE OF CONTENTS
| Page | ||||||
| Article 1 DEFINITIONS |
1 | |||||
| Section 1.1 |
Definitions | 1 | ||||
| Article 2 ELECTION OF NEW MANAGING DIRECTORS |
2 | |||||
| Article 3 MISCELLANEOUS |
2 | |||||
| Section 3.1 |
Term of the Agreement | 2 | ||||
| Section 3.2 |
Amendments | 2 | ||||
| Section 3.3 |
Governing Law | 2 | ||||
| Section 3.4 |
No Third-Party Rights | 2 | ||||
| Section 3.5 |
Execution in Counterparts | 2 | ||||
| Section 3.6 |
Notices | 2 | ||||
| Section 3.7 |
Severability | 3 | ||||
| Section 3.8 |
Entire Agreement | 3 | ||||
| Section 3.9 |
Section Headings; Construction | 3 | ||||
-i-
This Managing Director Matters Agreement, dated as of December 16, 2025 (as amended, supplemented, waived or otherwise modified from time to time in accordance with its terms, this “Agreement”), among Andersen Aggregator LLC, a Delaware limited liability company (“Aggregator”), and Andersen Group Inc., a Delaware corporation (“Pubco”).
WITNESSETH:
WHEREAS, the Company (as defined below) is an organization of dedicated business professionals with the analytical skills, personal integrity and business judgment needed to serve clients with a commitment to the highest quality of service;
WHEREAS, the Company seeks to provide the highest quality service to each of its clients worldwide through a responsive and effective relationship led by a Managing Director (as defined below) who understands and cares about the client’s business; and
WHEREAS, shared values enable the Managing Directors to bring the collective knowledge, expertise and resources of the Company to each client engagement, to build the business of the Company and to provide the Company’s people with outstanding career opportunities.
NOW, THEREFORE, in consideration of the premises and of the mutual agreements, covenants and provisions herein contained, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.1 Definitions. The following words and phrases as used herein shall have the following meanings, except as otherwise expressly provided or unless the context otherwise requires:
(a) This “Agreement” shall have the meaning ascribed to such term in the preamble hereto.
(b) “Affiliate” shall mean with respect to any Person any other Person directly or indirectly Controlling, Controlled by or under common Control with such Person. Unless the context states otherwise, “Affiliate” shall refer to an Affiliate of the Company. The parties expressly agree that the Entities listed in Exhibit A attached hereto, as such list may be updated by the Board of Directors from time to time, are Affiliates of the Company.
(c) “Company” shall mean AT Umbrella LLC, together with its Subsidiaries.
(d) “Control” of a Person shall mean the ability, directly or indirectly, to (i) vote more than fifty percent (50%) of the outstanding voting securities of or voting interest in such Person, or (ii) direct the management policies of such Person, by contract or otherwise.
(e) “Managing Director” shall mean a person who holds the title of Managing Director of the Company or a comparable position with an Affiliate thereof or who is a member
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of an advisory board or equivalent of an Affiliate thereof, as determined in good faith by the Board of Directors of Aggregator.
(f) “Person” means any individual, firm, corporation, partnership, limited liability company, trust, estate, joint venture, governmental authority or other entity.
(g) “Subsidiary” means, with respect to any Person, any corporation, partnership, limited liability company, association, joint venture or other business entity of which more than 50% of the total voting power of equity securities or other ownership interests entitled (without regard to the occurrence of any contingency) to vote in the election of the Person or Persons (whether directors, managers, trustees or other Persons performing similar functions) having the power to direct or cause the direction of the management and policies 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.
ARTICLE 2
ELECTION OF NEW MANAGING DIRECTORS
New Managing Directors may be elected from time to time, as approved by the Board of Directors of Aggregator. Pubco shall not appoint or cause to be appointed a Managing Director unless such Managing Director was previously approved by the Board of Directors of Aggregator.
ARTICLE 3
MISCELLANEOUS
Section 3.1 Term of the Agreement. The term of this Agreement shall continue until terminated by mutual written agreement of Aggregator and Pubco.
Section 3.2 Amendments. This Agreement may be amended only by mutual written agreement of Aggregator and Pubco.
Section 3.3 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to the conflicts of law rules of such State that would result in the application of the laws of any other State.
Section 3.4 No Third-Party Rights. Nothing expressed or referred to in this Agreement will be construed to give any person other than the parties to this Agreement any legal or equitable right, remedy, or claim under or with respect to this Agreement or any provision of this Agreement. This Agreement and all of its provisions and conditions are for the sole and exclusive benefit of the parties to this Agreement and their successors and permitted assigns.
Section 3.5 Execution in Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all such counterparts shall together constitute one agreement.
Section 3.6 Notices. All notices, requests and other communications to any party hereunder shall be in writing (including facsimile transmission and electronic mail (“e-mail”) transmission, so long as a receipt of such e-mail is requested and received) and shall be given to
2
such party at the address, facsimile number or e-mail address specified for such party on its signature page hereto, or to such other address or facsimile number as such party may hereafter specify for the purpose by notice to the other parties hereto. All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 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.
Section 3.7 Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other governmental 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 an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the fullest extent possible.
Section 3.8 Entire Agreement. This Agreement constitutes the entire agreement among the parties with respect to the subject matter of this Agreement and supersede all prior agreements and understandings, both oral and written, among the parties with respect to the subject matter of this Agreement. Nothing in this Agreement shall create any third- party beneficiary rights in favor of any Person or other party.
Section 3.9 Section Headings; Construction. The headings of sections in this Agreement are provided for convenience only and will not affect its construction or interpretation.
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IN WITNESS WHEREOF, the parties hereto have duly executed or caused to be duly executed this Managing Director Matters Agreement as of the date first above written.
| ANDERSEN GROUP INC. | ||
| By: |
/s/ Mark L. Vorsatz | |
| Name: |
Mark L. Vorsatz | |
| Title: |
Authorized Person | |
| Address: |
| |
|
|
| ANDERSEN AGGREGATOR LLC | ||
| By: |
/s/ Mark L. Vorsatz | |
| Name: |
Mark L. Vorsatz | |
| Title: |
Authorized Person | |
| Address: |
| |
|
|
Exhibit 10.3
TAX RECEIVABLE AGREEMENT
among
ANDERSEN GROUP INC.,
AT UMBRELLA LLC,
and
ANDERSEN AGGREGATOR LLC
Dated as of December 16, 2025
TABLE OF CONTENTS
| Page | ||||||
| ARTICLE I DEFINITIONS |
2 | |||||
| Section 1.01 |
Definitions | 2 | ||||
| ARTICLE II DETERMINATION OF REALIZED TAX BENEFIT |
9 | |||||
| Section 2.01 |
Basis Adjustment | 9 | ||||
| Section 2.02 |
Realized Tax Benefit and Realized Tax Detriment | 10 | ||||
| Section 2.03 |
Procedures, Amendments | 11 | ||||
| ARTICLE III TAX BENEFIT PAYMENTS |
12 | |||||
| Section 3.01 |
Payments | 12 | ||||
| Section 3.02 |
No Duplicative Payments | 13 | ||||
| Section 3.03 |
Pro Rata Payments | 13 | ||||
| ARTICLE IV TERMINATION |
13 | |||||
| Section 4.01 |
Termination, Early Termination and Breach of Agreement | 13 | ||||
| Section 4.02 |
Early Termination Notice | 15 | ||||
| Section 4.03 |
Payment upon Early Termination | 15 | ||||
| Section 4.04 |
Change of Control | 15 | ||||
| ARTICLE V SUBORDINATION AND LATE PAYMENTS |
16 | |||||
| Section 5.01 |
Subordination | 16 | ||||
| Section 5.02 |
Late Payments by the Corporate Taxpayer | 16 | ||||
| ARTICLE VI NO DISPUTES; CONSISTENCY; COOPERATION |
16 | |||||
| Section 6.01 |
Participation in the Corporate Taxpayer’s and OpCo’s Tax Matters | 16 | ||||
| Section 6.02 |
Consistency | 16 | ||||
| Section 6.03 |
Cooperation | 16 | ||||
| ARTICLE VII MISCELLANEOUS |
17 | |||||
| Section 7.01 |
Notices | 17 | ||||
| Section 7.02 |
Binding Effect; Benefit; Assignment; Right of First Refusal | 17 | ||||
| Section 7.03 |
Resolution of Disputes | 19 | ||||
| Section 7.04 |
Counterparts | 20 | ||||
| Section 7.05 |
Entire Agreement | 20 | ||||
| Section 7.06 |
Severability | 20 | ||||
| Section 7.07 |
Amendment | 20 | ||||
| Section 7.08 |
Governing Law | 21 | ||||
| Section 7.09 |
Reconciliation | 21 | ||||
| Section 7.10 |
Withholding | 21 | ||||
| Section 7.11 |
Admission of the Corporate Taxpayer into a Consolidated Group; Transfers of Corporate Assets | 22 | ||||
| Section 7.12 |
Confidentiality | 22 | ||||
| Section 7.13 |
Change in Law | 22 | ||||
| Section 7.14 |
Tax Characterization and Elections | 22 | ||||
| Section 7.15 |
Partnership Agreement | 23 | ||||
i
TAX RECEIVABLE AGREEMENT
This TAX RECEIVABLE AGREEMENT (as amended from time to time, this “Agreement”), dated as of December 16, 2025, is hereby entered into by and among Andersen Group Inc., a Delaware corporation (the “Corporate Taxpayer”), AT Umbrella LLC, a Delaware limited liability company (“OpCo”), and each of the TRA Parties (as defined below) from time to time party hereto, and each of the successors and assigns hereto.
WHEREAS, OpCo is treated as a partnership for U.S. federal income tax purposes and the Corporate Taxpayer is classified as an association taxable as a corporation for U.S. federal income tax purposes;
WHEREAS, Andersen Aggregator LLC, a Delaware limited liability company (“Aggregator”), holds, and certain future TRA Parties (as defined below) may hold from time to time, Class X Umbrella Units in OpCo (the “Units”), and following certain reorganization transactions, the Corporate Taxpayer will be the managing member of OpCo and will hold, directly and/or indirectly, the Units;
WHEREAS, on and after the date hereof, pursuant to Section 10.01 of the LLC Agreement (as defined below), each TRA Party has the right, in its sole discretion, from time to time to require OpCo to redeem (a “Redemption”) all or a portion of such TRA Party’s Units (upon the occurrence of which a corresponding portion of such TRA Party’s shares of Class B Common Stock will be cancelled) for shares of Class A Common Stock or, at the Corporate Taxpayer’s option, cash; provided that, pursuant to Section 10.03 of the LLC Agreement and at the election of the Corporate Taxpayer, the Corporate Taxpayer may effect a direct exchange (a “Direct Exchange,” and together with a Redemption, an “Exchange”) of such cash or shares of Class A Common Stock for such Units (and cancellation of the corresponding portion of such shares of Class B Common Stock);
WHEREAS, OpCo and each of its direct and indirect subsidiaries, if any, treated as a partnership for U.S. federal income tax purposes will have in effect an election under Section 754 of the Internal Revenue Code of 1986, as amended (the “Code”), for each Taxable Year (as defined below) in which an Exchange occurs, which elections are intended generally to result in an adjustment to the Tax (as defined below) basis of the assets owned by OpCo (solely with respect to the Corporate Taxpayer) at the time of an Exchange (such time, the “Exchange Date”) by reason of the Exchange and the receipt of payments under this Agreement;
WHEREAS, the income, gain, loss, expense and other Tax items of the Corporate Taxpayer may be affected by (i) the Basis Adjustments (as defined below) and (ii) Imputed Interest (as defined below); and
WHEREAS, the parties to this Agreement desire to make certain arrangements with respect to the effect of the Basis Adjustments and Imputed Interest on the actual liability for Taxes of the Corporate Taxpayer.
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:
1
ARTICLE I
DEFINITIONS
Section 1.01 Definitions.
(a) The following terms shall have the following meanings for the purposes of this Agreement:
“Actual Tax Liability” means, with respect to any Taxable Year, the actual liability for U.S. federal, state and local Taxes of (i) the Corporate Taxpayer and (ii) without duplication, OpCo, but only with respect to Taxes imposed on OpCo and allocable to the Corporate Taxpayer (including, for the avoidance of doubt, any such Taxes imposed on OpCo under Section 6225 of the Code or similar provision of state and local tax law, as applicable, that are allocable to the Corporate Taxpayer), for such Taxable Year.
“Affiliate” means, with respect to any Person, any other Person that directly or indirectly, through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such Person.
“Agreed Rate” means a per annum rate of SOFR plus 100 basis points.
“Attributable” means, with respect to any Attributable TRA Party, the portion of any Realized Tax Benefit that is “attributable” to such Attributable TRA Party, which shall be determined by reference to the assets from which arise the depreciation, amortization or other similar deductions for recovery of cost or basis (“Depreciation”) and with respect to increased basis upon a disposition of an asset or Imputed Interest that produce the Realized Tax Benefit, under the following principles:
(i) A portion of any Realized Tax Benefit arising from a deduction to the Corporate Taxpayer with respect to a Taxable Year for Depreciation arising in respect of a Basis Adjustment to a Reference Asset resulting from an Exchange is Attributable to the Attributable TRA Party to the extent of an amount that bears the same ratio to such Realized Tax Benefit as all Depreciation for the Taxable Year in respect of Basis Adjustments resulting from all Exchanges by the Attributable TRA Party bears to the aggregate of all Depreciation for the Taxable Year in respect of Basis Adjustments resulting from all Exchanges by the Attributable TRA Parties (in each case, other than with respect to the portion of the Basis Adjustment described in clause (ii) below).
(ii) A portion of any Realized Tax Benefit arising from a deduction to the Corporate Taxpayer with respect to a Taxable Year for Depreciation arising in respect of a Basis Adjustment to a Reference Asset resulting from a payment hereunder is Attributable to the Attributable TRA Party that receives such payment.
(iii) A portion of any Realized Tax Benefit arising from the disposition of a Reference Asset is Attributable to the Attributable TRA Party to the extent of an amount that bears the same ratio to such Realized Tax Benefit as all Basis Adjustments (to the extent not previously taken into account in the calculation of Realized Tax Benefits) resulting from all Exchanges by the Attributable TRA Party with respect to such Reference Asset bears to the aggregate of all Basis Adjustments (to the extent not previously taken into account in the calculation of Realized Tax Benefits) with respect to such Reference Asset.
(iv) A portion of any Realized Tax Benefit arising from a deduction to the Corporate Taxpayer with respect to a Taxable Year in respect of Imputed Interest is Attributable to the Attributable
2
TRA Party to the extent corresponding to amounts that such TRA Party is required to include in income in respect of Imputed Interest (without regard to whether such TRA Party is actually subject to Tax thereon).
(v) A portion of any Realized Tax Benefit arising from a carryover or carryback of any Tax item is Attributable to such TRA Party to the extent such carryover or carryback is attributable to or available for use because of the prior use of the Basis Adjustments or Imputed Interest with respect to which a Realized Tax Benefit would be Attributable to such TRA Party pursuant to clauses (i)-(iv) above.
Portions of any Realized Tax Detriment shall be Attributed to the TRA Parties under principles similar to those described in clauses (i)-(v) above.
“Attributable TRA Party” means any TRA Party undertaking an Exchange as a result of which any portion of a Realized Tax Benefit may be payable under this Agreement.
“Basis Adjustment” means the adjustment to the Tax basis of a Reference Asset under Sections 732 and 1012 of the Code and the Treasury Regulations promulgated thereunder (in situations where, as a result of one or more Exchanges, OpCo becomes an entity that is disregarded as separate from its owner for U.S. federal income tax purposes) or under Sections 734(b), 743(b) and 755 of the Code and the Treasury Regulations promulgated thereunder (in situations where, following an Exchange, OpCo remains in existence as an entity classified as a partnership for U.S. federal income tax purposes) and, in each case, comparable sections of state and local tax laws, as a result of (i) an Exchange and (ii) the payments made pursuant to the Tax Receivable Agreement. For the avoidance of doubt, the amount of any Basis Adjustment resulting from an Exchange of one or more Units shall be determined without regard to any Pre-Exchange Transfer of such Units and as if any such Pre-Exchange Transfer had not occurred.
A “Beneficial Owner” of a security is a Person who directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares: (i) voting power, which includes the power to vote, or to direct the voting of, such security and/or (ii) investment power, which includes the power to dispose of, or to direct the disposition of, such security.
“Blended Rate” means, with respect to any Taxable Year, the sum of the effective rates of Tax imposed on the aggregate net income of the Corporate Taxpayer in each state or local jurisdiction in which the 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 the Corporate Taxpayer in such jurisdiction for such Taxable Year, and (ii) the maximum applicable corporate or franchise Tax rate in effect in such jurisdiction in such Taxable Year. As an illustration of the calculation of the Blended Rate for a Taxable Year, if the 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% and 5%, respectively and the apportionment factors for such states in such Taxable Year are 60% and 40%, respectively, then the Blended Rate for such Taxable Year is equal to 5.6% (i.e., 6% times 60% plus 5% times 40%).
“Board” means the board of directors of the Corporate Taxpayer.
“Business Day” shall have the meaning ascribed to such term in the LLC Agreement.
“Change of Control” means the occurrence of any of the following events:
(i) any Person or any group of Persons acting together which would constitute a “group” for purposes of Section 13(d) of the Securities and Exchange Act of 1934, as amended, or any successor provisions thereto (excluding (A) a corporation or other entity owned, directly or indirectly, by
3
the stockholders of the Corporate Taxpayer in substantially the same proportions as their ownership of stock in the Corporate Taxpayer and (B) any TRA Party or any of such TRA Party’s Affiliates) becomes the Beneficial Owner, directly or indirectly, of securities of the Corporate Taxpayer representing more than 50% of the combined voting power of the Corporate Taxpayer’s then outstanding voting securities; or
(ii) the following individuals cease to constitute a majority of the number of directors of the Corporate Taxpayer then serving: individuals who, on the IPO Date, constitute the Board and any new director whose appointment or election by the Board or nomination for election by the Corporate Taxpayer’s shareholders was approved or recommended by a vote of at least a majority of the directors then still in office who either were directors on the IPO Date or whose appointment, election or nomination for election was previously so approved or recommended by the directors referred to in this clause (ii); or
(iii) there is consummated a merger or consolidation of the Corporate Taxpayer with any other corporation or other entity, and, immediately after the consummation of such merger or consolidation, either (A) the Board immediately prior to the merger or consolidation does not constitute at least a majority of the board of directors of the company surviving the merger or, if the surviving company is a Subsidiary, the ultimate parent thereof, or (B) the voting securities of the Corporate Taxpayer immediately prior to such merger or consolidation do not continue to represent or are not converted into more than 50% of the combined voting power of the then outstanding voting securities of the Person resulting from such merger or consolidation or, if the surviving company is a Subsidiary, the ultimate parent thereof; or
(iv) the shareholders of the Corporate Taxpayer approve a plan of complete liquidation or dissolution of the Corporate Taxpayer or there is consummated an agreement or series of related agreements for the sale or other disposition, directly or indirectly, by the Corporate Taxpayer of all or substantially all of the Corporate Taxpayer’s assets, other than such sale or other disposition by the Corporate Taxpayer of all or substantially all of the Corporate Taxpayer’s assets to an entity, at least 50% of the combined voting power of the voting securities of which are owned by shareholders of the Corporate Taxpayer in substantially the same proportions as their ownership of the Corporate Taxpayer immediately prior to such sale.
Notwithstanding the foregoing, a “Change of Control” shall not be deemed to have occurred by virtue of the consummation of any transaction or series of integrated transactions where either (A) except with respect to clause (ii) and clause (iii)(A) above, immediately following such transaction or series of integrated transactions the record holders of the shares of the Corporate Taxpayer immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in, and own substantially all of the shares of, an entity which owns all or substantially all of the assets of the Corporate Taxpayer immediately following such transaction or series of transactions, (B) as to clause (ii) and clause (iii)(A) above, such change in the directors constituting the Board is approved by Aggregator, or (C) unless otherwise agreed by (1) the Board of Directors of Aggregator and (2) the Corporate Taxpayer, such transaction or series of integrated transactions occurs between (1) Aggregator or such person that is approved by the Board of Directors of Aggregator and (2) the Corporate Taxpayer.
“Class A Common Stock” means Class A common stock, $0.0001 par value per share, of the Corporate Taxpayer.
“Class B Common Stock” means Class B common stock, $0.0001 par value per share, of the Corporate Taxpayer.
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“Control” means the possession, direct or indirect, 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 Return” means the U.S. federal and/or state and/or local Tax Return, as applicable, of the Corporate Taxpayer filed with respect to Taxes for any Taxable Year.
“Cumulative Net Realized Tax Benefit” for a Taxable Year means the cumulative amount of Realized Tax Benefits for all Taxable Years of the Corporate Taxpayer, 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 shall be determined based on the most recent Tax Benefit Schedule or Amended Schedule, if any, in existence at the time of such determination.
“Default Rate” means a per annum rate of SOFR plus 300 basis points.
“Determination” means (i) a “determination” as defined 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 or (ii) the acquiescence of the Corporate Taxpayer to the amount of any assessed liability for Tax.
“Direct Exchange” is defined in the recitals to this Agreement.
“Early Termination Date” means the date of an Early Termination Notice for purposes of determining the Early Termination Payment.
“Early Termination Rate” means a per annum rate of the lesser of (i) 6.5% per annum, compounded annually, and (ii) SOFR plus 300 basis points.
“Exchange” is defined in the recitals to this Agreement.
“Governmental Authority” has the meaning set forth in the LLC Agreement.
“Hypothetical Federal Tax Liability” means, with respect to any Taxable Year, the liability for U.S. federal income Taxes of (i) the Corporate Taxpayer and (ii) without duplication, OpCo, but only with respect to U.S. federal income Taxes imposed on OpCo and allocable to the Corporate Taxpayer (including, for the avoidance of doubt, any such Taxes imposed on OpCo under Section 6225 of the Code or similar provision of state and local tax law, as applicable, that are allocable to the Corporate Taxpayer), in each case using the same methods, elections, conventions and similar practices used on the relevant Corporate Taxpayer Return, but (w) using the Non-Stepped Up Tax Basis as reflected on the applicable Exchange Basis Schedule, including amendments thereto, for the Taxable Year, (x) excluding any deduction attributable to Imputed Interest for the Taxable Year, (y) deducting the Hypothetical Other Tax Liability (rather than any amount for state, local or foreign tax liabilities) for such Taxable Year and (z) without taking into account the carryover or carryback of any Tax item (or portions thereof) that is attributable to or (without duplication) available for use because of the prior use of any of the Basis Adjustments or Imputed Interest, as applicable.
“Hypothetical Other Tax Liability” means, with respect to any Taxable Year, U.S. federal taxable income determined in connection with calculating the Hypothetical Federal Tax Liability for such Taxable Year (determined without regard to clause (y) thereof) multiplied by the Blended Rate for such Taxable Year.
5
“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 the Corporate Taxpayer’s payment obligations under this Agreement.
“IPO” means the initial public offering of Class A Common Stock of the Corporate Taxpayer.
“IPO Date” means the closing date of the IPO.
“IRS” means the U.S. Internal Revenue Service.
“LLC Agreement” means the Amended and Restated Limited Liability Company Agreement of AT Umbrella LLC, dated as of the date hereof and as amended from time to time.
“LTIP Unit” means an LTIP Unit of OpCo.
“Market Value” means the closing price of the Class A Common Stock on the applicable Exchange 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; provided, that if the closing price is not reported by the Wall Street Journal for the applicable Exchange Date, then the Market Value shall mean the closing price of the Class A Common Stock on the Business Day immediately preceding such Exchange 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; provided, further, that if the Class A Common Stock is not then listed on a national securities exchange or interdealer quotation system, the Market Value shall mean the cash consideration paid for Class A Common Stock, or the fair market value of the other property delivered for Class A Common Stock, as determined by the Board in good faith.
“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 no Basis Adjustments had been made.
“Payment Date” means any date on which a payment is required to be made pursuant to this Agreement.
“Person” means any individual, corporation, firm, partnership, joint venture, limited liability company, estate, trust, business association, organization, governmental entity or other entity.
“Pre-Exchange Transfer” means any transfer or distribution in respect of one or more Units (i) that occurs prior to an Exchange of such Units, and (ii) to which Section 743(b) or 734(b) of the Code applies.
“Realized Tax Benefit” means, for a Taxable Year, the excess, if any, of the Hypothetical Tax Liability over the Actual Tax Liability. If all or a portion of the Actual Tax Liability for such Taxable Year arises as a result of an audit or similar proceeding 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 with respect to such Actual Tax Liability.
“Realized Tax Detriment” means, for a Taxable Year, the excess, if any, of the Actual Tax Liability over the Hypothetical Tax Liability. If all or a portion of the Actual Tax Liability for such Taxable
6
Year arises as a result of an audit or similar proceeding 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 with respect to such Actual Tax Liability.
“Redemption” has the meaning in the recitals to this Agreement.
“Reference Asset” means an asset that is held by OpCo, or by any of its direct or indirect subsidiaries, if any, treated as a partnership or disregarded entity for purposes of the applicable Tax, at the time of an Exchange. A Reference Asset also includes any asset that is “substituted basis property” under Section 7701(a)(42) of the Code with respect to a Reference Asset.
“Representative” means Aggregator or a designee selected by Aggregator.
“Schedule” means any of the following: (i) an Exchange Basis Schedule, (ii) a Tax Benefit Schedule, or (iii) the Early Termination Schedule.
“Section 734(b) Exchange” means any Exchange that results in a Basis Adjustment under Section 734(b) of the Code.
“SOFR” means, with respect to any Business Day, a rate per annum equal to the secured overnight financing rate for such Business Day published by the SOFR Administrator on the SOFR Administrator’s Website on the immediately succeeding Business Day.
“SOFR Administrator” means the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate).
“SOFR Administrator’s Website” means the website of the Federal Reserve Bank of New York, currently at http://www.newyorkfed.org, or any successor source for the secured overnight financing rate identified as such by the SOFR Administrator from time to time.
“Subsidiary” shall have the meaning ascribed to such term in the LLC Agreement.
“Subsidiary Stock” means any stock or other equity interest in any Subsidiary of the Corporate Taxpayer that is (i) treated as a corporation for U.S. federal income tax purposes and (ii) a member of an affiliated or consolidated group of corporations that files a consolidated income tax return pursuant to Sections 1501 et seq. of the Code with respect to which the Corporate Taxpayer is a member.
“Tax Return” means any return, declaration, report or similar statement required to be filed with respect to Taxes (including any attached schedules), including any information return, claim for refund, amended return and declaration of estimated Tax.
“Taxable Year” means a taxable year of the Corporate Taxpayer as defined in Section 441(b) of the Code or comparable section of state or local tax law, as applicable (and, therefore, for the avoidance of doubt, may include a period of less than 12 months for which a Tax Return is made), ending on or after the IPO Date.
“Taxes” means any and all taxes, assessments or similar charges that are based on or measured with respect to net income or profits, and any interest related thereto.
7
“Taxing Authority” means 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.
“TRA Party” means the parties hereto (other than the Corporate Taxpayer and OpCo) and each other person who from time to time executes a joinder in the form attached hereto as Exhibit A.
“Treasury Regulations” means the final, temporary and 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” means, as of an Early Termination Date, the assumptions that (i) in each Taxable Year ending on or after such Early Termination Date, the Corporate Taxpayer will have taxable income sufficient to fully utilize the deductions arising from the Basis Adjustments (assuming, to the extent applicable, in calculating such deductions that the election under Section 168(k)(7) of the Code is made with respect to any actual or deemed Basis Adjustment arising from an Exchange made in the Taxable Year that includes the Early Termination Date or deemed to be made on the Early Termination Date pursuant to clause (vi) of this definition), and Imputed Interest during such Taxable Year or future Taxable Years (including, for the avoidance of doubt, Basis Adjustments and Imputed Interest that would result from future Tax Benefit Payments that would be paid in accordance with the Valuation Assumptions) in which such deductions would become available, (ii) the U.S. federal income tax rates and state and local income tax rates that will be in effect for each Taxable Year will be those specified for such Taxable Year by the Code and other law as in effect on the Early Termination Date, except to the extent any change to such Tax rates for such Taxable Year has already been enacted into law, (iii) any loss or credit carryovers generated by deductions arising from Basis Adjustments or Imputed Interest that are available as of such Early Termination Date will be utilized by the Corporate Taxpayer on a pro rata basis from the Early Termination Date through the scheduled expiration date or, if there is no scheduled expiration date, the fifteenth (15th) anniversary of the generation of such loss or credit carryovers, (iv) any non-amortizable assets (other than Subsidiary Stock) will be disposed of on the fifteenth (15th) anniversary of the applicable Basis Adjustment, (v) any Subsidiary Stock will be deemed never to be disposed of, (vi) outstanding LTIP Units shall be deemed to be converted to Class X Umbrella Units pursuant to the terms of the LLC Agreement as of the Early Termination Date, and (vii) if, at the Early Termination Date, there are Units that have not been Exchanged (including, for purposes of this clause (vii), LTIP Units deemed converted pursuant to clause (vi)), then each such Unit shall be deemed to be Exchanged for the product of (i) the Market Value of the Class A Common Stock on the Early Termination Date and (ii) the number of shares of Class A Common Stock that would be transferred in respect of such Unit if the Exchange occurred on the Early Termination Date.
(b) Each of the following terms is defined in the Section set forth opposite such term:
| AAA |
7.03 | |||
| Aggregator |
Recitals | |||
| Agreement |
Preamble | |||
| Amended Schedule |
2.03(b) | |||
| Arbitration Notice Date |
7.03 | |||
| Corporate Taxpayer |
Preamble | |||
| Code |
Recitals | |||
| |
7.01 | |||
| Early Termination Effective Date |
4.02 | |||
| Early Termination Notice |
4.02 | |||
| Early Termination Payment |
4.03(b) |
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| Early Termination Schedule |
4.02 | |||
| Exchange Basis Schedule |
2.01 | |||
| Exchange Date |
Recitals | |||
| Exercise Period |
7.02(d)(ii) | |||
| Expert |
7.06 | |||
| Interest Amount |
3.01(b) | |||
| Material Objection Notice |
4.02 | |||
| Net Tax Benefit |
3.01(b) | |||
| Objection Notice |
2.03(a) | |||
| Offered Price |
7.02(d)(i) | |||
| Offered Terms |
7.02(d)(i) | |||
| Offered TRA Interests |
7.02(d)(i) | |||
| OpCo |
Preamble | |||
| Proposed Transferee |
7.02(d)(i) | |||
| Reconciliation Dispute |
7.09 | |||
| Reconciliation Procedures |
2.03(a) | |||
| Right of First Refusal Closing |
7.02(d)(iv) | |||
| Seller |
7.02(d) | |||
| Senior Obligations |
5.01 | |||
| Tax Benefit Payment |
3.01(b) | |||
| Tax Benefit Schedule |
2.02(a) | |||
| the closing date of a Change of Control |
4.04 | |||
| TRA Interests |
7.02(b) | |||
| Transfer Notice |
7.02(d)(i) | |||
| Units |
Recitals |
(c) Other Definitional and Interpretative Provisions. The words “hereof,” “herein” and “hereunder” and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof. References to Articles and Sections are to Articles and Sections of this Agreement unless otherwise specified. Any singular term in this Agreement shall be deemed to include the plural, and any plural term the singular. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation,” whether or not they are in fact followed by those words or words of like import. “Writing,” “written” and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form. References to any statute shall be deemed to refer to such statute as amended from time to time and to any rules or regulations promulgated thereunder. References to any agreement or contract are to that agreement or contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof. References to any Person include the successors and permitted assigns of that Person. References from or through any date mean, unless otherwise specified, from and including or through and including, respectively.
ARTICLE II
DETERMINATION OF REALIZED TAX BENEFIT
Section 2.01 Basis Adjustment. Within one hundred twenty (120) calendar days after the filing of the U.S. federal income Tax Return of the Corporate Taxpayer for each Taxable Year in which any Exchange has been effected by any TRA Party, the Corporate Taxpayer shall deliver to such TRA Party a schedule (the “Exchange Basis Schedule”) that shows, in reasonable detail necessary to perform the calculations required by this Agreement, including with respect to each Exchanging party, (i) the Non-
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Stepped Up Tax Basis of the Reference Assets as of each applicable Exchange Date, (ii) the Basis Adjustments with respect to the Reference Assets as a result of each Exchange effected in such Taxable Year and, if applicable, all prior Taxable Years, calculated (A) in the aggregate, and (B) solely with respect to Exchanges by such TRA Party, (iii) the period (or periods) over which the Reference Assets are amortizable and/or depreciable and (iv) the period (or periods) over which each Basis Adjustment is amortizable and/or depreciable. For the avoidance of doubt, payments made under this Agreement shall not be treated as resulting in a Basis Adjustment to the extent such payments are treated as Imputed Interest.
Section 2.02 Realized Tax Benefit and Realized Tax Detriment.
(a) Tax Benefit Schedule. Within one hundred twenty (120) calendar days after the filing of the U.S. federal income Tax Return of the Corporate Taxpayer for any Taxable Year in which any Exchange has been effected by a TRA Party or which is subsequent to any Taxable Year in which any Exchange has been effected by a TRA Party, the Corporate Taxpayer shall provide to such TRA Party a schedule showing, in reasonable detail, the calculation of the Realized Tax Benefit or Realized Tax Detriment and the portion Attributable to such TRA Party for such Taxable Year (a “Tax Benefit Schedule”). The Tax Benefit Schedule will become final as provided in Section 2.03(a) and may be amended as provided in Section 2.03(b) (subject to the procedures set forth in Section 2.03(b)).
(b) Applicable Principles.
(i) General. The Realized Tax Benefit or Realized Tax Detriment for each Taxable Year is intended to measure the decrease or increase in the Actual Tax Liability of the Corporate Taxpayer for such Taxable Year attributable to the Basis Adjustments and Imputed Interest, determined using a “with and without” methodology. For the avoidance of doubt, the Actual Tax Liability will take into account the deduction of the portion of the Tax Benefit Payment that must be accounted for as interest under the Code based upon the characterization of Tax Benefit Payments as additional consideration payable by the Corporate Taxpayer for the Units acquired in an Exchange. Carryovers or carrybacks of any Tax item attributable to the Basis Adjustment or 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. If a carryover or carryback of any Tax item includes a portion that is attributable to the Basis Adjustment or Imputed Interest and another portion that is not, such portions shall be considered to be used in accordance with the “with and without” methodology. The parties agree that (i) all Tax Benefit Payments attributable to the Basis Adjustments (other than amounts accounted for as interest under the Code) will (A) be treated as subsequent upward purchase price adjustments that give rise to further Basis Adjustments to the Reference Assets for the Corporate Taxpayer and (B) have the effect of creating additional Basis Adjustments to the Reference Assets for the Corporate Taxpayer in the year of payment, and (ii) as a result, such additional Basis Adjustments will be incorporated into the current year calculation and into future year calculations, as appropriate.
(ii) Applicable Principles of Section 734(b) Exchanges. Notwithstanding any provisions to the contrary in this Agreement, the foregoing treatment set out in Section 2.02(b)(i) shall not be required to apply to payments hereunder to a TRA Party in respect of a Section 734(b) Exchange by such TRA Party. For the avoidance of doubt, payments made under this Agreement relating to a Section 734(b) Exchange shall not be treated as resulting in a Basis Adjustment to the extent such payments are treated as Imputed Interest. The parties intend that (A) a TRA Party that has made a Section 734(b) Exchange shall, with respect to the Basis Adjustment resulting from such Section 734(b) Exchange or any payments hereunder in respect of such Section 734(b) Exchange, be entitled to Tax Benefit Payments attributable to such Basis Adjustments only to the extent such Basis Adjustments are allocable to the Corporate Taxpayer following such Section 734(b) Exchange (without taking into account any concurrent
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or subsequent Exchanges) and (B) if, as a result of a subsequent Exchange, an increased portion of the Basis Adjustments resulting from such Section 734(b) Exchange or any payments hereunder in respect of such Section 734(b) Exchange becomes allocable to the Corporate Taxpayer, then the TRA Party that makes such subsequent Exchange shall be entitled to a Tax Benefit Payment calculated in respect of such increased portion.
Section 2.03 Procedures, Amendments.
(a) Procedure. Every time the Corporate Taxpayer delivers to a TRA Party an applicable Schedule under this Agreement, including any Amended Schedule delivered pursuant to Section 2.03(b) and any Early Termination Schedule or amended Early Termination Schedule, the Corporate Taxpayer shall also (i) deliver to such TRA Party schedules and work papers, as determined by the Corporate Taxpayer or reasonably requested by such TRA Party, providing reasonable detail regarding the preparation of the Schedule and (ii) allow such TRA Party reasonable access to the appropriate representatives at the Corporate Taxpayer, as determined by the Corporate Taxpayer, in connection with a review of such Schedule. Without limiting the application of the preceding sentence, each time the Corporate Taxpayer delivers to a TRA Party a Tax Benefit Schedule, in addition to the Tax Benefit Schedule duly completed, the Corporate Taxpayer shall deliver to such TRA Party the Corporate Taxpayer Return, the reasonably detailed calculation by the Corporate Taxpayer of the Hypothetical Tax Liability, the reasonably detailed calculation by the Corporate Taxpayer of the Actual Tax Liability, as well as any other work papers as determined by the Corporate Taxpayer or reasonably requested by such TRA Party, provided that the Corporate Taxpayer shall be entitled to redact any information that it reasonably believes is unnecessary for purposes of determining the items in the applicable Schedule or amendment thereto. An applicable Schedule or amendment thereto shall become final and binding on the applicable TRA Party and the Corporate Taxpayer thirty (30) calendar days from the first date on which the TRA Party has received the applicable Schedule or amendment thereto unless such TRA Party (x) within thirty (30) calendar days after receiving an applicable Schedule or amendment thereto, provides the Corporate Taxpayer with notice of a material objection to such Schedule (an “Objection Notice”) made in good faith or (y) provides a written waiver of such right of any Objection Notice within the period described in clause (x) above, in which case such Schedule or amendment thereto becomes binding on the date the waiver is received by the Corporate Taxpayer. If the applicable TRA Party and the Corporate Taxpayer for any reason are unable to successfully resolve the issues raised in the Objection Notice within thirty (30) calendar days after receipt by the Corporate Taxpayer of an Objection Notice, the Corporate Taxpayer and the applicable TRA Party shall employ the reconciliation procedures as described in Section 7.09 (the “Reconciliation Procedures”), in which case such Schedule shall become binding ten (10) calendar days after the conclusion of the Reconciliation Procedures.
(b) Amended Schedule. The applicable Schedule for any Taxable Year may be amended from time to time by the Corporate Taxpayer (i) in connection with a Determination affecting such Schedule, (ii) to correct inaccuracies in the Schedule identified as a result of the receipt of additional factual information relating to a Taxable Year after the date the Schedule was provided to the applicable TRA Party, (iii) to comply with the Expert’s determination under the Reconciliation Procedures, (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 adjust the Exchange Basis Schedule to take into account payments made pursuant to this Agreement (any such Schedule, an “Amended Schedule”). The Corporate Taxpayer shall provide an Amended Schedule to each relevant TRA Party within thirty (30) calendar days of the occurrence of an event referenced in clauses (i) through (vi) of the preceding sentence. In the event a Schedule is amended after such Schedule becomes final pursuant to Section 2.03(a) or, if applicable, Section 7.09, (x) the Amended Schedule shall be taken into account in calculating the Cumulative Net
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Realized Tax Benefit for the Taxable Year in which the amendment actually occurs, and (y) as a result of the foregoing, any increase of the Net Tax Benefit attributable to an Amended Schedule shall not accrue the Interest Amount (or any other interest hereunder) until after the due date (without extensions) for filing IRS Form 1120 (or any successor form) of the Corporate Taxpayer for the Taxable Year in which the amendment actually occurs.
ARTICLE III
TAX BENEFIT PAYMENTS
Section 3.01 Payments.
(a) Within five (5) Business Days after the Tax Benefit Schedule with respect to a Taxable Year delivered to any TRA Party becomes final in accordance with Section 2.03(a), the Corporate Taxpayer shall pay to such TRA Party for such Taxable Year the Tax Benefit Payment in the amount determined pursuant to Section 3.01(b). Each such Tax Benefit Payment to a TRA Party shall be made by wire transfer of immediately available funds to the bank account previously designated by such TRA Party to the Corporate Taxpayer or as otherwise agreed by the Corporate Taxpayer and such TRA Party. For the avoidance of doubt, no Tax Benefit Payment shall be made in respect of estimated tax payments, including U.S. federal estimated income Tax payments. Notwithstanding any provision of this Agreement to the contrary, any TRA Party may elect with respect to any Exchange to limit the aggregate Tax Benefit Payments made to such TRA Party in respect of any such Exchange to a specified percentage of the amount equal to the sum of (i) the cash, excluding any Tax Benefit Payments, and (ii) the Market Value of the Class A Common Stock, in each case, received by such TRA Party on such Exchange (or such other limitation selected by the TRA Party and consented to by the Corporate Taxpayer, which consent shall not be unreasonably withheld). The TRA Party shall exercise its rights under the preceding sentence by notifying the Corporate Taxpayer in writing of its desire to impose such a limit and the specified percentage (or such other limitation selected by the TRA Party) and such other details as may be necessary (including whether such limit includes the Imputed Interest in respect of any such Exchange) in such manner and at such time (but in no event later than the date of any such Exchange) as reasonably directed by the Corporate Taxpayer; provided, however, that, in the absence of such direction, the TRA Party shall give such written notice in the same manner as is required by Section 7.01 of this Agreement contemporaneously with the TRA Party’s notice to the Corporate Taxpayer of the applicable Exchange.
(b) A “Tax Benefit Payment” means, with respect to a TRA Party, an amount, not less than zero, equal to the sum of the amount of the Net Tax Benefit Attributable to such TRA Party and the related Interest Amount. For the avoidance of doubt, for U.S. federal and applicable state and local income tax purposes, the Interest Amount shall not be treated as interest but instead shall be treated as additional consideration for the acquisition of Units in an Exchange, unless otherwise required by law. Subject to Section 3.03(a), the “Net Tax Benefit” for a Taxable Year shall be an amount equal to the excess, if any, of 85% of the Cumulative Net Realized Tax Benefit as of the end of such Taxable Year over the total amount of Tax Benefit Payments previously made under this Section 3.01 (excluding payments attributable to Interest Amounts); provided, for the avoidance of doubt, that such TRA Party shall not be required to return any portion of any previously made Tax Benefit Payment. The “Interest Amount” shall equal the interest on the amount of the Net Tax Benefit Attributable to such TRA Party calculated at the Agreed Rate from the due date (without extensions) for filing the IRS Form 1120 (or any successor form) of the Corporate Taxpayer for such Taxable Year until the earlier of (i) the date on which no remaining Tax Benefit Payment to the TRA Party is due in respect of such Net Tax Benefit and (ii) the Payment Date of the applicable Tax Benefit Payment.
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Section 3.02 No Duplicative Payments. It is intended that the provisions of this Agreement will not result in duplicative payment of any amount (including interest) required under this Agreement. The provisions of this Agreement shall be construed in the appropriate manner to ensure such intentions are realized.
Section 3.03 Pro Rata Payments.
(a) Notwithstanding anything in Section 3.01 to the contrary, to the extent that the aggregate Tax benefit of the Corporate Taxpayer’s reduction in Tax liability as a result of the Basis Adjustments and Imputed Interest under this Agreement is limited in a particular Taxable Year because the Corporate Taxpayer does not have sufficient taxable income to fully utilize available deductions and other attributes, the limitation on the Tax benefit for the Corporate Taxpayer shall be allocated among the TRA Parties in proportion to the respective amounts of Tax Benefit Payments that would have been determined under this Agreement if the Corporate Taxpayer had sufficient taxable income so that there were no such limitation; provided, that for purposes of allocating among the TRA Parties the aggregate Tax Benefit Payments under this Agreement with respect to any Taxable Year, the operation of this Section 3.03(a) with respect to any prior Taxable Year shall be taken into account, it being the intention of the Corporate Taxpayer and the TRA Parties for each TRA Party to receive, in the aggregate, Tax Benefit Payments in proportion to the aggregate Net Tax Benefits Attributable to such TRA Party had this Section 3.03(a) never operated.
(b) After taking into account Section 3.03(a), if for any reason the Corporate Taxpayer does not fully satisfy its payment obligations to make all Tax Benefit Payments due under this Agreement in respect of a particular Taxable Year, then the Corporate Taxpayer and the TRA Parties agree that (i) the Corporate Taxpayer shall pay the same proportion of each Tax Benefit Payment due under this Agreement in respect of such Taxable Year, without favoring one obligation over the other, and (ii) 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.
(c) To the extent the Corporate Taxpayer makes a payment to a TRA Party in respect of a particular Taxable Year under Section 3.01(a) of this Agreement (taking into account Section 3.03(a) and (b), but excluding payments attributable to Interest Amounts) in excess of the amount of such payment that should have been made to such TRA Party in respect of such Taxable Year, then (i) such TRA Party shall not receive further payments under Section 3.01(a) until such TRA Party has foregone an amount of payments equal to such excess and (ii) the Corporate Taxpayer shall pay the amount of such TRA Party’s foregone payments to the other TRA Parties in a manner such that each of the other TRA Parties, to the maximum extent possible, shall have received aggregate payments under Section 3.01(a) of this Agreement (excluding payments attributable to Interest Amounts) in the amount it would have received if there had been no excess payment to such TRA Party.
ARTICLE IV
TERMINATION
Section 4.01 Termination, Early Termination and Breach of Agreement.
(a) Unless terminated earlier pursuant to Section 4.01(b) or Section 4.01(c), this Agreement will terminate when there is no further potential for a Tax Benefit Payment pursuant to this Agreement. Tax Benefit Payments under this Agreement are not conditioned on any TRA Party retaining an interest in the Corporate Taxpayer or OpCo (or any successor thereto).
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(b) The Corporate Taxpayer may terminate this Agreement with respect to all amounts payable to the TRA Parties and with respect to all of the Units held (or previously held and Exchanged) by all TRA Parties at any time by paying to each TRA Party the Early Termination Payment in respect of such TRA Party; provided, however, that this Agreement shall only terminate pursuant to this Section 4.01(b) upon the receipt of the Early Termination Payment by all TRA Parties; provided, further, that the Corporate Taxpayer may withdraw any notice to exercise its termination rights under this Section 4.01(b) prior to the time at which any Early Termination Payment has been paid. Upon payment of the Early Termination Payment by the Corporate Taxpayer in accordance with this Section 4.01(b), neither the TRA Parties nor the Corporate Taxpayer shall have any further payment obligations under this Agreement, other than for any (i) Tax Benefit Payment agreed to by the Corporate Taxpayer and a TRA Party as due and payable but unpaid as of the Early Termination Notice and (ii) Tax Benefit Payment due for the Taxable Year ending with or including the date of the Early Termination Notice (except to the extent that the amount described in clause (ii) is included in the Early Termination Payment). If an Exchange occurs after the Corporate Taxpayer makes the Early Termination Payment pursuant to this Section 4.01(b), the Corporate Taxpayer shall have no obligations under this Agreement with respect to such Exchange.
(c) In the event that the Corporate Taxpayer 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 to the extent not cured within thirty (30) calendar days following receipt by the Corporate Taxpayer of written notice of such failure from the relevant TRA Party or by operation of law as a result of the rejection of this Agreement in a case commenced under the Bankruptcy Code or otherwise, 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 breach and shall include, but not be limited to, (1) the Early Termination Payment calculated as if an Early Termination Notice had been delivered on the date of a breach, (2) any Tax Benefit Payment agreed to by the Corporate Taxpayer and any TRA Parties as due and payable but unpaid as of the date of a breach, and (3) any Tax Benefit Payment due for the Taxable Year ending with or including the date of a breach; provided that procedures similar to the procedures of Section 4.02 shall apply with respect to the determination of the amount payable by the Corporate Taxpayer pursuant to this sentence. Notwithstanding the foregoing, in the event that the Corporate Taxpayer breaches this Agreement, each TRA Party shall be entitled to elect to receive the amounts set forth in clauses (1), (2) and (3) above or to seek specific performance of the terms hereof. The parties agree that the failure to make any payment due pursuant to this Agreement within three (3) months of the date such payment is due shall be deemed to be a breach of a material obligation under this Agreement for all purposes of this Agreement, and 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 payment is due. Notwithstanding anything in this Agreement to the contrary, it shall not be a breach of this Agreement if the Corporate Taxpayer fails to make any payment due pursuant to this Agreement when due to the extent the Corporate Taxpayer has insufficient funds to make such payment despite using reasonable best efforts to obtain funds to make such payment (including by causing OpCo or any other Subsidiaries to distribute or lend funds for such payment); provided that the interest provisions of Section 5.02 shall apply to such late payment (unless the Corporate Taxpayer does not have sufficient cash to make such payment as a result of limitations imposed by debt agreements to which the Corporate Taxpayer or any of its Subsidiaries is a party, in which case Section 5.02 shall apply, but the Default Rate shall be replaced by the Agreed Rate); provided, further, that the Corporate Taxpayer shall promptly (and in any event, within two (2) Business Days), pay all such unpaid payments, together with accrued and unpaid interest thereon, immediately following such time that the Corporate Taxpayer has, and to the extent the Corporate Taxpayer has, sufficient funds to make such payment, and the failure of the Corporate Taxpayer to do so shall constitute a breach of this Agreement. For the avoidance of doubt, all cash and cash equivalents used or to be used to pay dividends by, or repurchase equity securities of, the Corporate Taxpayer shall be deemed to be funds sufficient and available to pay such unpaid payments, together with any accrued and unpaid interest thereon.
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Section 4.02 Early Termination Notice. If the Corporate Taxpayer chooses to exercise its right of early termination under Section 4.01(b) above, the Corporate Taxpayer shall deliver to each TRA Party written notice of such intention to exercise such right (“Early Termination Notice”) and a schedule (the “Early Termination Schedule”) specifying the Corporate Taxpayer’s intention to exercise such right and showing in reasonable detail the calculation of the Early Termination Payment for such TRA Party. The Early Termination Schedule shall become final and binding on such TRA Party thirty (30) calendar days from the first date on which such TRA Party has received such Schedule or amendment thereto unless such TRA Party (i) within thirty (30) calendar days after receiving the Early Termination Schedule, provides the Corporate Taxpayer with notice of a material objection to such Schedule made in good faith (“Material Objection Notice”) or (ii) provides a written waiver of such right of a Material Objection Notice within the period described in clause (i) above, in which case such Schedule becomes binding on the date the waiver is received by the Corporate Taxpayer (such thirty (30) calendar day date as modified, if at all, by clauses (i) or (ii), the “Early Termination Effective Date”). If the Corporate Taxpayer and such TRA Party, for any reason, are unable to successfully resolve the issues raised in such Material Objection Notice within thirty (30) calendar days after receipt by the Corporate Taxpayer of the Material Objection Notice, the Corporate Taxpayer and such TRA Party shall employ the Reconciliation Procedures in which case such Early Termination Schedule shall become binding ten (10) calendar days after the conclusion of the Reconciliation Procedures (and, for the sake of clarity, the Early Termination Effective Date shall remain the date calculated pursuant to the terms and conditions of the immediately prior sentence).
Section 4.03 Payment upon Early Termination.
(a) Within three (3) Business Days after the Early Termination Effective Date, the Corporate Taxpayer shall pay to each TRA Party an amount equal to the Early Termination Payment in respect of such TRA Party. Such payment shall be made by wire transfer of immediately available funds to a bank account or accounts designated by such TRA Party or as otherwise agreed by the Corporate Taxpayer and such TRA Party.
(b) “Early Termination Payment” in respect of a TRA Party shall equal the present value, discounted at the Early Termination Rate as of the Early Termination Effective Date, of all Tax Benefit Payments in respect of such TRA Party that would be required to be paid by the Corporate Taxpayer beginning from the Early Termination Date and assuming that (i) the Valuation Assumptions are applied, (ii) for each Taxable Year, the Tax Benefit Payment is paid on the due date (without extensions) under applicable law as of the Early Termination Date for filing of IRS Form 1120 (or any successor form) of the Corporate Taxpayer and (iii) for purposes of calculating the Early Termination Rate, SOFR shall be SOFR as of the date of the Early Termination Notice.
Section 4.04 Change of Control. In the event of a Change of Control, all obligations hereunder shall be accelerated and such obligations shall be calculated as if an Early Termination Notice had been delivered on the closing date of the Change of Control and utilizing the Valuation Assumptions by substituting the term “the closing date of a Change of Control” in each place the term “Early Termination Date” appears. Such obligations shall include but not be limited to, (a) the Early Termination Payment calculated as if an Early Termination Notice had been delivered on the closing date of the Change of Control, (b) any Tax Benefit Payment agreed to by the Corporate Taxpayer and any TRA Parties as due and payable but unpaid as of the date of the Change of Control, and (c) any Tax Benefit Payment due for the Taxable Year ending with or including the date of the Change of Control. For the avoidance of doubt, Section 4.02 and Section 4.03 shall apply with respect to the determination of the amount payable by the Corporate Taxpayer pursuant to this Section 4.04, mutatis mutandis.
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ARTICLE V
SUBORDINATION AND LATE PAYMENTS
Section 5.01 Subordination. Notwithstanding any other provision of this Agreement to the contrary, any Tax Benefit Payment or Early Termination Payment required to be made by the Corporate Taxpayer to any TRA Party under this Agreement shall rank subordinate and junior in right of payment to any principal, interest or other amounts due and payable in respect of any obligations in respect of indebtedness for borrowed money of the Corporate Taxpayer and its Subsidiaries (“Senior Obligations”) and shall rank pari passu with all current or future unsecured obligations of the Corporate Taxpayer that are not Senior Obligations.
Section 5.02 Late Payments by the Corporate Taxpayer. The amount of all or any portion of any Tax Benefit Payment or Early Termination Payment not made to the applicable TRA Party when due under the terms of this Agreement shall be payable together with any interest thereon, computed at the Default Rate and commencing from the date on which such Tax Benefit Payment or Early Termination Payment was due and payable, subject to Section 4.01(c).
ARTICLE VI
NO DISPUTES; CONSISTENCY; COOPERATION
Section 6.01 Participation in the Corporate Taxpayer’s and OpCo’s Tax Matters. Except as otherwise provided herein, the Corporate Taxpayer shall have full responsibility for, and sole discretion over, all Tax matters concerning the Corporate Taxpayer and OpCo, including the preparation, filing or amending of any Tax Return and defending, contesting or settling any issue pertaining to Taxes. Notwithstanding the foregoing, the Corporate Taxpayer shall notify a TRA Party of, and keep such TRA Party reasonably informed with respect to, the portion of any audit of the Corporate Taxpayer and OpCo by a Taxing Authority the outcome of which is reasonably expected to affect the rights and obligations of such TRA Party under this Agreement, and shall provide to such TRA Party reasonable opportunity to provide information and other input (at such TRA Party’s own expense) to the Corporate Taxpayer, OpCo and their respective advisors concerning the conduct of (but, for the avoidance of doubt such TRA Party may not control) any such portion of such audit; provided, however, that the Corporate Taxpayer and OpCo shall not be required to take any action that is inconsistent with any provision of the LLC Agreement.
Section 6.02 Consistency. The Corporate Taxpayer and the TRA Parties agree to report and cause to be reported for all purposes, including U.S. federal, state and local Tax purposes and financial reporting purposes, all Tax-related items (including the Basis Adjustments and each Tax Benefit Payment) in a manner consistent with that specified by the Corporate Taxpayer in any Schedule required to be provided by or on behalf of the Corporate Taxpayer under this Agreement unless otherwise required by law. Any dispute as to required Tax or financial reporting shall be subject to Section 7.09.
Section 6.03 Cooperation. The Corporate Taxpayer and each TRA Party shall (a) furnish to the other party in a timely manner such information, documents and other materials as the other party may reasonably request for purposes of making any determination or computation necessary or appropriate under this Agreement, preparing any Tax Return or contesting or defending any audit, examination or controversy with any Taxing Authority, (b) make itself reasonably available to the other party and its representatives to provide explanations of documents and materials and such other information as the other party or its representatives may reasonably request in connection with any of the matters described in clause (a) above, and (c) reasonably cooperate in connection with any such matter, and the Corporate Taxpayer
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shall reimburse the applicable TRA Party for any reasonable third-party out-of-pocket costs and expenses incurred pursuant to this Section 6.03.
ARTICLE VII
MISCELLANEOUS
Section 7.01 Notices. All notices, requests and other communications to any party hereunder shall be in writing (including facsimile transmission and electronic mail (“e-mail”) transmission, so long as a receipt of such e-mail is requested and received) and shall be given to such party as set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice:
If to the Corporate Taxpayer, to:
Andersen Group Inc.
333 Bush Street
Suite 1700
San Francisco, California 94104
(415) 764-2700
Attn: CEO, Chief Legal Officer, and General Counsel
With copies (which shall not constitute notice) to:
Jay K. Hachigian
Richard R. Hesp
Jaime L. Narayan
Gunderson Dettmer Stough Villeneuve
Franklin & Hachigian, LLP
550 Allerton Street
Redwood City, California 94063
(650) 463-5335
Fax: (650) 618-3286
If to Aggregator, to the address, facsimile number or e-mail address specified for such party on the TRA Party Schedule to the LLC Agreement.
If to any transferee of Aggregator, to the address, facsimile number or e-mail address specified for such party on the signature page to such transferees joinder to this Agreement, in the form of Exhibit A.
If to any other TRA Party, to the address, facsimile number or e-mail address specified for such party on the Member Schedule to the LLC Agreement.
All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 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.
Section 7.02 Binding Effect; Benefit; Assignment; Right of First Refusal.
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(a) The provisions of this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. No provision of this Agreement is intended to confer any rights, benefits, remedies, obligations or liabilities hereunder upon any Person other than the parties hereto and their respective successors and assigns. The Corporate Taxpayer shall require and cause any direct or indirect successor (whether by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Corporate Taxpayer, by written agreement, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Corporate Taxpayer would be required to perform if no such succession had taken place.
(b) Subject to the Corporate Taxpayer’s prior written consent (not to be unreasonably withheld, conditioned or delayed), a TRA Party may assign any of its rights, including the right to receive any Tax Benefit Payments under this Agreement (collectively, “TRA Interests”) to any Person as long as (i) such TRA Party shall have complied with Section 7.02(d) to the extent applicable to such TRA Party and (ii) such transferee has executed and delivered, or, in connection with such transfer, executes and delivers, a joinder to this Agreement, in the form of Exhibit A, agreeing to become a “TRA Party” for all purposes of this Agreement, except as otherwise provided in such joinder; provided, that a TRA Party’s TRA Interests shall be assignable by such TRA Party under the procedure in this Section 7.02(b) regardless of whether such TRA Party continues to hold any interests in OpCo or the Corporate Taxpayer or has fully transferred any such interests.
(c) OpCo shall have the power and authority (but not the obligation) to permit any Person who becomes a member of OpCo to execute and deliver a joinder to this Agreement promptly upon acquisition of Units by such Person, and such Person shall be treated as a “TRA Party” for all purposes of this Agreement; provided, unless otherwise agreed in writing by Aggregator, that if OpCo or the Corporate Taxpayer effects an Exchange in regards to any Units from a transferee of Units previously held by Aggregator as permitted in the LLC Agreement, OpCo shall have the obligation to permit such transferee to execute and deliver a joinder to this Agreement and thereby become a TRA Party.
(d) Before a TRA Party (other than Aggregator) (such TRA Party, “Seller”) may transfer any TRA Interests to any Person, in addition to any other requirements set forth in this Agreement (including as set forth in Section 7.02(b)), Seller must comply with the following:
(i) Prior to Seller transferring any of its TRA Interests to any Person, Seller shall deliver to Aggregator a written notice (the “Transfer Notice”) stating: (A) Seller’s bona fide intention to transfer such TRA Interests; (B) the name, address, e-mail and phone number of each proposed purchaser or other transferee (each, a “Proposed Transferee”); (C) a description of Seller’s TRA Interests (or portion thereof) proposed to be transferred to each Proposed Transferee (the “Offered TRA Interests”); (D) the bona fide cash price or, in reasonable detail, other consideration for which Seller proposes to transfer the Offered TRA Interests (the “Offered Price”); and (E) any other material terms and conditions of such proposed transfer (the “Offered Terms”).
(ii) For a period of thirty (30) days (the “Exercise Period”) after the date on which the Transfer Notice is, pursuant to Section 7.01, deemed to have been delivered to Aggregator, Aggregator shall have the right to purchase all or any portion of the Offered TRA Interests on the terms and conditions set forth in this Section 7.02(d). In order to exercise its right hereunder, Aggregator must deliver written notice of its election to purchase to Seller within the Exercise Period. If no such written notice is given within the Exercise Period, Aggregator shall be deemed to have elected not to purchase the Offered TRA Interests.
(iii) The purchase price for the Offered TRA Interests to be purchased by Aggregator exercising its Right of First Refusal under this TRA Agreement will be the Offered Price, and
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will be payable as set forth in Section 7.02(d)(v). If the Offered Price includes consideration other than cash, the cash equivalent value of the non-cash consideration will be determined by the Board in good faith, which determination will be binding upon Aggregator and Seller, absent fraud or manifest error.
(iv) Subject to compliance with applicable state and federal securities laws, Aggregator and Seller shall effect the purchase and sale of all or any portion of the Offered TRA Interests, including the payment of the purchase price, within ten (10) days after the expiration of the Exercise Period or as promptly as otherwise practicable thereafter (the “Right of First Refusal Closing”). Payment of the purchase price will be made by wire transfer to a bank account designated by Seller in writing to Aggregator at least three (3) days prior to the Right of First Refusal Closing. At such Right of First Refusal Closing, Seller shall deliver to Aggregator, among other things, such documents and instruments of conveyance as may be necessary in the reasonable opinion of counsel to Aggregator to effect the transfer of such Offered TRA Interests.
If any of the Offered TRA Interests remain available after the exercise, if any, of Aggregator’s Right of First Refusal, then Seller shall be free to transfer, subject to the general conditions to transfer set forth in Section 7.02(b), any such remaining Offered TRA Interests to the Proposed Transferee at the Offered Price and under the Offered Terms set forth in the Transfer Notice; provided, however, that if the Offered TRA Interests are not so transferred during the sixty (60) day period following the delivery of the Transfer Notice, then Seller may not transfer any of such remaining Offered TRA Interests without complying again in full with the provisions of this Agreement.
Section 7.03 Resolution of Disputes.
(a) Except for Reconciliation Disputes subject to Section 7.09, any dispute, controversy, or claim arising out of, relating to, involving, or having any connection with this Agreement, including any question regarding the validity, interpretation, scope, performance, or enforceability of this dispute resolution provision (a “Dispute”), shall be exclusively and finally settled by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association (“AAA”).
(b) The arbitration shall be conducted in San Francisco, California unless, within thirty (30) days after the initial notice of a party of its intention to commence arbitration (the “Arbitration Notice Date”), the parties agree on another location.
(c) The arbitration shall be conducted by three (3) arbitrators. Each party to the dispute, controversy or claim shall appoint an arbitrator, obtain its appointee’s acceptance of such appointment, and deliver written notification of such appointment and acceptance to the other party within forty-five (45) days of the Arbitration Notice Date. The two (2) party-appointed arbitrators shall jointly agree upon and appoint a third arbitrator who shall be knowledgeable with regard to the type of issues in dispute and who shall serve as the chairperson of the arbitral panel. The party arbitrators shall obtain the chairperson’s acceptance of such appointment and notify the parties in writing of said appointment and acceptance within thirty (30) days after their appointment and acceptance as party arbitrators. If the two (2) party-appointed arbitrators are unable to agree upon the selection and appointment of the chairperson within that time frame, they shall so notify the parties in writing. Upon such notice, one or both of the parties may request in writing that the chairperson be appointed by AAA in accordance with the AAA Rules. The AAA shall notify the parties in writing of the appointment and acceptance of the chairperson within twenty-one (21) days of receiving such request.
(d) The parties shall be entitled to engage in reasonable discovery, including requests for production of relevant non-privileged documents. Depositions and interrogatories may be ordered by the arbitral panel upon a showing of need.
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(e) All decisions, rulings, and awards of the arbitral panel shall be made pursuant to majority vote of the three arbitrators. The award shall be in accordance with the applicable law, shall be in writing, and shall state the reasons upon which it is based. The arbitrators shall have no power to modify or abridge the terms of this Agreement. The arbitrators shall have no power to award, and the parties hereby waive any claim to, damages (including punitive or exemplary damages) in excess of compensatory damages.
(f) Costs incurred in the arbitration proceeding, including attorneys’ fees and expenses, shall be borne in the manner determined by the arbitral panel.
(g) Subject to this Section 7.03(g) and Section 7.03(h), the parties agree to renounce all recourse to litigation with regard to matters covered by this Agreement to the extent not inconsistent with applicable law. The award of the arbitrators shall be final, and judgment on the award may be entered by any court having jurisdiction to do so.
(h) Nothing in this Agreement shall prevent the parties, prior to the formation of the arbitral panel, from applying to a court of competent jurisdiction for provisional or interim measures or injunctive relief as may be necessary to safeguard the property or rights that are the subject matter of the arbitration. Once the arbitral panel is in place, it shall have exclusive jurisdiction to hear applications for such relief, except that any interim measures or injunctive relief ordered by the arbitral panel may be immediately and specifically enforced by a court of competent jurisdiction.
(i) Unless otherwise agreed by the parties or required by law, the parties, the arbitrators, any consultants retained by the arbitrators, and AAA shall maintain the confidentiality of all documents, communications, proceedings, and awards provided, produced, or exchanged pursuant to an arbitration conducted under this Section 7.03.
Section 7.04 Counterparts. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. Until and unless each party has received a counterpart hereof signed by the other party hereto, this Agreement shall have no effect and no party shall have any right or obligation hereunder (whether by virtue of any other oral or written agreement or other communication).
Section 7.05 Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter of this Agreement and supersede all prior agreements and understandings, both oral and written, between the parties with respect to the subject matter of this Agreement. Nothing in this Agreement shall create any third-party beneficiary rights in favor of any Person or other party hereto.
Section 7.06 Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other Governmental 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 an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the fullest extent possible.
Section 7.07 Amendment. No provision of this Agreement may be amended or waived unless such amendment or waiver is approved in writing by the Corporate Taxpayer and by Aggregator or its
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designee; provided, that no such amendment or waiver shall be effective if such amendment or waiver will have a materially disproportionate adverse effect on the payments certain Persons entitled to receive Early Termination Payments will or may receive under the Tax Receivable Agreement relative to other Persons entitled to receive Early Termination Payments, unless such disproportionately affected Persons entitled to receive a majority of the Early Termination Payments of all such disproportionately affected Persons consent in writing to such amendment. No provision of this Agreement may be waived unless such waiver is in writing and signed by the party against whom the waiver is to be effective.
Section 7.08 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to the conflicts of law rules of such State that would result in the application of the laws of any other State.
Section 7.09 Reconciliation. In the event that the Corporate Taxpayer and a TRA Party are unable to resolve a disagreement with respect to the matters governed by Sections 2.03, 3.01(b), 4.02 and 6.02 within the relevant period designated in this Agreement (“Reconciliation Dispute”), the Reconciliation Dispute shall be submitted for determination to a nationally recognized expert (the “Expert”) in the particular area of disagreement mutually acceptable to both parties. The Expert shall be a partner or principal in a nationally recognized accounting or law firm, and unless the Corporate Taxpayer and such TRA Party agree otherwise, the Expert shall not, and the firm that employs the Expert shall not, have any material relationship with the Corporate Taxpayer or such TRA Party or other actual or potential conflict of interest. If the parties are unable to agree on an Expert within fifteen (15) calendar days of receipt by the respondent(s) of written notice of a Reconciliation Dispute, the selection of an Expert shall be treated as a Dispute subject to Section 7.03 and an arbitration panel shall pick an Expert from a nationally recognized accounting firm that does not have any material relationship with the applicable Parties or other actual or potential conflict of interest. The Expert shall resolve any matter relating to the Exchange Basis Schedule or an amendment thereto or the Early Termination Schedule or an amendment thereto within thirty (30) calendar days and shall resolve any matter relating to a Tax Benefit Schedule or an amendment thereto within fifteen (15) calendar days or as soon thereafter as is reasonably practicable, in each case after the matter has been submitted to the Expert for resolution. Notwithstanding the preceding sentence, if the matter is not resolved before any payment that is the subject of a disagreement would be due (in the absence of such disagreement) or any Tax Return reflecting the subject of a disagreement is due, the undisputed amount shall be paid on the date prescribed by this Agreement and such Tax Return may be filed as prepared by the Corporate Taxpayer, subject to adjustment or amendment upon resolution. The costs and expenses relating to the engagement of such Expert or amending any Tax Return shall be borne by the Corporate Taxpayer, except as provided in the next sentence. The Corporate Taxpayer and such TRA Party shall bear their own costs and expenses of such proceeding, unless (i) the Expert substantially adopts such TRA Party’s position, in which case the Corporate Taxpayer shall reimburse such TRA Party for any reasonable out-of-pocket costs and expenses in such proceeding, or (ii) the Expert substantially adopts the Corporate Taxpayer’s position, in which case such TRA Party shall reimburse the Corporate Taxpayer for any reasonable out-of-pocket costs and expenses in such proceeding. Any dispute as to whether a dispute is a Reconciliation Dispute within the meaning of this Section 7.09 shall be decided by the Expert. The Expert shall finally determine any Reconciliation Dispute and the determinations of the Expert pursuant to this Section 7.09 shall be binding on the Corporate Taxpayer and such TRA Party and may be entered and enforced in any court having jurisdiction.
Section 7.10 Withholding. The Corporate Taxpayer shall be entitled to deduct and withhold from any payment payable pursuant to this Agreement such amounts as the Corporate Taxpayer is required to deduct and withhold with respect to the making of such payment under the Code or any provision of state, local or non-U.S. law; provided, however, that, prior to deducting or withholding any such amounts, the Corporate Taxpayer shall use commercially reasonable efforts to notify each applicable TRA Party and shall reasonably cooperate therewith regarding the basis for such deduction or withholding and in obtaining
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any available exemption or reduction of, or otherwise minimizing, to the extent permitted by applicable law, such deduction and withholding. To the extent that amounts are so deducted or withheld and paid over to the appropriate Taxing Authority by the Corporate Taxpayer, such deducted or withheld amounts shall be treated for all purposes of this Agreement as having been paid to the applicable TRA Party. Prior to the date of any payment under this Agreement and from time to time as reasonably requested by the Corporate Taxpayer, each TRA Party shall promptly provide the Corporate Taxpayer with any applicable Tax forms and certifications (including IRS Form W-9 or the applicable version of IRS Form W-8) reasonably requested and shall promptly provide an update of any such Tax form or certificate previously delivered if the same has become incorrect or has expired.
Section 7.11 Admission of the Corporate Taxpayer into a Consolidated Group; Transfers of Corporate Assets.
(a) If the Corporate Taxpayer is or becomes a member of an affiliated or consolidated group of corporations that files a consolidated income Tax Return pursuant to Sections 1501 et seq. of the Code or any corresponding provisions of state or local law, then: (i) the provisions of this Agreement shall be applied with respect to the group as a whole; and (ii) Tax Benefit Payments, Early Termination Payments and other applicable items hereunder shall be computed with reference to the consolidated taxable income of the group as a whole.
(b) If any entity that is obligated to make a Tax Benefit Payment or Early Termination Payment hereunder transfers one or more assets to a corporation (or a Person classified as a corporation for U.S. federal income tax purposes) with which such entity does not file a consolidated Tax Return pursuant to Section 1501 of the Code, such entity, for purposes of calculating the amount of any Tax Benefit Payment or Early Termination Payment (e.g., calculating the gross income of the entity and determining the Realized Tax Benefit of such entity) due hereunder, shall be treated as having disposed of such asset in a fully taxable transaction on the date of such contribution. The consideration deemed to be received by such entity shall be equal to the fair market value of the contributed asset. For purposes of this Section 7.11, a transfer of a partnership interest shall be treated as a transfer of the transferring partner’s share of each of the assets and liabilities of that partnership.
Section 7.12 Confidentiality. Section 13.11 (Confidentiality) of the LLC Agreement as of the date of this Agreement shall apply to any information of the Corporate Taxpayer provided to the TRA Parties and their assignees pursuant to this Agreement.
Section 7.13 Change in Law. Notwithstanding anything herein to the contrary, if, in connection with an actual or proposed change in law, a TRA Party reasonably believes that the existence of this Agreement could cause income (other than income arising from receipt of a payment under this Agreement) recognized by such TRA Party (or direct or indirect equity holders in such TRA Party) upon an Exchange to be treated as ordinary income rather than capital gain (or otherwise taxed at ordinary income rates) for U.S. federal income tax purposes or would have other material adverse tax consequences to the Corporate Taxpayer or such TRA Party or any direct or indirect owner of a TRA Party, then at the election of such TRA Party and to the extent specified by such TRA Party, this Agreement (i) shall cease to have further effect with respect to such TRA Party, (ii) shall not apply to an Exchange occurring after a date specified by such TRA Party, or (iii) shall otherwise be amended in a manner reasonably determined by such TRA Party; provided, that such amendment shall not result in an increase in payments under this Agreement to such TRA Party at any time as compared to the amounts and times of payments that would have been due to such TRA Party in the absence of such amendment.
Section 7.14 Tax Characterization and Elections. The parties intend that (A) each Direct Exchange shall give rise to Basis Adjustments, (B) each Redemption using Class A Common Stock or cash
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contributed to OpCo by the Corporate Taxpayer shall be treated as a direct purchase of Units from the applicable TRA Party pursuant to Section 707(a)(2)(B) of the Code that shall give rise to Basis Adjustments and (C) payments pursuant to this Agreement with respect to an Exchange (except with respect to amounts that constitute Imputed Interest) shall be treated as consideration in respect of such Exchange that give rise to additional Basis Adjustments. The Corporate Taxpayer will ensure that, on and after the date hereof and continuing through the term of this Agreement, OpCo and each of its direct and indirect subsidiaries that they control and that is treated as a partnership for U.S. federal income tax purposes (other than a subsidiary that is directly or indirectly held by or through an entity treated as a corporation for U.S. federal income tax purposes) will have in effect an election under Section 754 of the Code.
Section 7.15 Partnership Agreement. To the extent this Agreement imposes obligations on OpCo or a member of OpCo, this Agreement shall be treated as part of the partnership agreement of OpCo as described in Section 761(c) of the Code, and Sections 1.704-1(b)(2)(ii)(h) and 1.761-1(c) of the Treasury Regulations.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the Corporate Taxpayer, OpCo, and each TRA Party set forth below have duly executed this Agreement as of the date first written above.
| CORPORATE TAXPAYER: |
ANDERSEN GROUP INC. | |||||
| By: |
/s/ Mark L. Vorsatz | |||||
| Name: |
Mark L. Vorsatz | |||||
| Title: |
Authorized Person | |||||
| Address: |
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| OPCO: |
AT UMBRELLA LLC | |||||
| By: |
/s/ Mark L. Vorsatz | |||||
| Name: |
Mark L. Vorsatz | |||||
| Title: |
Authorized Person | |||||
| Address: |
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| TRA PARTY: |
ANDERSEN AGGREGATOR LLC | |||||
| By: |
/s/ Mark L. Vorsatz | |||||
| Name: |
Mark L. Vorsatz | |||||
| Title: |
Authorized Person | |||||
| Address: |
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EXHIBIT A
JOINDER
This JOINDER (this “Joinder”) to the Tax Receivable Agreement (as defined below), dated as of ________, by and among Andersen Group Inc., a Delaware corporation (the “Corporate Taxpayer”), and ________ (“Permitted Transferee”).
WHEREAS, on ________, Permitted Transferee acquired (the “Acquisition”) the right to receive any and all payments that may become due and payable under the Tax Receivable Agreement with respect to ________ Units and the corresponding shares of Class B Common Stock that were previously, or may in the future be, Exchanged and are described in greater detail in the LLC Agreement (collectively, “Interests” and, together with all other interests hereinafter acquired by the Permitted Transferee from Transferor, the “Acquired Interests”) from ________ (“Transferor”); and
WHEREAS, Transferor, in connection with the Acquisition, has required Permitted Transferee to execute and deliver this Joinder pursuant to Section 7.02(b) of the Tax Receivable Agreement, dated as of ______________, 2025, by and among the Corporate Taxpayer and each TRA Party (as defined therein) (the “Tax Receivable Agreement”).
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:
Section 1.01 Definitions. To the extent capitalized words used in this Joinder are not defined in this Joinder, such words shall have the respective meanings set forth in the Tax Receivable Agreement.
Section 1.02 Joinder. Permitted Transferee hereby acknowledges and agrees to become a “TRA Party” (as defined in the Tax Receivable Agreement) for all purposes of the Tax Receivable Agreement. Permitted Transferee hereby acknowledges the terms of Section 7.02(b) of the Tax Receivable Agreement and agrees to be bound by Section 7.12 of the Tax Receivable Agreement.
Section 1.03 Representative. By executing this Joinder, Permitted Transferee shall be deemed to have irrevocably appointed Representative as its agent and attorney in fact with full power of substitution to act from and after the date hereof and to do any and all things and execute any and all documents on behalf of such Permitted Transferee which may be necessary, convenient or appropriate to facilitate any matters under this Agreement, including: (a) execution of the documents and certificates required pursuant to this Agreement; (b) except to the extent provided in this Agreement, receipt and forwarding of notices and communications pursuant to this Agreement; (c) administration of the provisions of this Agreement; (d) any and all consents, waivers, amendments or modifications deemed by Representative to be necessary or appropriate under this Agreement and the execution or delivery of any documents that may be necessary or appropriate in connection therewith; (e) taking actions Representative is authorized to take pursuant to the other provisions of this Agreement; (f) negotiating and compromising, on behalf of Permitted Transferee, any dispute that may arise under, and exercising or refraining from exercising any remedies available under, this Agreement and executing, on behalf of Permitted Transferee, any settlement agreement, release or other document with respect to such dispute or remedy; and (g) engaging attorneys, accountants, agents or consultants on behalf of Permitted Transferee in connection with this Agreement and paying any fees related thereto on behalf of Permitted Transferee, subject to reimbursement by Permitted Transferee. Representative may resign upon thirty (30) days’ written notice to the Corporate Taxpayer.
Section 1.04 Notice. Any notice, request, consent, claim, demand, approval, waiver or other communication hereunder to Permitted Transferee shall be delivered or sent to Permitted Transferee at the
address set forth on the signature page hereto in accordance with Section 7.01 of the Tax Receivable Agreement.
Section 1.05 Governing Law. This Joinder shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to the conflicts of law rules of such State that would result in the application of the laws of any other State.
IN WITNESS WHEREOF, this Joinder has been duly executed and delivered by Permitted Transferee as of the date first above written.
| PERMITTED TRANSFEREE: |
[PERMITTED TRANSFEREE] | |||||
| By: |
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| Name: |
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| Title: |
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| Address: |
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Exhibit 10.5
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.
PROMISSORY NOTE
| Holdover Note | Date of Issuance | |||
| $162,255,265.78 |
December 16, 2025 | |||
FOR VALUE RECEIVED, AT Umbrella LLC, a Delaware limited liability company (the “Company”), hereby promises to pay to the order of Andersen Aggregator LLC (the “Noteholder”), the principal sum of $162,255,265.78 which represents an amount equal to the Balance (as defined below), together with interest thereon as stated herein from the date of this Promissory Note (the “Note”). The Company and the Noteholder are referred to herein as the “Parties”.
1. Definitions; Interpretation.
1.1 The following capitalized terms used herein shall have the meanings set forth in this Section 1.1. Capitalized terms not defined herein shall have the meanings set forth in the LLC Agreement.
“Affiliate” as to any Person, means any other Person that, directly or indirectly through one or more intermediaries, is in control of, is controlled by, or is under common control with, such Person. For purposes of this definition, “control” of a Person means the power, directly or indirectly, either to (a) vote ten percent (10%) or more of the securities having ordinary voting power for the election of directors (or persons performing similar functions) of such Person or (b) direct or cause the direction of the management and policies of such Person, whether by contract or otherwise.
“Andersen Group” means Andersen Group Inc, a Delaware corporation.
“Andersen Tax” means Andersen Tax LLC, a Delaware limited liability company.
“Aggregator” means Andersen Aggregator LLC, a Delaware limited liability company.
“Aggregator LLCA” means the Limited Liability Company Agreement of Andersen Aggregator LLC, as may be amended from time to time.
“Applicable Rate” means an interest rate per annum equal to seven point six three percent (7.63%).
“Balance” means the aggregate of the Total Class H Distribution Amounts (as defined in the Aggregator LLCA) in respect of all holders of the Class H Aggregator Units (as defined in the Aggregator LLCA) as of the date of issuance.
“Business Day” means a day other than a Saturday, Sunday, or other day on which commercial banks in New York City are authorized or required by law to close.
“Code” means the Internal Revenue Code of 1986 (as amended).
“Company” has the meaning set forth in the introductory paragraph.
“Default” means any of the events specified in Section 6 which constitute an Event of Default or which, upon the giving of notice, the lapse of time, or both, pursuant to Section 6, would, unless cured or waived, become an Event of Default.
“Event of Default” has the meaning set forth in Section 6.
“Governmental Authority” means the government of any nation or any political subdivision thereof, whether at the national, state, territorial, provincial, municipal, or any other level, and any agency, authority, instrumentality, regulatory body, court, central bank, or other entity exercising executive, legislative, judicial, taxing, regulatory, or administrative powers or functions of, or pertaining to, government.
“Initial Payment Date” means January 15, 2026.
“Law” as to any Person, means the certificate of incorporation and by-laws or other organizational or governing documents of such Person, and any law (including common law), statute, ordinance, treaty, rule, regulation, order, decree, judgment, writ, injunction, settlement agreement, requirement or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.
“LLC Agreement” means that certain Amended and Restated Limited Liability Company Agreement of the Company, dated on or about December 16, 2025 and as amended from time to time.
“Managing Member” has the meaning set forth in the LLC Agreement.
“Material Adverse Effect” means a material adverse effect on (a) the business, assets, properties, liabilities (actual or contingent), operations, or condition (financial or otherwise) of the Company; (b) the validity or enforceability of the Note; (c) the rights or remedies of the Noteholder hereunder; or (d) the Company’s ability to perform any of its material payment obligations hereunder.
“Maturity Date” means the earlier of (a) December 15, 2033 and (b) the date on which all amounts under this Note shall become due and payable pursuant to Section 7.
“Noteholder” has the meaning set forth in the introductory paragraph.
“Note” has the meaning set forth in the introductory paragraph.
“Parties” has the meaning set forth in the introductory paragraph.
“Payment” has the meaning set forth in Section 2.1 hereof.
“Payment Date” means a date that is not the Initial Payment Date and is set forth on the Amortization Schedule attached hereto as Schedule A.
“Person” means any individual, corporation, limited liability company, trust, joint venture, association, company, limited or general partnership, unincorporated organization, Governmental Authority, or other entity.
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1.2 Interpretation. For purposes of this Note (a) the words “include,” “includes,” and “including” shall be deemed to be followed by the words “without limitation”; (b) the word “or” is not exclusive; and (c) the words “herein,” “hereof,” “hereby,” “hereto,” and “hereunder” refer to this Note as a whole. The definitions given for any defined terms in this Note shall apply equally to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine, and neuter forms. Unless the context otherwise requires, references herein to: (x) Schedules, Exhibits, and Sections mean the Schedules, Exhibits, and Sections of this Note; (y) an agreement, instrument, or other document means such agreement, instrument, or other document as amended, supplemented, and modified from time to time to the extent permitted by the provisions thereof; and (z) a statute means such statute as amended from time to time and includes any successor legislation thereto and any regulations promulgated thereunder. This Note shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted.
2. Payments and Payment Dates.
2.1 Payment Dates. Subject to Section 5.03(a) of the LLC Agreement, this Note shall be amortized over eight (8) years bearing compound daily interest at the Applicable Rate from the date hereof. Payments of principal and the applicable amount of accrued interest (each, a “Payment”) shall be due and payable beginning as of the Initial Payment Date and then commencing on each Payment Date until December 15, 2033 as provided on the Amortization Schedule attached hereto as Schedule A, provided that all amounts outstanding under this Note, including all accrued and unpaid interest and other amounts payable under the Note, shall be due and payable on the Maturity Date, unless otherwise provided in Section 7; provided, further, that, unless determined otherwise by the Managing Member, with respect to each Payment Date, in no event shall the Payment with respect to such Payment Date and all prior Payment Dates exceed the aggregate Net Income previously allocated or allocable in the year of such Payment Date to the Noteholder in respect of the Note (as determined pursuant to Section 5.04 of the LLC Agreement and the last sentence of this paragraph 2.1) (the “Holder Net Income Allocation”). Such Payments will be made in accordance with, and subject to, the terms of Section 5.03 of the LLC Agreement, and each such Payment will only be made to the extent that the Company has sufficient cash on hand as determined in good faith by the Managing Member. The parties hereto intend that payments to the Noteholder in respect of the Note are intended to be payments of a distributive share of net operating income and in accordance therewith, net income attributable to a Revaluation shall not be allocated to the Noteholder in respect of the Note, unless determined otherwise by the Managing Member. Notwithstanding anything to the contrary herein or in the LLC Agreement, upon the liquidation of the Company, the Noteholder shall be entitled to receive no more than the aggregate amount the Noteholder would be entitled to receive in respect of the Note prior to and including on the date of liquidation based on this Note, Schedule A attached hereto and the LLC Agreement, reduced by all prior distributions to the Noteholder in respect of this Note pursuant to the Note and the LLC Agreement.
2.2 Optional Prepayments. The Company may prepay the outstanding principal balance due under this Note in whole or in part at any time or from time to time without penalty or premium. Unless otherwise agreed in writing by the Noteholder, any early partial prepayment of principal shall be applied to the outstanding installments of principal due under this Agreement in the direct order of their maturities, such that the first maturing principal installment(s) shall be reduced first.
2.3 Mandatory Prepayments. The Company must prepay the outstanding principal balance due under this Note in whole or in part at any time or from time to time without penalty or premium upon the occurrence of a Prepaid Distribution (as defined in the Aggregator LLCA as in effect as of the date hereof or as amended with the Company’s approval) by Noteholder. Unless otherwise agreed in writing by the Noteholder, any early partial prepayment of principal shall be applied to the
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outstanding installments of principal due under this Agreement in the direct order of their maturities, such that the first maturing principal installment(s) shall be reduced first.
2.4 Balance Adjustment.
(a) Notwithstanding anything to the contrary herein, the Company and the Noteholder acknowledge and agree that, the Balance, which represents the principal amount of this Note, may be correspondingly reduced in such amount to reflect any adjustment to the remaining undistributed portion of the Total Class H Distribution Amount (as defined in the Aggregator LLCA as in effect as of the date hereof or as amended with the Company’s approval) in respect of all holders of Class H Aggregator Units (as defined in the Aggregator LLCA) as in effect as of the date hereof or as amended with the Company’s approval, as is reasonably determined by the Managing Member (such adjustment, the “Balance Adjustment”). Upon the occurrence of a Balance Adjustment, the Amortization Schedule attached hereto as Schedule A shall be recalculated by the Managing Member, to reflect such adjusted Balance and principal amount. Such recalculation as set forth on such revised Amortization Schedule the Managing Member shall be final and binding absent manifest error.
(b) Notwithstanding anything to the contrary herein, the Company and the Noteholder acknowledge and agree that, the Balance, which represents the principal amount of this Note, may also be correspondingly reduced in such amount to reflect any adjustment to the remaining undistributed portion of the Total Class H Distribution Amount (as defined in the Aggregator LLCA as in effect as of the date hereof or as amended with the Company’s approval) pursuant to section B(4)(d)(iii) of the Aggregator LLCA (such adjustment, the “Conversion Event Balance Adjustment”). Upon the occurrence of a Conversion Event Balance Adjustment, the Amortization Schedule attached hereto as Schedule A shall be recalculated by the Managing Member, to reflect such adjusted Balance and principal amount. Such recalculation as set forth on such revised Amortization Schedule by the Managing Member shall be final and binding absent manifest error.
2.5 Tax Distributions. To the extent the Company makes tax distributions pursuant to the terms of the LLC Agreement (or the limited liability company agreement or other governing agreement of any successor) to the Noteholder in Noteholder’s capacity as an economic interest holder of the Company and such tax distributions are with respect to income or gain allocations attributable to the Payments, such tax distributions shall be treated as a prepayment of amounts otherwise payable to the Noteholder as Payments hereunder pursuant to Section 2.2 of this Note.
2.6 Tax Acknowledgement. The Company and the Noteholder acknowledge and agree that, notwithstanding anything to the contrary set forth herein, for U.S. federal income tax purposes and applicable state income tax purposes, this Note is intended to be treated as equity of the Company.
3. Interest.
3.1 Computation of Interest. All computations of interest shall be made on the basis of 365 or 366 days, as the case may be, and the actual number of days elapsed. Interest shall accrue on the principal balance on the day on which the Note is issued, and shall not accrue on the principal balance for the day on which it is paid.
3.2 Interest Rate Limitation. If at any time and for any reason whatsoever, the interest rate payable on the principal balance shall exceed the maximum rate of interest permitted to be charged by the Noteholder to the Company under applicable Law, that portion of each sum paid attributable to that portion of such interest rate that exceeds the maximum rate of interest permitted by applicable Law shall be deemed a voluntary prepayment of principal.
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4. Payment Mechanics.
4.1 Manner of Payments. All Payments shall be made in lawful money of the United States of America no later than 5:00 PM (California time) on the date sixty (60) days following the day on which such Payment is due by cashier’s check, certified check, or by wire transfer of immediately available funds to the Noteholder’s account at a bank specified by the Noteholder in writing to the Company from time to time at least fifteen (15) Business Days prior to the applicable Payment Date.
4.2 Business Day Convention. Whenever any Payment to be made hereunder shall be due on a day that is not a Business Day, such Payment shall be made on the next succeeding Business Day and such extension will be taken into account in calculating the amount of interest payable under this Note.
4.3 Rescission of Payments. If at any time any Payment made by the Company under this Note is rescinded or must otherwise be restored or returned upon the insolvency, bankruptcy, or reorganization of the Company or otherwise, the Company’s obligation to make such Payment shall be reinstated as though such Payment had not been made.
5. Representations and Warranties. The Company hereby represents and warrants to the Noteholder on the date hereof as follows:
5.1 Existence; Power and Authority. The Company (a) is a limited liability company duly organized, validly existing, and in good standing under the laws of the state of its jurisdiction of organization, and (b) has the requisite power and authority, and the legal right, to own, lease, and operate its properties and assets and to conduct its business as it is now being conducted, to execute and deliver this Note, and to perform its obligations hereunder, except to the extent that the failure to comply therewith would not reasonably be expected to have a Material Adverse Effect.
5.2 Authorization; Execution and Delivery. The execution and delivery of this Note by the Company and the performance of its obligations hereunder have been duly authorized by all necessary limited liability company action in accordance with all applicable Laws. The Company has duly executed and delivered this Note.
5.3 No Approvals. No consent or authorization of, filing with, notice to, or other act by, or in respect of, any Governmental Authority is required in order for the Company to execute, deliver, or perform any of its obligations under this Note.
5.4 No Violations. The execution and delivery of this Note and the consummation by the Company of the transactions contemplated hereby do not and will not (a) violate any Law applicable to the Company or by which any of its properties or assets may be bound; or (b) constitute a default under any material agreement or contract by which the Company may be bound, except in either such case to the extent that such violation or default would not reasonably be expected to have a Material Adverse Effect.
5.5 Enforceability. The Note is a valid, legal, and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).
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6. Events of Default. The occurrence and continuance of any of the following shall constitute an Event of Default hereunder:
6.1 Failure to Pay. The Company fails to pay any Payment pursuant to the terms and conditions of Sections 2.1, 2.2 and 2.3.
6.2 Breach of Representations and Warranties. Any representation or warranty made by the Company to the Noteholder herein is incorrect in any material respect on the date as of which such representation or warranty was made.
6.3 Bankruptcy.
(a) The Company commences any case, proceeding, or other action (i) under any existing or future Law relating to bankruptcy, insolvency, reorganization, or other relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it as bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition, or other relief with respect to it or its debts or (ii) seeking appointment of a receiver, trustee, custodian, conservator, or other similar official for it or for all or any substantial part of its assets, or the Company makes a general assignment for the benefit of its creditors;
(b) There is commenced against the Company any case, proceeding, or other action of a nature referred to in Section 6.3(a) which (i) results in the entry of an order for relief or any such adjudication or appointment or (ii) remains undismissed, undischarged, or unbonded for a period of thirty (30) days;
(c) There is commenced against the Company any case, proceeding, or other action seeking issuance of a warrant of attachment, execution, or similar process against all or any substantial part of its assets which results in the entry of an order for any such relief which has not been vacated, discharged, or stayed or bonded pending appeal within ten (10) days from the entry thereof;
(d) The Company takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in Section 6.3(a), Section 6.3(b), or Section 6.3(c) above; or
(e) The Company is generally not, or shall be unable to, or admits in writing its inability to, pay its debts as they become due.
7. Remedies. Upon the occurrence of any Event of Default and at any time thereafter during the continuance of such Event of Default, the Noteholder may, at their option, by written notice to the Company declare the entire principal amount of the Note, together with all accrued interest thereon and all other amounts payable under this Note, immediately due and payable; and/or exercise any or all of their rights, powers or remedies under applicable Law; provided, however, that if an Event of Default described in Section 6.3 shall occur, the principal of and accrued interest on the Balance shall become immediately due and payable without any notice, declaration, or other act on the part of the Noteholder.
8. Subordination. The indebtedness evidenced by the Notes are subordinated in right of payment to the prior payment in full of any Senior Indebtedness of the Company or Andersen Tax now existing or hereafter arising. “Senior Indebtedness” shall mean, unless expressly subordinated to or made on a parity with the amounts due under this Note, all amounts due in connection with (a) indebtedness of the Company or Andersen Tax to banks or other lending institutions regularly engaged in the business of lending money and (b) any such indebtedness or any debentures, notes or other evidence of indebtedness
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issued in exchange for such Senior Indebtedness, or any indebtedness arising from the satisfaction of such Senior Indebtedness by a guarantor.
9. Miscellaneous.
9.1 Notices. All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by confirmed electronic mail if sent during normal business hours of the recipient, if not so confirmed, then on the next Business Day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery. All communications shall be sent to the respective parties at the following addresses (or at such other addresses as shall be specified by notice given in accordance with this Section 9.1):
(i) If to the Company:
333 Bush Street, Suite 1700
San Francisco, CA 94104
Attention: Chief Executive Officer and Chief Legal Officer
(ii) If to the Noteholder, the address set forth on the books and records of the Company as maintained in good faith by the Managing Member.
9.2 Governing Law. This Note and any claim, controversy, dispute, or cause of action (whether in contract or tort or otherwise) based upon, arising out of, or relating to this Note, and the transactions contemplated hereby shall be governed by the laws of the State of Delaware, without reference to conflict of laws principles thereof.
9.3 Submission to Jurisdiction. The parties hereto agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, the Note or the transactions contemplated hereby (whether brought by any party or any of its Affiliates or against any party or any of its Affiliates) shall be brought in the Delaware Chancery Court or, if such court shall not have jurisdiction, any federal court located in the State of Delaware or other Delaware state court, and each of the parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees that service of process on such party as provided in Section 9.1 shall be deemed effective service of process on such party.
9.4 Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THE NOTE OR THE TRANSACTIONS CONTEMPLATED HEREBY.
9.5 Integration. This Note constitutes the entire contract between the Parties with respect to the subject matter hereof and supersedes all previous agreements and understandings, oral or written, with respect thereto.
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9.6 Successors and Assigns. This Note may not be assigned or transferred by the Noteholder to any Person unless such assignment or transfer is approved in advance in writing by the Company; provided, that, for the avoidance of doubt, the Company may withhold such approval if such assignment or transfer does not constitute a private transfer described in Treasury Regulations Section 1.7704-1(e) or if such assignment or transfer would otherwise pose a material risk that the Company would be a “publicly traded partnership” as that term is defined in Section 7704 of the Code and the Treasury Regulations promulgated thereunder, in each case, as determined by the Managing Member in its discretion. This Note shall inure to the benefit of, and be binding upon, the Parties and their permitted assigns. Furthermore, the Company may assign or transfer this Note, in whole or in part, (a) to any wholly-owned subsidiary of the Company, or (b) to any entity in which the equity holders of the Company, immediately prior to such assignment or transfer, continue to hold, directly or indirectly, a majority of the voting power of the transferee entity immediately following such assignment or transfer.
9.7 Waiver of Notice. The Company hereby waives demand for payment, presentment for payment, protest, notice of payment, notice of dishonor, notice of nonpayment, notice of acceleration of maturity, and diligence in taking any action to collect sums owing hereunder.
9.8 Amendments and Waivers. Any provision of this Note may be amended, waived or modified only upon the written consent of (a) the Company, (b) Andersen Group and (c) Aggregator. Any waiver of the terms hereof shall be effective only in the specific instance and for the specific purpose given.
9.9 Officers and Directors not Liable. In no event shall any officer or director of the Company be liable for any amounts due and payable pursuant to this Note.
9.10 Headings. The headings of the various Sections and subsections herein are for reference only and shall not define, modify, expand, or limit any of the terms or provisions hereof.
9.11 No Waiver; Cumulative Remedies. No failure to exercise, and no delay in exercising on the part of the Noteholder, of any right, remedy, power, or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power, or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power, or privilege. The rights, remedies, powers, and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers, and privileges provided by law.
9.12 Electronic Execution. The words “execution,” “signed,” “signature,” and words of similar import in the Note shall be deemed to include electronic or digital signatures or electronic records, each of which shall be of the same effect, validity, and enforceability as manually executed signatures or a paper-based record-keeping system, as the case may be, to the extent and as provided for under applicable law, including the Electronic Signatures in Global and National Commerce Act of 2000 (15 U.S.C. §§ 7001 to 7031), the Uniform Electronic Transactions Act (UETA), or any state law based on the UETA, including the New York Electronic Signatures and Records Act (N.Y. State Tech. §§ 301 to 309).
9.13 Severability. If any term or provision of this Note is invalid, illegal, or unenforceable in any jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other term or provision of this Note or invalidate or render unenforceable such term or provision in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal, or unenforceable, the Parties shall negotiate in good faith to modify this Note so as to affect 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 greatest extent possible.
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[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Parties have executed this Note as of December 16, 2025.
| AT UMBRELLA LLC | ||
| By: |
/s/ Mark L. Vorsatz | |
| Name: Mark L. Vorsatz | ||
| Title: Authorized Person | ||
| Address: |
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ACKNOWLEDGED AND AGREED: | ||
| ANDERSEN AGGREGATOR LLC | ||
| By: |
/s/ Mark L. Vorsatz | |
| Name: Mark L. Vorsatz | ||
| Title: Authorized Person | ||
| Address: |
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[Signature Page to Holdover Note]
SCHEDULE A
Amortization Schedule
| Payment |
Principal Balance Outstanding Beginning of Period |
Principal Payment |
Interest Payment |
Total Principal & Interest |
Remaining Principal Balance Outstanding |
|||||||||||||||
| 1/15/2026 |
$ | 162,255,265.78 | $ | 4,873,565.47 | $ | 983,558.57 | $ | 5,857,124.00 | $ | 157,381,700.33 | ||||||||||
| 4/10/2026 |
$ | 157,381,700.33 | $ | 1,482,991.54 | $ | 2,718,090.44 | $ | 4,201,081.98 | $ | 155,898,708.79 | ||||||||||
| 6/10/2026 |
$ | 155,898,708.79 | $ | 2,273,509.75 | $ | 1,927,572.23 | $ | 4,201,081.98 | $ | 153,625,199.04 | ||||||||||
| 9/10/2026 |
$ | 153,625,199.04 | $ | 1,327,337.50 | $ | 2,873,744.48 | $ | 4,201,081.98 | $ | 152,297,861.54 | ||||||||||
| 12/15/2026 |
$ | 152,297,861.54 | $ | 17,528,752.78 | $ | 2,817,663.87 | $ | 20,346,416.66 | $ | 134,769,108.76 | ||||||||||
| 4/10/2027 |
$ | 134,769,108.76 | $ | 719,331.13 | $ | 3,325,421.59 | $ | 4,044,752.72 | $ | 134,049,777.63 | ||||||||||
| 6/10/2027 |
$ | 134,049,777.63 | $ | 2,387,326.36 | $ | 1,657,426.36 | $ | 4,044,752.72 | $ | 131,662,451.26 | ||||||||||
| 9/10/2027 |
$ | 131,662,451.26 | $ | 1,581,847.90 | $ | 2,462,904.82 | $ | 4,044,752.72 | $ | 130,080,603.36 | ||||||||||
| 12/10/2027 |
$ | 130,080,603.36 | $ | 17,182,670.38 | $ | 2,406,622.21 | $ | 19,589,292.59 | $ | 112,897,932.98 | ||||||||||
| 4/10/2028 |
$ | 112,897,932.98 | $ | 1,079,366.08 | $ | 2,809,058.15 | $ | 3,888,424.22 | $ | 111,818,566.91 | ||||||||||
| 6/10/2028 |
$ | 111,818,566.91 | $ | 2,505,870.35 | $ | 1,382,553.88 | $ | 3,888,424.22 | $ | 109,312,696.56 | ||||||||||
| 9/10/2028 |
$ | 109,312,696.56 | $ | 1,843,598.50 | $ | 2,044,825.72 | $ | 3,888,424.22 | $ | 107,469,098.06 | ||||||||||
| 12/10/2028 |
$ | 107,469,098.06 | $ | 16,843,885.64 | $ | 1,988,286.58 | $ | 18,832,172.23 | $ | 90,625,212.41 | ||||||||||
| 4/10/2029 |
$ | 90,625,212.41 | $ | 1,451,146.89 | $ | 2,236,172.97 | $ | 3,687,319.86 | $ | 89,174,065.52 | ||||||||||
| 6/10/2029 |
$ | 89,174,065.52 | $ | 2,584,748.49 | $ | 1,102,571.37 | $ | 3,687,319.86 | $ | 86,589,317.03 | ||||||||||
| 9/10/2029 |
$ | 86,589,317.03 | $ | 2,067,562.33 | $ | 1,619,757.52 | $ | 3,687,319.86 | $ | 84,521,754.70 | ||||||||||
| 12/10/2029 |
$ | 84,521,754.70 | $ | 16,294,458.56 | $ | 1,563,737.61 | $ | 17,858,196.18 | $ | 68,227,296.14 | ||||||||||
| 4/10/2030 |
$ | 68,227,296.14 | $ | 1,791,719.44 | $ | 1,683,505.41 | $ | 3,475,224.84 | $ | 66,435,576.70 | ||||||||||
| 6/10/2030 |
$ | 66,435,576.70 | $ | 2,653,798.07 | $ | 821,426.77 | $ | 3,475,224.84 | $ | 63,781,778.62 | ||||||||||
| 9/10/2030 |
$ | 63,781,778.62 | $ | 2,282,109.81 | $ | 1,193,115.03 | $ | 3,475,224.84 | $ | 61,499,668.81 | ||||||||||
| 12/10/2030 |
$ | 61,499,668.81 | $ | 15,693,185.08 | $ | 1,137,805.83 | $ | 16,830,990.92 | $ | 45,806,483.73 | ||||||||||
| 4/10/2031 |
$ | 45,806,483.73 | $ | 1,921,396.13 | $ | 1,130,272.89 | $ | 3,051,669.02 | $ | 43,885,087.59 | ||||||||||
| 6/10/2031 |
$ | 43,885,087.59 | $ | 2,509,062.37 | $ | 542,606.65 | $ | 3,051,669.02 | $ | 41,376,025.22 | ||||||||||
| 9/10/2031 | $ | 41,376,025.22 | $ | 2,277,680.61 | $ | 773,988.41 | $ | 3,051,669.02 | $ | 39,098,344.61 | ||||||||||
| 12/10/2031 | $ | 39,098,344.61 | $ | 14,056,293.17 | $ | 723,358.76 | $ | 14,779,651.93 | $ | 25,042,051.45 | ||||||||||
| 4/10/2032 | $ | 25,042,051.45 | $ | 1,784,761.22 | $ | 623,081.19 | $ | 2,407,842.42 | $ | 23,257,290.22 | ||||||||||
| 6/10/2032 | $ | 23,257,290.22 | $ | 2,120,283.22 | $ | 287,559.19 | $ | 2,407,842.42 | $ | 21,137,007.00 | ||||||||||
| 9/10/2032 | $ | 21,137,007.00 | $ | 2,012,449.23 | $ | 395,393.19 | $ | 2,407,842.42 | $ | 19,124,557.77 | ||||||||||
| 12/10/2032 | $ | 19,124,557.77 | $ | 11,307,687.72 | $ | 353,823.59 | $ | 11,661,511.30 | $ | 7,816,870.05 | ||||||||||
| 4/10/2033 | $ | 7,816,870.05 | $ | 865,452.26 | $ | 192,880.91 | $ | 1,058,333.17 | $ | 6,951,417.80 | ||||||||||
| 6/10/2033 | $ | 6,951,417.80 | $ | 972,384.03 | $ | 85,949.14 | $ | 1,058,333.17 | $ | 5,979,033.77 | ||||||||||
| 9/10/2033 | $ | 5,979,033.77 | $ | 946,488.14 | $ | 111,845.03 | $ | 1,058,333.17 | $ | 5,032,545.63 | ||||||||||
| 12/10/2033 | $ | 5,032,545.63 | $ | 5,032,545.63 | $ | 93,107.16 | $ | 5,125,652.80 | $ | 0.00 | ||||||||||
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| $ | 162,255,265.78 | $ | 46,069,687.52 | $ | 208,324,953.30 | |||||||||||||||
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