JMKE 8-K
Jersey Mike's Subs Inc. (JMKE)
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).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 Entry into a Material Definitive Agreement.
In connection with the initial public offering (the “Offering” or the “IPO”) by Jersey Mike’s Subs Inc. (the “Company”) of its Class A common stock, par value $0.0001 per share (the “Class A Common Stock”), described in the prospectus (the “Prospectus”), dated July 29, 2026, 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. 333-297228) (as amended, the “Registration Statement”), the following agreements were entered into:
The Jersey Mike’s Holdings Limited Liability Company Agreement, the Tax Receivable Agreement, the Exchange Agreement, the Registration Rights Agreement, and the Stockholders Agreement are filed herewith as Exhibits 10.1, 10.2, 10.3, 10.4 and 10.5, respectively, and are incorporated herein by reference. The terms of these agreements are substantially the same as the terms set forth in the forms of such agreements previously filed as exhibits to the Registration Statement and as described therein. Certain parties to certain of these agreements have various relationships with the Company. For further information, see “Certain Relationships and Related Party Transactions” in the Prospectus.
Item 3.03 Material Modification to Rights of Security Holders.
The information set forth under Item 5.03 below is incorporated by reference in this Item 3.03.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Appointment of Directors; Committee Composition; Director Compensation
Effective July 29, 2026, following the effective time of the Registration Statement, Matthew Bromberg was appointed to the Board of Directors of the Company. Mr. Bromberg will serve as a Class I director with a term expiring at the Company’s first annual meeting of stockholders following the IPO.
For further information, see “Management—Composition of the Board of Directors After this Offering” and “Management—Board Committees” in the Prospectus.
As previously disclosed in the Prospectus, on July 1, 2026, Mr. Bromberg entered into an offer letter with the Company, which provides for a $125,000 per year cash retainer (payable quarterly) and an initial award of $125,000 in restricted stock units to be issued under the Omnibus Incentive Plan described below (subject to the final approval of the award by the Company's Board of Directors).
2026 Omnibus Incentive Plan
Effective July 29, 2026, the Company’s Board of Directors and its then sole stockholder adopted and approved the Company’s 2026 Omnibus Incentive Plan (the “Omnibus Incentive Plan”) in the form previously filed as Exhibit 4.3 to the Company’s Registration Statement on Form S-8 filed with the Securities and Exchange Commission on July 29, 2026 (the “Form S-8”). For further information regarding the Omnibus Incentive Plan, see “Management—Compensation Arrangements to be Adopted in Connection with this Offering—Omnibus Incentive Plan” in the Prospectus.
A copy of the Omnibus Incentive Plan is incorporated by reference (i) as Exhibit 10.6 and (ii) in this Item 5.02. The above description of the Omnibus Incentive Plan is not complete and is qualified in its entirety by reference to such exhibit.
2026 Employee Stock Purchase Plan
Effective July 29, 2026, the Company’s Board of Directors and its then sole stockholder adopted and approved the Company’s 2026 Employee Stock Purchase Plan (the “ESPP”) in the form previously filed as Exhibit 4.4 to the Company’s Form S-8. For further information regarding the ESPP, see “Management—Compensation Arrangements to be Adopted in Connection with this Offering—Employee Stock Purchase Plan” in the Prospectus.
A copy of the ESPP is incorporated by reference (i) as Exhibit 10.7 and (ii) in this Item 5.02. The above description of the ESPP is not complete and is qualified in its entirety by reference to such exhibit.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
On July 29, 2026, the Company’s Amended and Restated Certificate of Incorporation (the “Charter”), substantially in the form previously filed as Exhibit 3.1 to the Registration Statement, and the Company’s Amended and Restated Bylaws (the “Bylaws”), substantially in the form previously filed as Exhibit 3.2 to the Registration Statement, became effective. The Charter, among other things, provides that the Company’s authorized capital stock consists of 10,000,000,000 shares of Class A Common Stock, 10,000,000,000 shares of Class B common stock, par value $0.0001 per share, and 1,000,000,000 shares of preferred stock, par value $0.0001 per share. A description of the material terms of the Company’s capital stock, after giving effect to the adoption of the Charter and Bylaws, has previously been disclosed by the Company in the Registration Statement. The Charter and Bylaws are filed herewith as Exhibit 3.1 and Exhibit 3.2, respectively, and are incorporated herein by reference.
Item 8.01 Other Events.
On July 31, 2026, the Company completed the Offering of 43,478,261 shares of Class A Common Stock for cash consideration of $21.85 per share (net of underwriting discounts). As contemplated in the Prospectus, the Company has used the proceeds (net of underwriting discounts) from the issuance of 13,782,609 shares (approximately $301 million) in the Offering to purchase an equivalent
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number of newly issued Common Units from Jersey Mike’s Holdings, which Jersey Mike’s Holdings will in turn use to repay a portion of the outstanding indebtedness totaling approximately $301 million under the Series 2026-1 Notes, consisting of $250 million Series 2026-1 4.952% Fixed Rate Senior Secured Notes, Class A-2-I and $510 million Series 2026-1A 5.481% Fixed Rate Senior Secured Notes, Class A-2-II. The Company will not receive any proceeds from the sale of shares of Class A Common Stock by certain of its pre-IPO owners.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. |
Description |
3.1 |
Amended and Restated Certificate of Incorporation of Jersey Mike’s Subs Inc. |
3.2 |
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10.1 |
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10.2 |
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10.3 |
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10.4 |
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10.5 |
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10.6 |
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10.7 |
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104 |
Cover Page Interactive Data File (embedded within the Inline XBRL document). |
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed by the undersigned hereunto duly authorized.
Date: August 3, 2026 |
Jersey Mike’s Subs Inc. |
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By |
/s/ Scott G. McLester |
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Name: |
Scott G. McLester |
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Title: |
General Counsel |
Exhibit 3.1
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
JERSEY MIKE’S SUBS Inc.
The present name of the corporation is Jersey Mike’s Subs Inc. (the “Corporation”). The Corporation was incorporated under the name “Jersey Mike’s Inc.” by the filing of its original certificate of incorporation (the “Original Certificate of Incorporation”) with the Secretary of State of the State of Delaware on February 24, 2026. This Amended and Restated Certificate of Incorporation of the Corporation (as the same may be amended and/or restated from time to time, the “Restated Certificate of Incorporation”), which amends, restates and integrates the provisions of the Original Certificate of Incorporation, as amended, was duly adopted in accordance with the provisions of Sections 242 and 245 of the General Corporation Law of the State of Delaware and by the written consent of the stockholders in accordance with Section 228 of the General Corporation Law of the State of Delaware. The Original Certificate of Incorporation of the Corporation, as amended, is hereby amended, restated and integrated to read in its entirety as follows:
ARTICLE I
Section 1.1. Name. The name of the Corporation is Jersey Mike’s Subs Inc. (the “Corporation”).
ARTICLE II
Section 2.1. Address. The registered office of the Corporation in the State of Delaware is 1209 Orange Street, Corporation Trust Center, Wilmington, New Castle County, DE 19801; and the name of the Corporation’s registered agent at such address is The Corporation Trust Company.
ARTICLE III
Section 3.1. Purpose. The purpose of the Corporation is to engage in any lawful act or activity for which corporations may now or hereafter be organized under the General Corporation Law of the State of Delaware (as the same exists or may hereafter be amended from time to time, the “DGCL”).
ARTICLE IV
Section 4.1. Capitalization. The total number of shares of all classes of stock that the Corporation is authorized to issue is 21,000,000,000 shares, divided into three classes as follows: (i) 1,000,000,000 shares of Preferred Stock, par value $0.0001 per share (“Preferred Stock”), (ii) 10,000,000,000 shares of Class A Common Stock, par value $0.0001 per share (“Class A Common Stock”), and (iii) 10,000,000,000 shares of Class B Common Stock, par value $0.0001 per share (“Class B Common Stock” and, together with the Class A Common Stock, the “Common Stock”). The number of authorized shares of any of the Class A Common Stock, Class B Common Stock or Preferred Stock may be increased or decreased (but not below
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the number of shares thereof then outstanding) by the requisite vote of the stockholders entitled to vote thereon, and, irrespective of the provisions of Section 242(b)(2) of the DGCL (or any successor provision thereto), no vote of the holders of any of the Class A Common Stock, Class B Common Stock or Preferred Stock voting separately as a class shall be required therefor, unless a vote of any such holder is expressly required pursuant to this Restated Certificate of Incorporation (including any certificate of designation relating to any series of Preferred Stock).
Section 4.2. Preferred Stock.
(A) The Board of Directors of the Corporation (the “Board”) is hereby expressly authorized, by resolution or resolutions, at any time and from time to time, to provide, out of the authorized but unissued shares of Preferred Stock, for one or more series of Preferred Stock and, with respect to each such series, to fix the number of shares constituting such series and the designation of such series, the voting powers (if any) of the shares of such series, and the powers, preferences and relative, participating, optional or other special rights, if any, and any qualifications, limitations or restrictions thereof, of the shares of such series and to cause to be filed with the Secretary of State of the State of Delaware a certificate of designation with respect thereto. The powers, preferences and relative, participating, optional and other special rights of each series of Preferred Stock, and the qualifications, limitations or restrictions thereof, if any, may differ from those of any and all other series at any time outstanding.
(B) Except as otherwise required by law, holders of a series of Preferred Stock, as such, shall be entitled only to such voting rights, if any, as shall expressly be granted thereto by this Restated Certificate of Incorporation (including any certificate of designations relating to such series of Preferred Stock).
Section 4.3. Common Stock.
(A) Voting Rights.
(1) Except as otherwise provided in this Restated Certificate of Incorporation or applicable law, each holder of record of Class A Common Stock, as such, shall be entitled to one vote for each share of Class A Common Stock held of record by such holder on all matters on which stockholders generally or holders of Class A Common Stock as a separate class are entitled to vote (whether voting separately as a class or together with one or more classes of the Corporation’s capital stock). Notwithstanding the foregoing, to the fullest extent permitted by law, holders of Class A Common Stock, as such, shall have no voting power with respect to, and shall not be entitled to vote on, any amendment to this Restated Certificate of Incorporation (including any certificate of designation relating to any series of Preferred Stock) that relates solely to the terms, number of shares, powers, designations, preferences or relative, participating, optional or other special rights (including, without limitation, voting rights), or to qualifications, limitations or restrictions thereof, of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to this Restated Certificate of Incorporation (including any certificate of designations relating to any series of Preferred Stock) or pursuant to the DGCL.
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(2) Except as otherwise provided in this Restated Certificate of Incorporation or applicable law, each holder of record of Class B Common Stock, as such, shall be entitled to one vote for each share of Class B Common Stock held of record by such holder on all matters on which stockholders generally or holders of Class B Common Stock as a separate class are entitled to vote (whether voting separately as a class or together with one or more classes of the Corporation’s capital stock); provided, that, upon the occurrence of any split or combination of the Common Units (as defined in the exchange agreement, dated as of or about the date hereof among, inter alios, the Corporation, Jersey Mike’s HoldCo, LLC and the other parties thereto, as amended from time to time (the “Exchange Agreement”)) the issued shares of Class B Common Stock shall be automatically split or combined into a greater or lesser number of shares of Class B Common Stock at the same ratio as such split or combination of the Common Units; provided, further, that, if at any time the ratio at which Common Units are exchangeable for shares of Class A Common Stock changes from one-to-one pursuant to the terms of the Exchange Agreement, the number of votes to which each holder of record of Class B Common Stock is entitled to cast on any matter shall be automatically adjusted accordingly. Notwithstanding the foregoing, to the fullest extent permitted by law, holders of Class B Common Stock, as such, shall have no voting power with respect to, and shall not be entitled to vote on, any amendment to this Restated Certificate of Incorporation (including any certificate of designation relating to any series of Preferred Stock) that relates solely to the terms, number of shares, powers, designations, preferences or relative, participating, optional or other special rights (including, without limitation, voting rights), or to qualifications, limitations or restrictions thereof, of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to this Restated Certificate of Incorporation (including any certificate of designations relating to any series of Preferred Stock) or pursuant to the DGCL.
(3) Except as otherwise provided in this Restated Certificate of Incorporation or required by applicable law, the holders of Common Stock shall vote together as a single class (or, if the holders of one or more series of Preferred Stock are entitled to vote together with the holders of Common Stock, as a single class with the holders of such other series of Preferred Stock) on all matters submitted to a vote of the stockholders generally.
(4) Notwithstanding anything herein to the contrary, with respect to any amendment to this Restated Certificate of Incorporation that solely amends Annex A hereto:
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(B) Dividends and Distributions. Subject to applicable law and the rights, if any, of the holders of any outstanding series of Preferred Stock or any class or series of stock having a preference over or the right to participate with the Class A Common Stock with respect to the payment of dividends and other distributions in cash, property or shares of capital stock of the Corporation, such dividends and other distributions may be declared and paid on the Class A Common Stock out of the assets of the Corporation that are legally available for this purpose at such times and in such amounts as the Board in its discretion shall determine. Dividends and other distributions shall not be declared or paid on the Class B Common Stock other than dividends payable in the form of additional shares of Class B Common Stock (or rights to acquire, or securities convertible into or exchangeable for, such shares) corresponding to an analogous dividend payable in shares of Class A Common Stock (or rights to acquire, or securities convertible into or exchangeable for, such shares) to the holders of Class A Common Stock.
(C) Liquidation, Dissolution or Winding Up. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation, after payment or provision for payment of the debts and other liabilities of the Corporation and subject to the right, if any, of the holders of any outstanding series of Preferred Stock or any class or series of stock having a preference over or the right to participate with the Class A Common Stock as to distributions upon dissolution or liquidation or winding up of the Corporation, the holders of all outstanding shares of Class A Common Stock shall be entitled to receive the remaining assets of the Corporation available for distribution to its stockholders ratably in proportion to the number of shares held by each such stockholder. The holders of shares of Class B Common Stock, as such, shall not be entitled to receive any assets of the Corporation in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation.
(D) Transfer of Class B Common Stock.
(1) Upon any Exchange (as defined in the Exchange Agreement) of Common Units for shares of Class A Common Stock pursuant to the Exchange Agreement, a number of shares of Class B Common Stock held by each such holder equal to the number of Common Units surrendered in such Exchange shall be automatically transferred to the Corporation for no consideration, and the shares of Class B Common Stock so transferred to the Corporation shall thereupon be automatically cancelled and retired.
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(2) Unless otherwise approved by the Board, a holder of Class B Common Stock shall not transfer shares of Class B Common Stock to any transferee (other than the Corporation) unless such holder also simultaneously transfers an equal number of such holder’s Common Units (or interests in Jersey Mike’s Management Aggregator LLC or any successor entity, which in the Corporation’s books and records relate indirectly to an equal number of Common Units) to such transferee in compliance with the Exchange Agreement and the Third Amended and Restated Limited Liability Company Agreement of Jersey Mike’s HoldCo, LLC, dated on or about the date hereof, as such agreement may be amended and/or restated from time to time (the “LLC Agreement”), and only to the extent such transfer does not breach or violate, or cause any default under, the LLC Agreement or the Exchange Agreement.
(3) Any purported transfer of shares of Class B Common Stock in violation of this Section 4.3(D) shall be null and void ab initio. If, notwithstanding the provisions of this Section 4.3(D), a Person (as defined in Section 9.1(E)) shall, voluntarily or involuntarily, purportedly become or attempt to become, the purported holder (“Purported Holder”) of shares of Class B Common Stock in violation of this Section 4.3(D), then the Purported Holder shall not obtain any rights in and to such shares of Class B Common Stock (the “Restricted Shares”), and the purported transfer of the Restricted Shares to the Purported Holder shall not be recognized by the Corporation’s transfer agent (the “Transfer Agent”).
(4) Upon a determination by the Board that a Person (as defined in Section 9.1(E)) has attempted or may attempt to transfer or to acquire Restricted Shares in violation of this Section 4.3(D), the Board may take such action as it deems advisable to refuse to give effect to such transfer or acquisition on the books and records of the Corporation, including without limitation to cause the Transfer Agent to record the Purported Owner’s transferor as the record owner of the Restricted Shares, and to institute proceedings to enjoin or rescind any such transfer or acquisition.
(5) The Board may, to the extent permitted by law, from time to time establish, modify, amend or rescind, by bylaw or otherwise, regulations and procedures that are consistent with the provisions of this Section 4.3(D) for determining whether any transfer or acquisition of shares of Class B Common Stock would violate Section 4.3(D) and for the orderly application, administration and implementation of the provisions of this Section 4.3(D). Any such procedures and regulations shall be kept on file with the Secretary of the Corporation and with its Transfer Agent and shall be made available for inspection by any prospective transferee and, upon written request, shall be mailed to holders of shares of Class B Common Stock.
(6) The Board shall have all powers necessary to implement the provisions of this Section 4.3(D), including without limitation the power to prohibit the transfer of any shares of Class B Common Stock in violation thereof.
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ARTICLE V
Section 5.1. Bylaws. Subject to the rights granted to the holders of any one or more series of Preferred Stock then outstanding and the rights granted pursuant to the Stockholders Agreement, in furtherance and not in limitation of the powers conferred by the DGCL, the Board is expressly authorized to make, alter, amend, change, add to, rescind or repeal, in whole or in part, the bylaws of the Corporation (as the same may be amended and/or restated from time to time, the “Bylaws”) without the assent or vote of the stockholders in any manner not inconsistent with the laws of the State of Delaware or this Restated Certificate of Incorporation. Notwithstanding anything to the contrary contained in this Restated Certificate of Incorporation, the Bylaws or any provision of law that might otherwise permit a lesser vote of the stockholders, at any time when the Designating Stockholders (as defined in the Stockholders Agreement) (which, as used herein, shall include the Designating Stockholder Representative (as defined in the Stockholders Agreement) by or through which any Designating Stockholders may be acting) cease to be entitled to designate a Designee (as defined in the Stockholders Agreement), in addition to any vote of the holders of any class or series of capital stock of the Corporation required herein (including any certificate of designation relating to any series of Preferred Stock), or by the Bylaws or applicable law, the affirmative vote of the holders of at least sixty-six and two-thirds (66 2/3)% of the total voting power of all the then outstanding shares of stock of the Corporation entitled to vote thereon, voting together as a single class, shall be required in order for the stockholders of the Corporation to alter, amend, rescind or repeal, in whole or in part, any provision of the Bylaws or to adopt any provision inconsistent therewith.
ARTICLE VI
Section 6.1. Board of Directors.
(A) Except as otherwise provided in this Restated Certificate of Incorporation or the DGCL, the business and affairs of the Corporation shall be managed by or under the direction of the Board. Except as otherwise provided for or fixed pursuant to the provisions of Article IV (including any certificate of designation with respect to any series of Preferred Stock), Section 11.2 and this Article VI relating to the rights of the holders of any series of Preferred Stock to elect additional directors, and subject to the applicable requirements of the Stockholders Agreement, dated on or about the date hereof (in the form set forth on Annex A hereto, as amended and/or restated as provided for herein, the “Stockholders Agreement”), between the Corporation and each of parties thereto, the total number of directors constituting the Whole Board shall be determined from time to time exclusively by resolution adopted by the Board. For purposes of this Restated Certificate of Incorporation, the term “Whole Board” shall mean the total number of authorized directors (from time to time) whether or not there exist any vacancies in previously authorized directorships. The directors (other than those directors elected by the holders of any series of Preferred Stock, voting separately as a series or together with one or more other such series, as the case may be) shall be divided into three classes designated Class I, Class II and Class III. Class I directors shall initially serve for a term expiring at the first annual meeting of stockholders following the date the Common Stock is first publicly traded (the “IPO Date”), Class II directors shall initially serve for a term expiring at the second annual meeting of stockholders following the IPO Date and Class III directors shall initially serve for a term expiring at the third annual meeting of stockholders following the IPO Date. At each annual
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meeting of stockholders commencing with the first annual meeting following the IPO Date, the directors of the class to be elected at each annual meeting shall be elected for a three-year term. Subject to the applicable requirements of the Stockholders Agreement, the Board is authorized to assign members of the Board already in office to their respective class.
(B) Subject to the rights granted to the holders of any one or more series of Preferred Stock then outstanding and the rights granted pursuant to the Stockholders Agreement, at any time when any Designating Stockholder is entitled to designate a Designee (as defined in the Stockholders Agreement), any newly-created directorship on the Board that results from an increase in the total number of directors and any vacancy occurring in the Board (whether by death, resignation, retirement, disqualification, removal or other cause) shall be filled by the affirmative vote of a majority of the directors then in office (other than directors elected by the holders of any series of Preferred Stock, voting separately as a series or together with one or more such series, as the case may be), although less than a quorum, by a sole remaining director or, with the approval of the Designating Stockholders, by the stockholders (or, in the case of any newly created directorship or vacancy in respect of a Designee, by the Designating Stockholders entitled to fill such newly created directorship or vacancy). Subject to the rights granted to holders of one or more series of Preferred Stock then outstanding and the rights granted pursuant to the Stockholders Agreement, at any time when the Designating Stockholders cease to be entitled to designate a Designee, any newly-created directorship on the Board that results from an increase in the number of directors and any vacancy occurring in the Board shall be filled only by a majority of the directors then in office (other than directors elected by the holders of any series of Preferred Stock, voting separately as a series or together with one or more series, as the case may be), although less than a quorum, or by a sole remaining director (and otherwise not by stockholders). Any director elected to fill a vacancy or newly created directorship shall hold office until the next election of the class for such director shall have been chosen and until his or her successor shall be elected and qualified, or until his or her earlier death, resignation, retirement, disqualification or removal.
(C) Subject to the rights granted pursuant to the Stockholders Agreement, (1) at any time when the Designating Stockholders are entitled to designate a Designee, any director or all such directors may be removed with or without cause by the affirmative vote of a majority in voting power of all outstanding shares of stock of the Corporation entitled to vote thereon, voting together as a single class, and (2) at any time when the Designating Stockholders cease to be entitled to designate a Designee, any such director or all such directors may be removed only for cause and only upon the affirmative vote of the holders of at least sixty-six and two-thirds (66 2/3)% of the total voting power of all the then outstanding shares of stock of the Corporation entitled to vote thereon, voting together as a single class. Notwithstanding anything to the contrary herein, for so long as a Designating Stockholder is entitled to designate or cause the appointment of a Designee, (i) no such Designee shall be removed without, in addition to any vote required herein or by applicable law, the affirmative vote of the holders of a majority of the outstanding shares beneficially owned by such Designating Stockholder and (ii) any such Designee shall cease be qualified as, and shall cease to be, a director upon delivery by such Designating Stockholder of a written instrument advising that such Designee shall cease to serve as the Designee of such Designating Stockholder.
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(D) Whenever the holders of any one or more series of Preferred Stock issued by the Corporation shall have the right, voting separately as a series or separately as a class with one or more such other series, to elect directors at an annual or special meeting of stockholders, the election, term of office, removal and other features of such directorships shall be governed by the terms of this Restated Certificate of Incorporation (including any certificate of designation relating to any series of Preferred Stock) applicable thereto. Notwithstanding Section 6.1(A), the number of directors that may be elected by the holders of any such series of Preferred Stock shall be in addition to the number fixed pursuant to Section 6.1(A) hereof, and the total number of directors constituting the Whole Board shall be automatically adjusted accordingly. Except as otherwise provided by the Board in the resolution or resolutions establishing such series, whenever the holders of any series of Preferred Stock having such right to elect additional directors are divested of such right pursuant to the provisions of such stock, the terms of office of all such additional directors elected by the holders of such stock, or elected to fill any vacancies resulting from the death, resignation, disqualification or removal of such additional directors, shall forthwith terminate (in which case each such director thereupon shall cease to be qualified as, and shall cease to be, a director) and the total authorized number of directors of the Corporation shall automatically be reduced accordingly.
(E) Directors of the Corporation need not be elected by written ballot unless the Bylaws shall so provide.
ARTICLE VII
Section 7.1. Consent in Lieu of Meeting/Meetings of Stockholders. Subject to the rights granted to the holders of any one or more series of Preferred Stock then outstanding and the rights granted pursuant to the Stockholders Agreement, at any time when the Designating Stockholders are entitled to designate a Designee, any action required or permitted to be taken by the holders of stock of the Corporation may be taken by consent in lieu of a meeting, without prior notice and without a vote, if a consent or consents, setting forth the action so taken, shall be signed by the Designating Stockholders and the holders of outstanding shares of the relevant class or series, including the Designating Stockholders, having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the Corporation in accordance with applicable law. At any time when the Designating Stockholders cease to be entitled to designate a Designee, any action required or permitted to be taken by the holders of stock of the Corporation must be effected at a duly called annual or special meeting of such holders and may not be effected by any consent in lieu of a meeting by such holders unless such action is recommended by all directors of the Corporation then in office; provided, however, that any action required or permitted to be taken by the holders of Class B Common Stock, voting separately as a class, or, to the extent expressly permitted by the certificate of designation relating to one or more series of Preferred Stock, by the holders of such series of Preferred Stock, voting separately as a series or separately as a class with one or more other such series, may be taken by consent in lieu of a meeting, without prior notice and without a vote, if a consent or consents, setting forth the action so taken, shall be signed by the holders of outstanding shares of the relevant class or series having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the Corporation in
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accordance with applicable law. Subject to the rights of the holders of any series of Preferred Stock, special meetings of the stockholders of the Corporation may be called only by or at the direction of the Board, the Chair of the Board or the Chief Executive Officer of the Corporation; provided, however, that at any time when a Designating Stockholder is entitled to designate a Designee, special meetings of the stockholders of the Corporation for any purpose or purposes shall also be called by or at the direction of the Board or the Chair of the Board at the request of such Designating Stockholder.
ARTICLE VIII
Section 8.1. Limited Liability of Directors and Officers. No director or officer of the Corporation will have any personal liability to the Corporation or its stockholders for monetary damages for any breach of fiduciary duty as a director or officer, except to the extent such exemption from liability or limitation thereof is not permitted under the DGCL as the same exists or hereafter may be amended. Neither the amendment nor the repeal of this Article VIII shall eliminate or reduce the effect thereof in respect of any state of facts existing or act or omission occurring, or any cause of action, suit or claim that, but for this Article VIII, would accrue or arise, prior to such amendment or repeal. All references in this Section 8.1 to a director shall be deemed to refer to such other person or persons, if any, who pursuant to a provision of this Restated Certificate of Incorporation in accordance with Section 141(a) of the DGCL, exercise or perform any of the powers or duties otherwise conferred upon the Board by the DGCL.
ARTICLE IX
Section 9.1. Competition and Corporate Opportunities.
(A) In recognition and anticipation that (i) members of the Board who are not employees of the Corporation, Jersey Mike’s HoldCo, LLC or any of their respective subsidiaries (“Non-Employee Directors”) and their respective Affiliates and Affiliated Entities (each, as defined below) may now engage and may continue to engage in the same or similar activities or related lines of business as those in which the Corporation, directly or indirectly, may engage and/or other business activities that overlap with or compete with those in which the Corporation, directly or indirectly, may engage and (ii) the Designating Stockholders and their respective Affiliates may now engage and may continue to engage in the same or similar activities or related lines of business as those in which the Corporation, directly or indirectly, may engage and/or other business activities that overlap with or compete with those in which the Corporation, directly or indirectly, may engage, the provisions of this Article IX are set forth to regulate and define the conduct of certain affairs of the Corporation with respect to certain classes or categories of business opportunities as they may involve any of the Non-Employee Directors, the Designating Stockholders or their respective Affiliates and the powers, rights, duties and liabilities of the Corporation and its directors, officers and stockholders in connection therewith.
(B) To the fullest extent permitted by law, the Corporation hereby renounces any interest or expectancy in, or right to be offered an opportunity to participate in, any business opportunity that may be a corporate opportunity for any Non-Employee Director (including any
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Non-Employee Director who serves as an officer of the Corporation in both his or her director and officer capacities) or his or her Affiliates or Affiliated Entities, the Designating Stockholders or any of their respective Affiliates and the Corporation or any of its Affiliates, except as provided in Section 9.1(C) of this Article IX.
(C) Notwithstanding the foregoing provision of this Article IX, the Corporation does not renounce its interest in any corporate opportunity offered to any Non-Employee Director (including any Non-Employee Director who serves as an officer of the Corporation) if such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of the Corporation, and the provisions of Section 9.1(B) of this Article IX shall not apply to any such corporate opportunity. In addition, notwithstanding anything to the contrary set forth herein, the provisions of this Section 9.1 shall not release any person who is or was an employee of the Corporation, Jersey Mike’s HoldCo, LLC or any of their respective subsidiaries from any obligations or duties that such person may have pursuant to any other agreement that such person may have with the Corporation, Jersey Mike’s HoldCo, LLC or any such subsidiary.
(D) In addition to and notwithstanding the foregoing provisions of this Article IX, a potential corporate opportunity shall not be deemed to be a corporate opportunity for the Corporation if it is a business opportunity that (i) the Corporation is neither financially or legally able, nor contractually permitted, to undertake, (ii) from its nature, is not in the line of the Corporation’s business or is of no practical advantage to the Corporation or (iii) is one in which the Corporation has no interest or reasonable expectancy.
(E) For purposes of this Article IX, (i) “Affiliate” shall mean (a) in respect of a Non-Employee Director, any Person that, directly or indirectly, is controlled by such Non-Employee Director (other than the Corporation and any entity that is controlled by the Corporation), (b) in respect of any Designating Stockholder, a Person that, directly or indirectly, is controlled by any of the Designating Stockholders, controls any of the Designating Stockholders or is under common control with any of the Designating Stockholders and shall include any principal, member, director, partner, stockholder, officer, employee or other representative of any of the foregoing (other than the Corporation and any entity that is controlled by the Corporation), and (c) in respect of the Corporation, any Person that, directly or indirectly, is controlled by the Corporation; (ii) “Affiliated Entity” shall mean (A) any Person of which a Non-Employee Director serves as an officer, director, employee, agent or other representative (other than the Corporation and any entity that is controlled by the Corporation), (B) any Person that controls, is controlled by or under common control with a Person set forth in clause (A) whether directly or indirectly, and (C) any direct or indirect partner, stockholder, member, manager or other representative of any Person set forth in clauses (A) or (B); and (iii) “Person” shall mean any individual, corporation, general or limited partnership, limited liability company, joint venture, trust, association or any other entity.
(F) For the purposes of this Article IX, “control,” including the terms “controlling,” “controlled by” and “under common control with,” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting stock, by contract, or otherwise. A Person who is the owner of 20% or more of the outstanding voting stock of a corporation, partnership,
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unincorporated association or other entity shall be presumed to have control of such entity, in the absence of proof by a preponderance of the evidence to the contrary. Notwithstanding the foregoing, a presumption of control shall not apply where such Person holds voting stock, in good faith and not for the purpose of circumventing the restrictions on business combinations set forth in Article X of this Restated Certificate of Incorporation, as an agent, bank, broker, nominee, custodian or trustee for one or more owners who do not individually or as a group have control of such entity.
(G) To the fullest extent permitted by law, any Person purchasing or otherwise acquiring any interest in any shares of capital stock of the Corporation shall be deemed to have notice of and to have consented to the provisions of this Article IX. Neither the alteration, amendment, addition to or repeal of this Article IX, nor the adoption of any provision of this Restated Certificate of Incorporation (including any certificate of designation relating to any series of Preferred Stock) inconsistent with this Article IX, shall eliminate or reduce the effect of this Article IX in respect of any business opportunity first identified or any other matter occurring, or any cause of action, suit or claim that, but for this Article IX, would accrue or arise, prior to such alteration, amendment, addition, repeal or adoption.
ARTICLE X
Section 10.1. DGCL Section 203 and Business Combinations.
(A) The Corporation hereby expressly elects not to be governed by Section 203 of the DGCL.
(B) Notwithstanding the foregoing, the Corporation shall not engage in any business combination (as defined below), at any point in time at which the Corporation’s Common Stock is registered under Section 12(b) or 12(g) of the Exchange Act of 1934, as amended (the “Exchange Act”), with any interested stockholder (as defined below) for a period of three years following the time that such stockholder became an interested stockholder, unless:
(1) prior to such time, the Board approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder, or
(2) upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock (as defined below) of the Corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) those shares owned by (i) persons who are directors and also officers and (ii) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer, or
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(3) at or subsequent to such time, the business combination is approved by the Board and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least sixty-six and two-thirds (66 2/3)% of the outstanding voting stock of the Corporation which is not owned by the interested stockholder.
(C) For purposes of this Article X, references to:
(1) “Affiliate” means a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, another person.
(2) “associate,” when used to indicate a relationship with any person, means: (i) any corporation, partnership, unincorporated association or other entity of which such person is a director, officer or partner or is, directly or indirectly, the owner of 20% or more of any class of voting stock; (ii) any trust or other estate in which such person has at least a 20% beneficial interest or as to which such person serves as trustee or in a similar fiduciary capacity; and (iii) any relative or spouse of such person, or any relative of such spouse, who has the same residence as such person.
(3) “business combination,” when used in reference to the Corporation and any interested stockholder of the Corporation, means:
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(4) “control,” including the terms “controlling,” “controlled by” and “under common control with,” shall have the meaning set forth in Section 9.1(F).
(5) “Designating Stockholder Direct Transferee” means any person that acquires (other than in a registered public offering) directly from any Designating Stockholder or any of its successors or any “group,” or any member of any such group, of which such persons are a party under Rule 13d-5 of the Exchange Act beneficial ownership of 15% or more of the then outstanding voting stock of the Corporation.
(6) “Designating Stockholder Indirect Transferee” means any person that acquires (other than in a registered public offering) directly from any Designating Stockholder Direct Transferee or any other Designating Stockholder Indirect Transferee beneficial ownership of 15% or more of the then outstanding voting stock of the Corporation.
(7) “interested stockholder” means any person (other than the Corporation or any direct or indirect majority-owned subsidiary of the Corporation) that (i) is the owner of 15% or more of the outstanding voting stock of the Corporation, or (ii) is an Affiliate or associate of the Corporation and was the owner of 15% or more of the
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outstanding voting stock of the Corporation at any time within the three year period immediately prior to the date on which it is sought to be determined whether such person is an interested stockholder; and the Affiliates and associates of such person; but “interested stockholder” shall not include (a) any Designating Stockholder, any Designating Stockholder Direct Transferee, any Designating Stockholder Indirect Transferee or any of their respective Affiliates or successors, any Designating Stockholders acting together, or any “group,” or any member of any such group, to which such persons are a party under Rule 13d-5 of the Exchange Act, or (b) any person whose ownership of shares in excess of the 15% limitation set forth herein is the result of any action taken solely by the Corporation; provided, further, that in the case of clause (b) such person shall be an interested stockholder if thereafter such person acquires additional shares of voting stock of the Corporation, except as a result of further corporate action not caused, directly or indirectly, by such person. For the purpose of determining whether a person is an interested stockholder, the voting stock of the Corporation deemed to be outstanding shall include stock deemed to be owned by the person through application of the definition of “owner” below but shall not include any other unissued stock of the Corporation which may be issuable pursuant to any agreement, arrangement or understanding, or upon exercise of conversion rights, warrants or options, or otherwise.
(8) “owner,” including the terms “own” and “owned,” when used with respect to any stock, means a person that individually or with or through any of its Affiliates or associates:
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(9) “person” means any individual, corporation, partnership, unincorporated association or other entity.
(10) “stock” means, with respect to any corporation, capital stock and, with respect to any other entity, any equity interest.
(11) “voting stock” means stock of any class or series entitled to vote generally in the election of directors and, with respect to any entity that is not a corporation, any equity interest entitled to vote generally in the election of the governing body of such entity. Every reference to a percentage of voting stock shall refer to such percentages of the votes of such voting stock.
ARTICLE XI
Section 11.1. Severability. If any provision or provisions of this Restated Certificate of Incorporation shall be held to be invalid, illegal or unenforceable as applied to any circumstance for any reason whatsoever: (i) the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of this Restated Certificate of Incorporation (including, without limitation, each portion of any paragraph of this Restated Certificate of Incorporation containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) shall not, to the fullest extent permitted by applicable law, in any way be affected or impaired thereby and (ii) to the fullest extent permitted by applicable law, the provisions of this Restated Certificate of Incorporation (including, without limitation, each such portion of any paragraph of this Restated Certificate of Incorporation containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to permit the Corporation to protect its directors, officers, employees and agents from personal liability in respect of their good faith service or for the benefit of the Corporation.
Section 11.2. Stockholders Agreement. Notwithstanding anything to the contrary herein, for so long as the Stockholders Agreement is in effect, (a) the Designating Stockholders shall have and may exercise all such rights conferred upon them under the Stockholders Agreement, including the rights to nominate directors and appoint or cause the appointment of one or more directors to fill any vacancies or newly created directorships, (b) the total number of directors constituting the Whole Board shall not be less than the minimum number of directors that all Designating Stockholders are entitled to and actually so designate thereunder, and (c) the total number of directors constituting the Whole Board in effect at any time shall be automatically increased to the extent required to give effect to the exercise of rights of a Designating Stockholder under Article II of the Stockholders Agreement to designate for nomination, appoint or cause the appointment of a director.
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ARTICLE XII
Section 12.1. Derivative Actions.
(A) There is hereby established a committee of the Board designated as the “Litigation Demand Committee,” which shall have, and is hereby vested with, the sole and exclusive power and authority of the Board, to the fullest extent permitted by law, to investigate, review, consider and evaluate, and take and cause to be implemented all actions and make all such decisions and determinations with respect to, any demands to investigate or take any action with respect to any allegation or claim of any breach of fiduciary duty owed by any current or former director, officer, stockholder or other fiduciary of the Corporation or any affiliate thereof, as well as any other allegation or claim that may give rise to a derivative claim that may be brought by or on behalf of the Corporation or any affiliate thereof, including, without limitation, with respect to whether to initiate or decline to initiate any action, suit or proceeding, or to pursue, continue, move to dismiss, settle, compromise, resolve or take other action with respect to, any such demand or threatened or pending derivative action. Without limiting the foregoing power and authority so vested in the Litigation Demand Committee, the Litigation Demand Committee is authorized and empowered to exercise the full power and authority of the Board in connection with the exercise of the foregoing power and authority so vested in the Litigation Demand Committee, including, without limitation, the power and authority to engage such experts, counsel and advisors, including legal counsel and/or other advisors, as the Litigation Demand Committee may determine to be necessary, advisable, appropriate or desirable to assist in the discharge of its authority.
(B) The Litigation Demand Committee shall be composed of the directors in office at any time and from time to time then appointed to the Litigation Demand Committee by the Board; provided, that a director shall only be qualified to serve on the Litigation Demand Committee if, prior to the director’s appointment to the Litigation Demand Committee, the Board has determined that such director satisfies the relevant criteria for determining director independence under any rules promulgated by any national securities exchange on which the Class A Common Stock is listed for trading.
(C) The Litigation Demand Committee may in its discretion (and, solely to the extent the Litigation Demand Committee deems warranted by the facts and circumstances in respect of any demand or threatened or pending derivative action for which a demand has been made to, or that is otherwise before, the Litigation Demand Committee, the Litigation Demand Committee shall) establish a subcommittee of the Litigation Demand Committee, which subcommittee shall have any or all of the powers and authority of the Litigation Demand Committee.
Section 12.2. Forum. Unless the Corporation selects or consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if such court does not have subject matter jurisdiction thereof, the federal district court of the State of Delaware) shall, to the fullest extent permitted by law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action of breach of a fiduciary duty owed by any current or former director, officer, or stockholder of the Corporation to the Corporation or the Corporation’s stockholders, (iii) any action arising
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pursuant to any provision of the DGCL or this Restated Certificate of Incorporation or the Bylaws (as either may be amended and/or restated from time to time) or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware, or (iv) any action governed by the internal affairs doctrine of the law of the State of Delaware. Unless the Corporation selects or consents in writing to the selection of an alternative forum, the federal district courts of the United States of America shall, to the fullest extent permitted by applicable law, be the exclusive forum for the resolution of any cause of action arising under the federal securities laws of the United States of America, including, in each case, the applicable rules and regulations promulgated thereunder. To the fullest extent permitted by law, any person or entity purchasing or otherwise acquiring or holding any interest in shares of capital stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Article XII.
ARTICLE XIII
Section 13.1. Amendments. Notwithstanding anything contained in this Restated Certificate of Incorporation to the contrary, at any time when the Designating Stockholders cease to be entitled to designate a Designee, in addition to any vote required by applicable law, the following provisions in this Restated Certificate of Incorporation may be amended, altered, repealed or rescinded, in whole or in part, or any provision inconsistent therewith or herewith may be adopted, only by the affirmative vote of the holders of at least sixty-six and two-thirds (66 2/3)% of the total voting power of all the then outstanding shares of stock of the Corporation entitled to vote thereon, voting together as a single class: Article V, Article VI, Article VII, Article VIII, Article IX, Article X, Article XII and this Article XIII.
* * *
This Restated Certificate of Incorporation shall become effective at 8:59 p.m. (Eastern Time) on July 29, 2026.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the Corporation has caused this Amended and Restated Certificate of Incorporation to be signed by Scott G. McLester, its General Counsel, this 29th day of July, 2026.
JERSEY MIKE’S SUBS INC. |
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By: |
/s/ Scott G. McLester |
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Name: Scott G. McLester |
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Title: General Counsel |
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ANNEX A
STOCKHOLDERS AGREEMENT
DATED AS OF JULY 29, 2026
BETWEEN
JERSEY MIKE’S SUBS INC.
AND
THE OTHER PARTIES HERETO
TABLE OF CONTENTS
Page
ARTICLE I. INTRODUCTORY MATTERS |
1 |
|
1.1 |
Defined Terms |
1 |
1.2 |
Construction |
5 |
ARTICLE II. CORPORATE GOVERNANCE MATTERS |
5 |
|
2.1 |
Election of Directors |
5 |
2.2 |
Compensation |
7 |
2.3 |
Board Committees |
8 |
ARTICLE III. INFORMATION; VCOC |
8 |
|
3.1 |
Books and Records; Access |
8 |
3.2 |
Certain Reports |
8 |
3.3 |
VCOC |
9 |
3.4 |
Confidentiality |
11 |
3.5 |
Information Sharing |
11 |
ARTICLE IV. ADDITIONAL COVENANTS |
11 |
|
4.1 |
Pledges or Transfers |
11 |
4.2 |
Spin-Offs or Split-Offs |
12 |
4.3 |
Expense Reimbursement |
12 |
ARTICLE V. INDEMNIFICATION; LIABILITY INSURANCE |
12 |
|
5.1 |
Indemnification of Designating Stockholders |
12 |
5.2 |
Jointly Indemnifiable Claims |
13 |
5.3 |
Non-Exclusive Right |
15 |
5.4 |
Directors and Officers Insurance |
15 |
5.5 |
Other Rights of Designees |
15 |
ARTICLE VI. GENERAL PROVISIONS |
15 |
|
6.1 |
Termination |
15 |
6.2 |
Notices |
15 |
6.3 |
Amendment; Waiver |
16 |
6.4 |
Further Assurances |
17 |
6.5 |
Assignment |
17 |
6.6 |
Third Parties |
17 |
6.7 |
Governing Law |
17 |
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6.8 |
Jurisdiction; Waiver of Jury Trial |
17 |
6.9 |
Specific Performance |
18 |
6.10 |
Entire Agreement |
18 |
6.11 |
Severability |
18 |
6.12 |
Table of Contents, Headings and Captions |
18 |
6.13 |
Grant of Consent |
18 |
6.14 |
Counterparts |
18 |
6.15 |
Effectiveness |
19 |
6.16 |
No Recourse |
19 |
ii
STOCKHOLDERS AGREEMENT
This Stockholders Agreement is entered into as of July 29, 2026 between Jersey Mike’s Subs Inc., a Delaware corporation (the “Company”), and each of the other parties from time to time party hereto.
RECITALS:
WHEREAS, the Company is effecting an underwritten initial public offering (“IPO”) of shares of its Class A Common Stock (as defined below); and
WHEREAS, in connection with the IPO, the Company and the Designating Stockholders (as defined below) wish to set forth certain understandings between such parties, including with respect to certain governance matters.
NOW, THEREFORE, the parties agree as follows:
ARTICLE I.
INTRODUCTORY MATTERS
1.1 Defined Terms. In addition to the terms defined elsewhere herein, the following terms have the following meanings when used herein with initial capital letters:
“Affiliate” has the meaning set forth in Rule 12b-2 promulgated under the Exchange Act, as in effect on the date hereof; provided, however, that notwithstanding the foregoing, an Affiliate shall not include any Portfolio Company of any Person or the Designating Stockholders and neither the Company nor any of its Affiliates shall be deemed an Affiliate of a Designating Stockholder or its Affiliates or Portfolio Companies.
“Agreement” means this Stockholders Agreement, as the same may be amended, supplemented, restated or otherwise modified from time to time in accordance with the terms hereof.
“Beneficially Own” has the meaning set forth in Rule 13d-3 promulgated under the Exchange Act.
“Board” means the board of directors of the Company.
“Business Day” means any day other than a Saturday, a Sunday, or a holiday on which national banking associations in the State of New York are authorized by law to close.
“Class A Common Stock” means shares of class A common stock, par value $0.0001 per share, of the Company, and any securities issued in respect thereof, or in substitution therefor, in connection with any stock split, dividend or combination, or any reclassification, recapitalization, merger, consolidation or similar transaction.
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“Class B Common Stock” means shares of class B common stock, par value $0.0001 per share, of the Company, and any securities issued in respect thereof, or in substitution therefor, in connection with any stock split, dividend or combination, or any reclassification, recapitalization, merger, consolidation or similar transaction.
“Common Stock” means collectively, the shares of Class A Common Stock and Class B Common Stock.
“Common Units” has the meaning set forth in the LLC Agreement.
“Company” has the meaning set forth in the Preamble.
“Confidential Information” means any information concerning the Company or its Subsidiaries that is furnished after the date of this Agreement by or on behalf of the Company or its designated representatives to a Designating Stockholder or its designated representatives, together with any notes, analyses, reports, models, compilations, studies, documents, records or extracts thereof containing, based upon or derived from such information, in whole or in part; provided, however, that Confidential Information does not include information:
(i) that is or has become publicly available other than as a result of a disclosure by a Designating Stockholder or its designated representatives in violation of this Agreement;
(ii) that was already known to a Designating Stockholder or its designated representatives or was in the possession of a Designating Stockholder or its designated representatives prior to its being furnished by or on behalf of the Company or its designated representatives;
(iii) that is received by a Designating Stockholder or its designated representatives from a source other than the Company or its designated representatives, provided, that the source of such information was not actually known by a Designating Stockholder or designated representative to be bound by a confidentiality agreement with, or other contractual obligation of confidentiality to, the Company; or
(iv) that was independently developed or acquired by a Designating Stockholder or its designated representatives or on its or their behalf without the violation of the terms of this Agreement.
“Control” (including its correlative meanings, “Controlled by” and “under common Control with”) means possession, directly or indirectly, of the power to direct or cause the direction of management or policies (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise) of a Person.
“Designating Stockholders” means the entities listed on the signature pages hereto under the heading “Designating Stockholders” and each Person that executes a joinder agreement pursuant to Section 6.5 as a Permitted Transferee.
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“Designating Stockholder Representative” means the Designating Stockholder, or any group of Designating Stockholders collectively, then holding of record a majority of Total Outstanding Securities held of record by all Designating Stockholders.
“Designee” has the meaning assigned to such term in Section 2.1(a).
“Director” means any director of the Company from time to time.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder, as the same may be amended from time to time.
“Exchange Agreement” means the Exchange Agreement, dated on or about the date hereof, by and among the Company, Jersey Mike’s Holdings and the holders of Common Units party thereto, as the same may be amended, supplemented, restated or otherwise modified from time to time.
“Governmental Authority” means any: (i) nation, state, commonwealth, province, territory, county, municipality, district or other jurisdiction of any nature; (ii) U.S. and other federal, state, local, municipal, foreign or other government; or (iii) governmental or quasi‑governmental authority of any nature (including any governmental division, department, agency, commission, instrumentality, official, organization, unit, body or entity and any court or other tribunal).
“Information” has the meaning set forth in Section 3.1 hereof.
“IPO” has the meaning set forth in the Recitals.
“Jersey Mike’s Holdings” means Jersey Mike’s HoldCo, LLC, a Delaware limited liability company.
“Law” means any statute, law, regulation, ordinance, rule, injunction, order, decree, governmental approval, directive, requirement, or other governmental restriction or any similar form of decision of, or determination by, or any interpretation or administration of any of the foregoing by, any Governmental Authority.
“LLC Agreement” means the Third Amended and Restated Limited Liability Company Agreement of Jersey Mike’s Holdings, dated on or about the date hereof, as such agreement may be amended, supplemented, restated or otherwise modified from time to time.
“NewCo” has the meaning set forth in Section 4.2 hereof.
“Non-Recourse Party” has the meaning set forth in Section 6.16 hereof.
“Permitted Transferee” means with respect to a Designating Stockholder, a Transferee of shares of Common Stock that agrees to become party to, and be bound to the same extent as its transferor, by the terms of this Agreement.
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“Person” means an individual, a partnership, a limited partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, bank trust company, land trust, business trust, a joint venture, an unincorporated organization, or other form of business organization, whether or not regarded as a legal entity, custodian, trustee-executor, administrator, nominee or entity in a representative capacity under applicable Law, or any Governmental Authority or any department, agency or political subdivision thereof.
“Plan Asset Regulation” has the meaning set forth in Section 3.3(a) hereof.
“Portfolio Companies” has the meaning set forth in the LLC Agreement.
“Registration Rights Agreement” means the Registration Rights Agreement by and among the Company and the other parties thereto, dated on or about the date hereof, as such agreement may be amended, supplemented, restated or otherwise modified from time to time.
“Restated Certificate of Incorporation” means the Amended and Restated Certificate of Incorporation of the Company, dated on or about the date hereof, as such certificate may be amended and/or restated from time to time.
“Subsidiary” means, with respect to any Person, any corporation, limited liability company, partnership, association or other business entity of which: (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, representatives or trustees thereof is at the time owned or Controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or any combination thereof; or (ii) if a limited liability company, partnership, association or other business entity, a majority of the total voting power of stock (or equivalent ownership interest) of the limited liability company, partnership, association or other business entity is at the time owned or Controlled, directly or indirectly, by that Person or one or more Subsidiaries of that Person or any combination thereof. For purposes hereof, a Person or Persons shall be deemed to have a majority ownership interest in a limited liability company, partnership, association or other business entity if such Person or Persons shall (a) be allocated a majority of limited liability company, partnership, association or other business entity gains or losses or shall be or (b) Control the managing member, managing director or other governing body or general partner of such limited liability company, partnership, association or other business entity.
“Total Number of Directors” means the total number of directors comprising the Board from time to time.
“Total Outstanding Securities” means, at any time, the total number of outstanding shares of Class A Common Stock, plus the number of shares of Class A Common Stock that would be outstanding assuming all holders of Common Units other than the Company or any wholly owned subsidiary of the Company had exchanged such Common Units (together with a corresponding number of shares of Class B Common Stock) for shares of Class A Common Stock pursuant to the Exchange Agreement.
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“Transfer” (including its correlative meanings, “Transferor,” “Transferee” and “Transferred”) shall mean, with respect to any security, directly or indirectly, to sell, contract to sell, give, assign, hypothecate, pledge, encumber, grant a security interest in, offer, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of any economic, voting or other rights in or to such security. When used as a noun, “Transfer” shall have such correlative meaning as the context may require. For the avoidance of doubt, it is understood that a Permitted Pledge (as such term is defined in the LLC Agreement) shall not be a Transfer and the bank or financial institution in respect of whom the Permitted Pledge is made shall not be treated as a transferee or entitled to any rights under this Agreement as a result of such Permitted Pledge or any foreclosure thereunder.
“VCOC Investor” has the meaning set forth in Section 3.3(a) hereof.
1.2 Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction will be applied against any party. Unless the context otherwise requires: (a) “or” is disjunctive but not exclusive, (b) words in the singular include the plural, and in the plural include the singular, and (c) the words “hereof,” “herein,” and “hereunder” and words of similar import when used in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section references are to this Agreement unless otherwise specified.
ARTICLE II.
CORPORATE GOVERNANCE MATTERS
2.1 Election of Directors.
(a) The Designating Stockholder Representative shall have the right, but not the obligation, to designate a number of individuals serving as directors of the Company equal to: (i) if the Designating Stockholders and their Affiliates collectively Beneficially Own 50% or more of the Total Outstanding Securities, the lowest whole number that is greater than 50% of the Total Number of Directors; (ii) if the Designating Stockholders and their Affiliates collectively Beneficially Own at least 40% (but less than 50%) of the Total Outstanding Securities, the lowest whole number that is greater than 40% of the Total Number of Directors; (iii) if the Designating Stockholders and their Affiliates collectively Beneficially Own at least 30% (but less than 40%) of the Total Outstanding Securities, the lowest whole number that is greater than 30% of the Total Number of Directors; (iv) if the Designating Stockholders and their Affiliates collectively Beneficially Own at least 20% (but less than 30%) of the Total Outstanding Securities, the lowest whole number that is greater than 20% of the Total Number of Directors; and (v) if the Designating Stockholders and their Affiliates collectively Beneficially Own at least 5% (but less than 20%) of the Total Outstanding Securities, the lowest whole number (such number always being equal to or greater than one) that is greater than 10% of the Total Number of Directors (in each case, each such person a “Designee”).
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(b) If the Designating Stockholders and their Affiliates collectively Beneficially Own at least 5% of the Total Outstanding Securities, the Designating Stockholder Representative may designate one (1) non-voting observer to attend meetings of the Board. Except to the extent that the Board determines in its reasonable discretion that the receipt of such materials would prevent the Company from asserting attorney-client privilege, such non-voting observer shall have the same right to receive at the same time and in the same manner as a Director copies of all materials (including copies of all resolutions, consents and meeting minutes) given to Directors in connection with any meetings of the Board and if the Board proposes to act by consent in lieu of a meeting, the Company shall provide such non-voting observer at the same time and in the same manner with copies of the form of consent and all materials given to any Director in connection with such action. The non-voting observer may be required by the Board to temporarily leave a meeting of the Board if the presence of the non-voting observer would prevent the Company from asserting attorney-client privilege with respect to matters discussed before the Board at such time.
(c) If at any time the Designating Stockholder Representative has designated fewer than the total number of individuals that it is then entitled to designate pursuant to Section 2.1(a) hereof, the Designating Stockholder Representative shall have the right, at any time and from time to time, to appoint or cause to be appointed to the Board as Designees an additional number of individuals up to the difference between the total number of individuals that the Designating Stockholder Representative is then entitled to designate and the number of individuals theretofore designated by such Designating Stockholder Representative. Upon the election of a Designating Stockholder Representative to appoint or cause the appointment of any individual pursuant to this Section 2.1(c), the Total Number of Directors shall be automatically increased to enable the appointment of such individual as a Designee. The Company will ensure at all times during the term of this Agreement that its Restated Certificate of Incorporation and bylaws will not contain any limitation on the number of authorized Directors that would prevent it from complying with the foregoing sentence.
(d) Directors are subject to removal or disqualification pursuant to the applicable provisions of the Restated Certificate of Incorporation and applicable law; provided, however, for as long as the Designating Stockholder Representative is entitled to designate a Designee pursuant to Section 2.1(a) hereof, the removal of any Designee shall require, in addition to any vote of stockholders otherwise required by the Restated Certificate of Incorporation and applicable law, and so long as the applicable Designating Stockholder continues to own shares of Common Stock, such director may only be removed without cause by the Designating Stockholders who shall be the only holders of Common Stock entitled to vote on such removal and all other holders of Common Stock, as such, and the holders of any other class or series of capital stock of the Corporation, shall have no voting power on such removal.
(e) Notwithstanding anything to the contrary set forth in the Restated Certificate of Incorporation or bylaws, if the Designating Stockholder Representative is entitled to designate a Designee pursuant to Section 2.1(a) hereof, in the event of a vacancy on the Board with respect to any Designee of the Designating Stockholder Representative (whether resulting from the death, disability, retirement, removal (with or without cause), disqualification, resignation or otherwise) or in the event of an increase of the Total Number of Directors pursuant to Section 2.1(c) or Section 2.1(g) hereof, the Designating Stockholder Representative shall have
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the power, at its election, to appoint or cause to be appointed a new Designee to fill such vacancy or the newly created directorship resulting from such increase.
(f) If the Designating Stockholder Representative is entitled to designate a Designee pursuant to Section 2.1(a) hereof, the Company shall, to the fullest extent permitted by law, include in the slate of nominees recommended by the Board at any meeting of stockholders called for the purpose of electing directors (or consent in lieu of meeting) the persons designated pursuant to this Section 2.1 and use its best efforts to cause the election of each such Designee to the Board, including nominating each such individual to be elected as a Director as provided herein. Unless the Board in good faith, after consultation with the Company’s outside counsel, determines that it is otherwise required by its fiduciary duties, the Board shall, to the fullest extent permitted by law, recommend such individual’s election and solicit proxies or consents in favor thereof.
(g) In the event that any Designee shall fail to be elected to the Board at any meeting of stockholders called for the purpose of electing directors (or consent in lieu of meeting), if the Designating Stockholder Representative is entitled to designate a Designee pursuant to Section 2.1(a) hereof, the Designating Stockholder Representative shall have the right to appoint (or cause to be appointed) to the Board such Designee (or a new designee of the Designating Stockholder Representative). Upon the election of a Designating Stockholder Representative to appoint or cause the appointment to the Board of an individual pursuant to this Section 2.1(g), the Total Number of Directors shall be automatically increased to enable the appointment of such individual as a Designee. For the avoidance of doubt, it is understood that the failure of the stockholders of the Company to elect any Designee shall not affect the right of the Designating Stockholder Representative who nominated such Designee to exercise its rights under this Section 2.1, including its right to designate a Designee for election pursuant to Section 2.1(a) hereof in connection with any future election of directors of the Company.
2.2 Compensation. Except to the extent the Designating Stockholder Representative may otherwise notify the Company and if the Designating Stockholder Representative is entitled to designate a Designee pursuant to Section 2.1(a) hereof, the Designees shall be entitled to compensation consistent with the compensation received by other non-employee Directors, including any fees and equity awards, provided, that (x) to the extent any Director compensation is payable in the form of equity awards, at the election of a Designee, in lieu of any equity award, such compensation shall be paid in an amount of cash equal to the value of the equity award as of the date of the award, with any such cash subject to the same vesting terms, if any, as the equity awarded to other Directors and (y) at the election of a Designee, any Director compensation (whether cash, equity awards and/or cash in lieu of equity as may be designated by the electing Designee) shall be paid to the Designating Stockholder or an Affiliate thereof specified by the Designee rather than to the Designee. If the Company adopts a policy that Directors own a minimum amount of equity in the Company, no Designee that is an Affiliate, partner, personnel or employee of the Designating Stockholder Representative or its Affiliate shall be subject to such policy unless otherwise determined by the Designating Stockholder Representative in its sole discretion. All Directors and non-voting observers will be entitled to reimbursement for documented, reasonable out of-pocket expenses incurred in attending meetings of the Board (including any committee thereof).
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2.3 Board Committees. If the Designating Stockholder Representative is entitled to designate a Designee pursuant to Section 2.1(a) hereof, to the extent permitted by Law, the Restated Certificate of Incorporation and the rules of any stock exchange on which the Class A Common Stock is listed for trading, and subject to requisite independence or other eligibility requirements applicable to such committee, the Designating Stockholder Representative shall have the right, but not the obligation, to appoint (or cause to be appointed) at least one (1) Designee to each committee of the Board, other than the Litigation Demand Committee.
ARTICLE III.
INFORMATION; VCOC
3.1 Books and Records; Access. The Company shall, and shall cause its Subsidiaries to, keep proper books, records and accounts, in which full and correct entries shall be made of all financial transactions and the assets and business of the Company and each of its Subsidiaries in accordance with generally accepted accounting principles. The Company shall, and shall cause its Subsidiaries to, (a) permit the Designating Stockholders and their respective designated representatives (or other designees), at reasonable times and upon reasonable prior notice to the Company, to review the books and records of the Company or any of such Subsidiaries and to discuss the affairs, finances and condition of the Company or any of such Subsidiaries with the officers of the Company or any such Subsidiary and (b) provide the Designating Stockholders all information of a type, at such times and in such manner as is consistent with the Company’s and its predecessor’s past practice or that is otherwise reasonably requested by such Designating Stockholders from time to time (all such information so furnished pursuant to this Section 3.1, the “Information”). Subject to Section 3.4, any Designating Stockholder (and any party receiving Information from a Designating Stockholder) who shall receive Information shall maintain the confidentiality of such Information. Notwithstanding the foregoing, the Company shall not be required to disclose any privileged Information of the Company so long as the Company has used commercially reasonable efforts to enter into an arrangement pursuant to which it may provide such information to the Designating Stockholders without the loss of any such privilege. The information rights pursuant to this Section 3.1 shall terminate at the time the Designating Stockholders and their Affiliates collectively Beneficially Own less than 1% of the Total Outstanding Securities. The Designating Stockholders may elect from time to time by written notice to the Company not to have such information rights for a predetermined period of time (which may be indefinite).
3.2 Certain Reports. Until such time as the Designating Stockholders and their Affiliates collectively Beneficially Own less than 1% of the Total Outstanding Securities, the Company shall deliver or cause to be delivered to the Designating Stockholders, at their request:
(a) to the extent otherwise prepared by the Company, operating and capital expenditure budgets and periodic information packages relating to the operations and cash flows of the Company and its Subsidiaries; and
(b) to the extent otherwise prepared by the Company, such other reports and information as may be reasonably requested by the Designating Stockholders; provided,
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however, that in the cases of clauses (a) and (b), the Company shall not be required to disclose any privileged information of the Company so long as the Company has used commercially reasonable efforts to enter into an arrangement pursuant to which it may provide such information to the Designating Stockholders without the loss of any such privilege.
3.3 VCOC.
(a) With respect to each Designating Stockholder that is intended to qualify its direct or indirect investment in the Company as a “venture capital investment” as defined in the Department of Labor regulations codified at 29 CFR Section 2510.3-101 (the “Plan Asset Regulation”) (each, a “VCOC Investor”, and together, the “VCOC Investors”), for so long as a VCOC Investor, directly or through one or more subsidiaries, continues to hold any Common Stock (or other securities of the Company into which such Common Stock may be converted or for which such Common Stock may be exchanged), without limitation or prejudice of any of the rights provided to the Designating Stockholders hereunder, the Company shall, with respect to each such VCOC Investor:
(i) provide each VCOC Investor or its designated representative with:
(A) upon reasonable notice and at mutually convenient times, the right to visit and inspect any of the offices and properties of the Company and its Subsidiaries and inspect and copy the books and records of the Company and its Subsidiaries;
(B) as soon as available and in any event within 45 days after the end of each of the first three quarters of each fiscal year of the Company, consolidated balance sheets of the Company and its Subsidiaries as of the end of such period, and consolidated statements of income and cash flows of the Company and its Subsidiaries for the period then ended prepared in conformity with generally accepted accounting principles in the United States applied on a consistent basis, except as otherwise noted therein, and subject to the absence of footnotes and to year-end adjustments;
(C) as soon as available and in any event within 120 days after the end of each fiscal year of the Company, a consolidated balance sheet of the Company and its Subsidiaries as of the end of such year, and consolidated statements of income and cash flows of the Company and its Subsidiaries for the year then ended prepared in conformity with generally accepted accounting principles in the United States applied on a consistent basis, except as otherwise noted therein, together with an auditor’s report thereon of a firm of established national reputation;
(D) to the extent the Company is required by law or pursuant to the terms of any outstanding indebtedness of the Company to prepare such reports, any annual reports, quarterly reports and other periodic reports pursuant to Section 13 or 15(d) of the Exchange Act, actually prepared by the Company as soon as available; and
(E) upon written request by a VCOC Investor, copies of all materials provided to the Board, subject to appropriate protections with respect to confidentiality and preservation of attorney-client privilege; provided, that, in each case, if the Company makes the information described in clauses (B), (C) and (D) of this Section 3.3(a)(i) available through
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public filings on the EDGAR System or any successor or replacement system of the U.S. Securities and Exchange Commission, the requirement to deliver such information shall be deemed satisfied;
(ii) make appropriate officers and/or Directors of the Company available, and cause the officers and directors of its Subsidiaries to be made available, periodically and at such times as reasonably requested by each VCOC Investor, upon reasonable notice and at mutually convenient times, for consultation with such VCOC Investor or its designated representative with respect to matters relating to the business and affairs of the Company and its Subsidiaries; and
(iii) provide each VCOC Investor or its designated representative with such other rights of consultation which such VCOC Investor’s counsel may determine in writing to be necessary under applicable legal authorities promulgated after the date hereof to qualify its investment in the Company as a “venture capital investment” for purposes of the Plan Asset Regulation; provided that the parties agree that any such rights of consultation shall be of a nature consistent with those granted above and nothing in this Agreement shall be deemed to require the Company to grant to a VCOC Investor any additional rights with respect to the governance or management of the Company.
(b) The Company agrees to consider, in good faith, the recommendations of each VCOC Investor or its designated representative in connection with the matters on which it is consulted as described above in this Section 3.3, recognizing that the ultimate discretion with respect to all such matters shall be retained by the Company.
(c) In the event a VCOC Investor or any of its Affiliates Transfers all or any portion of their investment in the Company to an affiliated entity that is intended to qualify its investment in the Company as a “venture capital investment” (as defined in the Plan Asset Regulation), such Transferee shall be afforded the same rights with respect to the Company afforded to such VCOC Investor hereunder and shall be treated, for such purposes, as a third party beneficiary hereunder.
(d) For so long as a VCOC Investor, directly or through one or more subsidiaries, continues to hold any Common Stock (or other securities of the Company into which such Common Stock may be converted or for which such Common Stock may be exchanged) and upon the written request of such VCOC Investor, without limitation or prejudice of any of the rights provided to the Designating Stockholders hereunder, the Company shall, with respect to each such VCOC Investor, furnish and deliver a letter covering the matters set forth in Sections 3.3(a), 3.3(b), and 3.3(c) hereof in a form and substance satisfactory to such VCOC Investor.
(e) In the event a VCOC Investor is an Affiliate of a Designating Stockholder, as described in Section 3.3(a) above, such affiliated entity shall be afforded the same rights with respect to the Company and afforded to the Designating Stockholders under this Section 3.3 and shall be treated, for such purposes, as a third party beneficiary hereunder.
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3.4 Confidentiality. Each Designating Stockholder agrees that it will, and will direct its designated representatives to, keep confidential and not disclose any Confidential Information; provided, however, that such Designating Stockholder and its designated representatives may disclose Confidential Information to any other Designating Stockholders (including any Designating Stockholders, Designees, or non-voting observers pursuant to any other stockholders agreements entered into on or about the date hereof by the Company and any other party with similar designation or information rights), to the Designees or non-voting observers and to (a) its Affiliates and its Affiliates’ partners, members, stockholders, directors, managers, officers, employees, agents, attorneys, accountants, consultants, insurers, financing sources and other advisors in connection with such Designating Stockholder’s investment in the Company, (b) any Person, including a prospective purchaser of Common Stock or Common Units, as long as such Person has agreed, in writing, to maintain the confidentiality of such Confidential Information, (c) any of such Designating Stockholder’s or its respective Affiliates’ partners, members, stockholders, directors, managers, officers, employees, agents, attorneys, accountants, consultants, insurers, financing sources and other advisors in the ordinary course of business (the Persons referenced in clauses (a), (b) and (c), a Designating Stockholder’s “designated representatives”), (d) as the Company may otherwise consent in writing, (e) to the extent necessary in connection with the exercise of any remedy hereunder, or (f) to the extent that the Designating Stockholder or its designated representatives is required, in the good faith determination of such Designating Stockholder or designated representative, to disclose by applicable law, regulation or legal process, or upon the request or demand of any regulatory agency or authority having or claiming jurisdiction over such party or any of its properties or assets, provided, that such Designating Stockholder or designated representative takes reasonable steps to minimize the extent of any such required disclosure, provided, further, that no such steps to minimize disclosure shall be required where disclosure is made (i) in response to a request by a regulatory or self-regulatory authority or (ii) in connection with a routine audit or examination by a bank examiner or auditor and such audit or examination does not specifically reference the Company or this Agreement; provided, further, however, that each Designating Stockholder agrees to be responsible for any breaches of this Section 3.4 by such Designating Stockholder’s designated representatives.
3.5 Information Sharing. Each party hereto acknowledges and agrees that Designees may share any information concerning the Company and its Subsidiaries received by them from or on behalf of the Company or its designated representatives with each Designating Stockholder and its designated representatives (subject to such Designating Stockholder’s obligation to maintain the confidentiality of Confidential Information in accordance with Section 3.4).
ARTICLE IV.
ADDITIONAL COVENANTS
4.1 Pledges or Transfers. Upon the request of any Designating Stockholder that wishes to (x) pledge, hypothecate or grant security interests in any or all of the shares of Common Stock or Common Units held by it including to banks or financial institutions as collateral or security for loans, advances or extensions of credit or (y) Transfer any or all of the shares of Common Stock or Common Units held by it, including to third party investors, the Company agrees to cooperate with such Designating Stockholder in taking any action reasonably
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necessary to consummate any such pledge, hypothecation, grant or Transfer, including without limitation, delivery of letter agreements to lenders in form and substance reasonably satisfactory to such lenders (which may include agreements by the Company in respect of the exercise of remedies by such lenders), instructing the transfer agent to Transfer any such shares of Common Stock subject to the pledge, hypothecation or grant into the facilities of The Depository Trust Company without restricted legends and cooperating in diligence or other matters as may reasonably requested by any Designating Stockholder in connection with a proposed Transfer.
4.2 Spin-Offs or Split-Offs. In the event that the Company effects the separation of any portion of its business into one or more entities (each, a “NewCo”), whether existing or newly formed, including without limitation by way of spin-off, split-off, carve-out, demerger, recapitalization, reorganization or similar transaction, and any Designating Stockholder will receive equity interests in any such NewCo as part of such separation, the Company shall cause any such NewCo to enter into a stockholders agreement with the Designating Stockholders that provides the Designating Stockholders with rights vis-à-vis such NewCo that are substantially identical to those set forth in this Agreement.
4.3 Expense Reimbursement. The Company shall, and shall cause its respective Subsidiaries to, pay directly or reimburse, or cause to be paid directly or reimbursed, the Designating Stockholders and each of their respective Affiliates the actual and reasonable out-of-pocket costs and expenses incurred or accrued by or on behalf the Designating Stockholders and their respective Affiliates in connection with the enforcement of rights or taking of actions relating to (i) this Agreement, (ii) the certificate of incorporation and bylaws (or equivalent documentation) of the Company or its Subsidiaries, including the LLC Agreement, or (iii) any registration rights agreements, subscription agreements, stockholders or investor rights agreements, voting agreements or other agreements entered into with the Company or any of its Subsidiaries in connection with direct or indirect investments by the Designating Stockholders or their respective Affiliates in, or financing by any of them of, the Company or any of its Subsidiaries (subject to any applicable limitations on expense reimbursement rights expressly set forth in such agreements). All payments or reimbursement for such expenses will be made by wire transfer in same-day funds to the bank account designated by the relevant Designating Stockholder or Affiliate thereof promptly upon or as soon as practicable following request for reimbursement and delivery to the Company of any supporting documentation reasonably requested by the Company.
ARTICLE V.
INDEMNIFICATION; LIABILITY INSURANCE
5.1 Indemnification of Designating Stockholders. (a) To the fullest extent permitted by law, the Company will, and will cause its Subsidiaries to, jointly and severally, indemnify and hold each Designating Stockholder, its Affiliates and any of such Designating Stockholder’s or its respective Affiliates’ respective partners, members, stockholders, directors, managers, officers, employees and agents (including any non-voting observer appointed or designated pursuant to this Agreement) of each of the foregoing (collectively, the “Indemnitees”) free and harmless from and against any and all liabilities, losses, damages and costs and out-of-pocket expenses in connection therewith (including reasonable attorneys’ fees and expenses) incurred by the Indemnitees or any of them before or after the date of this Agreement
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(collectively, the “Indemnified Liabilities”), arising out of any action, cause of action, suit, litigation, investigation, inquiry, arbitration or claim by any Person (other than the Company or any of its Subsidiaries) against any Indemnitee (each, an “Action”) arising directly or indirectly out of, or in any way relating to, (i) (x) any actual or alleged fiduciary or similar duties to the Company, any of its Subsidiaries or their respective current or former stockholders arising from such Designating Stockholder’s, or its Affiliates’ ownership of shares of Common Stock or other securities of the Company or any of its Subsidiaries, (y) such Designating Stockholder’s or its Affiliates’ control or ability to influence the Company or any of its Subsidiaries or (z) such Designating Stockholder’s or its Affiliates’ ownership of shares of Common Stock or other securities of the Company or any of its Subsidiaries; provided that the foregoing indemnification rights in this Section 5.1(a) shall not be available to the extent that (1) any such Indemnified Liabilities are incurred as a result of willful misconduct of such Indemnitee; or (2) such Indemnified Liabilities arise out of any breach of this Agreement by such Indemnitee or its Affiliates or other related Persons or the breach of any fiduciary or other duty or obligation of such Indemnitee to its direct or indirect equity holders, creditors or Affiliates or (ii) the business, operations, properties, assets or other rights or liabilities of the Company or any of its Subsidiaries; provided, however, that, if and to the extent that the foregoing undertaking may be unavailable or unenforceable for any reason, the Company will, and will cause its Subsidiaries to, jointly and severally, make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities that is permissible under applicable law. For the purposes of this Section 5.1, none of the circumstances described in the limitations contained in the immediately preceding sentence shall be deemed to apply absent a final non-appealable judgment of a court of competent jurisdiction to such effect, in which case to the extent any such limitation is so determined to apply to any Indemnitee as to any previously advanced indemnity payments made by the Company, then such payments shall be promptly repaid by such Indemnitee to the Company.
(b) To the fullest extent permitted by law, the Company will, and will cause its Subsidiaries to, jointly and severally, reimburse any Indemnitee for all reasonable costs and expenses (including reasonable attorneys’ fees and expenses and any other litigation-related expenses) as they are incurred in connection with investigating, preparing, pursuing, defending or assisting in the defense of any Action for which the Indemnitee would be entitled to indemnification under the terms of this Article V, or any action or proceeding arising therefrom, whether or not such Indemnitee is a party thereto. The Company or its Subsidiaries, in the defense of any Action for which an Indemnitee would be entitled to indemnification under the terms of this Article V, may, without the consent of such Indemnitee (which consent shall not be unreasonably withheld), consent to entry of any judgment or enter into any settlement if and only if it (i) includes as a term thereof the giving by the claimant or plaintiff therein to such Indemnitee of an unconditional release from all liability with respect to such Action and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of such Indemnitee, and provided that any sums payable in connection with such settlement are paid in full by the Company and/or its Subsidiaries.
5.2 Jointly Indemnifiable Claims. The Company acknowledges and agrees that the Company shall, and to the extent applicable shall cause its Subsidiaries to, be fully and primarily responsible for the payment to the Indemnitee in respect of Indemnified Liabilities in connection with any Jointly Indemnifiable Claims (as defined below), pursuant to and in
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accordance with (as applicable) the terms of (i) the Delaware General Corporation Law, as amended, (ii) the Restated Certificate of Incorporation, (iii) the bylaws, as amended, of the Company, (iv) any director or officer indemnification agreement, (v) this Agreement, (vi) any other agreement between the Company or any Subsidiary and the Indemnitee pursuant to which the Indemnitee is indemnified, (vii) the laws of the jurisdiction of incorporation or organization of any Subsidiary of the Company and/or (viii) 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 Subsidiary of the Company ((i) through (viii) collectively, the “Indemnification Sources”), irrespective of any right of recovery the Indemnitee may have from any corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise (other than the Company, any of its Subsidiaries or the insurer under and pursuant to an insurance policy of the Company or any of its Subsidiaries) from whom an Indemnitee may be entitled to indemnification with respect to which, in whole or in part, the Company or any of its Subsidiaries may also have an indemnification obligation (collectively, the “Indemnitee-Related Entities”). Under no circumstance shall the Company or any of its Subsidiaries be entitled to any right of subrogation or contribution by the Indemnitee-Related Entities and no right of advancement or recovery the Indemnitee may have from the Indemnitee-Related Entities shall reduce or otherwise alter the rights of the Indemnitee or the obligations of the Company or any of its Subsidiaries under the Indemnification Sources. In the event that any of the Indemnitee-Related Entities shall make any payment to the Indemnitee in respect of indemnification with respect to any Jointly Indemnifiable Claim, (x) the Company shall, and to the extent applicable shall cause its Subsidiaries to, reimburse the Indemnitee-Related Entity making such payment to the extent of such payment promptly upon written demand from such Indemnitee-Related Entity, (y) to the extent not previously and fully reimbursed by the Company and/or any of its Subsidiaries pursuant to clause (x), 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 Indemnitee against the Company and/or any of its Subsidiaries, as applicable, and (z) the Indemnitee 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 Indemnitee agree that each of the Indemnitee-Related Entities shall be third-party beneficiaries with respect to this Section 5.2, entitled to enforce this Section 5.2 as though each such Indemnitee-Related Entity were a party to this Agreement. The Company shall cause each of its Subsidiaries to perform the terms and obligations of this Section 5.2 as though each such Subsidiary was a party to this Agreement. For purposes of this Section 5.2, the term “Jointly Indemnifiable Claims” shall be broadly construed and shall include any Indemnified Liabilities for which the Indemnitee shall be entitled to indemnification from both (1) the Company and/or any of its Subsidiaries pursuant to the Indemnification Sources, on the one hand, and (2) any Indemnitee-Related Entity pursuant to any other agreement between any Indemnitee-Related Entity and the Indemnitee pursuant to which the Indemnitee 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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5.3 Non-Exclusive Right. The rights of any Indemnitee to indemnification in this Article V will be in addition to any other rights any such Person may have under any other Section of this Agreement or any other agreement or instrument to which such Indemnitee is or becomes a party or is or otherwise becomes a beneficiary or under law or regulation or under the certificate of incorporation or bylaws (or equivalent governing documents) of the Company or any of its Subsidiaries.
5.4 Directors and Officers Insurance. The Company shall use its reasonable best efforts to purchase and maintain a policy or policies of directors’ and officers’ liability insurance which insurance shall cover each member of the Board.
5.5 Other Rights of Designees. Except as provided in Section 2.2, each Designee serving on the Board shall be entitled to the same rights and privileges applicable to all other members of the Board generally or to which all such members of the Board are entitled. In furtherance of the foregoing, the Company shall indemnify, exculpate, and reimburse fees and expenses of the Designees and, subject to execution of an observer agreement, non-voting observers (including by entering into an indemnification agreement in a form substantially similar to the Company’s form director indemnification agreement) and provide the Designees with director and officer insurance to the same extent it indemnifies, exculpates, reimburses and provides insurance for the other members of the Board pursuant to the Restated Certificate of Incorporation or bylaws of the Company, applicable law or otherwise.
ARTICLE VI.
GENERAL PROVISIONS
6.1 Termination. Subject to the early termination of any provision as a result of an amendment to this Agreement agreed to by the Board and the Designating Stockholders, as provided under Section 6.3, and except for Section 3.1, Section 3.2 and Section 3.3 hereof, which shall terminate as provided in those Sections, and the rest of this Agreement, excluding Article VI hereof, will terminate upon the delivery of written notice by the Designating Stockholder Representative to the Company requesting that this Agreement terminate. The VCOC Investors shall advise the Company when they collectively first cease to Beneficially Own any Common Stock (or other securities of the Company into which such Common Stock may be converted or for which such Common Stock may be exchanged), whereupon Section 3.3 hereof shall terminate.
6.2 Notices. Any notice, designation, request, request for consent or consent provided for in this Agreement shall be in writing and shall be either personally delivered, sent by electronic mail or sent by reputable overnight courier service (charges prepaid) to the Company at the address set forth below and to any other recipient at the address indicated on the Company’s records, or at such address or to the attention of such other Person as the recipient party has specified by prior written notice to the sending party. Notices and other such documents will be deemed to have been given or made hereunder when delivered personally or
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sent by electronic mail and one (1) Business Day after deposit with a reputable overnight courier service.
The Company’s address is: |
Jersey Mike’s Subs Inc. |
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Attention: Email: |
Scott G. McLester |
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With a copy to: [email address] |
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Each Designating Stockholder’s address is: |
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Blackstone Inc. |
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Attention:
Email: |
Devon L. Rinker Michael J. Staub [email addresses] |
6.3 Amendment; Waiver.
(a) The terms and provisions of this Agreement may be modified or amended only with the written approval of the Company and the Designating Stockholder Representative.
(b) Except as expressly set forth in this Agreement, neither the failure nor delay on the part of any party hereto to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy power or privilege preclude any other or further exercise of the same or of any other right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence.
(c) No party shall be deemed to have waived any claim arising out of this Agreement, or any right, remedy, power or privilege under this Agreement, unless the waiver of such claim, right, remedy, power or privilege is expressly set forth in a written instrument duly executed and delivered on behalf of such party; and any such waiver shall not be applicable or have any effect except in the specific instance in which it is given.
(d) Each Designating Stockholder, in its sole discretion, may withdraw from this Agreement at any time by written notice to the Company. Thereafter, such Designating Stockholder shall cease to be a party to this Agreement, shall have no further rights or obligations hereunder and none of the terms or provisions hereof shall have any continuing force and effect with respect to such Designating Stockholder.
(e) Any party hereto may unilaterally waive any of its rights hereunder in a signed writing delivered to the Company.
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6.4 Further Assurances. The parties hereto will sign such further documents, cause such meetings to be held, resolutions passed, exercise their votes and do and perform and cause to be done such further acts and things necessary, proper or advisable in order to give full effect to this Agreement and every provision hereof. To the fullest extent permitted by law, the Company shall not directly or indirectly take any action that is intended to, or would reasonably be expected to result in, any Designating Stockholder being deprived of the rights contemplated by this Agreement.
6.5 Assignment. This Agreement may not be assigned without the express prior written consent of the other party hereto, and any attempted assignment, without such consent, will be null and void; provided, however, that, without the prior written consent of any other party hereto, a Designating Stockholder may assign or transfer, in its sole discretion, its rights and obligations under this Agreement, in whole or in part, to any transferee (“Permitted Transferee”) of Common Stock and/or Common Units, whereupon such Permitted Transferee shall become a party to this Agreement, so long as such Permitted Transferee, if not already a party to this Agreement, executes and delivers to the Company a joinder to this Agreement evidencing its agreement to become a party to and to be bound by certain or all, as applicable, of the provisions of this Agreement as a Designating Stockholder hereunder, whereupon such Permitted Transferee shall be deemed a “Designating Stockholder” hereunder. This Agreement will inure to the benefit of and be binding on the parties hereto and their respective successors and permitted assigns.
6.6 Third Parties. Except as provided for in Article II, Article III and Article IV with respect to any Designating Stockholder, Article V with respect to any Indemnitee or in Section 6.16 with respect to a Non-Recourse Party, this Agreement does not create any rights, claims or benefits inuring to any person that is not a party hereto nor create or establish any third party beneficiary hereto.
6.7 Governing Law. THIS AGREEMENT AND ITS ENFORCEMENT AND ANY CONTROVERSY ARISING OUT OF OR RELATING TO THE MAKING OR PERFORMANCE OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE.
6.8 Jurisdiction; Waiver of Jury Trial. Each party hereto hereby (i) agrees that any action, directly or indirectly, arising out of, under or relating to this Agreement shall exclusively be brought in and shall exclusively be heard and determined in the Delaware Chancery Court, if such court shall not have jurisdiction, any federal court located in the State of Delaware, or, if neither of such courts shall have jurisdiction, any other Delaware state court, and (ii) solely in connection with the action(s) contemplated by subsection (i) hereof, (A) irrevocably and unconditionally consents and submits to the exclusive jurisdiction of the courts identified in subsection (i) hereof, (B) irrevocably and unconditionally waives any objection to the laying of venue in any of the courts identified in clause (i) of this Section 6.8, (C) irrevocably and unconditionally waives and agrees not to plead or claim that any of the courts identified in such clause (i) is an inconvenient forum or does not have personal jurisdiction over any party hereto, and (D) agrees that mailing of process or other papers in connection with any such action in the manner provided herein or in such other manner as may be permitted by applicable law shall be valid and sufficient service thereof. Each party hereto hereby irrevocably
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waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any claim or action directly or indirectly arising out of, under or in connection with this Agreement or the services contemplated hereby.
6.9 Specific Performance. Each party hereto acknowledges and agrees that in the event of any breach of this Agreement by any of them, the other parties hereto would be irreparably harmed and could not be made whole by monetary damages. Each party accordingly agrees to waive the defense in any action for specific performance that a remedy at law would be adequate and agrees that the parties, in addition to any other remedy to which they may be entitled at law or in equity, shall be entitled to specific performance of this Agreement without the posting of a bond.
6.10 Entire Agreement. This Agreement sets forth the entire understanding of the parties hereto with respect to the subject matter hereof. There are no agreements, representations, warranties, covenants or understandings with respect to the subject matter hereof or thereof. This Agreement supersedes all other prior agreements and understandings between the parties with respect to such subject matter.
6.11 Severability. If any provision of this Agreement, or the application of such provision to any Person or circumstance or in any jurisdiction, shall be held to be invalid or unenforceable to any extent, (i) the remainder of this Agreement shall not be affected thereby, and each other provision hereof shall be valid and enforceable to the fullest extent permitted by law, (ii) as to such Person or circumstance or in such jurisdiction such provision shall be reformed to be valid and enforceable to the fullest extent permitted by law, and (iii) the application of such provision to other Persons or circumstances or in other jurisdictions shall not be affected thereby.
6.12 Table of Contents, Headings and Captions. The table of contents, headings, subheadings and captions contained in this Agreement are included for convenience of reference only, and in no way define, limit or describe the scope of this Agreement or the intent of any provision hereof.
6.13 Grant of Consent. Any vote, consent or approval of, or designation by, or other action of, the Designating Stockholder Representative hereunder shall be effective if notice of such vote, consent, approval, designation or action is provided in accordance with Section 6.2 hereof by the Designating Stockholder Representative as of the latest date any such notice is so provided to the Company.
6.14 Counterparts. This Agreement and any amendment hereto may be executed in any number of counterparts (including counterparts transmitted electronically in portable document format (pdf), or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) with the same effect as if the signatures to each counterpart were upon a single instrument, all of which will be an original and together shall constitute a single instrument. The parties hereto irrevocably and unreservedly agree that this Agreement may be executed by way of electronic signatures and the parties agree that this
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Agreement, or any part thereof, shall not be challenged or denied any legal effect, validity and/or enforceability solely on the ground that it is in the form of an electronic record.
6.15 Effectiveness. This Agreement shall become effective as of the date hereof, among the Company, Jersey Mike’s Holdings and the other parties hereto.
6.16 No Recourse. This Agreement may only be enforced against, and any claims or cause of action that may be based upon, arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement, the transactions contemplated hereby or the subject matter hereof may only be made against the parties hereto and no Person who is not a named party to this Agreement, including any past, present or future Affiliate, Portfolio Company, director, officer, employee, incorporator, member, manager, partner, stockholder, agent, attorney or representative of any named party hereto or any past, present or future Affiliate, Portfolio Company, director, officer, employee, incorporator, member, manager, partner, stockholder, agent, attorney or representative of any of the foregoing (each, a “Non-Recourse Party”) shall have any liability (whether in contract or in tort, in law or in equity, or otherwise based upon any theory that seeks to impose liability of an entity party against its owners or Affiliates) for any obligations or liabilities arising under, in connection with or related to this Agreement or for any claim based on, in respect of, or by reason of, this Agreement or the transactions contemplated hereby and each party hereby waives and releases all such liabilities against any such Non-Recourse Party. Without limiting the rights of any party against the other parties hereto, in no event shall any party or any of its Affiliates seek to enforce this Agreement against, make any claims for breach of this Agreement against, or seek to recover monetary damages from, any Non-Recourse Party. Each Non-Recourse Party is expressly intended as third-party beneficiaries of this Section 6.16. Notwithstanding the foregoing, nothing in this Section 6.16 shall limit any Person’s liability to the extent such Person has committed fraud.
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Exhibit 3.2
AMENDED AND RESTATED
BYLAWS
OF
JERSEY MIKE’S SUBS INC.
ARTICLE I
Offices
Section 1.01 Registered Office. The registered office and registered agent of Jersey Mike’s Subs Inc. (the “Corporation”) in the State of Delaware shall be as set forth in the Corporation’s certificate of incorporation as then in effect (as the same may be amended and/or restated from time to time, the “Restated Certificate of Incorporation”). The Corporation may also have offices in such other places in the United States or elsewhere as the Board of Directors of the Corporation (the “Board of Directors”) may, from time to time, determine or as the business of the Corporation may require as determined by any officer of the Corporation.
ARTICLE II
Meetings of Stockholders
Section 2.01 Annual Meetings. Annual meetings of stockholders may be held at such place, if any, either within or without the State of Delaware, and at such time and date as the Board of Directors shall determine and state in the notice of meeting. The Board of Directors may, in its sole discretion, determine that annual meetings of the stockholders shall not be held at any place, but may instead be held solely by means of remote communication as described in Section 2.11 of these Amended and Restated Bylaws (as the same may be amended and/or restated from time to time, the “Bylaws”) in accordance with Section 211(a)(2) of the General Corporation Law of the State of Delaware (the “DGCL”). The Board of Directors may postpone, reschedule or cancel any annual meeting of stockholders previously scheduled by the Board of Directors.
Section 2.02 Special Meetings. Special meetings of the stockholders may only be called in the manner provided in the Restated Certificate of Incorporation and may be held at such place, if any, either within or without the State of Delaware, and at such time and date as the Board of Directors, the Chair of the Board of Directors (the “Chair”) or the Chief Executive Officer of the Corporation (the “Chief Executive Officer”) shall determine and state in the notice of such meeting. The Board of Directors may, in its sole discretion, determine that special meetings of the stockholders shall not be held at any place, but may instead be held solely by means of remote communication as described in Section 2.11 of these Bylaws in accordance with Section 211(a)(2) of the DGCL. The Board of Directors may postpone, reschedule or cancel any special meeting of the stockholders previously scheduled by the Board of Directors, the Chair or the Chief Executive Officer; provided, however, that notwithstanding anything to the contrary herein, with respect to any special meeting of stockholders previously scheduled by the Board of Directors or the Chair at the request of a Designating Stockholder (as defined in the
Restated Certificate of Incorporation), the Board of Directors shall not postpone, reschedule or cancel such special meeting without the approval of all directors then in office unless such Designating Stockholder has consented to such postponement, rescheduling or cancellation.
Section 2.03 Notice of Stockholder Business and Nominations.
(A) Annual Meetings of Stockholders.
(1) Nominations of persons for election to the Board of Directors and the proposal of other business to be considered by the stockholders may be made at an annual meeting of stockholders only (a) as provided in the Stockholders Agreement (as defined in the Restated Certificate of Incorporation) (with respect to nominations of persons for election to the Board of Directors only), (b) pursuant to the Corporation’s notice of meeting (or any supplement thereto) delivered pursuant to Section 2.04 of Article II of these Bylaws, (c) by or at the direction of the Board of Directors or any authorized committee thereof or (d) by any stockholder of the Corporation who is entitled to vote at the meeting, who, subject to paragraph (C)(4) of this Section 2.03, complied with the notice procedures set forth in paragraphs (A)(2) and (A)(3) of this Section 2.03 and who was a stockholder of record at the time such notice is delivered to the Secretary of the Corporation.
(2) For nominations or other business to be properly brought before an annual meeting by a stockholder pursuant to clause (d) of paragraph (A)(1) of this Section 2.03, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation, and, in the case of business other than nominations of persons for election to the Board of Directors, such other business must constitute a proper matter for stockholder action. To be timely, a stockholder’s notice shall be delivered to the Secretary of the Corporation at the principal executive offices of the Corporation not later than the close of business (as defined in Section 2.03(C)(2) below) on the 90th day nor earlier than the 120th day prior to the first anniversary of the date of the preceding year’s annual meeting (which date shall, for purposes of the Corporation’s first annual meeting of stockholders after its shares of Common Stock (as defined in the Restated Certificate of Incorporation) are first publicly traded, be deemed to have occurred on June 1 of the preceding calendar year); provided, however, that in the event that the date of the annual meeting is advanced by more than thirty (30) days, or delayed by more than seventy (70) days, from the anniversary date of the previous year’s meeting, or if no annual meeting required to be held was held in the preceding year, notice by the stockholder to be timely must be so delivered not earlier than the one hundred and twentieth (120th) day prior to such annual meeting and not later than the close of business on the later of the ninetieth (90th) day prior to such annual meeting or the 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. The number of nominees a stockholder may nominate for election at the annual meeting on such stockholder’s own behalf (or in the case of a stockholder giving the notice of on behalf of a beneficial owner, the number of nominees a stockholder may nominate for election at the annual meeting on behalf of such beneficial owner) shall not exceed the number of directors to be elected at such annual meeting. Public announcement of an adjournment or postponement of an annual meeting shall not commence a new time period (or extend any time period) for the giving of a stockholder’s notice. Notwithstanding anything in this Section 2.03(A)(2) to the contrary, if the number of directors to be elected to the Board of Directors at an annual meeting is increased
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after the time period for which nominations would otherwise be due under this Section and there is no public announcement by the Corporation naming all of the nominees for director or specifying the size of the increased Board of Directors at least one hundred (100) calendar days prior to the first anniversary of the prior year’s annual meeting of stockholders, then a stockholder’s notice required by this Section shall be considered timely, but only with respect to nominees for any new positions created by such increase, if it is received by the Secretary of the Corporation not later than the close of business on the tenth (10th) calendar day following the day on which such public announcement is first made by the Corporation.
(3) A stockholder’s notice delivered pursuant to this Section 2.03 shall set forth:
(a) as to each person whom the stockholder proposes to nominate for election or re-election as a director:
(b) as to any other business that the stockholder proposes to bring before the meeting: a brief description of the business desired to be brought before the meeting, the text of the proposal or business (including the text of any resolutions proposed for
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consideration and, in the event that such business includes a proposal to amend these Bylaws, the language of the proposed amendment), the reasons for conducting such business at the meeting and any material interest in such business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made;
(c) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made:
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(d) a description of any agreement, arrangement or understanding with respect to the nomination or proposal and/or the voting of shares of any class or series of stock of the Corporation between or among the stockholder giving the notice, the beneficial owner, if any, on whose behalf the nomination or proposal is made, any of their respective affiliates or associates (each as defined in Section 2.03(C)(2) below) and/or any other person (collectively, “proponent persons”), including, in the case of a nomination, the nominee, including any agreements, arrangements or understandings relating to any compensation or payments to be paid to any such proposed nominee(s), pertaining to the nomination(s) or other business proposed to be brought before the meeting of stockholders (which description shall identify the name of each other person who is party to such an agreement, arrangement or understanding);
(e) a description of any agreement, arrangement or understanding (including without limitation any contract to purchase or sell, acquisition or grant of any option, right or warrant to purchase or sell, swap or other instrument) to which any proponent person is a party, the intent or effect of which may be (i) to transfer to or from any proponent person, in whole or in part, any of the economic consequences of ownership of any security of the Corporation, (ii) to increase or decrease the voting power of any proponent person with respect to shares of any class or series of stock of the Corporation and/or (iii) to provide any proponent person, directly or indirectly, with the opportunity to profit or share in any profit derived from, or to otherwise benefit economically from, any increase or decrease in the value of any security of the Corporation;
(f) a description of any proxy (other than a revocable proxy given in response to a public proxy solicitation made pursuant to, and in accordance with, the Exchange Act), agreement, arrangement, or understanding pursuant to which such stockholder or beneficial owner has or shares a right, directly or indirectly, to vote any shares of any class or series of capital stock of the Corporation;
(g) a description of any agreement, arrangement or understanding with respect to any rights to dividends or other distributions on the shares of any class or series of capital stock of the Corporation, directly or indirectly, owned beneficially by such stockholder or beneficial owner that are separated or separable pursuant to such agreement, arraignment or understanding from the underlying shares of the Corporation; and
(h) the names and addresses of other stockholders and beneficial owners actually known (without any obligation of inquiry) by any stockholder giving the notice (and/or beneficial owner, if any, on whose behalf the nomination or proposal is made) to support financially such nomination or proposal, and to the extent known, the class and number of all shares of the Corporation’s capital stock owned beneficially and/or of record by such other stockholder(s) and beneficial owner(s). A stockholder providing notice of a proposed nomination for election to the Board of Directors or other business proposed to be brought before a meeting (whether given pursuant to this paragraph (A)(3) or paragraph (B) of this Section 2.03 of these Bylaws) shall update and supplement such notice from time to time to the extent
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necessary so that the information provided or required to be provided in such notice shall be true and correct (x) as of the record date for determining the stockholders entitled to notice of the meeting and (y) as of the date that is fifteen (15) days prior to the meeting or any adjournment or postponement thereof. For the avoidance of doubt, the obligation to update and supplement as set forth in this Section 2.03(A)(3) or any other section of these Bylaws shall not limit the Corporation’s rights with respect to any deficiencies in any stockholder’s notice, including, without limitation, any representation required herein, extend any applicable deadlines under these Bylaws or enable or be deemed to permit a stockholder who has previously submitted a stockholder’s notice under these Bylaws to amend or update any proposal 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 stockholders. Any such update and supplement shall be delivered in writing to the Secretary of the Corporation at the principal executive offices of the Corporation (i) in the case of any update and supplement required to be made as of the record date for notice of the meeting, not later than five (5) days after the later of such record date and the public announcement of such record date and (ii) in the case of any update or supplement required to be made as of fifteen (15) days prior to the meeting or adjournment or postponement thereof, not later than ten (10) days prior to the date of the meeting or any adjournment or postponement thereof. The Corporation may require any proposed nominee to furnish, within ten (10) days of a request therefor, such other information as it may reasonably require to determine whether such proposed nominee is qualified under the Restated Certificate of Incorporation, these Bylaws, the rules or regulations of any stock exchange applicable to the Corporation, or any law or regulation applicable to the Corporation to serve as a director and/or independent director of the Corporation.
(B) Special Meetings of Stockholders. Only such business (including, if applicable, the election of specific individuals to fill vacancies or newly created directorships on the Board of Directors) shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting. At any time that stockholders are not prohibited from filling vacancies or newly created directorships on the Board of Directors, nominations of persons for the election to the Board of Directors to fill any vacancy or unfilled newly created directorship may be made at a special meeting of stockholders at which any proposal to fill any vacancy or unfilled newly created directorship is to be presented to the stockholders (1) as provided in the Stockholders Agreement, (2) by or at the direction of the Board of Directors or any committee thereof or (3) by any stockholder of the Corporation who was a stockholder of record at the time such notice is delivered to the Secretary of the Corporation and at the time of the meeting, is entitled to vote at the meeting on such matters, and who (subject to paragraph (C)(4) of this Section 2.03) complies with the notice procedures set forth in paragraphs (A)(2) and (A)(3) of this Section 2.03 (except to the extent inconsistent with this paragraph (B) relating to the time period during which the stockholder must deliver the initial notice). The number of nominees a stockholder may nominate for election at the special meeting on such stockholder’s own behalf (or in the case of a stockholder giving the notice on behalf of a beneficial owner, the number of nominees a stockholder may nominate for election at the special meeting on behalf of such beneficial owner) shall not exceed the number of directors to be elected at such special meeting. In the event the Corporation calls a special meeting of stockholders for the purpose of submitting a proposal to stockholders for the election of one or more directors to fill any vacancy or newly created directorship on the Board of Directors, any such stockholder entitled to vote on such matter may nominate a person or persons (as the case
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may be) for election to such position(s) as specified in the Corporation’s notice of meeting only if the stockholder delivers a written notice complying with the applicable requirements in paragraphs (A)(2) and (A)(3) of this Section 2.03 and this paragraph (B) to the Secretary at the principal executive offices of the Corporation not earlier than the one hundred and twentieth (120th) day prior to such special meeting and not later than the close of business on the later of the ninetieth (90th) day prior to such special meeting or the tenth (10th) day following the day on which the Corporation first makes a public announcement of the date of the special meeting at which directors are to be elected. In no event shall the public announcement of an adjournment or postponement of a special meeting commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above.
(C) General.
(1) Except as provided in paragraph (C)(4) of this Section 2.03, only such persons who are nominated in accordance with the procedures set forth in this Section 2.03 or the Stockholders Agreement shall be eligible to serve as directors and only such business shall be conducted at an annual or special meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this Section 2.03. Except as otherwise provided by the DGCL, the Restated Certificate of Incorporation or these Bylaws, the chair of the meeting, subject to the supervision, discretion and control of the Board of Directors (and, in advance of the meeting of stockholders, the Board of Directors or a duly authorized committee thereof) shall, in addition to making any other determination that may be appropriate for the conduct of the meeting, have the power and duty to determine whether a nomination or any 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 these Bylaws (including whether the stockholder or beneficial owner, if any, on whose behalf the nomination or proposal is made, solicited (or is part of a group which solicited) or did not so solicit, as the case may be, proxies or votes in support of such stockholder’s nominee or proposal in compliance with such stockholder’s representation as required by clause (A)(3)(c)(iv) of this Section 2.03) and, if any proposed nomination or business is not in compliance with these Bylaws, to declare that such defective proposal or nomination shall be disregarded. 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 at the meeting by the chair of the meeting. The Board of Directors 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 of Directors, the chair of the meeting 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 chair, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board of Directors or prescribed by the chair 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 chair of the meeting shall determine; (iv) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (v) limitations on the time allotted to questions or comments by participants. Notwithstanding the foregoing provisions of this Section 2.03, unless otherwise
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required by law, if the stockholder (or a qualified representative of the stockholder) does not appear at the annual or special meeting of stockholders of the Corporation to present a nomination or business, such nomination shall be disregarded and such proposed business shall not be transacted notwithstanding that such proposal or nomination is set forth in the notice of meeting or other proxy materials and notwithstanding that proxies in respect of such vote may have been received by the Corporation. For purposes of this Section 2.03, to be considered a qualified representative of the stockholder, a person must be a duly authorized officer, manager 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 proxy at the meeting of stockholders and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the meeting of stockholders. Unless and to the extent determined by the Board of Directors or the chair of the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure. Notwithstanding anything to the contrary in these Bylaws, unless otherwise required by law, if any stockholder or proponent 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 stockholder 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 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 stockholder or proponent 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 proponent person has met the requirements of Rule 14a-19(a)(3) promulgated under the Exchange Act.
(2) Whenever used in these Bylaws, “public announcement” shall mean disclosure (a) in a press release released by the Corporation, provided such press release is released by the Corporation following its customary procedures, is reported by the Dow Jones News Service, Associated Press, Business Wire or PR Newswire or comparable national news service, or is generally available on internet news sites, or (b) in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Sections 13, 14 or 15(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2.03, the term “close of business” shall mean 6:00 p.m. local time at the principal executive offices of the Corporation on any calendar day, whether or not the day is a business day, and the term “affiliate” shall have the meaning given to such term under Rule 405 (“Rule 405”) promulgated under the Securities Act of 1933, as amended, and the term “associate” shall have the meaning given to such term under Rule 405; provided that the term “partner” as used in the definition of “associate” thereunder shall not include any limited partner that is not involved in the management of the relevant partnership.
(3) Notwithstanding the foregoing provisions of this Section 2.03, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules
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and regulations promulgated thereunder with respect to the matters set forth in this Section 2.03; provided, however, that, to the fullest extent permitted by law, any references in these Bylaws to the Exchange Act or the rules and regulations promulgated thereunder are not intended to and shall not limit any requirements applicable to nominations or proposals as to any other business to be considered pursuant to these Bylaws (including paragraphs (A)(1)(d) and (B) of this Section 2.03), and compliance with paragraphs (A)(1)(d) and (B) of this Section 2.03 of these Bylaws shall be the exclusive means for a stockholder to make nominations or submit other business. Nothing in these Bylaws shall be deemed to affect any rights of the holders of any class or series of stock having a preference over the Common Stock as to dividends or upon liquidation to elect directors under specified circumstances.
(4) Notwithstanding anything to the contrary contained in this Section 2.03, for as long as the Stockholders Agreement remains in effect and the Designating Stockholders (as defined in the Stockholders Agreement) (which, as used herein, shall include the Designating Stockholder Representative (as defined in the Stockholders Agreement) by or through which the Designating Stockholders may be acting) has the right to nominate at least one Designee (as defined in the Stockholders Agreement) thereunder, the parties to the Stockholders Agreement (to the extent then subject to the Stockholders Agreement) shall not be subject to the notice procedures set forth in paragraphs (A)(2), (A)(3) or (B) of this Section 2.03 with respect to any annual or special meeting of stockholders.
(5) Any stockholder directly or indirectly soliciting proxies from other stockholders must use a proxy card color other than white, which shall be reserved for the exclusive use by the Board of Directors.
Section 2.04 Notice of Meetings. Whenever stockholders are required or permitted to take any action at a meeting, notice stating the place, if any, date and time of the meeting, the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such meeting, the record date for determining the stockholders entitled to vote at the meeting, if such date is different from the record date for determining stockholders entitled to notice of the meeting, and, in the case of a special meeting, the purposes for which the meeting is called, shall be given to each stockholder of record entitled to vote thereat as of the record date for determining the stockholders entitled to notice of the meeting. Unless otherwise provided by law, the Restated Certificate of Incorporation or these Bylaws, the notice of any meeting shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder entitled to vote at such meeting as of the record date for determining the stockholders entitled to notice of the meeting.
Section 2.05 Quorum. Unless otherwise required by law, the Restated Certificate of Incorporation or the rules of any stock exchange upon which the Corporation’s securities are listed, the holders of record of a majority of the voting power of the issued and outstanding shares of capital stock of the Corporation entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum for the transaction of business at all meetings of stockholders. Notwithstanding the foregoing, where a separate vote by a class or series or classes or series is required, a majority in voting power of the outstanding shares of such class or series or classes or series, present in person or represented by proxy, shall constitute a quorum
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entitled to take action with respect to the vote on that matter. Once a quorum is present to organize a meeting, it shall not be broken by the subsequent withdrawal of any stockholders.
Section 2.06 Voting. Except as otherwise provided by or pursuant to the provisions of the Restated Certificate of Incorporation, each stockholder entitled to vote at any meeting of stockholders shall be entitled to one vote for each share of stock held by such stockholder that has voting power upon the matters in question. Each stockholder entitled to vote at a meeting of stockholders or to express consent to corporate action without a meeting may authorize another person or persons to act for such stockholder by proxy in any manner provided under Section 212(c) of the DGCL or as otherwise provided under applicable law, but no such proxy shall be voted or acted upon after three (3) years from its date, unless the proxy provides for a longer period. A proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A stockholder may revoke any proxy that is not irrevocable by attending the meeting and voting in person or by delivering to the Secretary of the Corporation a revocation of the proxy or a new proxy bearing a later date. Unless required by the Restated Certificate of Incorporation or applicable law, or determined by the chair of the meeting to be advisable, the vote on any question need not be by ballot. On a vote by ballot, each ballot shall be signed by the stockholder voting, or by such stockholder’s proxy, if there be such proxy. When a quorum is present or represented at any meeting, the affirmative vote of the holders of a majority of the votes cast on a proposal (which, for the avoidance of doubt, shall only include votes cast for or against the proposal and shall exclude abstentions and broker non-votes) shall be required to approve such proposal, unless the question is one upon which, by express provision of applicable law, of the rules or regulations of any stock exchange applicable to the Corporation, of any regulation applicable to the Corporation or its securities, of the Restated Certificate of Incorporation or of these Bylaws, a different or minimum vote is required, in which case such express provision shall govern and control the decision of such question. Notwithstanding the foregoing sentence and subject to the Restated Certificate of Incorporation, all elections of directors shall be determined by a plurality of the votes cast in respect of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors.
Section 2.07 Chair of Meetings. The Chair, if one is elected, or, in the Chair’s absence or disability or refusal to act, the Chief Executive Officer, or in the absence, disability or refusal to act of the Chair and the Chief Executive Officer, a director or officer designated by the Board of Directors shall be the chair of the meeting and, as such, preside at all meetings of the stockholders.
Section 2.08 Secretary of Meetings. The Secretary of the Corporation shall act as Secretary at all meetings of the stockholders. In the absence or disability or refusal to act of the Secretary, the Assistant Secretary shall act as the Secretary or the Chair, the Chief Executive Officer or the chair of the meeting shall appoint a person to act as Secretary at such meetings.
Section 2.09 Consent of Stockholders in Lieu of Meeting. Any action required or permitted to be taken at any annual or special meeting of stockholders of the Corporation may be taken without a meeting, without prior notice and without a vote only to the extent permitted by and in the manner provided in the Restated Certificate of Incorporation and in accordance with applicable law.
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Section 2.10 Adjournment. At any meeting of stockholders of the Corporation, if less than a quorum is present, the chair of the meeting or stockholders holding a majority in voting power of the shares of stock of the Corporation, present in person or by proxy and entitled to vote thereon, shall have the power to adjourn the meeting from time to time. Any meeting of stockholders of the Corporation may be adjourned by the chair of the meeting or the stockholders (including to address a technical failure to convene or continue a meeting using remote communication), and no notice of the adjourned meeting shall be required to be given if the time and place, if any, thereof and the means of remote communication, if any, by which stockholders and proxyholders may be deemed present in person and may vote at such 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 or (iii) set forth in the notice of meeting given in accordance with Section 2.04. Any business may be transacted at the adjourned meeting that might have been transacted at the meeting originally noticed. Notwithstanding the foregoing, (i) if 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 and (ii) if after the adjournment a new record date for determination of stockholders entitled to vote is fixed for the adjourned meeting, the Board of Directors 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 entitled to vote at such adjourned meeting as of the record date so fixed for notice of such adjourned meeting.
Section 2.11 Remote Communication. If authorized by the Board of Directors in its sole discretion, and subject to such guidelines and procedures as the Board of Directors may adopt, stockholders and proxyholders not physically present at a meeting of stockholders may, by means of remote communication:
(a) participate in a meeting of stockholders; and
(b) be deemed present in person and vote at a meeting of stockholders whether such meeting is to be held at a designated place or solely by means of remote communication;
provided, that
(i) the Corporation shall implement reasonable measures to verify that each person deemed present and permitted to vote at the meeting by means of remote communication is a stockholder or proxyholder;
(ii) the Corporation shall implement reasonable measures to provide such stockholders and proxyholders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the stockholders, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with such proceedings; and
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(iii) if any stockholder or proxyholder votes or takes other action at the meeting by means of remote communication, a record of such vote or other action shall be maintained by the Corporation.
Section 2.12 Inspectors of Election. The Corporation may, and shall if required by law, in advance of any meeting of stockholders, appoint one or more inspectors of election, who may be employees of the Corporation, to act at the meeting or any adjournment thereof and to make a written report thereof. The Corporation may designate one or more persons as alternate inspectors to replace any inspector who fails to act. In the event that no inspector so appointed or designated is able to act at a meeting of stockholders, the chair of the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of such inspector’s duties, shall take and sign an oath to execute faithfully the duties of inspector with strict impartiality and according to the best of such inspector’s ability. The inspector or inspectors so appointed or designated shall (i) ascertain the number of shares of capital stock of the Corporation outstanding and the voting power of each such share, (ii) determine the shares of capital stock of the Corporation represented at the meeting and the validity of proxies and ballots, (iii) count all votes and ballots, (iv) determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors and (v) certify their determination of the number of shares of capital stock of the Corporation represented at the meeting and such inspectors’ count of all votes and ballots. Such certification and report shall specify such other information as may be required by law. In determining the validity and counting of proxies and ballots cast at any meeting of stockholders of the Corporation, the inspectors may consider such information as is permitted by applicable law. No person who is a candidate for an office at an election may serve as an inspector at such election.
Section 2.13 Delivery to the Corporation. Whenever this Article II requires one or more persons (including a record or beneficial owner of stock) other than any party to the Stockholders Agreement 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), except as otherwise requested or consented to by the Corporation, 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 III
Board of Directors
Section 3.01 Powers. Except as otherwise provided by the Restated Certificate of Incorporation or the DGCL, the business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors. The Board of Directors may exercise all such authority and powers of the Corporation and do all such lawful acts and things as are not by the DGCL or the Restated Certificate of Incorporation directed or required to be exercised or done by the stockholders.
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Section 3.02 Number and Term; Chair. Subject to the Restated Certificate of Incorporation and the Stockholders Agreement, the number of directors shall be fixed exclusively by resolution of the Board of Directors. Directors shall be elected by the stockholders at their annual meeting, and the term of each director so elected shall be as set forth in the Restated Certificate of Incorporation. Directors need not be stockholders. The Board of Directors shall elect from its ranks a Chair, who shall have the powers and perform such duties as provided in these Bylaws and as the Board of Directors may from time to time prescribe. The Chair shall preside at all meetings of the Board of Directors at which the Chair is present. If the Chair is not present at a meeting of the Board of Directors, the Chief Executive Officer (if the Chief Executive Officer is a director and is not also the Chair) shall preside at such meeting, and, if the Chief Executive Officer is not present at such meeting or is not a director, a majority of the directors present at such meeting shall designate one (1) of their members to preside over such meeting.
Section 3.03 Resignations. Any director may resign at any time upon notice given in writing or by electronic transmission to the Board of Directors, the Chair, the Chief Executive Officer or the Secretary of the Corporation. The resignation shall take effect at the time or upon the happening of any event specified therein, and if no such time or event is specified, at the time of its receipt. The acceptance of a resignation shall not be necessary to make it effective unless otherwise expressly provided in the resignation.
Section 3.04 Removal. Directors of the Corporation may be removed in the manner provided in the Restated Certificate of Incorporation and applicable law.
Section 3.05 Vacancies and Newly Created Directorships. Except as otherwise provided by law and subject to the Stockholders Agreement, vacancies occurring in any directorship (whether by death, resignation, retirement, disqualification, removal or other cause) and newly created directorships resulting from any increase in the number of directors shall be filled in accordance with the Restated Certificate of Incorporation. Any director elected to fill a vacancy or newly created directorship shall hold office until the next annual meeting for the election of directors and until such director’s successor shall be elected and qualified, or until such director’s earlier death, resignation, retirement, disqualification or removal.
Section 3.06 Meetings. Regular meetings of the Board of Directors may be held at such places, if any, and times as shall be determined from time to time by the Board of Directors. Special meetings of the Board of Directors may be called by the Chief Executive Officer of the Corporation or the Chair, and shall be called by the Chief Executive Officer or the Secretary of the Corporation if directed by a majority of the members of the Board of Directors then in office or a Designating Stockholder (as long as the Designating Stockholder has rights to designate members of the Board of Directors under the Stockholders Agreement) and shall be at such places and times as they or he or she shall fix. Notice need not be given of regular meetings of the Board of Directors. At least twenty-four (24) hours before each special meeting of the Board of Directors, either written notice, notice by electronic transmission or oral notice (either in person or by telephone) of the time, date and place of the meeting shall be given to each director. Unless otherwise indicated in the notice thereof, any and all business may be transacted at a special meeting.
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Section 3.07 Quorum, Voting and Adjournment. Except as otherwise provided by the DGCL, the Restated Certificate of Incorporation or these Bylaws, a majority of the total number of directors shall constitute a quorum for the transaction of business. Except as otherwise provided by the DGCL, the Restated Certificate of Incorporation or these Bylaws, the act of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors. In the absence of a quorum, a majority of the directors present thereat may adjourn such meeting to another time and place.
Section 3.08 Committees; Committee Rules. The Board of Directors may designate one or more committees, including, but not limited to, an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee, each such committee to consist of one or more of the directors of the Corporation, subject to the Stockholders Agreement. The Board of Directors may designate one or more directors as alternate members of any committee to replace any absent or disqualified member at any meeting of the committee, subject to the Stockholders Agreement. Any such committee, to the extent provided in the resolution of the Board of Directors establishing such committee, shall have and may exercise all the powers and authority of the Board of Directors 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 or adopting, or recommending to the stockholders, any action or matter (other than the election or removal of directors) expressly required by the DGCL to be submitted to stockholders for approval or (b) adopting, amending or repealing any Bylaw of the Corporation. Each committee of the Board of Directors may fix its own rules of procedure and shall hold its meetings as provided by such rules, except as may otherwise be provided by a resolution of the Board of Directors designating such committee. Unless otherwise provided in such a resolution, the presence of at least a majority of the members then serving on the committee shall be necessary to constitute a quorum unless there are only one or two members then serving, in which event one member shall constitute a quorum; and all matters shall be determined by a majority vote of the members present at a meeting of the committee at which a quorum is present. Unless otherwise provided in such a resolution, in the event that a member and that member’s alternate, if alternates are designated by the Board of Directors, of such committee is or are absent or disqualified, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in place of any such absent or disqualified member.
Section 3.09 Action Without a Meeting. Unless otherwise restricted by the Restated Certificate of Incorporation, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting if all members of the Board of Directors or any committee thereof, 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, or electronic transmission or transmissions, shall be filed in the minutes of proceedings of the Board of Directors. Such filing shall be in paper form if the minutes are maintained in paper form or shall be in electronic form if the minutes are maintained in electronic form.
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Section 3.10 Remote Meeting. Unless otherwise restricted by the Restated Certificate of Incorporation, members of the Board of Directors, or any committee designated by the Board of Directors, may participate in a meeting by means of conference telephone or other communications equipment in which all persons participating in the meeting can hear each other. Participation in a meeting by means of conference telephone or other communications equipment shall constitute presence in person at such meeting.
Section 3.11 Compensation. The Board of Directors shall have the authority to fix the compensation, including fees and reimbursement of expenses, of directors for services to the Corporation in any capacity.
Section 3.12 Reliance on Books and Records. A member of the Board of Directors, or a member of any committee designated by the Board of Directors shall, in the performance of such person’s duties, be fully protected in relying in good faith upon records of the Corporation and upon such information, opinions, reports or statements presented to the Corporation by any of the Corporation’s officers or employees, or committees of the Board of Directors, or by any other person as to matters the member reasonably believes are within such other person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation.
ARTICLE IV
Officers
Section 4.01 Number. The officers of the Corporation shall include any officers required by the DGCL, each of whom shall be elected by the Board of Directors and who shall hold office for such terms as shall be determined by the Board of Directors and until their successors are elected and qualify or until their earlier resignation or removal. In addition, the Board of Directors may elect a Chief Executive Officer, a President, a Treasurer, and a Secretary and may elect (or delegate authority to the Chair of the Board of Directors or the Chief Executive Officer to appoint) one or more Vice Presidents, including one or more Executive Vice Presidents, Senior Vice Presidents, and one or more Assistant Treasurers, one or more Assistant Secretaries and any other additional officers as the Board of Directors deems necessary or advisable, who shall hold their office for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors. Any number of offices may be held by the same person.
Section 4.02 Other Officers and Agents. The Board of Directors may appoint (or delegate authority to a duly authorized officer to appoint) such other officers and agents as it deems advisable, who shall hold their office for such terms and shall exercise and perform such powers and duties as shall be determined from time to time by the Board of Directors.
Section 4.03 Chief Executive Officer. The Chief Executive Officer, subject to the determination of the Board of Directors, shall have general executive charge, management, and control of the properties and operations of the Corporation in the ordinary course of its business, with all such powers with respect to such properties and operations as may be reasonably incident to such responsibilities. If the Board of Directors has not elected a Chair or in the
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absence or inability to act as the Chair, the Chief Executive Officer shall exercise all of the powers and discharge all of the duties of the Chair, but only if the Chief Executive Officer is a director of the Corporation.
Section 4.04 President. The President, if any, shall be elected, shall, under the direction of the Chief Executive Officer, be responsible for the operations of the Corporation and shall have all the powers, rights, functions and responsibilities normally exercised by a president. The President shall have such other powers and perform such other duties as may from time to time be assigned to the President by the Chief Executive Officer, the Board of Directors or these Bylaws.
Section 4.05 Vice Presidents. Each Vice President, if any are elected, of whom one or more may be designated an Executive Vice President or Senior Vice President, shall have such powers and shall perform such duties as shall be assigned to him or her by the Chief Executive Officer or the Board of Directors.
Section 4.06 Treasurer. The Treasurer shall have custody of the corporate funds, securities, evidences of indebtedness and other valuables of the Corporation and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation. The Treasurer shall deposit all moneys and other valuables in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors or its designees selected for such purposes. The Treasurer shall disburse the funds of the Corporation, taking proper vouchers therefor. The Treasurer shall render to the Chief Executive Officer and the Board of Directors, upon their request, a report of the financial condition of the Corporation. If required by the Board of Directors, the Treasurer shall give the Corporation a bond for the faithful discharge of the Treasurer’s duties in such amount and with such surety as the Board of Directors shall prescribe.
In addition, the Treasurer shall have such further powers and perform such other duties incident to the office of Treasurer as from time to time are assigned to him or her by the Chief Executive Officer or the Board of Directors.
Section 4.07 Secretary. The Secretary shall: (a) cause minutes of all meetings of the stockholders and directors to be recorded and kept properly; (b) cause all notices required by these Bylaws or otherwise to be given properly; (c) see that the minute books, stock books, and other nonfinancial books, records and papers of the Corporation are kept properly; and (d) cause all reports, statements, returns, certificates and other documents to be prepared and filed when and as required. The Secretary shall have such further powers and perform such other duties as prescribed from time to time by the Chief Executive Officer or the Board of Directors.
Section 4.08 Assistant Treasurers and Assistant Secretaries. Each Assistant Treasurer and each Assistant Secretary, if any are elected, shall be vested with all the powers and shall perform all the duties of the Treasurer and Secretary, respectively, in the absence or disability of such officer, unless or until the Chief Executive Officer or the Board of Directors shall otherwise determine. In addition, Assistant Treasurers and Assistant Secretaries shall have such powers and shall perform such duties as shall be assigned to them by the Chief Executive Officer or the Board of Directors.
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Section 4.09 Corporate Funds and Checks. The funds of the Corporation shall be kept in such depositories as shall from time to time be prescribed by the Board of Directors or its designees selected for such purposes. All checks or other orders for the payment of money shall be signed by the Chief Executive Officer, the President, a Vice President, the Treasurer or the Secretary or such other person or agent as may from time to time be authorized and with such countersignature, if any, as may be required by the Board of Directors.
Section 4.10 Contracts and Other Documents. The Chief Executive Officer and the Secretary, or such other officer or officers as may from time to time be authorized by the Board of Directors or any other committee given specific authority in the premises by the Board of Directors during the intervals between the meetings of the Board of Directors, shall have power to sign and execute on behalf of the Corporation deeds, conveyances and contracts, and any and all other documents requiring execution by the Corporation.
Section 4.11 Ownership of Equity of Another Entity. Unless otherwise directed by the Board of Directors, the Chief Executive Officer, the President, a Vice President, the Treasurer or the Secretary, or such other officer or agent as shall be authorized by the Board of Directors, shall have the power and authority, on behalf of the Corporation, to attend and to vote at any meeting of securityholders of any entity in which the Corporation holds securities or equity interests and may exercise, on behalf of the Corporation, any and all of the rights and powers incident to the ownership of such securities or equity interests at any such meeting, including the authority to execute and deliver proxies and consents on behalf of the Corporation.
Section 4.12 Delegation of Duties. In the absence, disability or refusal of any officer to exercise and perform such officer’s duties, the Board of Directors may delegate to another officer such powers or duties.
Section 4.13 Resignation and Removal. Any officer of the Corporation may be removed from office for or without cause at any time by the Board of Directors (or a duly authorized officer). Any officer may resign at any time in the same manner prescribed under Section 3.03 of these Bylaws.
Section 4.14 Vacancies. The Board of Directors shall have the power to fill vacancies occurring in any office.
ARTICLE V
Stock
Section 5.01 Shares With Certificates. Unless the Board of Directors shall otherwise provide by resolution or resolutions that the shares of stock of the Corporation shall be represented by certificates, the Corporation’s stock shall be uncertificated shares. Every holder of stock in the Corporation 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 Chair (if an officer), the Vice Chair (if an officer), Chief Executive Officer, President, Chief Financial Officer, a Vice President, the Treasurer, any Assistant Treasurer, the Secretary and any Assistant Secretary of the Corporation shall be an authorized officer for such purpose), certifying the number and class of shares of stock of the
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Corporation owned by such holder. Any or all of the signatures on any such certificate may be a facsimile. The Board of Directors shall have the power to appoint one or more transfer agents and/or registrars for the transfer or registration of certificates of stock of any class, and may require stock certificates to be countersigned or registered by one or more of such transfer agents and/or registrars.
Section 5.02 Uncertificated Shares. Within a reasonable time after the issue or transfer of any uncertificated shares, a written statement of the information required by the DGCL shall be sent by or on behalf of the Corporation to stockholders entitled to such uncertificated shares. The Corporation may adopt a system of issuance, recordation and transfer of its shares of stock by electronic or other means not involving the issuance of certificates.
Section 5.03 Transfer of Shares. Shares of stock of the Corporation represented by certificates shall be transferable upon its books by the holders thereof, in person or by their duly authorized attorneys or legal representatives, in the manner prescribed by law, the Restated Certificate of Incorporation and in these Bylaws, upon surrender to the Corporation by delivery of the certificates representing such shares (to the extent such shares are evidenced by a physical stock certificate) or by due delivery of transfer instructions (in the case of uncertificated shares) and any documents required therefor to the person in charge of the stock and transfer books and ledgers and compliance with any procedures adopted by the Corporation or its agents and applicable law. Certificates representing such shares, if any, shall be cancelled and new certificates (if the shares are to be certificated) or uncertificated shares (if the shares are to be uncertificated) shall thereupon be issued. A record shall be made of each transfer. Whenever any transfer of shares shall be made for collateral security, and not absolutely, it shall be so expressed in the entry of the transfer if, when the certificates (if any) are presented to the Corporation for transfer or when any uncertificated shares are requested to be transferred, both the transferor and transferee request the Corporation to do so. The Corporation shall, subject to applicable law, have power and authority to make such rules and regulations as it may deem necessary or proper concerning the issue, transfer and registration of certificates for shares of stock of the Corporation or uncertificated shares.
Section 5.04 Lost, Stolen, Destroyed or Mutilated Certificates. A new certificate of stock or uncertificated shares may be issued in the place of any certificate previously issued by the Corporation alleged to have been lost, stolen or destroyed, and the Corporation may, in its discretion, require the owner of such lost, stolen or destroyed certificate, or such owner’s legal representative, to give the Corporation a bond, in such sum as the Corporation may direct, in order to indemnify the Corporation against any claims that may be made against it in connection therewith. A new certificate or uncertificated shares of stock may be issued in the place of any certificate previously issued by the Corporation that has become mutilated upon the surrender by such owner of such mutilated certificate and, if required by the Corporation, the posting of a bond by such owner in an amount sufficient to indemnify the Corporation against any claim that may be made against it in connection therewith.
Section 5.05 List of Stockholders Entitled to Vote. The Corporation shall prepare, no later than the tenth (10th) day before each meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting (provided, however, that if the record date for determining the stockholders entitled to vote is less than ten (10) days before the date of the
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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, provided that the information required to gain access to such list is provided with the notice of meeting, or (b) during ordinary business hours at the principal place of business of the Corporation. In the event that the Corporation determines to make the list available on an electronic network, the Corporation may take reasonable steps to ensure that such information is available only to stockholders of the Corporation. Except as otherwise provided by the DGCL, 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 5.05 or to vote in person or by proxy at any meeting of stockholders.
Section 5.06 Fixing Date for Determination of Stockholders of Record.
(A) In order that the Corporation may determine the stockholders entitled to notice of any meeting of stockholders or any adjournment thereof, the Board of Directors 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 of Directors, 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 of Directors 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 of Directors 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 is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders 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 of Directors 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.
(B) 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 of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall not be more than sixty (60) days prior to such action. If no such record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.
(C) Unless otherwise restricted by the Restated Certificate of Incorporation, in order that the Corporation may determine the stockholders entitled to express consent to corporate action without a meeting, the Board of Directors may fix a record date, which record date shall
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not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record 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 of Directors. If no record date for determining stockholders entitled to express consent to corporate action without a meeting is fixed by the Board of Directors, (i) when no prior action of the Board of Directors is required by law, the record date for such purpose 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 applicable law, and (ii) if prior action by the Board of Directors is required by law, the record date for such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action.
Section 5.07 Registered Stockholders. Prior to the surrender to the Corporation of the certificate or certificates for a share or shares of stock or notification to the Corporation of the transfer of uncertificated shares with a request to record the transfer of such share or shares, the Corporation may treat the registered owner of such share or shares as the person entitled to receive dividends, to vote, to receive notifications and otherwise to exercise all the rights and powers of an owner of such share or shares. To the fullest extent permitted by law, the Corporation shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof.
ARTICLE VI
Notice and Waiver of Notice
Section 6.01 Notice. Any notice to any stockholder under the Restated Certificate of Incorporation, these Bylaws or the DGCL shall be deemed given, if mailed, when deposited in the United States mail, postage prepaid, directed to the stockholder at such stockholder’s address as it appears on the records of the Corporation, and if given by any other form, including any form of electronic transmission, permitted by the DGCL, shall be deemed given as provided in the DGCL. Without limiting the manner by which notice otherwise may be given effectively to stockholders, any notice to stockholders may be given by electronic transmission in the manner provided in Section 232 of the DGCL.
Section 6.02 Waiver of Notice. A written waiver of any notice, signed by a stockholder or director, or waiver by electronic transmission by such person, whether given before or after the time of the event for which notice is to be given, shall be deemed equivalent to the notice required to be given to such person. Neither the business nor the purpose of any meeting need be specified in such a waiver. Attendance at any meeting (in person or by remote communication) shall constitute waiver of notice except attendance 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.
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ARTICLE VII
Indemnification
Section 7.01 Right to Indemnification. Each person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a “proceeding”), by reason of the fact that such person is or was a director or an 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 an employee benefit plan (hereinafter an “indemnitee”), whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee, agent or trustee or in any other capacity while serving as a director, officer, employee, agent or trustee, shall be indemnified and held harmless by the Corporation to the fullest extent permitted by Delaware law, as the same exists or may hereafter be amended (but, in the case of any such amendment, if permitted, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than such law permitted the Corporation to provide prior to such amendment), against all expense, liability and loss (including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) actually and reasonably incurred or suffered by such indemnitee in connection therewith; provided, however, that, except as provided in Section 7.03 with respect to proceedings to enforce rights to indemnification or advancement of expenses or with respect to any compulsory counterclaim brought by such indemnitee, the Corporation shall indemnify any such indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof) was authorized by the Board of Directors.
Any reference to an officer of the Corporation in this Article VII shall be deemed to refer exclusively to the Chief Executive Officer, Chief Financial Officer, President, Treasurer, Chief Operating Officer, General Counsel 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 pursuant to Article IV of these Bylaws, including, without limitation, any “executive officer” or “Section 16 officer,” 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 VII.
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Any person serving as a director, officer, partner, member, trustee, administrator, employee, member, manager, or agent of another corporation, partnership, limited liability company, joint venture, trust or other enterprise, at least 50% of whose equity interests are owned by the Corporation (a “subsidiary” for purposes of this Article VII) shall be conclusively presumed to be serving in such capacity at the request of the Corporation.
Section 7.02 Right to Advancement of Expenses. In addition to the right to indemnification conferred in Section 7.01, an indemnitee shall also have the right to be paid by the Corporation the expenses (including attorney’s fees) incurred by the indemnitee in appearing at, participating in or defending any such proceeding in advance of its final disposition or in connection with a proceeding brought to establish or enforce a right to indemnification or advancement of expenses under this Article VII (which shall be governed by Section 7.03 (hereinafter an “advancement of expenses”)); provided, however, that, if the DGCL requires or in the case of an advancement of expenses made in a proceeding brought to establish or enforce a right to indemnification or advancement of expenses, an advancement of expenses incurred by an indemnitee pursuant to this Section 7.02 in such indemnitee’s capacity as a director or officer of the Corporation (and not in any other capacity in which service was or is rendered by such indemnitee, including, without limitation, service to an employee benefit plan) shall be made solely upon delivery to the Corporation of an undertaking (hereinafter an “undertaking”), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (hereinafter a “final adjudication”) that such indemnitee is not entitled to be indemnified or entitled to advancement of expenses under Sections 7.01 and 7.02 or otherwise.
Section 7.03 Right of Indemnitee to Bring Suit. If a claim under Section 7.01 or 7.02 is not paid in full by the Corporation within (i) ninety (90) days after a written claim for indemnification has been received by the Corporation or (ii) thirty (30) days after a claim for an advancement of expenses has been received by the Corporation, the indemnitee may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim or to obtain advancement of expenses, as applicable. To the fullest extent permitted by law, 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 also 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 for indemnification set forth in the DGCL, and in any suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the Corporation shall be entitled to recover such expenses upon a final adjudication that the indemnitee has not met any applicable standard for indemnification set forth in the DGCL. Neither the failure of the Corporation (including by its directors who are not parties to such action, a committee of such directors, independent legal counsel, or its stockholders) to have made 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 the DGCL, nor an actual determination by the Corporation (including by its directors who are not parties to such action, a committee of such directors, independent legal counsel, or its stockholders) that the indemnitee has not met such applicable standard of conduct, shall create a presumption that the indemnitee has not met the
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applicable standard of conduct. 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 VII or otherwise shall be on the Corporation.
Section 7.04 Indemnification Not Exclusive.
(A) The provision of indemnification to or the advancement of expenses to any indemnitee under this Article VII, or the entitlement of any indemnitee to indemnification or advancement of expenses under this Article VII, shall not limit or restrict in any way the power of the Corporation to indemnify or advance expenses to such indemnitee in any other way permitted by law or be deemed exclusive of, or invalidate, any right to which any indemnitee seeking indemnification or advancement of expenses may be entitled under any law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such indemnitee’s capacity as an officer, director, employee or agent of the Corporation and as to action in any other capacity.
(B) Given that certain jointly indemnifiable claims (as defined below) may arise due to the service of the indemnitee as a director and/or officer of the Corporation at the request of the indemnitee-related entities (as defined below), the Corporation shall be fully and primarily responsible for the payment to the indemnitee in respect of indemnification or advancement of all expenses, judgments, penalties, fines and amounts paid in settlement to the extent legally permitted and as required by the terms of the Restated Certificate of Incorporation or these Bylaws of the Corporation (or any other agreement between the Corporation and such persons, as applicable) in connection with any such jointly indemnifiable claims, pursuant to and in accordance with the terms of this Article VII, irrespective of any right of recovery the indemnitee may have from the indemnitee-related entities. Any obligation on the part of any indemnitee-related entities to indemnify or advance expenses to any indemnitee shall be secondary to the Corporation’s obligation and shall be reduced by any amount that the indemnitee may collect as indemnification or advancement from the Corporation. The Corporation irrevocably waives, relinquishes and releases the indemnitee-related entities from any and all claims it may have against the indemnitee-related entities for contribution, subrogation or any other recovery of any kind in respect thereof. Under no circumstance shall the Corporation be entitled to any right of subrogation or contribution by the indemnitee-related entities and no right of advancement or recovery the indemnitee may have from the indemnitee-related entities shall reduce or otherwise alter the rights of the indemnitee or the obligations of the Corporation hereunder. In the event that any of the indemnitee-related entities shall make any payment to the indemnitee in respect of indemnification or advancement of expenses with respect to any jointly indemnifiable claim, the indemnitee-related entity making such payment shall be subrogated to the extent of such payment to all of the rights of recovery of the indemnitee against the Corporation, and the indemnitee 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. Each of the indemnitee-related entities shall be third-party beneficiaries with respect to this Section 7.04(B) of Article VII, entitled to enforce this Section 7.04(B) of Article VII.
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For purposes of this Section 7.04(B) of Article VII, the following terms shall have the following meanings:
(1) The term “indemnitee-related entities” means any corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise (other than the Corporation or any other corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise for which the indemnitee has agreed, on behalf of the Corporation or at the Corporation’s request, to serve as a director, officer, employee or agent and which service is covered by the indemnity described herein) from whom an indemnitee may be entitled to indemnification or advancement of expenses with respect to which, in whole or in part, the Corporation may also have an indemnification or advancement obligation (other than as a result of obligations under an insurance policy).
(2) The term “jointly indemnifiable claims” shall be broadly construed and shall include, without limitation, any action, suit or proceeding for which the indemnitee shall be entitled to indemnification or advancement of expenses from both the indemnitee-related entities and the Corporation pursuant to Delaware law, any agreement or certificate of incorporation, bylaws, partnership agreement, operating agreement, certificate of formation, certificate of limited partnership or comparable organizational documents of the Corporation or the indemnitee-related entities, as applicable.
Section 7.05 Corporate Obligations; Reliance. The rights granted pursuant to the provisions of this Article VII shall vest at the time a person becomes a director or officer of the Corporation entitled to such rights and shall be deemed to create a binding contractual obligation on the part of the Corporation to the persons who from time to time are elected as officers or directors of the Corporation entitled to such rights, and such persons in acting in their capacities as officers or directors of the Corporation or any subsidiary shall be entitled to rely on such provisions of this Article VII without giving notice thereof to the Corporation. 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, alteration or repeal of this Article VII that adversely affects any right of an indemnitee or its successors shall be prospective only and shall not limit, eliminate, or impair any such right 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 or repeal.
Section 7.06 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.
Section 7.07 Indemnification of Employees and Agents of the Corporation and Others. The Corporation may, to the extent authorized from time to time by the Board of Directors, grant rights to indemnification and to the advancement of expenses to any employee or agent of the Corporation and to any person (in addition to an indemnitee) serving at the request of the Corporation as an officer, director, employee or agent of any other enterprise to the fullest extent
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of the provisions of this Article VII with respect to the indemnification and advancement of expenses of indemnitees hereunder.
Section 7.08 Savings Clause. To the fullest extent permitted by law, if this Article VII or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify and advance expenses to each person entitled to indemnification under this Article VII as to all expense, liability and loss (including attorneys’ fees and related disbursements, judgments, fines, ERISA excise taxes and penalties and any other penalties and amounts paid or to be paid in settlement) actually and reasonably incurred or suffered by such person and for which indemnification and advancement of expenses is available to such person pursuant to this Article VII to the fullest extent permitted by any applicable portion of this Article VII that shall not have been invalidated.
ARTICLE VIII
Miscellaneous
Section 8.01 Electronic Transmission. For purposes of these Bylaws, “electronic transmission” means any form of communication, not directly involving the physical transmission of paper, including the use of, or participation in, one or more electronic networks or databases (including one or more distributed electronic networks or databases), that creates a record that may be retained, retrieved, and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process.
Section 8.02 Corporate Seal. The Board of Directors may provide a suitable seal, containing the name of the Corporation, which seal shall be in the charge of the Secretary. If and when so directed by the Board of Directors or a committee thereof, duplicates of the seal may be kept and used by the Treasurer or by an Assistant Secretary or Assistant Treasurer.
Section 8.03 Fiscal Year. The fiscal year of the Corporation shall end on the last Sunday of each calendar year, or such other day as the Board of Directors may designate.
Section 8.04 Section Headings. Section headings in these Bylaws are for convenience of reference only and shall not be given any substantive effect in limiting or otherwise construing any provision herein.
Section 8.05 Inconsistent Provisions. In the event that any provision of these Bylaws is or becomes inconsistent with any provision of the Restated Certificate of Incorporation, the DGCL or any other applicable law, such provision of these Bylaws shall not be given any effect to the extent of such inconsistency but shall otherwise be given full force and effect.
ARTICLE IX
Amendments
Section 9.01 Amendments. The Board of Directors is expressly authorized to make, alter, amend, change, add to, rescind or repeal, in whole or in part, these Bylaws without the assent or vote of the stockholders in any manner not inconsistent with the laws of the State of
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Delaware or the Restated Certificate of Incorporation. Notwithstanding any other provisions of these Bylaws, the Certificate of Incorporation, or any provision of law that might otherwise permit a lesser vote of the stockholders, at any time when the Designating Stockholders (as defined in the Stockholders Agreement) cease to be entitled to designate a Designee (as defined in the Stockholders Agreement), in addition to any vote of the holders of any class or series of capital stock of the Corporation required by the Restated Certificate of Incorporation (including any certificate of designation relating to any series of Preferred Stock (as defined in the Restated Certificate of Incorporation)), these Bylaws or applicable law, the affirmative vote of the holders of at least sixty-six and two-thirds (66 2/3)% of the total voting power of all the then outstanding shares of stock of the Corporation entitled to vote thereon, voting together as a single class, shall be required in order for the stockholders of the Corporation to alter, amend, repeal or rescind, in whole or in part, any provision of these Bylaws (including, without limitation, this Section 9.01) or to adopt any provision inconsistent herewith.
[Remainder of Page Intentionally Left Blank]
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Exhibit 10.1
______________________________________
JERSEY MIKE’S Holdco, LLC
A Delaware Limited Liability Company
______________________________________
THIRD AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
Dated as of July 29, 2026
THE LIMITED LIABILITY COMPANY UNITS EVIDENCED BY THIS THIRD AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933 OR UNDER ANY OTHER APPLICABLE SECURITIES LAWS. SUCH LIMITED LIABILITY COMPANY UNITS MAY NOT BE SOLD, ASSIGNED, PLEDGED OR OTHERWISE DISPOSED OF AT ANY TIME WITHOUT EFFECTIVE REGISTRATION UNDER SUCH ACT AND LAWS OR EXEMPTION THEREFROM, AND COMPLIANCE WITH THE OTHER RESTRICTIONS ON TRANSFERABILITY SET FORTH HEREIN. PURCHASERS OF LIMITED LIABILITY COMPANY UNITS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THEIR INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
TABLE OF CONTENTS
Page
Article I Definitions |
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2 |
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Section 1.1 |
Definitions |
2 |
Section 1.2 |
Terms Generally |
16 |
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Article II General Provisions |
16 |
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Section 2.1 |
Formation; Continuation |
16 |
Section 2.2 |
Name |
16 |
Section 2.3 |
Members |
16 |
Section 2.4 |
Term |
16 |
Section 2.5 |
Purpose; Powers |
17 |
Section 2.6 |
Foreign Qualification |
18 |
Section 2.7 |
Registered Office; Registered Agent; Principal Office; Other Offices |
18 |
Section 2.8 |
No State-Law Partnership |
19 |
Section 2.9 |
Amendment and Restatement |
19 |
Section 2.10 |
Classes |
19 |
Section 2.11 |
Inspection of Books and Records |
21 |
Section 2.12 |
Registered Members |
21 |
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Article III Management |
22 |
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Section 3.1 |
Managing Member; Delegation of Authority and Duties |
22 |
Section 3.2 |
Compensation |
23 |
Section 3.3 |
Approval or Ratification of Acts or Contracts |
23 |
Section 3.4 |
Officers |
23 |
Section 3.5 |
Management Matters |
24 |
Section 3.6 |
Voting and Other Rights |
24 |
Section 3.7 |
Liability of Members |
25 |
Section 3.8 |
Potential Conflicts and Competing Activities |
25 |
Section 3.9 |
Fiduciary Duties |
28 |
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Article IV Capital Contributions; Allocations; Distributions |
28 |
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Section 4.1 |
Uncertificated Units |
28 |
Section 4.2 |
No Capital Contributions |
28 |
Section 4.3 |
Capital Accounts |
28 |
Section 4.4 |
Allocations of Net Income and Net Loss |
29 |
Section 4.5 |
Distributions |
32 |
Section 4.6 |
Right of Set-Off |
34 |
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Article V Resignation; Dissolution; Transfer of Membership Interests; Admission of New Members |
34 |
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Section 5.1 |
Member Resignation |
34 |
Section 5.2 |
Dissolution |
35 |
Section 5.3 |
Admission of Additional or Substitute Members |
36 |
Section 5.4 |
Transfer of Member’s Interest |
37 |
Section 5.5 |
Subsidiary Distributions |
40 |
Section 5.6 |
Encumbrances |
40 |
Section 5.7 |
Further Restrictions |
40 |
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Article VI Reports to Members; Tax Matters 41 |
41 |
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Section 6.1 |
Books of Account |
41 |
Section 6.2 |
Fiscal Year |
41 |
Section 6.3 |
Certain Tax Matters |
41 |
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Article VII Liability, Exculpation, Indemnification and Insurance |
43 |
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Section 7.1 |
Liability |
43 |
Section 7.2 |
Duties and Liabilities of Covered Persons |
44 |
Section 7.3 |
Exculpation |
45 |
Section 7.4 |
Indemnification |
45 |
Section 7.5 |
Advancement of Expenses |
45 |
Section 7.6 |
Notice of Proceedings |
46 |
Section 7.7 |
Insurance |
46 |
Section 7.8 |
Indemnitor of First Resort |
46 |
Section 7.9 |
No Appraisal; Release |
47 |
Section 7.10 |
Non-Exclusivity of Rights |
47 |
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Article VIII Miscellaneous |
48 |
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Section 8.1 |
Governing Law; Severability |
48 |
Section 8.2 |
Successors and Assigns |
48 |
Section 8.3 |
Confidentiality |
48 |
Section 8.4 |
Investment Representations of Members |
49 |
Section 8.5 |
Amendments |
49 |
Section 8.6 |
Notices |
50 |
Section 8.7 |
Counterparts; Electronic Signatures |
52 |
Section 8.8 |
Power of Attorney |
52 |
Section 8.9 |
Founder Member Representative |
53 |
Section 8.10 |
WAIVER OF JURY TRIAL |
54 |
Section 8.11 |
EXCLUSIVE JURISDICTION AND VENUE |
54 |
Section 8.12 |
Entire Agreement |
55 |
Section 8.13 |
Section Titles |
55 |
Section 8.14 |
No Third Party Beneficiaries |
55 |
ii
THIRD AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
JERSEY MIKE’S HOLDCO, LLC
A Delaware Limited Liability Company
THIS THIRD AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this “Agreement”) of Jersey Mike’s HoldCo, LLC (the “Company”), dated and effective as of July 29, 2026, is adopted by and among Jersey Mike’s Subs Inc., a Delaware corporation, as Managing Member (as defined below), the other Members set forth on the signature pages hereto and each other Person who becomes a Member in accordance with the terms of this Agreement.
BACKGROUND
NOW THEREFORE, in consideration of the mutual covenants and agreements contained herein, the parties hereto, each intending to be legally bound, agree as follows:
Article I
Definitions
Section 1.1 Definitions. Unless the context otherwise requires, the following terms shall have the following meanings for purposes of this Agreement:“Act” means the Delaware Limited Liability Company Act, Title 6, Delaware Code, §§ 18-101, et seq., as it may be amended from time to time.
“Additional Member” means any Person that has been admitted to the Company as a Member following the date hereof pursuant to Section 5.3 by virtue of having received Membership Interests from the Company and not from any other Member or Assignee.
“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:
(a) decrease such deficit by any amounts which such Member is obligated to restore pursuant to this Agreement or is deemed to be obligated to restore pursuant to Treasury Regulation Section 1.704-1(b)(2)(ii)(c) or the penultimate sentence of each of Treasury Regulations Sections 1.704‑2(i)(5) and 1.704‑2(g)(1); and
(b) increase such deficit by the items described in Treasury Regulations Sections 1.704‑1(b)(2)(ii)(d)(4), (5) and (6).
“Affiliate” when used with reference to another Person means any Person (other than the Company or its Subsidiaries, except when such other Person is the Company or any of its Subsidiaries), directly or indirectly, through one or more intermediaries, Controlling, Controlled by, or under common Control with, such other Person; provided, however, that notwithstanding the foregoing, (a) an Affiliate of a Person shall not include any Portfolio Companies of such Person or its Affiliates, (b) the Company and its Subsidiaries, Management Aggregator and the Managing Member shall not be deemed to be an Affiliate of Peter Cancro, the Founder Member or its Affiliates, (c) Peter Cancro, the Founder Member and their respective Affiliates shall not be deemed to be an Affiliate of the Company, (d) the Company and its Subsidiaries, Management Aggregator and the Managing Member shall not be deemed to be Affiliates of the Blackstone Member or its Affiliates, and (e) Peter Cancro and any Person directly or indirectly, through one
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or more intermediaries, Controlled by Peter Cancro shall be deemed an Affiliate of the Founder Member.
“Affiliated Institution” means with respect to any Covered Person, any investment fund, institutional investor or other financial intermediary with which such Covered Person is Affiliated or of which such Covered Person is a member, partner or employee.
“Affiliated Persons” has the meaning set forth in Section 3.8(c).
“Agreement” has the meaning set forth in the preamble above.
“Assignee” means any transferee to which a Member or another Assignee has transferred its interest in the Company in accordance with Article V.
“Assumed Income Tax Rate” means the highest effective combined marginal U.S. federal, state and local income tax rate applicable to an individual or corporation that is resident in New York City (whichever is higher) for such taxable year, taking into account the character of the taxable income in question, taxes imposed under Section 1411 of the Code, and the limitations on the deductibility of tax items; provided, that with the prior consent of the Blackstone Member (so long as the Blackstone Member owns any Units of the Company), the Managing Member may reduce the Assumed Income Tax Rate to any tax rate that is at least equal to the combined marginal U.S. federal, state and local income tax rate applicable to a corporation that is resident in New York City for such taxable year taking into account the character of the taxable income in question, taxes imposed under Section 1411 of the Code, and the limitations on the deductibility of tax items.
“Available Cash” means, with respect to any fiscal period, the amount of cash on hand which the Managing Member, in its sole discretion, acting in good faith, deems available for distribution to the Members, taking into account all debts, liabilities and obligations of the Company then due and amounts which the Managing Member, in its sole discretion, deems necessary to expend or retain for working capital or to place into reserves for customary and usual claims with respect to the Company’s operations.
“Bankruptcy” means, with respect to a Member, (a) the Member’s general assignment for the benefit of creditors, (b) the filing of a petition or answer seeking for the Member any reorganization, arrangement, composition, readjustment, receivership, liquidation, dissolution, protection or similar relief in any state or federal bankruptcy, insolvency, reorganization or receivership proceeding or (c) the filing of an answer or other pleading admitting or failing to contest the material allegations of a petition filed against the Member in any state or federal bankruptcy, insolvency, reorganization or receivership proceeding.
“Blackstone Majority Holders” means the Person or Persons holding a majority of Common Units held by Blackstone Members.
“Blackstone Member” means, collectively, Submarine Buyer LLC, a Delaware limited liability company (the “Purchaser”) and any Subsequent Transferee of the Purchaser (unless the Blackstone Member notifies the Company prior to any Transfer that such Subsequent Transferee shall not be a Blackstone Member) and any Affiliate of a Blackstone Member, in each case who becomes a Member in accordance with the provisions of this Agreement. In the event
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that the Blackstone Member refers to multiple Persons, any action required or permitted to be taken or determination required or permitted to be made by the Blackstone Member shall require the approval of either (a) the Blackstone Majority Holders or (b) the Person appointed in writing by the Blackstone Majority Holders to take such actions.
“Business Day” means any day other than a Saturday, a Sunday or a holiday on which national banking associations in the State of New York are authorized by law to close.
“Cancro Family Member” means (a) Peter Cancro, (b) any descendant of Peter Cancro (whether natural, adopted or step); (c) any spouse of Peter Cancro or of a descendant of Peter Cancro; (d) any estate, trust, guardianship, custodianship or other fiduciary arrangement for the benefit of any one or more individuals named or described in (a), (b) and (c) above, so long as one or more individuals named or described in (a), (b) and (c) above controls all rights to vote Units so owned; and (e) any corporation, partnership, limited liability company or other business organization controlled exclusively by (and all of the interests in which are owned, directly or indirectly, by) any one or more individuals or entities named or described in (a), (b), (c) and (d) above.
“Capital Account” means, with respect to any Member, the account maintained for such Member in accordance with the following provisions:
(a) To each Member’s Capital Account there shall be added such Member’s Capital Contributions, such Member’s share of Net Income and any items in the nature of income or gain which are specially allocated pursuant to Section 4.4(c) hereof, and the amount of any Company liabilities assumed by such Member or which are secured by any property distributed to such Member.
(b) To each Member’s Capital Account there shall be deducted the amount of cash and the Gross Asset Value of any property distributed (or deemed distributed) to such Member pursuant to this Agreement, such Member’s distributive share of Net Losses and any items in the nature of expenses or losses which are specially allocated pursuant to Section 4.4(c) hereof, and the amount of any liabilities of such Member assumed by the Company or which are secured by any property contributed by such Member to the Company.
(c) In the event any interest in the Company is transferred in accordance with the terms of this Agreement, the transferee shall succeed to the Capital Account of the transferor to the extent it relates to the transferred interest.
(d) In determining the amount of any liability for purposes of subparagraphs (a) and (b) hereof, there shall be taken into account Section 752(c) of the Code and any other applicable provisions of the Code.
(e) The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Regulations Section 1.704‑1(b), and shall be interpreted and applied in a manner consistent with such Regulations.
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(f) Notwithstanding anything to the contrary, in determining the Capital Accounts of the Members, the Managing Member may make such allocations as it deems necessary to give economic effect to the provisions of this Agreement.
“Capital Contribution” means, with respect to any Member, the amount of cash and the initial Gross Asset Value of any property (other than money) contributed from time to time to the Company by such Member.
“Certificate of Formation” has the meaning set forth in the preamble above.
“Claims and Expenses” has the meaning set forth in Section 7.4.
“Class” means the classes of Units into which the interests of the Company may be classified or divided from time to time pursuant to the provisions of this Agreement.
“Class A Common Stock” means the Class A common stock of the Managing Member.
“Class A Units” means the Class A-1 Units and the Class A-2 Units.
“Class A-1 Units” means the limited liability company interests of the Company designated as “Class A-1 Units” under the Prior Agreement and having the rights, preferences and privileges set forth in the Prior Agreement.
“Class A-2 Units” means the limited liability company interests of the Company designated as “Class A-2 Units” under the Prior Agreement and having the rights, preferences and privileges set forth in the Prior Agreement.
“Class B Common Stock” means the Class B common stock of the Managing Member.
“Class B Units” means the limited liability company interests of the Company designated as “Class B Units” under the Prior Agreement and having the rights, preferences and privileges set forth in the Prior Agreement.
“Code” means the Internal Revenue Code of 1986, as amended from time to time, or any successor statute. Any reference herein to a particular provision of the Code shall mean, where appropriate, the corresponding provision in any successor statute.
“Common Units” means the limited liability company interests of the Company designated as “Common Units” and having the rights, preferences and privileges set forth in, and subject to, this Agreement.
“Company” has the meaning set forth in the preamble above.
“Company Minimum Gain” has the meaning ascribed to the term “partnership minimum gain” set forth in Regulations Section 1.704‑2(d).
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“Control” when used with reference to any Person means the power to direct the management or policies of such Person, directly or indirectly, by or through stock or other equity ownership, agency or otherwise, or pursuant to or in connection with an agreement, arrangement or understanding (written or oral); and the terms “Controlling” and “Controlled” shall have meanings correlative to the foregoing.
“Corporate Opportunity” has the meaning set forth in Section 3.8(c).
“Covered Person” means (a) each Officer, the Managing Member (including any former, additional or substitute Managing Member), and each officer and director of the Managing Member (including of any former, additional or substitute Managing Member); (b) any Affiliated Person of the Blackstone Member or any Founder Member and any Affiliates of the Partnership Representative or Designated Individual (as applicable); (c) the Designated Individual and the Partnership Representative (as applicable), in each case solely in their or its capacity as such and each such Person’s successors, heirs, estate or legal representatives; (d) any Person that is required to be indemnified by the Managing Member under the Delaware General Corporation Law, pursuant to and in accordance with the certificate of incorporation and/or the bylaws of the Managing Member as in effect from time to time, or pursuant to and in accordance with any indemnification agreement whereby the Managing Member agrees to indemnify such Person in such Person’s capacity as a director, officer or employee of the Managing Member; (e) any officer or director of the Managing Member or any former, additional or substitute Managing Member who is or was serving at the request of the Managing Member or any additional or substitute Managing Member as an officer, director, employee, member, manager, partner, partnership representative, designated individual, agent, fiduciary or trustee of another Person, provided, that a Person shall not be a Covered Person under this clause (f) by reason of providing, on a fee-for-services basis, trustee, fiduciary or custodial services; (g) any other Person the Managing Member in its sole discretion designates as a “Covered Person” for purposes of this Agreement; (h) each Initial Member and; (i) any Person of which an Initial Member, the Managing Member, an Affiliated Person of an Initial Member or an Affiliated Person of the Managing Member (other than a shareholder of the Managing Member and its Affiliates) is an officer, director, manager, shareholder, partner, member, employee, representative or agent; and (j) any Person who is an Affiliate, officer, director, manager, shareholder, partner, member, employee, representative or agent of any of the foregoing in clauses (b), (c), (d), (e), (f), (g), (h) and (i) whether or not such Person continues to have the applicable status referred to in such clauses.
“Depreciation” means, for each fiscal year or other period, an amount equal to the depreciation, amortization or other cost recovery deduction allowable with respect to an asset for such year or other period, except that if the Gross Asset Value of an asset differs from its adjusted basis for federal income tax purposes at the beginning of such year or other period, Depreciation shall be an amount which bears the same ratio to such beginning Gross Asset Value as the federal income tax depreciation, amortization or other cost recovery deduction for such year or other period bears to such beginning adjusted tax basis; provided, however, that if the federal income tax depreciation, amortization or other cost recovery deduction for such year is zero, Depreciation shall be calculated with reference to such beginning Gross Asset Value using any reasonable method selected by the Managing Member.
“Designated Individual” has the meaning set forth in Section 6.3(c).
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“Disabling Conduct” means, in respect of any Person, an act or omission (a) that is a criminal act by such Person that such Person had no reasonable cause to believe was lawful, (b) that constitutes intentional fraud or bad faith by such Person or (c) with respect to any individual who is also an employee or Officer of the Company or an employee or officer of one of the Company’s Subsidiaries, a breach of fiduciary duty to the Company or one of its subsidiaries.
“Dissolution” means, with respect to a Member that is not a natural person, means (a) the filing of a certificate of dissolution (or equivalent document in such Member’s jurisdiction of organization) on such Member’s behalf, (b) such Member’s administrative dissolution, unless such Member’s legal existence is reinstated within the time period prescribed by applicable law, or (c) any other event that initiates such Member’s winding up under applicable law.
“Encumbrance” means any mortgage, hypothecation, claim, lien, encumbrance, conditional sales or other title retention agreement, right of first refusal, preemptive right, pledge, option, charge, security interest or other similar interest, easement, judgment or imperfection of title of any nature whatsoever.
“Equity Incentive Plan” means the Jersey Mike’s Subs Inc. 2026 Omnibus Incentive Plan, as amended from time to time.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the rules and regulations promulgated pursuant thereto.
“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, and the rules and regulations promulgated pursuant thereto.
“Exchange Agreement” means the exchange agreement dated as of or about the date hereof among, inter alios, the Managing Member, the other Members party thereto, and the other parties thereto, as amended from time to time.
“Exchange Transaction” means an exchange of Common Units for shares of Class A Common Stock of the Managing Member pursuant to, and in accordance with, the Exchange Agreement or, if the Managing Member and the exchanging Member shall mutually agree, a Transfer of Common Units to the Managing Member, the Company or any of their Subsidiaries for shares of Class A Common Stock of the Managing Member or other consideration otherwise than pursuant to, and in accordance with, the Exchange Agreement.
“Founder Majority Holders” means the Person or Persons holding a majority of the Common Units held by the Founder Member.
“Founder Member” means, collectively, Original 56ers, Inc., a Delaware corporation (“Founder Corp”) and the Founder Trusts and each of their respective Permitted Transferees. For the avoidance of doubt, in the event that the Founder Member refers to multiple Persons, any action required or permitted to be taken or determination required or permitted to be made by the Founder Member shall solely require the approval of the Founder Member Representative.
“Founder Member Representative” means the Person designated pursuant to Section 8.9 of this Agreement.
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“Founder Trusts” means the Christine Cancro Exempt Trust under the Cancro Family Dynasty Trust Agreement, dated December 29, 2020, the Caroline Jones Exempt Trust under the Cancro Family Dynasty Trust Agreement, dated December 29, 2020, the Robert Cancro Exempt Trust under the Cancro Family Dynasty Trust Agreement, dated December 29, 2020, and the Paul Cancro Exempt Trust under the Cancro Family Dynasty Trust Agreement, dated December 29, 2020.
“Governmental Authority” means any national, supranational, state, federal, provincial, local or municipal government or any administrative or regulatory body with authority therefrom with jurisdiction over the Company or any Member, as the case may be.
“Gross Asset Value” means, with respect to any asset, the asset’s adjusted basis for federal income tax purposes, except as follows:
(a) The initial Gross Asset Value of any asset contributed by a Member to the Company shall be the gross fair market value of such asset on the date of contribution, as determined by the contributing Member and the Company.
(b) The Gross Asset Values of all Company assets shall be adjusted to equal their respective gross fair market values, as reasonably determined by the Managing Member, as of the following times:
(i) the acquisition of an additional interest in the Company (other than in connection with the execution of this Agreement) by a new or existing Member in exchange for more than a de minimis Capital Contribution, if the Managing Member reasonably determines that such adjustment is necessary or appropriate to reflect the relative economic interests of the Members in the Company;
(ii) the distribution by the Company to a Member of more than a de minimis amount of Company property as consideration for an interest in the Company, if the Managing Member reasonably determines that such adjustment is necessary or appropriate to reflect the relative economic interests of the Members in the Company;
(iii) the liquidation of the Company within the meaning of Regulations Section 1.704‑1(b)(2)(ii)(g); and
(iv) such other times as the Managing Member shall reasonably determine necessary or advisable in order to comply with Regulations Sections 1.704‑1(b) and 1.704‑2.
(c) The Gross Asset Value of any Company asset distributed to a Member shall be the gross fair market value of such asset on the date of distribution, as reasonably determined by the Managing Member.
(d) The Gross Asset Values of Company assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Section 734(b) or Section 743(b) of the Code, but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Regulations Section 1.704-1(b)(2)(iv)(m); provided,
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however, that Gross Asset Values shall not be adjusted pursuant to this subparagraph (d) to the extent that the Managing Member determines that an adjustment pursuant to subparagraph (b) of this definition of Gross Asset Value is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant to this subparagraph (d).
(e) If the Gross Asset Value of a Company asset has been determined or adjusted pursuant to subparagraph (a), (b), or (d) of this definition of Gross Asset Value, then such Gross Asset Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset for purposes of computing Net Income and Net Losses.
“Incentive Unit Award Agreement” means an Incentive Unit Award Agreement or Incentive Unit Subscription Agreement, as applicable, between the Company and one or more Management Members, in a form approved by the Board (as defined in the Prior Agreement) or the Managing Member, as applicable, as it may be amended or supplemented from time to time.
“Incentive Unit Exchange” has the meaning set forth in Section 5.4(f).
“Incentive Unit Exchange Rate” means, at any time, the quotient of (a) the excess of (x) the Per Common Unit Equity Value on the date of the Incentive Unit Exchange over (y) the sum of the Participation Threshold applicable to such Incentive Unit and the amount of any Tax Distributions made in respect of the applicable Incentive Unit after the date of the IPO and prior to it becoming a Participating Incentive Unit, divided by (b) the Per Common Unit Equity Value on the date of the Incentive Unit Exchange; provided that if the number determining by the foregoing calculation is a negative number, the Incentive Unit Exchange Rate shall be deemed to be zero (0).
“Incentive Units” means the limited liability company interests of the Company designated as “Incentive Units” and having the rights, preferences and privileges set forth in, and subject to, this Agreement.
“Initial Members” means the Blackstone Member and the Founder Member.
To “invest” shall mean to directly (or indirectly through a Person of whom such Person possesses or exercises, directly or indirectly, Control or influence over, or provides advice regarding, the investment decisions or management of such entity, in each case, in exchange for compensation) invest, whether in the form of debt, equity or otherwise.
“Investment Company Act” means the Investment Company Act of 1940, as amended from time to time, and the rules and regulations promulgated pursuant thereto.
“IPO” has the meaning set forth in the preamble.
“IPO Common Unit Issuance” means the issuance of Common Units undertaken in connection with the IPO.
“Management Aggregator” means Jersey Mike’s Management Aggregator LLC, a Delaware limited liability company.
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“Management Aggregator Equity Incentive Plan” means the Management Aggregator Equity Incentive Plan, as amended from time to time.
“Management Member” means the holders of Common Units or Incentive Units under this Agreement who provide or provided services to the Company or its Affiliates.
“Managing Member” means Jersey Mike’s Subs Inc., a corporation incorporated under the laws of the State of Delaware, or any successor Managing Member admitted to the Company in accordance with the terms of this Agreement, in its capacity as the managing member of the Company.
“Master Reorganization Agreement” means that certain Master Reorganization Agreement, dated as of July 29, 2026, by and among Jersey Mike’s Subs Inc., the Company and the other parties thereto.
“Member” means (a) the Managing Member, (b) the Blackstone Member, (c) the Founder Member, (d) the Management Aggregator and (e) each other Person who is hereafter admitted to the Company as a Substitute Member or Additional Member in accordance with the terms of this Agreement and the Act. The Members shall constitute the “members” (as that term is defined in the Act) of the Company. Notwithstanding any provision of this Agreement to the contrary, the Members shall constitute a single class or group of members of the Company for voting and related purposes of the Act and this Agreement.
“Member 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 Debt” has the meaning assigned to “partner nonrecourse debt” in Regulations Section 1.704-2(b)(4).
“Member Nonrecourse Deduction” has the meaning ascribed to the term “partner nonrecourse deductions” set forth in Regulations Section 1.704-2(i)(2).
“Membership Interest” means the entire limited liability company interest of a Member in the Company at any particular time, including the right of such Member to any and all benefits to which a Member may be entitled as provided in this Agreement, together with the obligations of such Member to comply with all the terms and provisions of this Agreement. Membership Interests shall be expressed as a number and type of Units.
“Net Income” or “Net Loss” means for each taxable year of the Company, an amount equal to the Company’s taxable income or loss for such taxable year, 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:
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(a) Any income of the Company that is exempt from federal income tax and not otherwise taken into account in computing Net Income or Net Loss pursuant to this definition of Net Income or Net Loss shall be added to such taxable income or loss;
(b) 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 Regulations Section 1.704‑1(b)(2)(iv)(i), and not otherwise taken into account in computing Net Income or Net Loss pursuant to this definition of Net Income or Net Loss shall be subtracted from such taxable income or loss;
(c) In the event the Gross Asset Value of any Company asset is adjusted pursuant to subparagraph (b) or (c) of the definition of Gross Asset Value, the amount of such adjustment shall be taken into account as gain or loss from the disposition of such asset for purposes of computing Net Income or Net Loss;
(d) Gain or loss resulting from any disposition of property with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Gross Asset Value of the property disposed of, notwithstanding that the adjusted tax basis of such property differs from its Gross Asset Value;
(e) In lieu of the depreciation, amortization, and other cost recovery deductions taken into account in computing such taxable income or loss, Depreciation shall be taken into account for such fiscal year;
(f) 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 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 the basis of the asset) from the disposition of the asset and shall be taken into account for purposes of computing Net Income or Net Loss; and
(g) Notwithstanding any other provision of this definition of Net Income or Net Loss, any items which are specially allocated pursuant to Section 4.4(c) hereof shall not be taken into account in computing Net Income or Net Loss. The amounts of the items of Company income, gain, loss, or deduction available to be specially allocated pursuant to Section 4.4(c) hereof shall be determined by applying rules analogous to those set forth in this definition of Net Income or Net Loss.
“Offering Transactions” has the meaning set forth in the Registration Statement.
“Officer” means each Person designated as an officer of the Company pursuant to Section 3.4, subject to such Section 3.4 and any resolution of the Managing Member appointing such Person as an officer or relating to such appointment.
“Other Member” means any Member that is not the Blackstone Member or the Founder Member.
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“Participating Incentive Unit” means an Incentive Unit that is a Vested Unit and for which the Participation Threshold is zero (0).
“Participation Threshold” with respect to an Incentive Unit, is equal to the amount determined by the Managing Member (as adjusted for any changes to the capital structure of the Company from time to time) and communicated to the holder of such Incentive Unit and reflected in the books and records of the Company. Each Incentive Unit’s Participation Threshold shall be adjusted after the grant of such Incentive Unit as follows:
“Partnership Representative” has the meaning set forth in Section 6.3(c).
“Per Common Unit Equity Value” means, as of any particular time, the amount to which each holder of a Common Unit would be entitled in respect of such Common Unit if the aggregate equity value of the Company as of such time (as reasonably determined by the Managing Member based on the volume weighted average price per share of the Class A Common Stock on the Trading Day prior to the date of an Incentive Unit Exchange) were distributed to the Members in accordance with Section 4.5 (assuming for these purposes that all Incentive Units are Vested Units).
“Permitted Pledge” means any pledge, hypothecation or grant of security over Units by the Blackstone Member or the Founder Member or any Affiliate thereof with respect to all or any portion of its Units (or any beneficial interest therein) to or in favor of any bank or financial institution as collateral for (a) any loan, advance, extension of credit or (b) any derivative transaction referencing the Class A Common Stock (including, without limitation, any transaction which transfers some or all of the economic risk of ownership of Class A Common Stock, including any forward contract, equity swap, put or call, put or call equivalent position, collar, sale of exchangeable security or any similar transaction), in the case of each of clause (a) and (b), other than a total return swap or other transaction or instrument which is deemed to transfer some or all of the beneficial ownership of any Units for U.S. federal income tax purposes.
“Permitted Transferee” means, generally, with respect to any Member: (a) that is not a natural person, any Affiliate of such Member or any investment fund, vehicle or similar entity of which such Member or an Affiliate, advisor or manager of such Member serves as the general partner, manager or advisor and in which such Member or an Affiliate retains dispositive power
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(but excluding any Portfolio Company of the foregoing); (b) that is a natural person or a trust for the benefit of one or more natural persons, (i) upon the death of such Person pursuant to the applicable laws of descent and distribution and (ii) such natural person’s spouse and descendants (whether natural or adopted) and any trust, partnership, limited liability company or similar vehicle established and maintained solely for the benefit of (or the sole members or partners of which are) such natural person, such natural person’s spouse and/or such natural person’s descendants, in each case of this clause (ii) only if such natural person retains control of any rights to vote Units transferred to such Permitted Transferee; or (c) subject in all respects to the provisions of this Agreement, with respect to the Founder Member, Peter Cancro or any Cancro Family Member, any Cancro Family Member, any Founder Trust and any corporation, partnership, limited liability company or other entity directly or indirectly wholly owned and controlled by one or more Cancro Family Members; provided, that no “benefit plan investor” within the meaning of Section 3(42) of the Employee Retirement Income Security Act of 1974, as amended, may be a Permitted Transferee.
“Person” means a natural person, partnership (whether general or limited), limited liability company, trust, estate, association, corporation, or any other legal entity.
“Portfolio Companies” has the meaning set forth in Section 3.8(c).
“Prior Agreement” has the meaning set forth in the preamble above.
“Reclassification” has the meaning set forth in Section 2.10(a).
“Registration Statement” means the Registration Statement on Form S-1 filed with the SEC (File No. 333-297228) as it has been or as it may be amended or supplemented from time to time, filed by the Managing Member with the Securities and Exchange Commission under the Securities Act to register the offering and sale of Class A Common Stock of the Managing Member in the IPO.
“Regulations” or “Treasury Regulations” means the Income Tax Regulations, including temporary Regulations, promulgated under the Code, as such Regulations may be amended from time to time (including corresponding provisions of succeeding regulations).
“Regulatory Allocations” has the meaning set forth in Section 4.4(c)(i)(E).
“Related Person” means, with respect to any natural person or a trust for the benefit of one or more natural persons, (a) such natural person’s immediate family (whether natural or adopted) or any beneficiary of such trust (each, a “Beneficiary”), as applicable, including parents, siblings, spouse and children, and any trust, custodianship, partnership, limited liability company or similar vehicle which primary beneficiary is such natural person or Beneficiary, as applicable, or one or more members of such immediate family and/or such natural person’s or Beneficiary’s, as applicable, lineal descendants and (b) the legal representative or guardian of such natural person or Beneficiary’s, as applicable, or of any such immediate family member or of such natural person’s or Beneficiary’s, as applicable, or family member’s estate in the event such natural person, Beneficiary or any such immediate family member becomes incapacitated or dies.
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“Reorganization Transactions” has the meaning set forth in the Registration Statement.
“Restrictive Covenant Agreement” means that certain Restrictive Covenant Agreement, dated as of November 8, 2024, by and between Submarine Buyer LLC, Peter Cancro and Founder Corp.
“Reverse Unit Split” has the meaning set forth in Section 2.10(b).
“SEC” means the U.S. Securities and Exchange Commission.
“Securities” means capital stock, partnership interests, limited liability company interests, beneficial interests, warrants, options, notes, bonds, debentures, and other securities, equity interests, ownership interests and similar obligations of every kind and nature of any Person.
“Securities Act” means the Securities Act of 1933, as amended from time to time, and the rules and regulations promulgated pursuant thereto.
“Services Agreements” has the meaning set forth in Section 3.8(d).
“Similar Law” means any federal, state, local, non-U.S. or other law or regulation that could cause the underlying assets of the Company to be treated as assets of a Member by virtue of its Membership Interest and thereby subject the Member and the Managing Member (or other persons responsible for the investment and operation of the Company’s assets) to laws or regulations that are similar to the fiduciary responsibility or prohibited transaction provisions contained in Title I of ERISA or Section 4975 of the Code.
“Subsequent Transferees” means, with respect to any Member, each Person that becomes a Substitute Member of the Company by virtue of such Person’s receiving all or a portion of its Membership Interest from such Member or from such Member’s Subsequent Transferees, in each case, in accordance with this Agreement.
“Subsidiary” means, with respect to any Person, any entity of which a majority of the total voting power of shares of stock or equivalent ownership interests entitled to vote in the election of directors, managers, trustees or other members of the applicable governing body 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 that has been admitted to the Company as a Member pursuant to Section 5.3 by virtue of such Person’s receiving all or a portion of a Membership Interest from a Member or its Assignee and not from the Company.
“Tax Distribution” has the meaning set forth in Section 4.5(d).
“Tax Partner” means a “partner” within the meaning of Section 7701(a)(2) of the Code.
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“Trading Day” means a day on which shares of the Class A Common Stock (a) are not suspended from trading at the close of business on the Nasdaq Global Select Market or such other national securities exchange where the Class A Common Stock has been listed or admitted for trading or any successor to any such exchange and (b) have traded at least once on the Nasdaq Global Select Market or such other national securities exchange where the Class A Common Stock has been listed or admitted for trading or any successor to any such exchange. If the Class A Common Stock is not listed or admitted for trading on the Nasdaq Global Select Market or another national securities exchange, or any successor to any of the foregoing, “Trading Day” means a Business Day.
“Transfer” means (in either the noun or the verb form, including with respect to the verb form, all conjugations thereof within their correlative meanings) with respect to any Security, the gift, sale, assignment, transfer, pledge or other disposition (whether for or without consideration and whether voluntary, involuntary or by operation of law) of such Security or any interest therein. The terms “Transferee” and “Transferor” shall have meanings correlative to the foregoing.
“Unit Register” has the meaning set forth in Section 2.3.
“Units” means a fractional share of the Membership Interests of all Members. The number of Units outstanding, the Classes of Units and the holders thereof are set forth on the Unit Register, as such Unit Register may be amended from time to time pursuant hereto. With respect to any particular Class of Units, such Class of Units shall be deemed to include any equity Securities received in connection with any combination of such Units, recapitalization, merger, consolidation, division, or other reorganization, or by way of split, dividend or other distribution, in each case, in respect of such Class of Units. Except as expressly provided in this Agreement to the contrary, any reference to “Units” shall include the Common Units, Incentive Units and Units of any other Class or series that may be established in accordance with this Agreement. All Units of a particular Class shall have identical rights in all respects as all other Units of such Class, except in each case as otherwise specified in this Agreement. As of the date hereof, the only Classes of Units for purposes of this Agreement are the Common Units and the Incentive Units.
“Unvested Unit” means any Units that have not vested as of the date of determination pursuant to the terms of the applicable Incentive Unit Award Agreement.
“Vested Unit” means any Units that have vested as of the date of determination pursuant to the terms of the applicable Incentive Unit Award Agreement.
Section 1.2 Terms Generally. The definitions in Section 1.1 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. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The phrases “directly or indirectly” or “direct or indirect”, when used in the context of ownership, holdings, Control, Transfer or acquisition include ownership, holdings, Control, Transfer or acquisition, as applicable, through a chain of direct or indirect beneficial ownership or Control of one or more Persons. All the terms herein that relate to accounting matters shall be interpreted in accordance with generally accepted accounting principles from time to time in effect.
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All references to “Sections” and “Articles” shall refer to Sections and Articles of this Agreement unless otherwise specified. The words “hereof” and “herein” and similar terms shall relate to this Agreement. The word “or” shall be disjunctive but not exclusive.
Article II
General Provisions
Section 2.1 Formation; Continuation. The Company has been organized as a Delaware limited liability company by the execution and filing of the Certificate of Formation under and pursuant to the Act by an “authorized person” of the Company within the meaning of the Act. Each of the Managing Member and each Officer is hereby designated as an “authorized person” of the Company within the meaning of the Act. The rights, powers, duties, obligations and liabilities of the Members shall be determined pursuant to the Act and this Agreement. To the extent that the rights, powers, duties, obligations and liabilities of any Member are different by reason of any provision of this Agreement than they would be in the absence of such provision, this Agreement shall, to the extent permitted by the Act, control. The Persons listed on the Unit Register as members of the Company as of the date hereof shall be admitted to the Company, or shall continue, as applicable, as Members upon their execution of this Agreement.
Section 2.2 Name. The name of the Company is “Jersey Mike’s HoldCo, LLC” and all Company business shall be conducted in that name or in such other names that comply with applicable law as the Managing Member may select from time to time.
Section 2.3 Members. The name and address of each Member shall be kept with the unit register filed with the Company’s records (“Unit Register”). The Managing Member or an Officer of the Company may revise the Unit Register from time to time to reflect the admission or resignation of a Member, the designation of any Member as a Founder Member, or a Blackstone Member, the making of additional Capital Contributions, the Transfer of Units pursuant to Section 5.4 or other modifications to the information set forth therein, in each case in accordance with the terms of this Agreement.
Section 2.4 Term. The term of the Company commenced on the date the Certificate of Formation was filed with the office of the Secretary of State of the State of Delaware and the Company shall continue in existence indefinitely until dissolved as determined under Section 5.2 and subsequently terminated.
Section 2.5 Purpose; Powers.
(a) The nature of the business or purposes to be conducted or promoted by the Company is to engage in any lawful act or activity for which limited liability companies may be organized under the Act. The Company may engage in any and all activities necessary, desirable or incidental to the accomplishment of the foregoing. Notwithstanding anything herein to the contrary, nothing set forth herein shall be construed as authorizing the Company to possess any purpose or power, or to do any act or thing, forbidden by law to a limited liability company organized under the laws of the State of Delaware.
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(b) In furtherance of its purposes stated in Section 2.5(a), the Company shall have all powers necessary, suitable or convenient for the accomplishment of its purposes, alone or with others, as principal or agent, including the following:
(i) to conduct its business, carry on its operations and have and exercise the powers granted to a limited liability company by the Act in any state, territory, district or possession of the United States, or in any foreign country that may be necessary, convenient or incidental to the accomplishment of the purpose of the Company;
(ii) to acquire by purchase, lease, contribution of property or otherwise, own, hold, operate, maintain, finance, refinance, improve, lease, sell, convey, mortgage, transfer, demolish or dispose of any real or personal property that may be necessary, convenient or incidental to the accomplishment of the purpose of the Company;
(iii) to enter into, perform and carry out contracts of any kind, including contracts with any Member, any Affiliate or Portfolio Company thereof, or any agent of the Company necessary to, in connection with, convenient to or incidental to the accomplishment of the purpose of the Company;
(iv) to purchase, take, receive, subscribe for or otherwise acquire, own, hold, vote, use, employ, sell, mortgage, lend, pledge, or otherwise dispose of, and otherwise use and deal in and with, shares or other interests in or obligations of domestic or foreign corporations, associations, general or limited partnerships (including the power to be admitted as a partner thereof and to exercise the rights and perform the duties created thereby), trusts, limited liability companies (including the power to be admitted as a member or appointed as a manager thereof and to exercise the rights and perform the duties created thereby) or Persons or direct or indirect obligations of the United States or of any government, state, territory, governmental district or municipality or of any instrumentality of any of them;
(v) to lend money for any proper purpose, to invest and reinvest its funds and to take and hold real and personal property for the payment of funds so loaned or invested;
(vi) to sue and be sued, complain and defend, and participate in administrative or other proceedings, in its name;
(vii) to appoint employees and agents of the Company and define their duties and fix their compensation;
(viii) to indemnify any Person in accordance with the Act and to obtain any and all types of insurance;
(ix) to cease its activities and cancel its Certificate of Formation;
(x) to negotiate, enter into, renegotiate, extend, renew, terminate, modify, amend, waive, execute, acknowledge or take any other action with respect to any lease, contract or security agreement in respect of any assets of the Company;
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(xi) to borrow money and issue evidences of indebtedness and guaranty indebtedness (whether of the Company or any of its Subsidiaries or otherwise), and to secure the same by a mortgage, pledge or other lien on the assets of the Company;
(xii) to pay, collect, compromise, litigate, arbitrate or otherwise adjust or settle any and all other claims or demands of or against the Company or to hold such proceeds against the payment of contingent liabilities; and
(xiii) to make, execute, acknowledge and file any and all documents or instruments, or to take such other action, necessary, convenient or incidental to the accomplishment of the purpose of the Company.
(c) Managing Member. Subject to the provisions of this Agreement, (i) the Company may, with the approval of the Managing Member, enter into and perform any and all documents, agreements and instruments contemplated by this Agreement, all without any further act, vote or approval of any Member and (ii) the Managing Member may authorize any Person (including any Officer) to enter into and perform any document on behalf of the Company.
Section 2.6 Foreign Qualification. The Company shall be qualified or registered under foreign limited liability company statutes or assumed or fictitious name statutes or similar laws in any jurisdiction in which the Company owns property or transacts business to the extent, in the judgment of the Managing Member, such qualification or registration is necessary or advisable in order to protect the limited liability of the Members or to permit the Company lawfully to own property or transact business. Each Officer shall have the power and authority to execute, file and publish any certificates, notices, statements or other documents (and any amendments and/or restatements thereof) necessary to permit the Company to conduct business as a limited liability company in each jurisdiction where the Company elects to do business. At the request of the Managing Member or any Officer, each Member shall execute and deliver all certificates and other instruments conforming with this Agreement that are necessary or appropriate to qualify, register, continue and terminate the Company as a foreign limited liability company in all such jurisdictions in which the Company may reasonably be expected to conduct business.
Section 2.7 Registered Office; Registered Agent; Principal Office; Other Offices. The registered office of the Company required by the Act to be maintained in the State of Delaware shall be the office of the initial registered agent named in the Certificate of Formation or such other office (which need not be a place of business of the Company) as the Managing Member may designate from time to time in the Certificate of Formation. The registered agent of the Company in the State of Delaware shall be the initial registered agent named in the Certificate of Formation or such other Person or Persons as the Managing Member may designate from time to time in the Certificate of Formation. The principal office of the Company shall be at 1 Commvault Way, S300, Tinton Falls, NJ 07724 or at such place as the Managing Member may designate from time to time subject to the terms of this Agreement, which need not be in the State of Delaware, and the Company shall maintain records there. The Company may have such other offices as the Managing Member may designate from time to time.
Section 2.8 No State-Law Partnership. The Members intend that the Company shall not be a partnership (including a limited partnership) or joint venture, and that no Member or
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Officer shall be a partner or joint venturer of any other Member or Officer, for any purposes other than federal and, if applicable, state or local tax purposes, and this Agreement shall not be construed to the contrary. The Members intend that the Company shall be treated as a partnership for federal and, if applicable, state and local income tax purposes, and each Member and the Company shall file all tax returns and shall otherwise take all tax and financial reporting positions in a manner consistent with such treatment.
Section 2.9 Amendment and Restatement. This Agreement amends, restates and supersedes in its entirety the Prior Agreement.
Section 2.10 Classes.
(a) As of the effective time designated in the Master Reorganization Agreement, the outstanding Class A Units are hereby reclassified into and shall constitute Common Units, on a one-for-one basis, and the outstanding Class B Units are hereby reclassified into and shall constitute Incentive Units, on a one-for-one basis (the foregoing being referred to herein as the “Reclassification”). Each Member of the Company shall be a Managing Member, Common Member and/or Incentive Member, and each category of Member shall have the rights set forth herein. Jersey Mike’s Subs Inc. upon execution of this Agreement is hereby appointed the Managing Member of the Company (including any Substitute Member of such Person, the “Managing Member”). Any holder of a Common Unit that is admitted to the Company as a member of the Company other than the Managing Member shall be a “Common Member.” Any holder of an Incentive Unit that is admitted to the Company as a member of the Company shall be an “Incentive Member.”
(b) Effective immediately following the Reclassification, (i) each Common Unit issued and outstanding shall automatically and without further action on the part of the Company or any Common Member be reclassified into a fraction of one Common Unit as set forth in the books and records of the Company, and (ii) each Incentive Unit issued and outstanding shall automatically and without further action on the part of the Company or any Incentive Member be reclassified into a fraction of one Incentive Unit as set forth in the books and records of the Company (clauses (i) and (ii) of this sentence being referred to in this Agreement as the “Reverse Unit Split”); provided that each Common Member and each Incentive Member shall be treated similarly on a pro rata basis in the Reverse Unit Split. The number of Common Units and Incentive Units held by each Member as of the date hereof is set forth on the Unit Register. Notwithstanding anything in this Agreement to the contrary (other than as expressly provided in Section 8.5), to the fullest extent permitted by applicable law, the holders of Incentive Units shall not have any right to vote on any matter in respect of the Company.
(c) Subject to the provisions of this Agreement, including the final sentence of this Section 2.10(c), the Managing Member shall have the sole authority to create and issue additional Classes, one or more series of any such Classes or other Securities of the Company, which may include, without limitation, unsecured and secured debt obligations of the Company, debt obligations of the Company convertible into any Class or series of Units or other limited liability company interests of the Company that may be issued by the Company, options, rights or warrants to purchase any such Class or series of Units or other limited liability company interests in the Company, or any combination of any of the foregoing, from time to time (“Additional
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Securities”), for any purpose, on terms and conditions established in the sole and complete discretion of the Managing Member, all without the approval of any other Member or any other Person bound by this Agreement, and the total number of Units of any such Class which the Managing Member shall have the authority to cause the Company to issue shall not be limited, subject to Section 5(b) of the Equity Incentive Plan and Section 3 of the Management Aggregator Equity Incentive Plan. Notwithstanding anything to the contrary contained in this Agreement, without the prior written consent of the Blackstone Member and the Founder Member, the Company shall not issue any Additional Securities if such issuance would cause the Company to become a “publicly-traded partnership,” as such term is defined in Section 469(k)(2) of the Code or Section 7704 of the Code or cause the Company to have more than one hundred (100) Tax Partners, and any issuance of Additional Securities in violation of this Section 2.10(c) shall be void ab initio.
(d) Additional Securities to be issued by the Company shall be issuable from time to time (including, without limitation, the IPO Common Unit Issuance) in one or more Classes or series, at such price, and with such designations, preferences and relative, participating, optional or other special rights, powers and duties, including rights, powers, and duties senior to existing limited liability company interests or other Securities of the Company or Classes or series thereof, all as shall be fixed by the Managing Member in the exercise of its sole and complete discretion, including, without limitation: (i) the right of such Additional Securities or Class or series thereof to share in distributions; (ii) the rights of such Additional Securities or Class or series thereof upon dissolution and liquidation of the Company; (iii) whether such Additional Securities or Class or series thereof are redeemable by the Company and, if so, the price at which, and the terms and conditions on which, such Additional Securities or Class or series thereof may be redeemed by the Company; (iv) whether such Additional Securities or Class or series thereof are issued with the privilege of conversion and, if so, the rate at and the terms and conditions upon which such Additional Securities or Class or series thereof may be converted into any other limited liability company interest in, or security of, the Company or Class or series thereof; (v) the terms and conditions of the issuance of such Additional Securities or Class or series thereof; and (vi) the rights of such Additional Securities or Class or series thereof to vote on matters relating to the Company and this Agreement.
(e) In connection with the creation or issuance pursuant to and in accordance with Section 2.10(c) and Section 2.10(d) of any Additional Securities or any Class or series thereof, the Managing Member, in its sole discretion and without the approval at the time of any other Member or other Person bound by this Agreement and subject to the restrictions in Section 8.5, may amend any provision of this Agreement, and execute, swear to, acknowledge, deliver, file and record whatever documents may be required in connection therewith, as the Managing Member determines in its sole discretion to be necessary, desirable or advisable to reflect the creation, authorization and issuance of such Additional Securities or Class or series thereof and the relative rights and preferences of such Additional Securities or Class or series thereof.
(f) Notwithstanding anything to the contrary in this Section 2.10, the number of Incentive Units outstanding shall be appropriately adjusted for any Unit split, Unit distribution, combination, reclassification, recapitalization, merger, consolidation, division, exchange or the like of the number of Common Units.
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(g) The Managing Member may cause the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire Membership Interests or other Securities of the Company or any of its Subsidiaries from any holder thereof at any time; provided, that neither the Company nor any of its Subsidiaries shall repurchase, redeem or otherwise acquire any Membership Interests or other Securities held by an Initial Member (or any Permitted Transferee thereof) without the prior written consent of such Initial Member (other than pursuant to an Exchange Transaction effected pursuant to, and in accordance with, the Exchange Agreement).
(h) The Company and the Managing Member shall at all times maintain (i) a one-to-one ratio between the number of issued and outstanding shares of Class A Common Stock and the number of issued and outstanding Common Units owned, directly or indirectly, by the Managing Member and (ii) a one-to-one ratio between the number of issued and outstanding shares of Class B Common Stock and the number of issued and outstanding Common Units owned, directly or indirectly, by Members other than the Managing Member, in each case disregarding (A) treasury shares and (B) de minimis variances resulting from rounding. The Managing Member shall not issue any shares of Class A Common Stock (or securities convertible into or exercisable therefor) unless substantially concurrently the Company issues to the Managing Member (or the Managing Member otherwise acquires from a holder that is not a wholly owned subsidiary of the Managing Member) a corresponding number of Common Units (or corresponding securities of the Company with substantially identical economic rights), and the Managing Member contributes to the Company the net proceeds, if any, received by it in respect of any such issuance or acquisition. The Company shall not repurchase any Common Units (or corresponding securities of the Company with substantially identical economic rights) owned, directly or indirectly, by the Managing Member, unless substantially concurrently the Managing Member redeems a corresponding number of its Class A Common Stock (or corresponding securities of the Company with substantially identical economic rights). If the Managing Member effects any subdivision, combination, split, dividend or reclassification of the Class A Common Stock, the Common Units shall be correspondingly adjusted, and vice versa. Notwithstanding anything otherwise to the contrary herein, the Managing Member may take such other actions as it determines to be necessary or advisable in order to maintain the one-to-one ratios contemplated by this Section 2.10(h) and to maintain the economic equivalence of Common Units and shares of Class A Common Stock. This Section 2.10(h) may not be amended, waived or modified without the prior written consent of each of the Initial Members.
Section 2.11 Inspection of Books and Records. To the extent permitted under applicable law, each Member (other than the Managing Member and Initial Members) waives such Member’s right to obtain or inspect any books, records and other information of the Company, including any information relating to the Capital Contributions of the Members other than such Member’s ownership of Units and such Member’s Capital Contributions and any other information as is necessary and essential to calculate amounts due to such Member under Section 4.5 upon an Incentive Unit Exchange. For the avoidance of doubt, the Initial Members shall not be deemed to have waived any rights to receive information expressly provided in this Agreement, the Exchange Agreement, the Registration Rights Agreement or the Tax Receivable Agreement.
Section 2.12 Registered Members. The Company shall be entitled to recognize the exclusive right of a Person registered on its records as the owner of Units for all purposes and shall not be bound to recognize any equitable or other claim to or interest in Units on the part of
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any other Person, whether or not it shall have express or other notice thereof, except as otherwise provided by the Act or other applicable law.
Article III
Management
Section 3.1 Managing Member; Delegation of Authority and Duties.
(a) Managing Member. The Company shall be managed by or under the direction of a Managing Member. Subject to the provisions of this Agreement, the Managing Member shall have the sole and exclusive power and authority to manage and control the business and affairs of the Company, to make all decisions and determinations with respect to the Company or affecting the business and affairs of the Company, to take all such actions as it deems necessary, advisable, appropriate or desirable to accomplish the purposes of the Company as set forth in this Agreement and shall otherwise possess all rights and powers as provided in the Act and otherwise by law to a managing member of a limited liability company. The Members hereby consent to the exercise by the Managing Member of all such powers and rights conferred on it by the Act with respect to the management and control of the Company under this Agreement. Notwithstanding the foregoing and except as expressly set forth in this Agreement (including pursuant to Section 8.5 hereof), (i) if a vote, consent or approval of the Members is required by the Act or other applicable law with respect to any act to be taken by the Company or matter considered by the Managing Member, the Members agree that they shall be deemed to have waived and shall not have the right to vote on (or otherwise consent to or approve) such matter and (ii) the approval by the Managing Member of any proposed action of or relating to the Company shall bind each Member and shall have the same legal effect as the approval of each Member of such action. No Member (other than the Partnership Representative or Designated Individual in its capacity as such), in his, her or its capacity as a Member, shall have any power to act for, sign for or do any act that would bind the Company. Each Member acknowledges and agrees that each Member and each of their respective Affiliates and Portfolio Companies do and will continue to engage for such Member’s own account and for the account of others in other business ventures.
(b) Authority of the Managing Member. The Managing Member shall have the power and authority to delegate to one or more other Persons the rights and powers of the Managing Member 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 Officers) or its Subsidiaries, and to delegate by a management agreement or another agreement with, or otherwise to, one or more of its Affiliates or its or its Affiliate(s)’ respective directors, officers, managers or equivalent persons. The Managing Member may authorize any Person (including any Officer), other than a Member, to enter into and perform under any document on behalf of the Company.
(c) Authority as an Equity Holder. Each Member agrees that any Officer (at the instruction of the Managing Member), on behalf of the Company, shall have the exclusive right to vote (or cause to vote) or execute (or cause to execute) consents with respect to Securities issued by other Persons held by the Company, directly or indirectly, on any matter to be voted upon at any meeting of the holders of such Securities or in connection with any proposed action by written consent of the holders of such Securities.
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(d) Reimbursement of Expenses. The Company shall pay, or cause to be paid, all costs, fees, operating expenses and other expenses of the Company (including the costs, fees and expenses of attorneys, accountants or other professionals) incurred in pursuing and conducting, or otherwise related to, the activities of the Company. The Company shall also, in the sole discretion of the Managing Member, bear and/or reimburse the Managing Member for (i) any costs, fees or expenses incurred by the Managing Member in connection with serving as the Managing Member and (ii) all other expenses allocable to the Company or its Subsidiaries or otherwise incurred by the Managing Member in connection with operating the Company’s business (including expenses allocated to the Managing Member by its Affiliates). To the extent that the Managing Member determines in its sole discretion that such expenses are related to the business and affairs of the Managing Member that are conducted through the Company and/or its Subsidiaries (including expenses that relate to the business and affairs of the Company and/or its Subsidiaries and that also relate to other activities of the Managing Member), the Managing Member may cause the Company to pay or bear all expenses of the Managing Member, including, without limitation, compensation and meeting costs of the board of directors or similar body of the Managing Member, any salary, bonus, incentive compensation and other amounts paid to any Person including Affiliates of the Managing Member to perform services for the Company, litigation costs and damages arising from litigation, accounting and legal costs and franchise taxes, except to the extent such franchise taxes are based on or measured with respect to Net Income or profits, provided that the Company shall not pay or bear any income tax obligations of the Managing Member or any obligations of the Managing Member under that certain Tax Receivable Agreement dated as of or about the date hereof among, inter alios, the Managing Member and the other Persons from time to time party thereto, as amended from time to time. Reimbursements pursuant to this Section 3.1(d) shall be in addition to any reimbursement to the Managing Member as a result of indemnification pursuant to Article VII.
Section 3.2 Compensation. The Managing Member shall not be entitled to any compensation for services rendered to the Company in its capacity as Managing Member.
Section 3.3 Approval or Ratification of Acts or Contracts. Subject to the terms of this Agreement (including Section 3.1(b)), any act or contract that shall be approved or be ratified by the Managing Member shall be as valid and binding upon the Company and upon all the Members (in their capacity as Members) as if it shall have been approved or ratified by every Member of the Company.
Section 3.4 Officers.(a) Designation and Appointment. The Managing Member may, from time to time, employ and retain Persons as may be necessary or appropriate for the conduct of the Company’s business (subject to the supervision and control of the Managing Member), including employees, agents and other Persons (any of whom may be a Member) who may be designated as Officers of the Company. Any number of offices may be held by the same Person. In its discretion, the Managing Member may choose not to fill any office for any period as it may deem advisable. Officers need not be residents of the State of Delaware or Members. Any Officers so designated shall have such authority and perform such duties as the Managing Member may, from time to time, delegate to them. The Managing Member may assign such titles to particular Officers as the Managing Member may authorize. Each Officer shall hold office until such Officer’s successor shall be duly designated and shall qualify or until such Officer’s death or until such Officer shall resign or shall have been removed in the manner hereinafter provided. The
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salaries or other compensation, if any, of the Officers of the Company shall be fixed from time to time by the Managing Member.
(b) Resignation/Removal. Any Officer may resign as such at any time. Such resignation shall be made in writing and shall take effect at the time specified therein, or if no time be specified, at the time of its receipt by the Managing Member. The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided in the resignation. Any Officer may be removed as such, either with or without cause, at any time by the Managing Member. Designation of an Officer shall not of itself create any contractual or employment rights.
Section 3.5 Management Matters.
(a) All property owned by the Company shall be registered in the Company’s name, in the name of a nominee or in “street name” as the Managing Member may from time to time determine. Any corporation, brokerage firm or transfer agent called upon to transfer any Securities to or from the name of the Company shall be entitled to rely on instructions or assignments signed or purported to be signed by an Officer or any other Person authorized by the Managing Member without inquiry as to the authority of the Person signing or purporting to sign such instructions or assignments or as to the validity of any transfer to or from the name of the Company. At the time of any such transfer, any such corporation, brokerage firm or transfer agent shall be entitled to assume that (i) the Company is then in existence and (ii) that this Agreement is in full force and effect and has not been amended, in each case unless such corporation, brokerage firm or transfer agent shall have received written notice to the contrary.
(b) The Managing Member may take all actions which may be necessary or appropriate (i) for the continuation of the Company’s valid existence as a limited liability company under the laws of the State of Delaware (and of each other jurisdiction in which such existence is necessary to enable the Company to conduct the business in which it is engaged) and (ii) for the maintenance, preservation and operation of the business of the Company in accordance with the provisions of this Agreement and applicable laws and regulations. The Managing Member may file or cause to be filed for recordation in the office of the appropriate authorities of the State of Delaware, and in the proper office or offices in each other jurisdiction in which the Company is formed or qualified, such certificates (including certificates of limited liability companies and fictitious name certificates) and other documents as are required by the applicable statutes, rules or regulations of any such jurisdiction or as are required to reflect the identity of the Members and the amounts of their respective Capital Contributions.
Section 3.6 Voting and Other Rights. Except as otherwise expressly provided in this Agreement, the Members (except the Managing Member) shall have no voting rights or rights of approval, veto or consent or similar rights over any actions of the Company or the Managing Member, including with respect to any merger, consolidation, division, combination or conversion of the Company, or any other matter that a Member (except the Managing Member) might otherwise have the ability to vote on or consent with respect to under the Act, at law, in equity or otherwise.
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Section 3.7 Liability of Members.
(a) Except as otherwise required by applicable law or as expressly set forth in this Agreement, no Member shall have any liability whatsoever in such Member’s capacity as a Member, whether to the Company, to any of the other Members, to the creditors of the Company or to any other third party, for the debts, liabilities, commitments or any other obligations of the Company or for any losses of the Company. Except as otherwise required by law, each Member shall be liable only to make such Member’s payments provided expressly herein.
(b) In accordance with the Act and the laws of the State of Delaware, a member of a limited liability company may, under certain circumstances, be required to return amounts previously distributed to such Member. It is the intent of the Members that no distribution to any Member pursuant to Article IV hereof shall be deemed a return of money or other property paid or distributed in violation of the Act. The payment of any such money or distribution of any such property to a Member shall be deemed to be a compromise for purposes of Section 18-502(b) of the Act, and the Member receiving any such money or property shall not be required to return to any Person any such money or property. However, if any court of competent jurisdiction holds that, notwithstanding the provisions of this Agreement, any Member is obligated to make any such payment, such obligation shall be the obligation of such Member and not of any other Member; provided, that if any Member is required to make any such payment under circumstances that are not unique to such Member but that would have been applicable to all Members in question (such as where a distribution or Tax Distribution was made to all Members and rendered the Company insolvent, but only one Member was sued for return of such distribution or Tax Distribution), then the Member that was required to return or repay such distribution (or any portion thereof) will be entitled to reimbursement from the other Members that were not required to return the distribution or Tax Distribution made to them based on each such Member’s share of the distribution or Tax Distribution in question. The provisions of the immediately preceding sentence are solely for the benefit of the Members and will not be construed as benefiting any third party. The amount of any distribution or Tax Distribution returned to the Company by a Member or paid by a Member for the account of the Company or to a creditor of the Company will be added to the account or accounts from which it was subtracted when it was distributed to such Member. Notwithstanding anything contained herein to the contrary, the failure of the Company to observe any formalities or requirements relating to the exercise of its powers or management of its business and affairs under this Agreement or the Act shall not be grounds for imposing liability on the Members for liabilities of the Company.
Section 3.8 Potential Conflicts and Competing Activities.
(a) Certain Potential Conflicts. Each Member acknowledges that:
(i) The Blackstone Member, the Founder Member, the Managing Member and each of its Affiliated Persons may engage in material business transactions with the Company or its Subsidiaries; and
(ii) the directors, officers, and/or employees of the Blackstone Member, the Founder Member, the Managing Member and each of its Affiliated Persons may serve as officers, directors and/or employees of the Company or its Subsidiaries.
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(b) Limitation of Liability. To the fullest extent permitted by law, none of the Blackstone Member, any of its Affiliates or Affiliated Persons or any manager, director, officer or employee of the Blackstone Member or any of its Affiliates or Affiliated Persons who may serve as an officer, manager, director, observer and/or employee of the Company or its Subsidiaries shall be liable to the Company or its Subsidiaries:
(i) by reason of any business decision or transaction undertaken or caused to be undertaken by an Affiliated Person of the Blackstone Member which may be adverse to the interests of the Company or its Subsidiaries;
(ii) by reason of any activity undertaken or caused to be undertaken by an Affiliated Person of the Blackstone Member or by any other Person in which the Blackstone Member or any of its Affiliates may have an investment or other financial interest which is in competition with the Company or its Subsidiaries; or
(iii) by reason of any transaction with an Affiliated Person of the Blackstone Member, or any transaction in which an Affiliated Person of the Blackstone Member has a financial interest.
(c) Competing Activities. The Members expressly acknowledge and agree that to the fullest extent permitted by applicable law: (i) the Blackstone Member, the Founder Member and (A) their respective Affiliates, (B) the managers, directors, officers and employees of the Blackstone Member and the Founder Member and their respective Affiliates (not including the Company and its Subsidiaries), including any such Person that is an Officer, (C) any of the Blackstone Member’s and its Affiliates’ portfolio companies (not including the Company or any of its Subsidiaries) in which the Blackstone Member or its Affiliates, or any of their respective Affiliates’ investment funds have made a debt or equity investment (and vice versa) (such persons, the “Portfolio Companies”) and (D) the Blackstone Member’s and its Affiliates’ respective limited partners, non-managing members or other similar direct or indirect investors (collectively, those Persons described in the foregoing clauses (A) through (D), the “Affiliated Persons” of the Blackstone Member or the Founder Member, as the case may be) have the right to, directly or indirectly, engage in and possess interests in other business ventures of every type and description, including those engaged in the same or similar business activities or lines of business as the Company or any of its Subsidiaries or deemed to be competing with the Company or any of its Subsidiaries, on its own account, or in partnership with, or as an employee, officer, director or shareholder or equityholder of any other Person, with no obligation to communicate, present or offer to the Company or any of its Subsidiaries or any equityholders or directors or officers or managers of the Company or any of its Subsidiaries (or their respective Affiliates) the right to participate therein; (ii) the Blackstone Member, the Founder Member and their respective Affiliated Persons may invest in, provide services to or otherwise do business with any client, customer or vendor of the Company or any of its Subsidiaries or any Person that directly or indirectly competes with the Company or any of its Subsidiaries (including, in each of clauses (i) and (ii), any such matters or transactions that may constitute a Corporate Opportunity); and (iii) none of the Blackstone Member, the Founder Member or any of their respective Affiliated Persons shall be deemed to have breached any duty (fiduciary, contractual or otherwise), if any, to the Company or any of its Subsidiaries or equityholders of the Company or any of its Subsidiaries (or their respective Affiliates), as the case may be, by engaging in any such activities or entering into
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any such transactions. The Company and its Subsidiaries shall have no interest or expectation in, nor right to be informed of, any potential transaction or matter which may be an investment or business opportunity or prospective economic or competitive advantage in which the Company or its Subsidiaries could have an interest or expectancy (each, a “Corporate Opportunity”), and in the event that the Blackstone Member, the Founder Member or any respective Affiliated Person thereof acquires knowledge of a potential transaction or matter which may be a Corporate Opportunity, such Person shall have no duty (fiduciary, contractual or otherwise) to communicate, offer or present such Corporate Opportunity to the Company or any of its Subsidiaries or any equityholders or other directors, officers or managers of the Company or any of its Subsidiaries (or their respective Affiliates), as the case may be. None of the Blackstone Member, the Founder Member and/or any of their respective Affiliated Persons shall be liable to the Company or any of its Subsidiaries or any other Member or other Person bound by this Agreement for breach of any duty (fiduciary, contractual or otherwise) by reason of the fact that such Person, directly or indirectly, pursues or acquires any such Corporate Opportunity for itself, directs such Corporate Opportunity to another Person or does not communicate, offer or present such Corporate Opportunity to the Company or any of its Subsidiaries or any equityholders or other directors, officers or managers of the Company or any of its Subsidiaries (or their respective Affiliates). Each Member acknowledges that this paragraph is intended to disclaim and renounce any right of the Company or any other Person bound by this Agreement with respect to the matters set forth herein. This paragraph shall be construed to effect such disclaimer and renunciation to the full extent permitted by law. Notwithstanding anything to the contrary set forth herein, this Section 3.8 shall not (i) release the Founder Member from any obligations or agreements in the Restrictive Covenant Agreement or (ii) release any Person who is an employee of the Company or its Subsidiaries from any obligations or duties that such Person may have pursuant to any other agreement that such Person may have with the Company and its Subsidiaries.
(d) Services Agreements. Each Member represents and warrants that such Members (i) has been advised by the Blackstone Member and the Company, that the Blackstone Member and/or its Affiliates have entered into an investor information agreement and an administrative services agreement with the Company and/or certain of its Subsidiaries (the “Company Parties”) (collectively, the “Services Agreements”) providing for the provision of specific services and the payment of certain fees, if any, and expenses to and indemnification of the Blackstone Member and its Affiliated Persons (and their and their respective employees, officers, directors, agents, advisors and other representatives) by the Company Parties, (ii) has been given the opportunity to be informed by the Blackstone Member and the Company of the material terms and conditions of the Services Agreements, including the fees, if any, the parameters of the expense reimbursements and indemnifications, and the time periods during which the Services Agreements shall be in effect and (iii) waives any right such Member may have to approve, or to claim any damages with respect to, the entry by any of the Company Parties into the Services Agreements.
Section 3.9 Fiduciary Duties. Notwithstanding anything to the contrary in this Agreement or at law or in equity including but not limited to the Act, each Member agrees that any fiduciary duty that would otherwise be imposed under Delaware law (including the duty of loyalty and the duty of care) on any Member, including without limitation, the Managing Member, the Blackstone Member, the Founder Member or any Affiliated Person of the Blackstone Member or the Founder Member, shall be defined, limited and eliminated as provided in this Section 3.9.
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To the fullest extent permitted by applicable law, including Section 18-1101(c) of the Act, none of the Managing Member, the Blackstone Member, the Founder Member, or any Affiliated Person (in each case, other than to the extent an Affiliated Person of the Managing Member is acting in such Person’s capacity as an Officer) shall have any duty (at law or in equity, including fiduciary duties) to the Company, its Subsidiaries, to any other Member or equityholder of the Company or its Subsidiaries or to any other Person bound by this Agreement.
Article IV
Capital Contributions;
Allocations; Distributions
Section 4.1 Uncertificated Units. Unless and until the Managing Member shall determine otherwise, Units shall be uncertificated and recorded in the Unit Register. If at any time the Managing Member shall determine to certificate Units, such certificates will bear a legend in substantially the following form:“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER STATE OR FOREIGN SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD, OR TRANSFERRED EXCEPT IN COMPLIANCE THEREWITH. THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER AS SET FORTH IN THE THIRD AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT OF JERSEY MIKE’S HOLDCO, LLC DATED AS OF JULY 29, 2026, AS AMENDED FROM TIME TO TIME, A COPY OF WHICH WILL BE FURNISHED BY JERSEY MIKE’S HOLDCO, LLC UPON REQUEST.”
Section 4.2 No Capital Contributions. No Member shall be required to make any Capital Contribution without such Member’s consent.
Section 4.3 Capital Accounts.
(a) There shall be established for each Member on the books of the Company a Capital Account which shall be increased or decreased in the manner set forth in this Agreement.
(b) A Member shall not have any obligation to the Company or to any other Member to restore any negative balance in the Capital Account of such Member.
Section 4.4 Allocations of Net Income and Net Loss.
(a) Timing and Amount of Allocations of Net Income and Net Loss. Net Income and Net Loss of the Company shall be determined and allocated with respect to each fiscal year of the Company as of the end of each such year or as circumstances otherwise require or allow. Subject to the other provisions of this Section 4.4, an allocation to a Member of a share of Net Income or Net Loss shall be treated as an allocation of the same share of each item of income, gain, loss or deduction that is taken into account in computing Net Income or Net Loss.
(b) General Allocations. Except as otherwise provided in this Agreement, all Net Income and Net Loss and to the extent necessary, individual items of income, gain, loss or
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deduction of the Company, shall be allocated in a manner such that the Capital Account of each Member after giving effect to the allocations set forth in Section 4.4(c) is, as nearly as possible, equal (proportionately) to (i) the distributions that would be made pursuant to Section 5.2 if the Company were dissolved, its affairs wound up and its assets sold for cash equal to their Gross Asset Value, all Company liabilities were satisfied (limited with respect to each non‑recourse liability to the Gross Asset Value of the assets securing such liability) and the net assets of the Company were distributed in accordance with Section 5.2 to the Members immediately after making such allocation and all Incentive Units were not subject to a risk of forfeiture based on the continued performance of services (solely for purposes of this provision), minus (ii) such Member’s share of Company Minimum Gain and Member Minimum Gain, computed immediately prior to the hypothetical sale of assets. Notwithstanding the foregoing, the Managing Member may cause the Company to make such allocations as it deems reasonably necessary to give economic effect to the provisions of this Agreement, taking into account facts and circumstances as the Managing Member deems reasonably necessary for this purpose.
(c) Additional Allocation Provisions. Notwithstanding the foregoing provisions of this Section 4.4:
(i) Regulatory Allocations.
(A) If there is a net decrease in Company Minimum Gain or Member Minimum Gain during any fiscal year, the Members shall be allocated items of Company income and gain for such year (and, if necessary, for subsequent years) in accordance with Regulations Section 1.704‑2(f) or 1.704‑2(i)(4), as applicable. It is intended that this Section 4.4(c)(i)(A) qualify and be construed as a “minimum gain chargeback” and a “chargeback of partner nonrecourse debt minimum gain” within the meaning of such Regulations, which shall be controlling in the event of a conflict between such Regulations and this Section 4.4(c)(i)(A).
(B) If any Member unexpectedly receives an adjustment, allocation or distribution described in Regulations Section 1.704‑1(b)(2)(ii)(d)(4), (5) or (6), items of Company income and gain shall be allocated, in accordance with Regulations Section 1.704‑1(b)(2)(ii)(d), to the Member in an amount and manner sufficient to eliminate, to the extent required by such Regulations, the Adjusted Capital Account Deficit of the Member as quickly as possible. It is intended that this Section 4.4(c)(i)(B) qualify and be construed as a “qualified income offset” within the meaning of Regulations 1.704‑1(b)(2)(ii)(d), which shall be controlling in the event of a conflict between such Regulations and this Section 4.4(c)(i)(B).
(C) If any Member has an Adjusted Capital Account Deficit at the end of any fiscal year which is in excess of the sum of (i) the amount such Member is obligated to restore, if any, pursuant to any provision of this Agreement, and (ii) the amount such Member is deemed to be obligated to restore pursuant to the penultimate sentences of Treasury Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such Member shall be specially allocated items of Company income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 4.4(c)(i)(C) shall be made only if and to the
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extent that a Member would have an Adjusted Capital Account Deficit in excess of such sum after all other allocations provided for in this Article IV have been tentatively made as if Section 4.4(c)(i)(B) and this Section 4.4(c)(i)(C) were not in this Agreement.
(D) Notwithstanding anything to the contrary in this Agreement, any Member Nonrecourse Deductions for any taxable year or other period for which allocations are made will be allocated to the Member who bears the economic risk of loss with respect to the Member Nonrecourse Debt to which the Member Nonrecourse Deductions are attributable in accordance with Regulations Section 1.704-2(i).
(E) The allocations set forth in Sections 4.4(c)(i)(A), (B) and (D) (the “Regulatory Allocations”) are intended to comply with certain regulatory requirements, including the requirements of Regulations Sections 1.704-1(b) and 1.704‑2. Notwithstanding the provisions of Section 4.4(b), the Regulatory Allocations shall be taken into account in allocating other items of income, gain, loss and deduction among the Members so that, to the extent possible, the net amount of such allocations of other items and the Regulatory Allocations to each Member shall be equal to the net amount that would have been allocated to each such Member if the Regulatory Allocations had not occurred.
(ii) For any fiscal year during which a Member’s interest in the Company is assigned by such Member (or by an assignee or successor in interest to a Member), the portion of the Net Income and Net Loss of the Company that is allocable in respect of such Member’s interest shall be apportioned between the assignor and the assignee of such Member’s interest using any permissible method under Section 706 of the Code and the Regulations thereunder, as determined by the Managing Member.
(iii) The Members intend that the taxation of the Incentive Units, including the issuance of the Incentive Units to Substitute Members or Additional Members, shall be determined in accordance with the following. The taxation of such issuance of such Incentive Units shall be in accordance with Rev. Proc. 93‑27, 1993‑2 C.B. 343 and Rev. Proc. 2001‑43, 2001‑2 C.B. 191, with the effect that such Incentive Units shall be treated as issued and outstanding as of the date of issuance and will be treated as a profits interest. Without limiting the foregoing, upon issuances of the revenue procedure contemplated by IRS Notice 2005-43, the Company and the Members agree to treat the Incentive Units as “safe harbor partnership interests” (as defined in such IRS Notice) and to take such actions as may be required under such revenue procedure in order for the Incentive Units to be so treated. In furtherance of the foregoing, the Managing Member shall, if necessary, limit distributions to holders of Incentive Units under Section 4.5(b)(ii), so that such distributions do not exceed the amount of available income or profits in respect of such Incentive Units as determined by the Managing Member in good faith.
(d) Required Tax Allocations. For income tax purposes, all items of income, gain, loss, deduction and credit for federal income tax purposes shall be allocated to each Member in the same manner as the Net Income or Net Loss that is allocated to such Member pursuant to
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Section 4.4(a), (b) and (c) to which such tax items relate; provided, that income, gain, loss and deduction with respect to property whose basis differs from its Gross Asset Value shall be allocated solely for income tax purposes in accordance with the principles of Sections 704(b) and 704(c) of the Code (using any method determined by the Managing Member) so as to take account of such difference. With respect to allocations under Section 704(c) of the Code, the Managing Member may elect any reasonable method under Treasury Regulations Section 1.704-3 (and similar state, local and non-U.S. law); provided that the Company shall use the “traditional method” under Treasury Regulations Section 1.704-3 (and similar state, local and non-U.S. law) with respect to (1) any property contributed to the Company prior to the IPO and (2) any “reverse 704(c) layer” resulting from the issuance of Common Units in connection with the IPO, in each case, unless otherwise determined by the Managing Member, with the consent of the Blackstone Member and the Founder Member. Notwithstanding the foregoing, the Managing Member may cause the Company to make such allocations as it deems necessary to give economic effect to the provisions of this Agreement. To the extent there is an adjustment by a taxing authority to any item of income, gain, loss, deduction or credit of the Company (or an adjustment to any Member’s distributive share thereof), the Managing Member may cause the Company to reallocate the adjusted items among each Member or former Member (as determined by the Managing Member) in accordance with the final resolution of such audit adjustment.
(e) Withholding. Each Member hereby authorizes the Company to withhold and to pay over any taxes payable by the Company or any of its Affiliates with respect to any payment, distribution or allocation to such Member, or which are otherwise attributable to such Member (including, without limitation, (i) amounts imposed pursuant under Section 6225 of the Code (or any similar or analogous provision under state, local or foreign law), (ii) amounts imposed on the Company (or any entity in which the Company invests that is treated as a flow-through entity for relevant tax purposes) with respect to income of the Company (or such entity) in lieu of taxes imposed directly on a Member with respect to such Member, and (iii) any associated interest, penalties or other additions, in each case). If and to the extent that the Company shall be required to withhold or pay any such taxes under applicable tax law, such Member shall be deemed for all purposes of this Agreement to have received a payment from the Company as of the time such withholding or other tax is required to be withheld or paid, which payment shall be deemed to be a distribution to such Member, and shall reduce the future distributions to which such Member is otherwise entitled to receive under this Agreement, provided, that if the Managing Member reasonably determines that such Member would not be expected to receive any future distributions in the amount of such withholding or payment, the Member shall pay to the Company the amount by which such withholding or payment exceeds such expected future distributions. The Managing Member shall use commercially reasonable efforts to provide a Member with prior written notice of any taxes to be withheld with respect to such Member pursuant to this Section 4.4(e) at least five (5) days prior to the date of such withholding. The withholdings referred to in this Section 4.4(e) shall be made at the maximum applicable statutory rate under applicable tax law unless the Company receives documentation, satisfactory to the Managing Member, to the effect that a lower rate is applicable, or that no withholding is applicable. To the fullest extent permitted by law, each Member hereby agrees to indemnify and hold harmless the Company and the other Members from and against any liability for taxes, penalties, additions to tax, expenses or interest with respect to income attributable to or distributions or other payments to such Member. The obligations of a Member set forth in this Section 4.4(e) shall survive the dissolution, winding
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up and termination of the Company and the resignation of a Member from the Company or any Transfer of a Member’s Units.
Section 4.5 Distributions.
(a) Distributions shall be made by the Company to the Members if, when and in such amounts determined by the Managing Member (except as otherwise provided in Section 5.2).
(b) When a distribution (other than a Tax Distribution, which is governed by Section 4.5(d)) is authorized by the Managing Member pursuant to Section 4.5(a), each Member’s allocable portion thereof will be distributed as follows, subject to Section 4.5(c), Section 4.5(d), Section 4.5(e), Section 4.5(f) and Section 4.5(g):
(i) Subject to Section 4.5(b)(ii) with respect to Incentive Units, all distributions by the Company shall be made or allocated to holders of Common Units and Participating Incentive Units pro rata based on the number of Common Units and Participating Incentive Units held by each such holder.
(ii) For the avoidance of doubt, if the amount to be distributed pursuant to Section 4.5(b)(i) with respect to any particular distribution would cause the amount of any outstanding Incentive Unit’s Participation Threshold to be reduced to zero, then such Incentive Unit shall participate in distributions under Section 4.5(b)(i) on a pro rata basis only after the portion of the amount to be distributed in such distribution that would cause such Incentive Unit’s Participation Threshold to be reduced to (but not below) zero has first been distributed to the holders of outstanding Common Units (taking into account outstanding Incentive Units that have lesser Participation Thresholds (determined immediately prior to such distribution)).
(c) If there occurs an increase in the number of Vested Units that are Incentive Units from time to time, on each subsequent distribution date, prior to making such subsequent distribution, the amounts that would otherwise have been distributable to such Incentive Units under Section 4.5(b)(ii) shall be distributed instead to the Incentive Members in respect of the Incentive Units that were outstanding and were not Vested Units on the date amounts were previously distributed under Section 4.5(b)(ii), as applicable, until the amounts distributed under this Section 4.5(c) (including any amount previously distributed under this Section 4.5(c)) equal the amounts which otherwise would have been distributable under Section 4.5(b)(ii) if such Incentive Units had been Vested Units at the time of such previous distribution(s).
(d) If the Managing Member reasonably determines that the taxable income of the Company for a taxable year will give rise to net taxable income for any Member, then the Managing Member shall cause the Company to, no later than five (5) days prior to the date on which U.S. federal corporate or individual (whichever is earlier) estimated tax payments are due for a taxpayer with a taxable year ending on December 31, make a distribution (a “Tax Distribution”) to each Member in respect of the Units held by such Member (solely to the extent of Available Cash and subject to any restrictions under the Company’s and its Subsidiaries’ financing agreements (in each case, as reasonably determined by the Managing Member)) in an
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amount equal to the excess of (x) the product of (i) the estimated net taxable income of the Company (taking into account any allocations of gross income, gain, deduction or loss) allocable to such Member in respect of the Units held by such Member for such taxable year through the end of such quarterly period and (ii) the Assumed Income Tax Rate, over (y) distributions previously made to such Member pursuant to this Section 4.5 or Section 5.2 with respect to such taxable year. If such quarterly Tax Distributions are, in the aggregate, less than the amount of Tax Distributions to which such Member is entitled pursuant to this Section 4.5(d), the Managing Member shall cause the Company to make an annual Tax Distribution to each Member sufficient to make up such shortfall (solely to the extent of Available Cash and subject to any restrictions under the Company’s and its Subsidiaries’ financing agreements (in each case, as reasonable determined by the Managing Member)). In computing taxable income or loss for purposes of this Section 4.5(d), items of income, gain, loss and deduction shall be determined (i) without taking into account any adjustments under Section 743(b) of the Code and (ii) by reducing allocable income by cumulative net taxable losses from prior taxable years to the extent such prior losses are permitted to be carried forward (subject to any limitations on the use of such carried forward amounts), are of a character that would permit such losses to be deducted against current income allocations, and have not been utilized against prior income allocations. Notwithstanding anything to the contrary in this Agreement, each Member holding Common Units (including, for the avoidance of doubt, Participating Incentive Units) shall participate in Tax Distributions on a pro rata basis in accordance with the number of such Member’s Common Units (including such Participating Incentive Units) (and, for the avoidance of doubt, any distributions made pursuant to this Section 4.5(d) to Members holding Incentive Units (other than Participating Incentive Units) shall be made in accordance with the amount of taxable income allocated to such Incentive Units). If such quarterly Tax Distributions are, in the aggregate, greater than the amount of Tax Distributions to which such Member is entitled pursuant to this Section 4.5(d), such excess shall be credited against and reduce the amount to be distributed to any such Member on the next Tax Distribution date (or dates) pursuant to this Section 4.5(d). A Tax Distribution to a Member in respect of any Unit shall be charged against current or future distributions to which such Member would otherwise have been entitled under this Section 4.5 or Section 5.2 in respect of such Unit to which such Member would otherwise be entitled. Notwithstanding the foregoing the Company shall not be required to make any distribution pursuant to this Section 4.5(d) with respect to any Unvested Units if the Company has not allocated any taxable income in the applicable taxable period to such Unvested Units.
(e) If all or a portion of a Member’s Units are transferred, sold, forfeited or otherwise disposed of, then the transferor shall have no further right to receive any further distributions in respect of such Units (including, for the avoidance of doubt, Tax Distributions which shall instead be made to such transferee with respect to such Units) and any subsequent distributions to the transferee shall be determined with regard to amounts previously distributed to the transferor. For purposes of determining the amount of distributions under this Section 4.5, any holder of a Membership Interest (or any portion thereof), whether or not such Person is a Substitute Member, shall be treated as having received amounts received by its predecessors or successors in interest.
(f) In the event of any combination of Units, recapitalization, merger, consolidation, division or other reorganization, or any Unit split, Unit dividend or other distribution in respect of Units other in the manner as set forth in this Section 4.5, the Managing
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Member shall make such equitable adjustments to this Section 4.5 as are appropriate to give effect to the economic intent of this Section 4.5 (including with respect to the applicable Participation Threshold).
(g) Notwithstanding anything to the contrary contained in this Agreement, the Company, and the Managing Member on behalf of the Company, shall not make a distribution to any Member on account of its interest in the Company if such distribution would violate the Act or other applicable law.
Section 4.6 Right of Set-Off. In connection with any withholding tax or any payment to a creditor of a Member (or the Company in the case of a failure of a Member to return a distribution required to be returned under the Act) to which the Company is subject as a result of any act or status of any Member, or to which the Company has become subject with respect to the interest of any Member, the Company shall have (and each Member hereby grants to the Company) a right of set‑off against such distributions in the amount of such withholding tax or such payment to a creditor.
Article V
RESIGNATION; Dissolution;
Transfer of Membership Interests;
Admission of New Members
Section 5.1 Member Resignation. Except in connection with a transfer of all of a Member’s Units in accordance with this Agreement, resignation by a Member from the Company shall not be permitted. In the event of a Transfer of all of a Member’s Units in accordance with this Agreement, such Member shall cease to be a Member and shall have no further rights or obligations under this Agreement, except for the obligations in Section 4.4.
Section 5.2 Dissolution.
(a) The Company shall be dissolved and its affairs shall be wound up on the first to occur of the following:
(i) a written election by the Managing Member to dissolve the Company, which written election shall be delivered to each Member; provided that, the Managing Member must receive the prior written consent of each such Initial Member prior to making any election to dissolve the Company (such consent not to be unreasonably withheld, conditioned or delayed);
(ii) at any time there are no Members, unless the business of the Company is continued in accordance with the Act; or
(iii) the entry of a decree of judicial dissolution of the Company under Section 18-802 of the Act.
Except as provided in this Agreement, the death, retirement, resignation, expulsion, incapacity, Bankruptcy or Dissolution of a Member, or the occurrence of any other event that causes a Member
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to cease to be a member of the Company, shall not cause a dissolution of the Company, and the Company shall continue in existence subject to the terms and conditions of this Agreement. Notwithstanding any other provision of this Agreement, each Member waives any right it might have under the Act or otherwise to (i) agree in writing to dissolve the Company upon such Member’s Bankruptcy, or upon the occurrence of an event that causes such Member to cease to be a member of the Company, and (ii) petition for or otherwise seek the judicial dissolution of the Company.
(b) If the Company is dissolved, the business and property of the Company shall be wound up by the Managing Member or other liquidating trustee or trustees as shall be named by the Managing Member. The costs of winding up shall be borne as a Company expense. Until final distribution, the Managing Member or other liquidating trustee shall continue to operate the Company properties with all of the power and authority of the Managing Member.
(c) The assets of the Company shall be applied in the following manner and order:
(i) All debts and obligations of the Company, if any, shall be paid, discharged or provided for by adequate reserves;
(ii) The balance, to the Members in accordance with Section 4.5.
(d) Cancellation of Certificate of Formation. On completion of the distribution of Company assets as provided herein, the Managing Member (or such other Person as the Act may require or permit) shall file a certificate of cancellation with the Secretary of State of the State of Delaware, cancel any other filings made and take such other actions as may be necessary to terminate the Company.
Section 5.3 Admission of Additional or Substitute Members.
(a) Subject to the second sentence of this Section 5.3(a), the Managing Member shall have the right, in its sole and absolute discretion, to admit as an Additional Member, any Person who acquires or receives an interest in the Company, or any part thereof from the Company. Notwithstanding anything to the contrary contained in this Agreement, without the prior written consent of the Blackstone Member and the Founder Member, the Managing Member shall not admit any Person as an Additional Member if such admission would cause the Company to become a “publicly-traded partnership,” as such term is defined in Section 469(k)(2) of the Code or Section 7704 of the Code or cause the Company to have more than one hundred (100) Tax Partners, and any admission of an Additional Member in violation of this Section 5.3(a) shall be void ab initio. Concurrently with the admission of an Additional Member, the Company shall forthwith cause any necessary papers to be filed and recorded and notice to be given wherever and to the extent required showing the admission of an Additional Member, all at the expense, including payment of any professional and filing fees incurred, of the Additional Member unless otherwise determined by the Managing Member. Upon the admission of an Additional Member, the Company shall give prompt written notice of such admission to the Blackstone Member and the Founder Member and shall provide the updated Unit Register reflecting the name, address and Units of such Additional Member to the Blackstone Member and the Founder Member.
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(b) Subject to the penultimate sentence of this Section 5.3(b), the Managing Member shall have the right, in its sole and absolute discretion, to admit as a Substitute Member any Person who acquires a Membership Interest from a Member in accordance with Section 5.4 and such Substitute Member shall succeed to the Membership Interest acquired from such Member, including such Member’s Capital Contributions with respect to such Membership Interests; provided, that, if such transferee is not admitted as a Substitute Member or if the Blackstone Member provides notice to the Managing Member that any transferee of such Blackstone Member would not be a Substitute Member, such transferee will not become a Substitute Member, except that such transferee’s Membership Interests acquired from the Blackstone Member would nevertheless succeed to the Blackstone Member’s Capital Contributions with respect to such Membership Interests. Notwithstanding anything to the contrary contained in this Agreement, without the prior written consent of the Blackstone Member and the Founder Member, the Company shall not admit any Person as a Substitute Member if such admission would cause the Company to become a “publicly-traded partnership,” as such term is defined in Section 469(k)(2) of the Code or Section 7704 of the Code or cause the Company to have more than one hundred (100) Tax Partners, and any admission of a Person as a Substitute Member in violation of this Section 5.3(b) shall be void ab initio. Concurrently with the admission of a Substitute Member, the Company shall forthwith cause any necessary papers to be filed and recorded and notice to be given wherever and to the extent required showing the substitution of a transferee as a Substitute Member in place of the transferring Member. Upon the admission of a Substitute Member, the Company shall give prompt written notice of such admission to the Blackstone Member and the Founder Member and shall provide the updated Unit Register reflecting the name, address and Units of such Substitute Member to the Blackstone Member and the Founder Member.
(c) The admission of any Person as a Substitute Member or Additional Member shall be conditioned upon (i) such Person’s written acceptance and adoption of all the terms and provisions of this Agreement, either by (A) execution and delivery of a counterpart signature page to this Agreement countersigned by any Officer or any other Person authorized by the Managing Member on behalf of the Company or (B) any other writing required by the Managing Member evidencing the intent of such Person to become a Substitute Member or Additional Member and to be bound by this Agreement, and (ii) such other documentation as the Managing Member may reasonably request to confirm such Transfer’s compliance with the provisions of this Article V, including Section 5.4(b) hereof, which reasonable request may (except in the case of a Transfer by an Initial Member to its Permitted Transferee), at the Managing Member’s discretion, include a request for a written opinion of legal counsel, which opinion shall be satisfactory in form and substance to the Company and its legal counsel (in additional to any opinion that the Managing Member may reasonably require to be delivered).
Section 5.4 Transfer of Member’s Interest.
(a)
(i) Except as provided in this Section 5.4, no Member may Transfer all or part of such Member’s Membership Interest without the prior approval of the Managing Member, which approval may be given or withheld in the sole discretion of the Managing Member (as applicable), except that each Member may Transfer all or a portion of such
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Member’s Units to any Permitted Transferee of such Member without the prior written consent of the Managing Member (subject to compliance with this Agreement, including Section 5.4(b)(iii) below).
(ii) Notwithstanding any provision hereof to the contrary or in the operating agreement of the Management Aggregator, no indirect Transfer of any Units held by the Management Aggregator (including as a result of any Transfer of interests in the Management Aggregator) shall be permitted without the prior consent of the Managing Member and, and for so long as the Blackstone Member has the right to elect one or more directors of PubCo under the PubCo Stockholders Agreement dated July 29, 2026 by and between the PubCo and each other party thereto, the Blackstone Member.
(b) Notwithstanding any provision hereof to the contrary (other than Section 5.4(d) below, which shall supersede this provision), without the prior consent of the Managing Member and, in the case of (iii) below, the Blackstone Member and the Founder Member, no Transfer of an interest in the Company may be made if such Transfer would:
(i) violate any federal, state and other applicable laws, including any federal, state and other securities laws applicable to the Company and the Units;
(ii) cause the Company to become subject to the registration requirements of the Investment Company Act, the Exchange Act or any other securities laws of any jurisdiction;
(iii) cause the Company to (a) become a “publicly-traded partnership,” as such term is defined in Section 469(k)(2) of the Code or Section 7704 of the Code or (b) have more than one hundred (100) Tax Partners;
(iv) require the registration of such Units pursuant to any applicable securities laws of any jurisdiction;
(v) violate any provision of this Agreement; or
(vi) cause (A) all or any portion of the assets of the Company (i) to constitute “plan assets” (for purposes of Title I of ERISA, Section 4975 of the Code or the applicable provisions of any Similar Law) of any existing or prospective Member or (ii) to be subject to the provisions of Title I of ERISA, Section 4975 of the Code or any applicable Similar Law or (B) the Managing Member to become a fiduciary with respect to any existing or prospective Member, pursuant to ERISA or the applicable provisions of any Similar Law or otherwise.
(c) Any purported Transfer of Units or Membership Interests other than in accordance with this Agreement shall be null and void ab initio, and the Company shall refuse to recognize any such Transfer for any purpose and shall not reflect in its records any change in record ownership of Units pursuant to any such Transfer.
(d) Subject to the final sentence of this Section 5.4(d), notwithstanding anything otherwise to the contrary in this Section 5.4, each Member may Transfer Common Units
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in Exchange Transactions (including any Common Units received in an Incentive Unit Exchange on or prior to the date of such Exchange Transaction) pursuant to, and in accordance with, the Exchange Agreement; provided that in the case of any Member other than an Initial Member, such Exchange Transaction shall be effected in compliance with reasonable policies that the Managing Member may adopt or promulgate from time to time (including policies requiring the use of designated administrators or brokers) in its sole discretion. Notwithstanding anything to the contrary in this Agreement, without the prior written consent of the Blackstone Member and the Founder Member, no such Transfer shall cause the Company to become a “publicly-traded partnership,” as such term is defined in Section 469(k)(2) of the Code or Section 7704 of the Code or cause the Company to have more than one hundred (100) Tax Partners, and any Transfer in violation of this Section 5.4(d) shall be void ab initio.
(e) A holder of Common Units shall not Transfer Common Units to any transferee unless such holder also simultaneously transfers an equal number of such holder’s shares of Class B Common Stock to such transferee in compliance with the Exchange Agreement, this Agreement and the certificate of incorporation of the Managing Member, and only to the extent such Transfer does not breach or violate, or cause any default under, this Agreement, the certificate of incorporation of the Managing Member or the Exchange Agreement, it being understood that a Permitted Pledge shall be deemed not to breach or violate, or cause a default under, such agreements and certificates.
(f) Notwithstanding anything otherwise to the contrary in this Section 5.4(f), each Incentive Member shall be entitled from and after one (1) year following the consummation of the date of the closing of the IPO (or such earlier time as may be determined by the Managing Member in its sole discretion), upon the terms and subject to the conditions hereof, to surrender Incentive Units that are Vested Units (such units, “Exchanged Incentive Units”) to the Company, in exchange for the delivery to such Incentive Member a number of Common Units that is equal to the product of the number of Exchanged Incentive Units surrendered multiplied by the Incentive Unit Exchange Rate (such exchange, an “Incentive Unit Exchange”), which newly issued Common Units may be exchanged in an Exchange Transaction pursuant to and in accordance with Section 5.4. Any such Incentive Unit Exchange shall be effected in compliance with such reasonable policies that the Managing Member may adopt or promulgate from time to time in its sole discretion.
(g) The Managing Member may in its sole discretion at any time and from time to time, without the consent of any Member or other Person, (i) cause to be Transferred in an Exchange Transaction any and all Common Units (including Common Units received in an Incentive Unit Exchange), except for Common Units held by any Person that is an Initial Member at the time in question and/or in which a Person that is an Initial Member at the time in question has an indirect interest as set forth in the books and records of the Company or Initial Member or (ii) cause to be Transferred in an Incentive Unit Exchange any and all Incentive Units; provided that any Transfer that affects the Common Units or Incentive Units held by a Person that is an employee or director of Jersey Mike’s Subs Inc. or its subsidiaries or a Related Person of such employee, shall require the prior written consent of such employee or director for so long as he or she remains an employee or director of Jersey Mike’s Subs Inc. or its subsidiaries. Any such determinations by the Managing Member need not be uniform and may be made selectively among Members, whether or not such Members are similarly situated. In addition, the Managing Member
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may, with the consent of the Blackstone Member, and the consent of Members holding at least 66 2/3% of the outstanding Common Units, require all Members to Transfer in an Exchange Transaction all Common Units held by them; provided that the prior written consent of each Initial Member affected by any such proposed Transfer will be required.
(h) Notwithstanding any provision hereof to the contrary no Transfer of an interest in the Company (other than any Transfer pursuant to an Exchange Transaction in accordance with this Agreement) may be made unless the Managing Member and the Blackstone Member determine that such Transfer would not result in a risk that the Company would become a “publicly-traded partnership,” as such term is defined in Section 469(k)(2) of the Code or Section 7704 of the Code or that it would cause the Company to have more than one hundred (100) Tax Partners (in each case, taking into account such current, anticipated or potential transactions or other facts and circumstances as the Managing Member and the Blackstone Member, may deem necessary or appropriate), and any Transfer in violation of this Section 5.4(h) shall be void ab initio. Each of the Managing Member and the Blackstone Member agrees that it will not unreasonably withhold, condition or delay its consent under this Section 5.4(h) to any Transfer by the Founder Member or the Blackstone Member that is otherwise permitted by this Agreement to the extent such Transfer would not (in the determination of the Managing Member and Blackstone acting reasonably and in good faith) result in an increase in the number of Tax Partners as compared to the number of Tax Partners immediately prior to such Transfer.
(i) For purposes of this Section 5.4 and the definitions used herein, the term “Transfer” shall include any transfer of (or deemed transfer of) a Unit for U.S. federal income tax purposes, including as a result of a Member that is a disregarded entity becoming a regarded entity for U.S. federal income tax purposes (or vice versa). For the avoidance of doubt, it is understood that a Permitted Pledge shall not be a Transfer and the bank or financial institution in respect of whom the Permitted Pledge is made shall not be treated as a transferee or entitled to any rights under this Agreement as a result of such Permitted Pledge.
(j) The Managing Member, in its capacity as managing member of Management Aggregator, shall not consent to any transfer of an interest in the Management Aggregator without the prior consent of the Blackstone Member.
Section 5.5 Subsidiary Distributions. If the Company distributes Securities of a Subsidiary to Members, then the rights and obligations of Members under this Agreement shall apply, mutatis mutandis, to such Member with respect to the Securities received in such distribution.
Section 5.6 Encumbrances. Except as otherwise provided herein, no Member or assignee of a Unit other than the Blackstone Member or the Founder Member (to the extent for the Founder Member, only approved in accordance with the Managing Member’s insider trading policy) may create an Encumbrance with respect to all or any portion of its Units (or any beneficial interest therein) other than Encumbrances that run in favor of the Member unless the Managing Member consents in writing thereto, which consent may be given or withheld, or made subject to such conditions as are determined by the Managing Member, in the Managing Member’s sole discretion. Consent of the Managing Member shall be withheld until the holder of the Encumbrance acknowledges the terms and conditions of this Agreement. Any purported
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Encumbrance that is not in accordance with this Agreement shall be, to the fullest extent permitted by law, null and void (it being understood that a Permitted Pledge shall be an Encumbrance that is in accordance with this Agreement).
Section 5.7 Further Restrictions. Notwithstanding any contrary provision in this Agreement, the Managing Member may impose such vesting requirements, forfeiture provisions, Transfer restrictions, minimum retained ownership requirements or other similar provisions with respect to any Units that are outstanding as of the date of this Agreement or are created thereafter, with the written consent of the holder of such Units. Such requirements, provisions and restrictions need not be uniform and may be waived or released by the Managing Member in its sole discretion with respect to all or a portion of the Units owned by any one or more Members at any time and from time to time, and shall not constitute the breach of any duty hereunder or otherwise existing at law, in equity or otherwise.
Article VI
Reports to Members; Tax Matters
Section 6.1 Books of Account.
(a) Appropriate books of account shall be kept by the Company, in accordance with generally accepted accounting principles, at the principal place of business of the Company, and the Managing Member shall have access to all books, records and accounts of the Company and the right to make copies thereof for any purpose reasonably related to such Member’s interest as a member of the Company, in each case, under such conditions and restrictions as the Managing Member may reasonably prescribe. Except as provided in this Agreement including, without limitation, Section 7.10, each Member hereby waives any and all rights that, absent this waiver, such Member would otherwise have under Section 18-305 of the Act.
(b) All determinations, valuations and other matters of judgment required to be made for accounting purposes under this Agreement shall be made by the Managing Member and shall be conclusive and binding on all Members, their successors, heirs, estates or legal representatives and any other Person, and to the fullest extent permitted by law no such Person shall have the right to an accounting or an appraisal of the assets of the Company or any successor thereto, including in any sale transaction or other merger, consolidation, division, recapitalization or other reorganization.
(c) Subject to any other rights to information to which Members may be contractually entitled, the Managing Member may keep confidential from the other Members, for such period of time as the Managing Member determines in its sole discretion, (i) any information that the Managing Member reasonably believes to be in the nature of trade secrets or (ii) other information the disclosure of which the Managing Member believes is not in the best interests of the Company, could damage the Company or its business or that the Company is required by law or by agreement with any third party to keep confidential, including without limitation, information as to the Units held by any other Member. With respect to any schedules, annexes or exhibits to this Agreement, each Member (other than the Managing Member) shall only be entitled to receive and review any such schedules, annexes and exhibits relating to such Member and shall not be
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entitled to receive or review any schedules, annexes or exhibits relating to any Member (other than the Managing Member).
Section 6.2 Fiscal Year. The fiscal year of the Company shall end on the last Sunday of each calendar year unless otherwise determined by the Managing Member in accordance with Section 706 of the Code.
Section 6.3 Certain Tax Matters.
(a) The Managing Member shall cause the Company (and/or its or its Subsidiaries’ employees and/or agents) to prepare, or cause to be prepared all federal, state and local tax returns of the Company for each year for which such returns are required to be filed and shall cause such returns to be timely filed, and shall reasonably determine the appropriate treatment of each item of income, gain, loss, deduction and credit of the Company and the accounting methods and conventions under the tax laws of the United States, the several states and other relevant jurisdictions as to the treatment of any such item or any other method or procedure related to the preparation of such tax returns. The Company shall deliver to each Member who is or was a Member during the applicable tax period the following information: (i) on or prior to each March 15, May 15, August 15 and October 15, estimates of year to date net taxable income for the taxable period in which such dates occur; (ii) on or prior to February 15 of the following year, estimates of full year taxable income for the preceding taxable year, with an updated estimate to be delivered by April 1; and (iii) within 210 days after the entity’s year-end, a final Schedule K-1 for such taxable year, along with copies of all other federal, state and local income tax returns or reports filed by the entity for such year as may be required as a result of the operations of the entity (which, in each case, shall include the separate allocation of effectively connected income, unrelated business taxable income, and all other separately stated items), a schedule of book-tax differences for the immediately preceding tax year and such other tax information as shall be reasonably necessary for the preparation by the Members of their federal, state and local income tax returns and other tax information reporting. In each case, the information provided by the Company shall include the separate allocation of fixed, determinable, annual or periodical income, effectively connected income, unrelated business taxable income, long-term capital gains and losses, “section 1231” gains and losses, and all other separately stated items, state apportionment information, gross receipts tax information, and such other tax information as may be reasonably requested by the Managing Member. For so long as the Founder Member owns any outstanding Securities of the Company (or any successor thereto), the Founder Member Representative shall be entitled to such additional information as the Founder Member Representative may reasonably request to comply with the Founder Corp’s tax compliance obligations, which information the Company shall deliver to the Founder Member Representative within the time periods in which such information is provided to the Managing Member (or, if such information was not provided to the Managing Member, as soon as reasonably practicable after such request). The Company shall bear the cost of preparing and filing the Company’s and its Subsidiaries’ tax returns. The Managing Member may cause the Company to make or refrain from making any and all elections permitted by tax laws and may make all other tax decisions and determinations relating to U.S. federal, state or local tax matters of the Company, in each case, at the expense of the Company. Each Member agrees not to, except as otherwise required by applicable law or regulatory requirements, (i) treat, on such Member’s individual income tax returns, any item of income, gain, loss, deduction or credit relating to such Member’s interest in the Company in a manner inconsistent with the
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treatment of such item by the Company as reflected on the Schedule K-1 or other information statement furnished by the Company to such Member for use in preparing such Member’s income tax returns or (ii) file any claim for refund relating to any such item based on, or which would result in, such inconsistent treatment.
(b) The Company intends to be classified and treated as a partnership for United States federal tax purposes. In connection therewith, the Members hereby consent to the making of any elections pursuant to Treasury Regulations Section 301.7701-3 consistent with such treatment and agree not to revoke such elections except as permitted by the terms of this Agreement.
(c) The Company and each other Member hereby designates the Managing Member to act as or cause the Company to appoint a “partnership representative” within the meaning of Section 6223(a) of the Code (as amended by the Bipartisan Budget Act of 2015) of the Company (the “Partnership Representative”) and a “designated individual” within the meaning of Treasury Regulation Section 301.6223-1(b) (a “Designated Individual”). The Partnership Representative shall have all of the rights, duties, powers and obligations provided for in Sections 6221 through 6231 of the Code with respect to the Company. To the fullest extent permitted by applicable law, each Member agrees to indemnify and hold harmless the Company and all other Members from and against any and all liabilities, obligations, damages, deficiencies and expenses resulting from any breach or violation by such Member of the provisions of Section 6.3(a) and Section 6.3(b) and from all actions, suits, proceedings, demands, assessments, judgments, costs and expenses, including reasonable attorneys’ fees and disbursements, incident to any such breach or violation. For the avoidance of doubt, the provisions relating to liability and indemnification of Members set forth in Article VII of this Agreement shall be fully applicable to the Partnership Representative and the Designated Individual, each in its capacity as such.
(d) If the Company pays an imputed underpayment pursuant to Section 6225 of the Code or any similar provision of state, local or non-U.S. law, to the extent possible, the portion thereof attributable to a Member shall be treated as a withholding tax with respect to such Member under Section 4.4(e). To the extent that such portion of an imputed underpayment cannot be withheld from a current distribution, the Member (or former Member) shall be liable to the Company for the amount that cannot be so offset in accordance with Section 4.4(e) and Section 4.6. The Managing Member may cause the Company to elect the “alternative procedure” set forth in Section 6226 of the Code (or any similar provision of state, local or non-U.S. law) instead of paying an imputed underpayment.
(e) The Managing Member shall cause the Company to have in effect (and to cause each direct or indirect subsidiary that is treated as a partnership for U.S. federal income tax purposes) an election, pursuant to Section 754 of the Code, to adjust the tax basis of Company properties, for the taxable year that includes the date of the IPO and for each taxable year in which an Exchange Transaction occurs.
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Article VII
Liability, Exculpation, Indemnification and Insurance
Section 7.1 Liability. To the fullest extent permitted by law, the debts, obligations and liabilities of the Company and its Subsidiaries, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company and its Subsidiaries, and no Covered Person or Member shall be obligated personally for the repayment, satisfaction or discharge of any such debt, obligation or liability of the Company and its Subsidiaries solely by reason of being a Covered Person or Member. To the fullest extent permitted by law, a Covered Person or Member shall also not, solely by reason of being a Covered Person or Member, be bound by, or personally liable to any third Person for a judgment, decree or order of any Governmental Authority or in any other manner, for the expenses or liabilities of the Company or any of its Subsidiaries, whether arising in contract, tort or otherwise.
Section 7.2 Duties and Liabilities of Covered Persons. No Covered Person shall be liable or accountable in damages or otherwise to the Company, the Managing Member, any other Member or any other Person bound by this Agreement for any loss or liability arising out of any act or omission on behalf of the Company taken or omitted by such Covered Person, so long as such act or omission did not constitute Disabling Conduct. To the fullest extent permitted by law, no Covered Person (other than any Officer in their capacity as such) shall be required to consider the interests of, or have any duty stated or implied by law or equity (including any fiduciary duty) to any other Covered Person or the Company by virtue of owning any interest in the Company or being a Member. Furthermore, each of the Members and the Company hereby waives any and all fiduciary duties that, absent such waiver, may be implied by applicable law and, in doing so, acknowledges and agrees that the duties and obligations of each Covered Person to each other, to the Company and its Subsidiaries, the Members are only as expressly set forth in this Agreement and the exculpation and indemnification provisions of this Agreement do not restore or create, whether in contract or otherwise, any fiduciary duties. Notwithstanding the foregoing, (i) the foregoing shall not release any Covered Person who is an employee of the Company or its Subsidiaries from any obligation or duties that such Covered Person may have in their capacity as an employee of the Company or its Subsidiaries or pursuant to any other agreement that such Covered Person may have with the Company and the Subsidiaries and (ii) the foregoing shall not eliminate the obligation of each such Person to act in compliance with the express terms of this Agreement or the obligation of the parties hereto to act in accordance with the implied contractual covenant of good faith and fair dealing imposed under Delaware law. The provisions of this Agreement, to the extent that they restrict or eliminate the duties and liabilities of a Covered Person otherwise existing at law or in equity, are agreed by the Members and each other Person bound by this Agreement to replace such other duties and liabilities of such Covered Person. To the extent that, at law or in equity, any Covered Person has duties and liabilities related thereto to the Company or to any other Covered Person, a Covered Person acting under this Agreement shall not be liable to the Company, the Members, any other Covered Person or any other Person bound by this Agreement for such Covered Person’s good faith reliance on the provisions of this Agreement. Whenever in this Agreement a Covered Person is permitted or required to make a decision (including a decision that is in such Covered Person’s “discretion” or under a grant of similar authority or latitude), the Covered Person shall be entitled to consider only such interests and factors as such Covered Person desires, including its own interests, and shall
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have no duty or obligation to give any consideration to any interest of or factors affecting the Company or any other Person (in each case, subject to, with respect to any Officer (in their capacity as such), its fiduciary duties to the Company). Whenever in this Agreement a Covered Person is permitted or required to make a decision in such Covered Person’s “good faith” or under another express standard, the Covered Person shall act under such express standard and shall not be subject to any other or different standard imposed by this Agreement or any other applicable law.
Section 7.3 Exculpation. To the fullest extent permitted by law, and except as otherwise expressly provided herein, no Covered Person shall be liable to the Company, its Subsidiaries or any Member or any other Person bound by this Agreement for any Claims and Expenses arising out of any act or omission of such Covered Person on behalf of the Company or its Subsidiaries to the extent that such act or omission did not constitute Disabling Conduct. A Covered Person shall be fully protected in relying in good faith upon the records of the Company or its Subsidiaries and upon such information, opinions, reports or statements presented to the Company or its Subsidiaries by any Person as to matters the Covered Person believes are within such other Person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Company or its Subsidiaries, including information, opinions, reports or statements as to the value and amount of assets, liabilities, profits or losses or any other facts pertinent to the existence and amount of assets from which distributions to Members might properly be paid.
Section 7.4 Indemnification. To the fullest extent permitted by applicable law, the Company shall indemnify and hold harmless each of the Covered Persons from and against any and all liabilities, obligations, losses, claims, damages, fines, costs, expenses and disbursements (including reasonable and documented legal and accounting fees and expenses, costs of investigation and sums paid in settlement), and any taxes and interest and penalties thereon (other than taxes based on fees or other compensation received by such Covered Person from the Company), of any kind or nature whatsoever (collectively, “Expenses”) arising from all any and all claims, demands, actions, suits, proceedings (whether civil, criminal, administrative, investigative or otherwise) (collectively, “Claims”) which may be imposed on, incurred by or asserted at any time against such Covered Person in any way related to or arising out of this Agreement, the Company or the management or administration of the Company or in connection with the business or affairs of the Company and/or the Managing Member or the activities of such Covered Person, including the business of the Managing Member, on behalf of the Company and/or the Managing Member or the direct or indirect ownership of Units or other interests of the Company; provided, that a Covered Person shall not be entitled to indemnification hereunder for (i) any Claims (or Expenses relating thereto), except counterclaims (and Expenses relating thereto) that are finally determined by a court of competent jurisdiction to have resulted from such Covered Person’s Disabling Conduct or (ii) any Claims (or Expenses relating thereto) that are brought by such Covered Person against the Company or any of its Subsidiaries or another Covered Person (other than counterclaims (or Expenses related thereto) brought by a counterclaimant in response thereto).
Section 7.5 Advancement of Expenses. To the fullest extent permitted by applicable law, the Company shall pay the expenses (including reasonable legal fees and expenses and costs of investigation) incurred by a Covered Person in defending any claim, demand, action, suit or proceeding, including for a material breach or violation of this Agreement (other than a
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direct claim, demand, action, suit or proceeding brought by the Company against any Other Member or a counterclaim in response to a direct claim, demand, action, suit or proceeding brought by a Covered Person against the Company or any of its Subsidiaries or another Covered Person, including for material breach or violation of this Agreement) as such expenses are incurred by such Covered Person and in advance of the final disposition of such matter, provided, that such Covered Person undertakes to repay such expenses if it is determined by agreement between such Covered Person and the Company or, in the absence of such an agreement, by a final judgment of a court of competent jurisdiction that such Covered Person is not entitled to be indemnified pursuant to Section 7.4, including as a result of such Covered Person’s Disabling Conduct.
Section 7.6 Notice of Proceedings. Promptly after receipt by a Covered Person of notice of the commencement of any proceeding against such Covered Person, such Covered Person shall, if a claim for indemnification in respect thereof is to be made against the Company, give written notice to the Managing Member of the commencement of such proceeding, provided, that the failure of a Covered Person to give notice as provided herein shall not relieve the Company of its obligations under Sections 7.4 and 7.5, except to the extent that the Company is actually prejudiced by such failure to give notice. In case any such proceeding is brought against a Covered Person (other than a proceeding by or in the right of the Company), after the Company has acknowledged in writing its obligation to indemnify and hold harmless the Covered Person, the Company will be entitled to assume the defense of such proceeding; provided, that (i) the Covered Person shall be entitled to participate in such proceeding and to retain its own counsel at its own expense and (ii) if the Covered Person shall give notice to the Company that in its good faith judgment certain claims made against it in such proceeding could have a material adverse effect on the Covered Person or its Affiliates other than as a result of monetary damages, the Covered Person shall have the right to control (at its own expense and with counsel reasonably satisfactory to the Company) the defense of such specific claims with respect to the Covered Person (but not with respect to the Company or any other Member); and provided further that if a Covered Person elects to control the defense of a specific claim with respect to such Covered Person, such Covered Person shall not consent to the entry of a judgment or enter into a settlement that would require the Company to pay any amounts under Section 7.4 without the prior written consent of the Company, such consent not to be unreasonably withheld. After notice from the Company to such Covered Person acknowledging the Company’s obligation to indemnify and hold harmless the Covered Person and electing to assume the defense of such proceeding, the Company will not be liable for expenses subsequently incurred by such Covered Person in connection with the defense thereof. Without the consent of such Covered Person, the Company will not consent to the entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Covered Person of a release from all liability arising out of the proceeding and claims asserted therein.
Section 7.7 Insurance. The Company may, or may cause an Affiliate to, purchase and maintain directors and officers insurance, at its expense, for the benefit of the Managing Member and officers of the Company, providing coverage in such scope and subject to such limits as the Managing Member determines, in its discretion, is appropriate.
Section 7.8 Indemnitor of First Resort. Without limiting the foregoing, the Company and each Member hereby acknowledges that one or more of the Covered Persons may have certain rights to indemnification, advancement of expenses and/or insurance provided by an
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Affiliated Institution. The Company and each Member hereby agrees that, with respect to any such Covered Persons, the Company (i) is, relative to each Affiliated Institution, the indemnitor of first resort (i.e., its obligations to the applicable Covered Person under this Agreement are primary and any duplicative, overlapping or corresponding obligations of an Affiliated Institution are secondary), (ii) shall be required to make all advances and other payments under this Agreement, and shall be fully liable therefor, without regard to any rights any Covered Person may have against such Covered Person’s Affiliated Institution and (iii) irrevocably waives, relinquishes and releases any such Affiliated Institution from any and all claims against such Affiliated Institution for contribution, subrogation or any other recovery of any kind in respect thereof. The Company further agrees that no advancement or payment by an Affiliated Institution on behalf of a Covered Person with respect to any claim for which such Covered Person has sought indemnification from the Company shall affect the foregoing and any such Affiliated Institution shall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of any such applicable Covered Person against the Company. The Company and each Member agree that each Affiliated Institution is an express third party beneficiary of the terms of this Section 7.8.
Section 7.9 No Appraisal; Release. Each of the Other Members hereby (i) acknowledges and agrees that the number of Units recorded in the Unit Register as being held by such Other Member are all of the Units that such Other Member is entitled to pursuant to any subscription agreement or otherwise, (ii) waives any appraisal rights that such Member may have under the Act (or otherwise) with respect to any transaction involving the Company or any of its Subsidiaries that is approved by the Managing Member, (iii) agrees not to demand or exercise appraisal or dissenters rights under any applicable law with respect to such transaction in the event that appraisal rights are available with respect to such transaction and (iv) acknowledges and agrees that, upon the receipt and acceptance of any distribution made to such Other Member pursuant to Section 4.5, such Other Member shall release the Company, its Subsidiaries and any Covered Persons from any claim, demands, actions, proceedings, damages, losses or liabilities of any kind whatsoever that such Other Member may have or may have had under this Agreement arising out of or attributable to the distribution (including the accuracy or sufficiency thereof) to such Other Member.
Section 7.10 Non-Exclusivity of Rights. The provisions of this Article VII shall be applicable to all actions, claims, suits or proceedings made or commenced after the date of this Agreement, whether arising from acts or omissions to act occurring before or after its adoption. The provisions of this Article VII shall be deemed to be a contract between the Company and each Person entitled to indemnification under this Article VII (or legal representative thereof) who serves in such capacity at any time while this Article VII and the relevant provisions of applicable law, if any, are in effect, and any amendment, modification or repeal hereof shall not affect any rights or obligations then existing with respect to any state of facts or any action, suit or proceeding then or theretofore existing, or any action, suit or proceeding thereafter brought or threatened based in whole or in part on any such state of facts. If any provision of this Article VII shall be found to be invalid or limited in application by reason of any law or regulation, it shall not affect the validity of the remaining provisions hereof. The rights of indemnification and advancement provided in this Article VII shall neither be exclusive of, nor be deemed in limitation of, any rights to which any Person may otherwise be or become entitled or permitted by contract, this Agreement or as a matter of law, both as to actions in such person’s official capacity and actions in any other capacity,
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it being the policy of the Company that indemnification of and advancement to any person whom the Company is obligated to indemnify or advance expenses pursuant to Section 7.4 and Section 7.5 shall be made to the fullest extent permitted by law.
Article VIII
Miscellaneous
Section 8.1 Governing Law; Severability. THIS AGREEMENT IS GOVERNED BY AND SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF DELAWARE, EXCLUDING ANY CONFLICT-OF-LAWS RULE OR PRINCIPLE THAT MIGHT REFER THE GOVERNANCE OR THE CONSTRUCTION OF THIS AGREEMENT TO THE LAW OF ANOTHER JURISDICTION. In the event of a direct conflict between the provisions of this Agreement or any mandatory provision of the Act, the Act shall control. If any provision of this Agreement or the application thereof to any Person or circumstance is held invalid or unenforceable to any extent, the remainder of this Agreement and the application of that provision to other Persons or circumstances is not affected thereby and that provision shall be enforced to the greatest extent permitted by law.
Section 8.2 Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto, their respective heirs and personal representatives; provided, that, to the fullest extent permitted by law, no Person claiming by, through or under a Member (whether such Member’s heir, personal representative or otherwise), as distinct from such Member itself, shall have any rights as, or in respect to, a Member (including the right to approve or vote on any matter or to notice thereof).
Section 8.3 Confidentiality. By executing this Agreement, each Member expressly agrees, at all times during the term of the Company and for a period of five (5) years thereafter, to maintain the confidentiality of, and not to disclose to any Person other than the Company, another Member, a Person designated by the Company or any of their respective partners, officers, directors, managers, members, employees, financial planners, accountants, attorneys or other advisors or representatives, any information relating to the business, financial results or clients of the Company or any of its Subsidiaries that is not generally known to the public, except in each case as otherwise required by law or judicial or administrative process or by any regulatory or self‑regulatory organization having jurisdiction and except in the case of any Member who is employed by any entity controlled by the Company in the ordinary course of his or her duties; provided, that, notwithstanding the foregoing, the Company and the Members agree that (i) each of the Blackstone Member and any of its Subsequent Transferees may disclose any such information as part of such Member’s or any of their respective Affiliates’ ordinary course of business or governance, including normal reporting, rating or review procedures (including normal credit rating and pricing process) or in connection with such Member’s or any of their respective Affiliates’ normal fund raising, marketing, informational or reporting activities at a customary level of detail (including to investors) and (ii) the Blackstone Member and, after the fourth anniversary of the IPO (or, with respect to Permitted Transferees, anytime), the Founder Member (and, in each case, their respective Permitted Transferees), may disclose any such information to any prospective transferee of such Member or its Subsequent Transferee permitted pursuant to the terms of this Agreement, in each case, as long as such prospective transferee agrees
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to be bound by a confidentiality agreement or similar written obligation for the benefit of the Company. Notwithstanding anything in this Agreement to the contrary, without the prior written consent of the Blackstone Member, no Member, its equityholders or its Affiliates shall use the “Blackstone” name or reference the Blackstone Member’s ownership in the Company and its Subsidiaries except as required by law or judicial or administrative process or by any regulatory or self‑regulatory organization having jurisdiction.
Section 8.4 Investment Representations of Members. Each Member (as to himself, herself, or itself only) hereby represents and warrants to and acknowledges with the Company that:
(a) (i) such Member has such knowledge and experience in financial and business matters and is capable of evaluating the merits and risks of an investment in the Company and making an informed investment decision with respect thereto; (ii) such Member is able to bear the economic and financial risk of an investment in the Company for an indefinite period of time; (iii) such Member is acquiring interests in the Company with a view to, or for resale in connection with, any distribution of any Securities of the Company to the public or public offering thereof; (iv) the interests in the Company have not been registered under the securities laws of any jurisdiction and cannot be disposed of unless they are subsequently registered and/or qualified under applicable securities laws (or there is an exemption therefrom) and the provisions of this Agreement have been complied with; (v) the execution, delivery and performance of this Agreement have been duly authorized by such Member and do not require such Member to obtain any consent or approval that has not been obtained and do not contravene or result in a default under any provision of any law or regulation applicable to such Member or other governing documents or any agreement or instrument to which such Member is a party or by which such Member is bound; and (vi) this Agreement is valid, binding and enforceable against such Member in accordance with its terms;
(b) this Agreement has been duly and validly executed and delivered by such Member, and this Agreement constitutes a legal and binding obligation of such Member, enforceable against such Member in accordance with its terms; and
(c) the execution, delivery and performance by such Member of this Agreement (or any joinder to this Agreement) and the consummation by such Member of the transactions contemplated hereby (and thereby) will not, with or without the giving of notice or lapse of time, or both, (i) violate any provision of law, statute, rule or regulation to which such Member is subject, (ii) violate any order, judgment or decree applicable to such Member, or (iii) conflict with, result in a breach or default under, any term or condition of any agreement or other instrument to which such Member is a party or by which such Member is bound.
Section 8.5 Amendments. Subject to Section 3.1(b), the Managing Member may, in its sole discretion and to the fullest extent allowable under Delaware law, amend this Agreement (whether by merger, division, operation of law or otherwise), without the consent or approval of the other Members or any other Person, including such amendments, supplements, waivers or modifications to (i) admit Substitute Members and Additional Members in accordance with this Agreement, (ii) create, authorize and issue Additional Securities in accordance with Section 2.10(c) and Section 2.10(d) of this Agreement or Unit combinations or subdivisions
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pursuant to Section 2.10 hereof, (iii) update the Unit Register in accordance with this Agreement, (iv) change the name of the Company, the location of the principal place of business of the Company, the registered agent of the Company or the registered office of the Company, (v) address changes in U.S. federal income tax regulations, legislation or interpretation, (vi) change the fiscal year or taxable year of the Company and to implement any other changes that the Managing Member determines to be necessary or appropriate as a result of a change in the fiscal year or taxable year of the Company including a change in the dates on which distributions are to be made by the Company, (vii) to effect the combination, subdivision and/or reclassification of outstanding Units to give economic effect to equity investments in the Company by the Managing Member that are not accompanied by the issuance by the Company to the Managing Member of additional Units, (viii) as necessary to ensure that the Company would not to become a “publicly-traded partnership,” as such term is defined in Section 469(k)(2) of the Code or Section 7704 of the Code or have more than one hundred (100) Tax Partners and (ix) take any action necessary and related to clauses (i) through (viii), except that (A) this Agreement may not be amended, waived or modified (whether by merger, division, operation of law or otherwise) in a manner that is adverse to the Blackstone Member without the consent of the Blackstone Member, (for clarity, it is agreed among the parties hereto that any modifications to provisions relating to the replacement of the Managing Member as managing member of the Company or the appointment of a replacement managing member of the Company, the fiduciary duties of the Members or any Affiliated Person, corporate opportunities or similar waivers, any consent or consultation rights (including in respect of the amendment / waiver provisions in this Agreement), information/access, indemnification or expense reimbursement rights, and modifications to any provision that would subject a Member to any capital contribution or funding obligations or increase the duration of the restrictions on transfers by such Person shall be considered an adverse modification requiring consent of the Blackstone Member), (B) this Agreement may not be amended, waived or modified in any manner that would cause the Company to become a “publicly-traded partnership,” as such term is defined in Section 469(k)(2) of the Code or Section 7704 of the Code or cause the Company to have more than one hundred (100) Tax Partners, without the prior written consent of the Blackstone Member and the Founder Member, and any such amendment, waiver or modification made to this Agreement without the consent of the Blackstone Member and the Founder Member shall be void ab initio, (C) an amendment, waiver or modification to the express rights, preferences or privileges of any Units, as set forth in this Agreement, in a manner that materially adversely and disproportionately affects the rights under this Agreement of such Units relative to the rights under this Agreement of any other Units in the same Class of Units must be approved by the Members holding a majority of the outstanding Units so affected and (D) an amendment, waiver or modification to this Agreement that has a materially adverse and disproportionate effect on the rights of the Founder Member compared to the rights of any other holder of Common Units must be approved by the Founder Member.
Section 8.6 Notices. Any notice provided for in this Agreement shall be in writing and shall be either personally delivered, sent by electronic mail, or sent by reputable overnight courier service (charges prepaid) to the Company, the Blackstone Member and the Founder Member, as applicable, at the address set forth below and to any other recipient at the address indicated on the Company’s records, or at such address or to the attention of such other person as the recipient party has specified by prior written notice to the sending party; provided, that any notice provided by the Founder Member to the Company shall be deemed to have also been given to the Blackstone Member. Notices will be deemed to have been given hereunder if
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(a) delivered personally, when delivered at the address specified in this Section 8.6, (b) sent by electronic mail, on the first Business Day after when such electronic mail is sent to the e-mail address specified in this Section 8.6, or (c) sent by reputable overnight courier service, one Business Day after deposit with such service.
If to the Company:
Jersey Mike’s HoldCo, LLC
c/o Jersey Mike’s Subs Inc.
1 Commvault Way, S300
Tinton Falls, NJ 07724
Attention: Scott G. McLester, General Counsel
Email: [email address]
with a copy to (which shall not constitute notice):
Email: [email address]
with a copy to (which shall not constitute notice):
Simpson Thacher & Bartlett LLP
900 G Street, N.W.
Washington, D.C. 20001
Attention: Joshua F. Bonnie
William R. Golden
Katharine L. Thompson
Email: [email addresses]
If to the Blackstone Member:
Submarine Buyer LLC
c/o Blackstone Inc.
345 Park Avenue
New York, NY 10154
Attention: Michael Staub
Devon Rinker
Email: [email addresses]
with a copy to (which shall not constitute notice):
Simpson Thacher & Bartlett LLP
900 G Street, N.W.
Washington, D.C. 20001
Attention: Joshua F. Bonnie
William R. Golden
Katharine L. Thompson
Email: [email addresses]
If to the Founder Member:
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[address]
Attention: Peter Cancro
Email: [email address]
with a copy to:
McDermott Will & Schulte LLP
444 West Lake Street, Suite 4000
Chicago, IL 60660
Attention: Stanley Meadows
Email: [email address]
and
Zarco Einhorn Salkowski, P.A.
2 S. Biscayne Blvd.
34th Floor
Miami, FL 33131
Attention: Robert Zarco
Email: [email address]
Section 8.7 Counterparts; Electronic Signatures. This Agreement may be executed in any number of counterparts (including counterparts transmitted electronically in portable document format (pdf), or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) with the same effect as if the signatures to each counterpart were upon a single instrument, all of which will be an original and together shall constitute a single instrument. The parties hereto irrevocably and unreservedly agree that this Agreement may be executed by way of electronic signatures and the parties agree that this Agreement, or any part thereof, shall not be challenged or denied any legal effect, validity and/or enforceability solely on the ground that it is in the form of an electronic record.
Section 8.8 Power of Attorney. Each Member irrevocably appoints any Officer (acting at the instruction of the Managing Member) as such Member’s true and lawful representative and attorney‑in‑fact, each acting alone (or through the designation to an Officer of the Company), in such Member’s name, place and stead, to make, execute, sign and file all instruments, documents and certificates which, from time to time, may be required by this Agreement or by the laws of the United States of America, the State of Delaware or any other state in which the Company shall determine to do business, or any political subdivision or agency thereof, to execute, implement and continue the valid and subsisting existence of the Company. Such power of attorney is coupled with an interest and shall survive and continue in full force and effect notwithstanding the subsequent resignation from the Company of any Member for any reason and shall survive and shall not be affected by the disability or incapacity of such Member. This Section 8.8 shall not apply to the Blackstone Member or the Founder Member.
Section 8.9 Founder Member Representative.
(a) Appointment; Authority. For purposes of this Agreement, each Person who is a Founder Member shall, without any further action on the part of any such Founder Member,
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be deemed to have consented to the appointment of the Founder Member Representative, with full power of substitution, to act in the name, place and stead of such Person for purposes of taking any and all actions and making of any decisions required or permitted to be taken by the Founder Member Representative under or contemplated by this Agreement, including the exercise of the power to (i) execute any agreements, documents and certificates pursuant to this Agreement, including all amendments to such agreements, and take all actions required or permitted to be taken under such agreements, (ii) receive and forward notices and communications pursuant to this Agreement and (iii) take all other actions necessary, desirable or appropriate in the judgment of the Founder Member Representative for the accomplishment of the foregoing and all of the other terms, conditions and limitations of this Agreement and any other agreements, documents and certificates pursuant thereto. Peter Cancro hereby accepts its appointment as the Founder Member Representative. All decisions, actions, consents and instructions of the Founder Member Representative shall be final and binding upon, and constitute a decision or action of, each Founder Member, and no Founder Member shall have any right to object, dissent, protest or otherwise contest the same, except for intentional fraud or willful misconduct. Neither the Company nor the Blackstone Member shall have the right to object, dissent, protest or otherwise contest the authority of the Founder Member Representative. The execution of this Agreement by each Founder Member shall also be deemed to constitute approval of all arrangements relating to the transactions contemplated hereby and to the provisions hereof binding upon the Founder Member.
(b) Resignation; Removal. The Founder Member Representative may resign at any time and may be removed for any reason or no reason by the vote or written consent of the Founder Majority Holders.
(c) Replacement. In the event of the death, incapacity, resignation or removal of the Founder Member Representative, the Founder Majority Holders can appoint a new Founder Member Representative by written consent and by sending notice and a copy of the duly executed written consent appointing such new Founder Member Representative to the Company. Such appointment will be effective upon the later of the date indicated in the consent or the date such consent is received by the Company.
(d) Acknowledgment. The Company and the Blackstone Member shall be entitled to deal exclusively with the Founder Member Representative on all matters relating to this Agreement and shall be entitled to rely conclusively on any document executed or purported to be executed on behalf of any Founder Member by the Founder Member Representative, and on any other action taken or purported to be taken on behalf of any Founder Member by the Founder Member Representative, as being fully binding upon such Person. Notices or communications to or from the Founder Member Representative shall constitute notice to or from each of the Founder Members. The provisions of this Section 8.9, including the power of attorney granted hereby, are independent and severable, are irrevocable and are coupled with an interest and shall not be terminated by any act of any one or more Founder Members, or by operation of law, whether by death or other event.
(e) Expenses and Liabilities; Founder Member Representative Holdback Account. Any fees, costs, expenses or liabilities incurred by the Founder Member Representative in connection with the performance of its duties under this Agreement shall not be the personal obligation of the Founder Member Representative, but shall be payable by and attributable to the
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applicable Founder Member (in accordance with their respective Common Units as a proportion of the Common Units held by all applicable Founder Member).
(f) No Liability. To the fullest extent permitted by law, neither the Founder Member Representative nor any agent employed by the Founder Member Representative shall incur any liability to any Founder Member relating to the performance of his duties hereunder except for actions or omissions constituting fraud, bad faith or willful misconduct. The Founder Member Representative shall not have by reason of this Agreement a fiduciary relationship in respect of any Founder Member, except in respect of amounts actually received on behalf of such Person. The Founder Member Representative shall not be required to make any inquiry concerning the performance or observance of any of the terms, provisions or conditions of this Agreement.
Section 8.10 WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY LAW, EACH PARTY HERETO HEREBY WAIVES ITS RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES HERETO AGAINST ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. EACH PARTY HERETO HEREBY AGREES THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES HERETO FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT, OR ANY PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
Section 8.11 EXCLUSIVE JURISDICTION AND VENUE. EACH OF THE PARTIES HERETO AGREES THAT ANY DISPUTE BASED ON OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS OR ACTIONS OR OMISSIONS OF ANY PARTY HERETO RELATING TO THIS AGREEMENT SHALL BE LITIGATED IN AND MUST BE BROUGHT IN THE DELAWARE COURT OF CHANCERY (OR, IF SUCH COURT DOES NOT POSSESS OR REFUSES TO ACCEPT JURISDICTION, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY COURT OF THE STATE OF NEW YORK LOCATED IN NEW YORK COUNTY OR, IN THE CASE OF CLAIMS TO WHICH THE FEDERAL COURTS HAVE EXCLUSIVE SUBJECT MATTER JURISDICTION, THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK (AND IN THE CASE OF APPEALS IN THE COURTS IN WHICH APPEALS FROM SUCH COURTS ARE TO BE HEARD)). EACH OF THE PARTIES HERETO IRREVOCABLY SUBMITS TO THE PERSONAL JURISDICTION OF SUCH COURTS, AND TO THE FULLEST EXTENT PERMITTED BY LAW WAIVES ANY OBJECTION THEY MAY HAVE CONCERNING THE VENUE OR CONVENIENCE OF SUCH FORUM. NOTWITHSTANDING THE FOREGOING, HOWEVER, ANY PARTY MAY COMMENCE ANY ACTION OR PROCEEDING TO ENFORCE ANY JUDGMENT OBTAINED AGAINST
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ANOTHER PARTY IN COMPLIANCE WITH THE FOREGOING PROVISIONS IN ANY APPROPRIATE JURISDICTION OR COURT. TO THE FULLEST EXTENT PERMITTED BY LAW, SERVICE OF PROCESS MAY BE MADE ON ANY PARTY HERETO BY PREPAID CERTIFIED MAIL WITH A PROOF OF MAILING RECEIPT VALIDATED BY THE U.S. POSTAL SERVICE CONSTITUTING EVIDENCE OF VALID SERVICE, AND THAT, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, SERVICE MADE PURSUANT TO THE ABOVE SHALL HAVE THE SAME LEGAL FORCE AND EFFECT AS IF SERVED UPON SUCH PARTY PERSONALLY WITHIN THE STATE OF DELAWARE.
Section 8.12 Entire Agreement. This Agreement, including the Schedules hereto, the Exchange Agreement and the other documents and agreements referred to herein or therein or entered into concurrently herewith embody the entire agreement and understanding of the parties hereto in respect of the subject matter contained herein. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.
Section 8.13 Section Titles. Section titles are for descriptive purposes only and shall not control or alter the meaning of this Agreement as set forth in the text hereof.
Section 8.14 No Third Party Beneficiaries. Except for the applicable provisions of Article VII, which shall be enforceable by a Covered Person and/or an Affiliated Institution, this Agreement is not intended to, and does not, confer upon any Person other than the parties hereto any rights or remedies.
[signature pages follow]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.
MANAGING MEMBER: |
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JERSEY MIKE’S SUBS INC. |
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By: /s/ Scott G. McLester |
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Name: |
Scott G. McLester |
Title: |
General Counsel |
BLACKSTONE MEMBER: |
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SUBMARINE BUYER LLC |
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By: Submarine Buyer Holdco LLC, its sole member |
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By: Boardwalk I Aggregator L.P., its managing member |
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By: BCP 9 Holdings Manager L.L.C., its general partner |
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By: /s/ Robert Brooks |
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Name: |
Robert Brooks |
Title: |
Authorized Signatory |
FOUNDER MEMBERS: |
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Original 56ers, Inc. |
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By: /s/ Peter Cancro |
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Name: |
Peter Cancro |
Title: |
Authorized Signatory |
Christine Cancro Exempt Trust UA Cancro Family Dynasty Trust |
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By: /s/ Lisa Morgan |
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Name: |
Lisa Morgan |
Title: |
Authorized Signatory |
Caroline Jones Exempt Trust UA Cancro Family Dynasty Trust |
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By: /s/ Lisa Morgan |
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Name: |
Lisa Morgan |
Title: |
Authorized Signatory |
Robert Cancro Exempt Trust UA Cancro Family Dynasty Trust |
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By: /s/ Lisa Morgan |
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Name: |
Lisa Morgan |
Title: |
Authorized Signatory |
Paul Cancro Exempt Trust UA Cancro Family Dynasty Trust |
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By: /s/ Lisa Morgan |
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Name: |
Lisa Morgan |
Title: |
Authorized Signatory |
MANAGEMENT AGGREGATOR: |
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JERSEY MIKE’S MANAGEMENT AGGREGATOR LLC |
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By: /s/ Charles R. Morrison |
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Name: |
Charles R. Morrison |
Title: |
Authorized Signatory |
Exhibit 10.2
TAX RECEIVABLE AGREEMENT
between
JERSEY MIKE’S SUBS INC.
and
THE PERSONS NAMED HEREIN
Dated as of July 29, 2026
TABLE OF CONTENTS
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Page |
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ARTICLE I DEFINITIONS |
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2 |
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SECTION 1.1 |
Definitions |
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2 |
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ARTICLE II DETERMINATION OF CERTAIN REALIZED TAX BENEFIT |
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15 |
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SECTION 2.1 |
Basis Schedule |
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15 |
SECTION 2.2 |
Tax Benefit Schedule |
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16 |
SECTION 2.3 |
Procedures, Amendments |
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17 |
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ARTICLE III TAX BENEFIT PAYMENTS |
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19 |
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SECTION 3.1 |
Payments |
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SECTION 3.2 |
No Duplicative Payments |
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SECTION 3.3 |
Pro Rata Payments |
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19 |
SECTION 3.4 |
Payment Ordering |
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SECTION 3.5 |
Unvested Unit Payments |
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SECTION 3.6 |
Certain Blocker Transferred Basis, Exchange Basis and IPO Basis. |
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SECTION 3.7 |
Overpayments |
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ARTICLE IV TERMINATION |
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SECTION 4.1 |
Early Termination of Agreement; Breach of Agreement; Change of Control |
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SECTION 4.2 |
Early Termination Notice |
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SECTION 4.3 |
Payment upon Early Termination |
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ARTICLE V SUBORDINATION AND LATE PAYMENTS |
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SECTION 5.1 |
Subordination |
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SECTION 5.2 |
Late Payments by the Corporate Taxpayer |
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ARTICLE VI NO DISPUTES; CONSISTENCY; COOPERATION |
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SECTION 6.1 |
Participation in the Corporate Taxpayer’s and OpCo’s Tax Matters |
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SECTION 6.2 |
Consistency |
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SECTION 6.3 |
Cooperation |
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ARTICLE VII MISCELLANEOUS |
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SECTION 7.1 |
Notices |
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SECTION 7.2 |
Counterparts |
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SECTION 7.3 |
Entire Agreement; No Third Party Beneficiaries |
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SECTION 7.4 |
Governing Law |
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SECTION 7.5 |
Severability |
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SECTION 7.6 |
Successors; Assignment; Amendments; Waivers |
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SECTION 7.7 |
Titles and Subtitles |
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SECTION 7.8 |
Resolution of Disputes |
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SECTION 7.9 |
Reconciliation |
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SECTION 7.10 |
Withholding |
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SECTION 7.11 |
Admission of the Corporate Taxpayer into a Consolidated Group; Transfers of Corporate Assets |
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SECTION 7.12 |
Confidentiality |
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SECTION 7.13 |
Change in Law |
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SECTION 7.14 |
TRA Party Representative |
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SECTION 7.15 |
Effectiveness |
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TAX RECEIVABLE AGREEMENT
This TAX RECEIVABLE AGREEMENT (this “Agreement”), is dated as of July 29, 2026, and is between Jersey Mike’s Subs Inc., a Delaware corporation (including any successor corporation, “PubCo”), each of the undersigned parties, and each of the other persons from time to time that becomes a party hereto (each, excluding PubCo, a “TRA Party” and together the “TRA Parties”).
RECITALS
WHEREAS, the TRA Parties directly or indirectly hold limited liability company interests in OpCo (as defined below) (the “Units”), which is classified as a partnership for U.S. federal income Tax (as defined below) purposes;
WHEREAS, after the IPO (as defined below), PubCo will be the managing member of OpCo, and will hold, directly and/or indirectly, Units;
WHEREAS, each of the Blockers (as defined below) is classified as an association taxable as a corporation for U.S. federal income Tax purposes;
WHEREAS, pursuant to the Master Reorganization Agreement dated on or about the IPO Date (as defined below), among PubCo and the parties named therein, in connection with the IPO, among other things, each of the Blocker Shareholders (as defined below) will contribute the relevant Blocker interests held by such Blocker Shareholder to PubCo in exchange for Class A common stock of PubCo (the “Class A Shares”) (the “Blocker Transfers” and such reorganization the “Reorganization”);
WHEREAS, as a result of the Reorganization, the Corporate Taxpayer will (i) be entitled to utilize Blocker Attributes (as defined below) and (ii) obtain the benefit of the Blocker Transferred Basis (as defined below);
WHEREAS, in connection with the IPO, PubCo will acquire (directly or indirectly) IPO Units (as defined below) for a contribution of cash to OpCo not treated as part of a disguised sale under Section 707(a) of the Code (as defined below) (the “IPO Exchange”);
WHEREAS, as a result of the IPO Exchange, the Corporate Taxpayer will be entitled to obtain the benefit of the IPO Basis (as defined below);
WHEREAS, the Units directly or indirectly held by the TRA Parties may be exchanged for Class A Shares, in accordance with and subject to the provisions of the OpCo Agreement (as defined below) and the Exchange Agreement (as defined below) and/or for other cash or other property;
WHEREAS, OpCo and each of its direct and indirect Subsidiaries (as defined below) treated as a partnership for U.S. federal income Tax purposes will have in effect an election under Section 754 of the Code, for each Taxable Year (as defined below) that includes the IPO Date and for each Taxable Year in which a taxable acquisition (including a deemed taxable acquisition under Section 707(a) of the Code) or non-taxable acquisition of Units by the Corporate
Taxpayer from any of the TRA Parties (or, for U.S. federal income tax purposes, a disregarded entity of a TRA Party) (an “Exchanging Holder”) for Class A Shares and/or other consideration or redemption by OpCo, in each case, in connection with the IPO or after the IPO Date (any such acquisition, including any deemed taxable acquisition under Section 707(a) of the Code, or redemption, excluding, for the avoidance of doubt, the IPO Exchange and Reorganization, an “Exchange”) occurs;
WHEREAS, as a result of an Exchange, the Corporate Taxpayer will be entitled to use the Exchange Basis (as defined below) and the Basis Adjustments (as defined below) relating to such Units exchanged in such Exchange;
WHEREAS, the income, gain, loss, expense and other Tax items of the Corporate Taxpayer may be affected by the (i) Blocker Attributes, (ii) Blocker Transferred Basis, (iii) IPO Basis, (iv) Exchange Basis, (v) Basis Adjustments, and (vi) Imputed Interest (as defined below) (collectively, the “Tax Attributes”); and
WHEREAS, the parties to this Agreement desire to provide for certain payments and make certain arrangements with respect to the effect of the Tax Attributes on the 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:
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions. As used in this Agreement, the terms set forth in this Article I shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined).
“Acquired Units” means the Units acquired by the Corporate Taxpayer in the Reorganization.
“Actual Tax Liability” means, with respect to any Taxable Year of the Corporate Taxpayer, the sum of (i) the sum of (A) the liability for U.S. federal income Taxes of the Corporate Taxpayer and (B) without duplication, the portion of any liability for U.S. federal income Taxes imposed directly on OpCo (and OpCo’s applicable Subsidiaries) under Section 6225 or any similar provision of the Code that is allocable to the Corporate Taxpayer under Section 704 of the Code, in each case using the same methods, elections, conventions and similar practices used on the relevant IRS Form 1120 (or any successor form) and (ii) the product of (A) the amount of the U.S. federal net taxable income for such taxable year reported on the Corporate Taxpayer’s IRS Form 1120 (or any successor form), adjusted as necessary by assuming, in order to prevent double counting, that state and local income Taxes are not deductible by the Corporate Taxpayer for U.S. federal income tax purposes, and (B) the Assumed State and Local Tax Rate.
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“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 first Person.
“Agreed Rate” means a per annum rate of SOFR plus 100 basis points.
“Agreement” has the meaning set forth in the Preamble to this Agreement.
“Amended Schedule” has the meaning set forth in Section 2.3(b) of this Agreement.
“Assumed State and Local Tax Rate” means, with respect to any Taxable Year, the sum of the effective rates of Tax (for the avoidance of doubt, taking into account any U.S. federal benefit of the state tax deduction) imposed on the aggregate net income of the Corporate Taxpayer or OpCo, as applicable, in each state or local jurisdiction in which the Corporate Taxpayer or OpCo, as applicable, files Tax Returns for such Taxable Year, with the 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 of the Corporate Taxpayer in such jurisdiction for such Taxable Year and (ii) the maximum applicable corporate Tax rate in effect in such jurisdiction in such Taxable Year. As an illustration of the calculation of the Assumed State and Local Tax 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 6.5% and 5.5%, respectively, and the apportionment factors for such states in such Taxable Year are 55% and 45% respectively, then the Assumed State and Local Tax Rate for such Taxable Year is equal to 6.05% (i.e., 6.5% multiplied by 55% plus 5.5% multiplied by 45%).
“Attributable” means the portion of any Tax Attribute of the Corporate Taxpayer that is “Attributable” to a TRA Party, determined under the following principles:
(i) any Blocker Attributes shall be determined separately with respect to each Blocker and shall be Attributable to the Blocker Shareholders of each Blocker that, but for the participation of a Blocker and the relevant Blocker Shareholder in the Reorganization, the Corporate Taxpayer would not have had the use of such Blocker Attributes;
(ii) any Blocker Transferred Basis shall be Attributable to the Blocker Shareholders of each Blocker or each Unit Holder, as applicable, in an amount equal to the product of (A) the total Blocker Transferred Basis and (B) the Total Percentage Interest of such Blocker Shareholder or Unit Holder, as applicable;
(iii) any IPO Basis shall be Attributable to the Blocker Shareholders of each Blocker or each Unit Holder, as applicable, in an amount equal to the product of (A) the total IPO Basis and (B) the Total Percentage Interest of such Blocker Shareholder or Unit Holder, as applicable;
(iv) any Exchange Basis shall be determined separately with respect to each Exchanging Holder and shall be Attributable to the Blocker Shareholders of each Blocker or each Exchanging Holder in an amount equal to the total Exchange Basis relating to such Units delivered to the Corporate Taxpayer by such Exchanging Holder in an amount equal
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to the product of (A) the total Exchange Basis so delivered and (B) the Total Percentage Interest of such Blocker Shareholder or Unit Holder, as applicable;
(v) any Basis Adjustments shall be determined separately with respect to each Exchanging Holder and are Attributable to each Exchanging Holder in an amount equal to the total Basis Adjustments relating to such Units delivered to the Corporate Taxpayer by such Exchanging Holder in the Exchange; and
(vi) any deduction to the Corporate Taxpayer with respect to a Taxable Year in respect of Imputed Interest is Attributable to the Person that is required to include the Imputed Interest in income (without regard to whether such Person is actually subject to Tax thereon).
“Basis Adjustment” means the adjustment to the Tax basis of a Reference Asset under Sections 732, 734(b), 707(a), 737 and/or 1012 of the Code (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/or 754 of the Code (in situations where, following an Exchange, OpCo remains in existence as an entity treated as a partnership for U.S. federal income Tax purposes) which arises (a) as a result of an Exchange and the payments made pursuant to this Agreement in respect of such Exchange or (b) as a result of any Earnout Payment with respect to Units held by the Corporate Taxpayer, which Units were acquired by the Corporate Taxpayer in an Exchange. 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 (i.e., for the avoidance of doubt, any Basis Adjustments in respect of Units that were transferred in a Pre-Exchange Transfer shall be determined as if such Units were Exchanged by the owner of such Units prior to such Pre-Exchange Transfer). The amount of any Basis Adjustment shall be determined using the Market Value at the time of the Exchange.
“Basis Schedule” has the meaning set forth in Section 2.1(b) of this Agreement.
“Beneficial Owner” means, with respect to any security, 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. The terms “Beneficially Own” and “Beneficial Ownership” shall have correlative meanings.
“Blackstone Funds” means, individually or collectively, any investment fund, co-investment vehicle and/or other similar vehicle or accounts, in each case, managed by an Affiliate of Blackstone Inc., or any of their respective successors.
“Blocker 743(b) Adjustments” means the adjustments to the Tax basis of the Reference Assets under Section 743(b) of the Code that (a) are attributable to the Units held by a Blocker and that exist as of the close of the IPO Date (as determined based on the interim closing of the books of OpCo as of the close of the IPO Date) or (b) arise as a result of any Earnout
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Payment with respect to Units held by the Corporate Taxpayer, which Units were acquired by the Corporate Taxpayer in the Reorganization.
“Blocker Attributes” means, (a) without duplication, the net operating losses, capital losses, research and development credits, Section 174 expense capitalization (if any), foreign tax credits, excess Section 163(j) limitation carryforwards (including excess business interest expense), charitable deductions and any Tax attributes (other than capitalized debt issuance costs) subject to carryforward under Section 381 of the Code that the Corporate Taxpayer is entitled to utilize as a result of the Blockers’ participation in the Reorganization that relate to periods (or portions thereof) prior to the Reorganization; provided however, that in order to determine whether any such Tax attribute is a Blocker Attribute, the Taxable Year of the Corporate Taxpayer that includes the effective date of the Reorganization shall be deemed to end as of the close of such effective date; provided further that such Tax attributes shall not include any such Tax attribute of a Blocker that is used to offset Taxes of such Blocker, if such offset Taxes are attributable to the Taxable Year (or portion thereof) ending on or prior to the date of the Reorganization (including a Taxable Year that is deemed to have ended in the preceding sentence) and (b) any and all Blocker 743(b) Adjustments.
“Blocker Shareholder” means, a Person who is a TRA Party and, prior to or in connection with the Reorganization, directly or indirectly holds equity interests of a Blocker, and as a result of the Reorganization, holds Class A Shares.
“Blocker Transferred Basis” means (a) the Tax basis (excluding any Blocker 743(b) Adjustments) of any Reference Asset that is (i) amortizable under Section 197 of the Code or (ii) depreciable under Section 168 of the Code or (b) Section 174 expense capitalization (if any) and any capitalized costs, including capitalized debt issuance costs and capitalized costs incurred in connection with the formation and capitalization of OpCo, in each case relating to Units transferred to PubCo in the Blocker Transfers, and in the case of each of clause (a) or (b), determined at the time of the Reorganization; provided that, any Tax basis included in the IPO Basis and Attributable to the Blocker Shareholders (with respect to Acquired Units) shall be excluded from the determination of the Blocker Transferred Basis.
“Blockers” means (i) BCP 9 Boardwalk Feeder L.L.C., a Delaware limited liability company, (ii) BXPE Lux (Feeder) 13 L.P., a Delaware limited partnership, (iii) BXPE US (Feeder) 13 L.P., a Delaware limited partnership, and (iv) Boardwalk GP Holdco L.L.C., a Delaware limited liability company (each entity individually, a “Blocker”).
“Board” means the Board of Directors of PubCo.
“Business Day” means each day that is not a Saturday, Sunday or other day on which banking institutions in New York, New York are authorized or required by law to close.
“Change of Control” means the occurrence of any of the following events:
(i) any Person or any group of Persons acting together that would constitute a “group” for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended or any successor provisions thereto (excluding (a) a corporation or other entity owned, directly or indirectly, by the stockholders of the Corporate Taxpayer in substantially the
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same proportions as their ownership of stock of the Corporate Taxpayer or (b) a Person or group of Persons in which one or more of the Blackstone Funds or their Affiliates, directly or indirectly hold Beneficial Ownership of securities representing more than 50% of the total voting power in such Person or held by such group, provided, that this clause (b) shall not apply to any transaction or series of related transactions in which the Units, Class A Shares or rights under this Agreement held by the Founder TRA Parties are acquired, redeemed, cancelled or converted, in whole or in part, other than at the election of the applicable Founder TRA Party) is or 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 for any reason 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 (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation) whose appointment or election by the Board or nomination for election by the Corporate Taxpayer’s stockholders was approved or recommended by a vote of at least a two-thirds (2/3) 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 (x) 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 (y) 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 stockholders 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, lease 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, lease or other disposition by the Corporate Taxpayer of all or substantially all of the Corporate Taxpayer’s assets (A) to an entity at least 50% of the combined voting power of the voting securities of which are owned by stockholders of the Corporate Taxpayer in substantially the same proportions as their ownership of the Corporate Taxpayer immediately prior to such sale or (B) a direct or indirect Subsidiary of the Corporate Taxpayer.
“Class A Shares” means Class A common stock of PubCo.
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“Code” means the U.S. Internal Revenue Code of 1986, as amended.
“Common Units” has the meaning set forth in the OpCo Agreement.
“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” means PubCo and any entity that is a member of any group filing a consolidated Tax Return of which PubCo is a member, where appropriate.
“Covered Person” has the meaning set forth in Section 7.14(d) of this Agreement.
“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 Detriment 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 Schedules or Amended Schedules, if any, in existence at the time of such calculation; provided that, for the avoidance of doubt, the computation of the Cumulative Net Realized Tax Benefit shall be adjusted to reflect any applicable Determination with respect to any Realized Tax Benefits and/or Realized Tax Detriments.
“Default Rate” means a per annum rate of SOFR plus 500 basis points.
“Determination” shall have the meaning ascribed to such term in Section 1313(a) of the Code or similar provision of state, local or non-U.S. 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.
“Dispute” has the meaning set forth in Section 7.8(a) of this Agreement.
“Early Termination Date” means the date of an Early Termination Notice for purposes of determining the Early Termination Payment.
“Early Termination Effective Date” means the date on which an Early Termination Schedule becomes binding pursuant to Section 4.2.
“Early Termination Notice” has the meaning set forth in Section 4.2 of this Agreement.
“Early Termination Payment” has the meaning set forth in Section 4.3(b) of this Agreement.
“Early Termination Rate” means the lesser of (i) 6.5% per annum, compounded annually, and (ii) SOFR plus 100 basis points.
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“Early Termination Schedule” has the meaning set forth in Section 4.2 of this Agreement.
“Earnout Payment” means the payment of any earn-out with respect to Units pursuant to that certain Equity Purchase Agreement by and among Submarine Buyer LLC, Jersey Mike’s Franchise Systems, Inc., Jersey Shore Construction LLC, Jersey Mike’s Inc. and Peter Cancro, dated as of November 8, 2024, that is paid by the Corporate Taxpayer, or deemed paid by the Corporate Taxpayer for U.S. federal income tax purposes, following the IPO Date.
“Exchange” has the meaning set forth in the Recitals of this Agreement.
“Exchange Agreement” means the Exchange Agreement, dated on or about the date hereof, between the Corporate Taxpayer, OpCo and the holders of Units from time to time party thereto, as amended from time to time.
“Exchange Basis” means (a) the Tax basis of any Reference Asset that is (i) amortizable under Section 197 of the Code or (ii) depreciable under Section 168 of the Code or (b) Section 174 expense capitalization (if any) and any capitalized costs incurred in connection with the formation of OpCo, in each case relating to the Units held by Unit Holders, and in the case of each of clause (a) or (b), determined at the time of the Reorganization; provided that, any Tax basis included in the IPO Basis and Attributable to Exchanging Holders shall be excluded from the determination of the Exchange Basis. The parties hereto acknowledge that, upon certain events, the Corporate Taxpayer may acquire an interest in the Tax Attributes described in the first sentence of this definition of Exchange Basis other than as a result of an Exchange (including, for example, where the Corporate Taxpayer acquires additional Units in exchange for the contribution of cash or property). To the extent the Corporate Taxpayer acquires an interest in any Tax Attribute described in the first sentence of this definition of Exchange Basis other than as a result of an Exchange, such Tax Attributes shall be treated as Exchange Basis delivered to the Corporate Taxpayer in an Exchange and shall be includable in the Tax Benefit Schedule and any Tax Benefit Payments.
“Exchange Date” means the date of any Exchange.
“Exchanging Holder” has the meaning set forth in the Recitals of this Agreement.
“Expert” has the meaning set forth in Section 7.9 of this Agreement.
“Founder Corp” means Original 56ers, Inc., a Delaware corporation.
“Founder TRA Parties” means Founder Corp and the Founder Trusts (as defined in the OpCo Agreement) and their respective successors and permitted assigns.
“Founder TRA Party Representative” means initially Founder Corp and thereafter, such single Person designated in writing by the then current Founder TRA Party Representative and that is an Affiliate of the Founder TRA Party Representative. For the avoidance of doubt, there shall at any time be only one Founder TRA Party Representative.
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“Future TRAs” has the meaning set forth in Section 5.1 of this Agreement.
“Hypothetical Tax Liability” means, with respect to any Taxable Year of the Corporate Taxpayer, the sum of (i) the sum of (A) the liability for U.S. federal income Taxes of the Corporate Taxpayer, and (B) without duplication, the portion of any liability for U.S. federal income Taxes imposed directly on OpCo (and OpCo’s applicable Subsidiaries) under Section 6225 or any similar provision of the Code that is allocable to the Corporate Taxpayer under Section 704 of the Code, in each case using the same methods, elections, conventions and similar practices used on the relevant IRS Form 1120 (or any successor form) and (ii) the product of (A) the U.S. federal net taxable income for such Taxable Year reported on the Corporate Taxpayer’s IRS Form 1120 (or any successor form), adjusted as necessary in order to prevent double counting by assuming that state and local income Taxes are not deductible by the Corporate Taxpayer for U.S. federal income tax purposes, and (B) the Assumed State and Local Tax Rate, but, in the determination of the liability in clauses (i) and (ii), with respect to the Corporate Taxpayer, (a) without taking into account Blocker Attributes, if any, (b) using the Non-Blocker Transferred Basis as reflected on the Basis Schedule including amendments thereto for the Taxable Year, (c) using the Non-IPO Basis as reflected on the Basis Schedule including amendments thereto for the Taxable Year, (d) using the Non-Exchange Basis as reflected on the Basis Schedule including amendments thereto for the Taxable Year, (e) using the Non-Stepped Up Tax Basis as reflected on the Basis Schedule including amendments thereto for the Taxable Year, and (f) excluding any deduction attributable to Imputed Interest attributable to any payment made under this Agreement for the Taxable Year. For the avoidance of doubt, (i) Hypothetical Tax Liability shall be determined without taking into account the carryover or carryback of any Tax item (or portions thereof) that is attributable to a Tax Attribute, (ii) there shall be no adjustment to any items of income, gain, loss, expense or other Tax items for state and local tax purposes in determining the Hypothetical Tax Liability and (iii) the basis of the Reference Assets in the aggregate for purposes of determining the Hypothetical Tax Liability shall never be less than zero.
“Imputed Interest” in respect of a TRA Party shall mean any interest imputed under Sections 1272, 1274 or 483 or other provision of the Code and any similar provision of state, local or non-U.S. Tax law with respect to the Corporate Taxpayer’s payment obligations in respect of such TRA Party under this Agreement.
“Incentive Unit” has the meaning set forth in the OpCo Agreement.
“Interest Amount” has the meaning set forth in Section 3.1(b) of this Agreement.
“IPO” means the initial public offering of Class A Shares by the Corporate Taxpayer (including any greenshoe related to such initial public offering).
“IPO Basis” means (a) the Tax basis of any Reference Asset held by OpCo at the time of the IPO that is (i) amortizable under Section 197 of the Code or (ii) depreciable under Section 168 of the Code or (b) Section 174 expense capitalization (if any) and any capitalized costs incurred in connection with the formation of OpCo, in the case of each of clause (a) or (b), to the extent allocable to the Corporate Taxpayer as a result of its acquisition of IPO Units.
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“IPO Date” means the initial closing date of the IPO.
“IPO Exchange” has the meaning set forth in the Recitals of this Agreement.
“IPO Units” means the Units acquired by PubCo with the net proceeds from the IPO (excluding any Units acquired in an Exchange).
“IRS” means the U.S. Internal Revenue Service.
“Market Value” shall mean the closing price of the Class A Shares on the applicable Exchange Date on the national securities exchange or interdealer quotation system on which such Class A Shares are 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 Shares on the Business Day immediately preceding such Exchange Date on the national securities exchange or interdealer quotation system on which such Class A Shares are then traded or listed, as reported by the Wall Street Journal; provided further, that if the Class A Shares are not then listed on a national securities exchange or interdealer quotation system, “Market Value” shall mean the cash consideration paid for Class A Shares, or the fair market value of the other property delivered for Class A Shares, as determined by the Board in good faith. Notwithstanding anything to the contrary in the above sentence, to the extent property is exchanged for cash in a transaction, the Market Value shall be determined by reference to the amount of cash transferred in such transaction.
“Material Objection Notice” has the meaning set forth in Section 4.2 of this Agreement.
“Net Tax Benefit” has the meaning set forth in Section 3.1(b) of this Agreement.
“Non-Blocker Transferred Basis” means: (a) with respect to any Reference Asset at the time of the Reorganization that is (i) amortizable under Section 197 of the Code or (ii) depreciable under Section 168 of the Code, the Tax basis (including any Blocker 743(b) Adjustments) that such Reference Asset would have had if the Blocker Transferred Basis at the time of the Reorganization was equal to zero or (b) with respect to Section 174 expense capitalization and any capitalized costs incurred in connection with the formation of OpCo, zero (0).
“Non-Exchange Basis” means: (a) with respect to any Reference Asset at the time of an Exchange that is (i) amortizable under Section 197 of the Code or (ii) depreciable under Section 168 of the Code, the Tax basis that such Reference Asset would have had if the Exchange Basis at the time of the Exchange was equal to zero or (b) with respect to Section 174 expense capitalization and any capitalized costs incurred in connection with the formation of OpCo, zero (0).
“Non-IPO Basis” means: (a) with respect to any Reference Asset at the time of the IPO Exchange that is (i) amortizable under Section 197 of the Code or (ii) depreciable under Section 168 of the Code, the Tax basis that such Reference Asset would have had if the IPO Basis of such Reference Asset at the time of the IPO was equal to zero and (b) with respect to Section 174 expense capitalization and capitalized costs incurred in connection with the formation of OpCo, zero (0).
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“Non-Stepped Up Tax Basis” means, with respect to any Reference Asset at the time of an Exchange, the Tax basis that such asset would have had at such time if no Basis Adjustments had been made.
“Objection Notice” has the meaning set forth in Section 2.3(a) of this Agreement.
“OpCo” means Jersey Mike’s HoldCo, LLC, a Delaware limited liability company.
“OpCo Agreement” means, with respect to OpCo, the Third Amended and Restated Limited Liability Company Agreement of OpCo, dated on or about the date hereof, as such agreement may be further amended, restated, supplemented and/or otherwise modified from time to time.
“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.
“Pillar Two Taxes” means Taxes imposed and payable by reason of the Model Global Anti-Base Erosion rules released by the Organization for Economic Co-operation and Development G20 Inclusive Framework on Base Erosion and Profit Shifting, introducing a minimum level of Tax for multinational enterprises, or any similar Taxes, including any authority, law, regulation, administrative or other guidance intended to effect the foregoing.
“Pre-Exchange Transfer” means any transfer (including upon the death of a Unit Holder) or distribution in respect of one or more Units (i) that occurs prior to an Exchange of such Units, and (ii) to which Section 734(b) or Section 743(b) of the Code applies.
“PubCo” has the meaning set forth in the Preamble to this Agreement.
“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 the Taxable Year arises as a result of an audit by a Taxing Authority of any Taxable Year, such liability shall not be included in determining the Realized Tax Benefit unless and until there has been a Determination.
“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 the Taxable Year arises as a result of an audit by a Taxing Authority of any Taxable Year, such liability shall not be included in determining the Realized Tax Detriment unless and until there has been a Determination.
“Reconciliation Dispute” has the meaning set forth in Section 7.9 of this Agreement.
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“Reconciliation Procedures” has the meaning set forth in Section 2.3(a) of this Agreement.
“Reference Asset” means an asset that is held by OpCo, or by any of its direct or indirect Subsidiaries treated as a partnership or disregarded entity for U.S. federal income Tax purposes (but only if such indirect Subsidiaries are held only through Subsidiaries treated as partnerships or disregarded entities for U.S. federal income Tax purposes) for purposes of the applicable Tax, at the time of the Reorganization, the IPO, the IPO Exchange or an Exchange, as relevant. 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.
“Reorganization” has the meaning set forth in the Recitals of this Agreement.
“Schedule” means any of the following: (i) a 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.
“Senior Obligations” has the meaning set forth in Section 5.1 of this Agreement.
“SOFR” with respect to any day means the secured overnight financing rate as administered by the Federal Reserve Bank of New York (or a successor administrator), on the website of the Federal Reserve Bank of New York at http://www.newyorkfed.org, or any successor source; provided that, at no time shall SOFR be less than 0%. If the Corporate Taxpayer reasonably determines in good faith that (i) SOFR is no longer a widely recognized benchmark rate for newly originated loans in the U.S. loan market in U.S. dollars or (ii) the applicable supervisor or administrator (if any) of SOFR or an applicable government authority has made a public statement identifying a specific date after which SOFR shall no longer be used for determining interest rates for loans in the U.S. loan market in U.S. dollars, then the Corporate Taxpayer and each TRA Party Representative shall collectively (as determined in good faith by the Corporate Taxpayer and each TRA Party Representative to be consistent with a generally accepted market practice at such time), establish a replacement interest rate (the “Replacement Rate”), in which case, the Replacement Rate shall, subject to the next two sentences, replace SOFR for all purposes under this Agreement. In connection with the establishment and application of the Replacement Rate, this Agreement shall be amended solely with the consent of the Corporate Taxpayer, OpCo, and each TRA Party Representative, as may be necessary or appropriate, in the reasonable judgment of the Corporate Taxpayer and each TRA Party Representative, to effect the provisions of this definition. The Replacement Rate shall be applied in a manner consistent with a generally accepted market practice at such time; provided that, in each case, to the extent such market practice is not administratively feasible for the Corporate Taxpayer, such Replacement Rate shall be applied as otherwise reasonably determined by the Corporate Taxpayer and the TRA Party Representative.
“Sponsor TRA Parties” means all the TRA Parties, other than the Founder TRA Parties.
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“Sponsor TRA Party Representative” means, initially, Submarine Buyer L.L.C., a Delaware limited liability company, and thereafter such Person or Persons designated by the then-Sponsor Representative.
“Subsidiaries” means, with respect to any Person, as of any date of determination, any other Person as to which such Person, owns, directly or indirectly, or otherwise controls more than 50% of the voting power or other similar interests or the sole general partner interest or managing member or similar interest of such Person.
“Tax Attributes” has the meaning set forth in the Recitals of this Agreement.
“Tax Benefit Payment” has the meaning set forth in Section 3.1(b) of this Agreement.
“Tax Benefit Schedule” has the meaning set forth in Section 2.2(a) of this Agreement.
“Tax Return” means any return, declaration, report or similar statement filed or required to be filed with respect to Taxes (including any attached schedules), including, without limitation, 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 (and, therefore, for the avoidance of doubt, may include a period of less than twelve (12) months for which a Tax Return is made), ending on or after the IPO Date.
“Taxes” means any and all U.S. federal, state, local and non-U.S. taxes (including any Pillar Two Taxes), assessments or similar charges that are based on or measured with respect to net income or profits and any interest related to such Tax.
“Taxing Authority” 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.
“Threshold Exchange Units” has the meaning set forth in Section 3.6 of this Agreement.
“Total Percentage Interest” in respect of a TRA Party shall mean the percentage for each TRA Party set forth on Schedule 2. In the case of any transfer by a TRA Party in accordance with this Agreement, the Total Percentage Interest of such TRA Party as set forth on Schedule 2 shall be allocated between the transferor and transferee based on the percentage acquired as set forth on the joinder to this Agreement delivered pursuant to Section 7.6.
“TRA Party” has the meaning set forth in the Preamble to this Agreement.
“TRA Party Representative” means (i) the Sponsor TRA Representative, (ii) the Founder TRA Party Representative, and (iii) and either (a) the Person or Persons designated in
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writing by the Sponsor TRA Party Representative from time to time as one or more TRA Party Representatives and/or (b) as designated by the Corporate Taxpayer if so required, in each case, pursuant to Section 7.14 of this Agreement.
“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 Year.
“Unit Holder” means holders of Units other than the Corporate Taxpayer.
“Units” has the meaning set forth in the Recitals of this Agreement.
“Unvested Unit” has the meaning set forth in the OpCo Agreement.
“Valuation Assumptions” shall mean, as of an Early Termination Date, the assumptions that in each Taxable Year ending on or after such Early Termination Date, (1) the Corporate Taxpayer will have taxable income sufficient to fully utilize the Tax items arising from the Tax Attributes (other than any items addressed in clause (2) below) during such Taxable Year or future Taxable Years (including, for the avoidance of doubt, Basis Adjustments and Imputed Interest that would result from future payments made under this Agreement that would be paid in accordance with the Valuation Assumptions) in which such deductions would become available, (2) any Blocker Attributes (other than Blocker 743(b) Adjustments) and any interest expense carryforwards or loss carryovers arising from Tax Attributes or from Imputed Interest, in each case that are available as of the date of such Early Termination Date, will be used by the Corporate Taxpayer on a pro rata basis from the date of such Early Termination Date through the earlier of (x) the scheduled expiration date under applicable Tax law of such Blocker Attribute or interest expense carryforward or loss carryover or (y) the fifth (5th) anniversary of the Early Termination Date, (3) the U.S. federal, state and local income Tax rates that will be in effect for each such Taxable Year will be those specified for each such Taxable Year by the Code and other law as in effect on the Early Termination Date and the Assumed State and Local Tax Rate will be calculated based on such rates and the apportionment factor applicable in the immediately prior Taxable Year, (4) any non-amortizable assets (other than cash equivalents or equity interests in Subsidiaries that are treated as corporations for U.S. federal income Tax purposes) will be disposed of on the fifteenth (15th) anniversary of the applicable Exchange (in the case of Basis Adjustments) or the IPO Date (in the case of any Blocker 743(b) Basis Adjustments) (or, if the Early Termination Date occurs after the fifteenth (15th) anniversary of the last Exchange or the IPO Date, as applicable, such non-amortizable assets will be deemed disposed of as of the Early Termination Date) and any cash equivalents will be disposed of twelve (12) months following the Early Termination Date; provided, that in the event of a Change of Control, such non-amortizable assets shall be deemed disposed of at the time of disposition (if applicable) of the relevant asset in the Change of Control (if earlier than such fifteenth (15th) anniversary) and, in the case of a Change of Control that includes the disposition of any equity interests in a Subsidiary that is treated as a corporation for U.S. federal income Tax purposes, such equity interests shall be deemed disposed of at the time of the disposition of such equity interests in the Change of Control, (5) if, at the Early Termination Date, there are Units that have not been Exchanged, then each such Unit, shall be deemed Exchanged for the Market Value of the Class A Shares and the amount of cash that would be transferred if the Exchange occurred on the Early Termination Date (and therefore, for the avoidance of doubt any outstanding Threshold Exchange Units held by a Unit Holder shall also be deemed Exchanged on the Early Termination Date) and (6) if, at the time of the Early Termination,
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there are any Incentive Units outstanding, each such Incentive Unit shall be deemed converted into a Common Unit in accordance with the conversion mechanics set forth in the OpCo Agreement (including with respect to Unvested Units, deeming Incentive Units that are Unvested Units but for which the distribution threshold has been achieved or would be achieved upon a sale of OpCo as of the Early Termination as converted to Common Units as though they were vested)), and such Common Unit deemed received shall, in turn, be deemed Exchanged in accordance with clause (5) above.
“Vested Unit” has the meaning set forth in the OpCo Agreement.
ARTICLE II
DETERMINATION OF CERTAIN REALIZED TAX BENEFIT
SECTION 2.1 Basis Schedule.
(a) Initial Basis Schedule. Within ninety (90) days of the date hereof, the Corporate Taxpayer shall prepare and deliver to each TRA Party that is a Blocker Shareholder a schedule (the “Initial Basis Schedule”) that shows (i) the Blocker Attributes, (ii) the Blocker Transferred Basis of each Reference Asset, if any, (iii) the period (or periods) over which each Reference Asset is amortizable and/or depreciable and (iv) the period (or periods) over which the Blocker Attributes or Blocker Transferred Basis is amortizable and/or depreciable, in the case of each of clauses (i) through (iv), with respect to such TRA Party that is a Blocker Shareholder and with respect to all TRA Parties that are Blocker Shareholders. The Initial Basis Schedule shall be prepared in good faith based upon the most recent information provided by the Blocker Shareholders to the Corporate Taxpayer.
(b) Subsequent Basis Schedules. Within one hundred and twenty (120) calendar days after the due date (including extensions) of IRS Form 1120 (or any successor form) of the Corporate Taxpayer for each relevant Taxable Year, the Corporate Taxpayer shall deliver to each TRA Party a schedule (the “Basis Schedule”) that shows, in reasonable detail necessary to perform the calculations required by this Agreement, (i) the Blocker Attributes, (ii) the Blocker Transferred Basis of each Reference Asset, if any, (iii) the IPO Basis of each Reference Asset, if any, (iv) the Exchange Basis of each Reference Asset, if any, (v) the Basis Adjustment with respect to each Reference Asset as a result of the Exchanges effected in such Taxable Year or any prior Taxable Year, if any, calculated in the aggregate, (vi) the Non-Stepped Up Tax Basis of each Reference Asset as of each applicable Exchange Date, if any, (vii) the period (or periods) over which each Reference Asset is amortizable and/or depreciable and (viii) the period (or periods) over which the Blocker Attributes, Blocker Transferred Basis, the IPO Basis, the Exchange Basis, and each Basis Adjustment is amortizable and/or depreciable, in the case of each of clauses (i) through (viii), with respect to such TRA Party and with respect to all other TRA Parties. For the avoidance of doubt, in preparing any Basis Schedule pursuant to this Agreement, the Corporate Taxpayer may redact the names of any other TRA Party or any other information that it deems confidential. All costs and expenses incurred in connection with the provision and preparation of the Basis Schedules and Tax Benefit Schedules for each TRA Party in compliance with this Agreement shall be borne by PubCo.
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SECTION 2.2 Tax Benefit Schedule.
(a) Tax Benefit Schedule. Within one hundred and twenty (120) calendar days after the due date (including extensions) of IRS Form 1120 (or any successor form) of the Corporate Taxpayer for any Taxable Year in which there is a Realized Tax Benefit or a Realized Tax Detriment arising from Tax Attributes that are Attributable to 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 and Tax Benefit Payment or the Realized Tax Detriment, as applicable, in respect of such TRA Party for such Taxable Year (a “Tax Benefit Schedule”). Each Tax Benefit Schedule will become final as provided in Section 2.3(a) and may be amended as provided in Section 2.3(b) (subject to the procedures set forth in Section 2.3(b)).
(b) Applicable Principles.
(i) General. Subject to Section 3.3, the Realized Tax Benefit (or the Realized Tax Detriment) for each Taxable Year is intended to measure the decrease (or increase) in the actual liability for Taxes of the Corporate Taxpayer for such Taxable Year attributable to the Tax Attributes, determined using a “with and without” methodology (i.e., the Actual Tax Liability being the “with” calculation and the Hypothetical Tax Liability being the “without” calculation). Carryovers or carrybacks of any Tax item attributable to any of the Tax Attributes shall be considered to be subject to the rules of the Code and the Treasury Regulations 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 any Tax Attribute 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 (A) all Tax Benefit Payments (other than Imputed Interest thereon) attributable to Blocker Transferred Basis or Blocker Attributes will be treated as non-qualifying property or money for purposes of Section 351 of the Code received in the Reorganization, (B) all Tax Benefit Payments (other than Imputed Interest thereon) attributable to the IPO Basis and Attributable to the Blocker Shareholders (with respect to the Acquired Units) will be treated as non-qualifying property or money for purposes of Section 351 of the Code received in the Reorganization, (C) all Tax Benefit Payments (other than Imputed Interest thereon) attributable to Basis Adjustments (other than Basis Adjustments resulting from Tax Benefit Payments attributable to the Blocker Transferred Basis or IPO Basis) will be treated as subsequent upward purchase price adjustments with respect to the Units exchanged in the applicable Exchange that have the effect of creating additional Basis Adjustments to Reference Assets for the Corporate Taxpayer in the year of payment, (D) all Tax Benefit Payments (other than Imputed Interest thereon) attributable to Exchange Basis, Blocker Transferred Basis or IPO Basis and Attributable to an Exchanging Holder will be treated as subsequent upward purchase price adjustments with respect to the Threshold Exchange Units that have the effect of creating additional Basis Adjustments to Reference Assets for the Corporate Taxpayer in the year of payment, (E) as a result, any additional Basis Adjustments will be incorporated into the calculation for the year of payment and into any future year calculations, as appropriate and (F) the Actual Tax Liability will take into account the deduction of the portion of the Tax Benefit Payment that must be accounted for as Imputed Interest.
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(ii) Applicable Principles of Section 734(b) Exchanges. Notwithstanding any provisions to the contrary in this Agreement, the foregoing treatment set out in Section 2.2(b)(i) shall not be required to apply to payments hereunder to an Exchanging Holder in respect of a Section 734(b) Exchange by such Exchanging Holder. 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) an Exchanging Holder 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 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 Unit Holder that makes such subsequent Exchange shall be entitled to a Tax Benefit Payment calculated in respect of such increased portion. For purposes of this Agreement, such Basis Adjustments resulting from subsequent Section 734(b) Exchanges as described in (B) in the previous sentence shall be reported and treated as Exchange Basis for purposes of this Agreement.
(iii) Applicable Principles of Pillar Two. Notwithstanding anything to the contrary in this Agreement, to the extent that any Tax Attributes increase Pillar Two Taxes over the amount of Pillar Two Taxes that would be payable absent the Tax Attributes (as determined on a “with and without” basis in a manner consistent with this Agreement), the Realized Tax Benefit or Realized Tax Detriment shall be decreased or increased, as applicable, to take into account such increase in Pillar Two Taxes. The TRA Parties agree that PubCo and OpCo may make reasonable assumptions and estimates consistent with the purpose of this section to reduce administrative burdens on PubCo and OpCo when computing whether the Tax Attributes resulted in an increase in Pillar Two Taxes; provided, however, that PubCo shall disclose any such assumptions or estimates in the Tax Benefit Schedule and such assumptions and estimates shall be subject to the procedures set forth in Section 2.3.
SECTION 2.3 Procedures, Amendments.
(a) Procedure. Every time the Corporate Taxpayer delivers to a TRA Party an applicable Schedule under this Agreement, including any Amended Schedule, the Corporate Taxpayer shall also (x) deliver to the applicable TRA Party Representative supporting schedules and work papers, as determined by the Corporate Taxpayer or as reasonably requested by such TRA Party Representative, providing reasonable detail regarding data and calculations that were relevant for purposes of preparing such Schedule and (y) allow such TRA Party Representative reasonable access at no cost to the appropriate representative at the Corporate Taxpayer, as determined by the Corporate Taxpayer or as reasonably requested by such TRA Party Representative, in connection with a review of such Schedule. Without limiting the generality of the preceding sentence, the Corporate Taxpayer shall ensure that any Tax Benefit Schedule that is delivered to a TRA Party, along with any supporting schedules and work papers, provides a
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reasonably detailed presentation of the calculation of the Actual Tax Liability and the Hypothetical Tax Liability and identifies any material assumptions or operating procedures or principles that were used for purposes of such calculations. An applicable Schedule or amendment thereto shall become final and binding on all parties thirty (30) calendar days from the date on which the relevant TRA Party is treated as having received the applicable Schedule or amendment thereto under Section 7.1 unless the applicable TRA Party Representative with respect to the applicable TRA Party, (i) within thirty (30) calendar days from such date provides the Corporate Taxpayer with written notice of a material objection to such Schedule which sets forth in reasonable detail such TRA Party Representative’s material objection (“Objection Notice”) made in good faith or (ii) provides a written waiver of such right of any Objection Notice within the period described in clause (i) above, in which case such Schedule or amendment thereto becomes binding on the date the waiver is received by the Corporate Taxpayer. If the Corporate Taxpayer and the applicable TRA Party Representative, for any reason, are unable to successfully resolve the issues raised in an Objection Notice within thirty (30) calendar days after receipt by the Corporate Taxpayer of such Objection Notice, the Corporate Taxpayer and the applicable TRA Party Representative shall employ the reconciliation procedures as described in Section 7.9 of this Agreement (the “Reconciliation Procedures”). Each TRA Party Representative will fairly represent the interests of each TRA Party that it represents and shall use reasonable efforts to timely raise and pursue, in accordance with this Section 2.3(a), any reasonable objection to a Schedule or amendment thereto timely communicated in writing to such TRA Party Representative by an applicable TRA Party.
(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 a TRA Party, (iii) to comply with an Expert’s determination under the Reconciliation Procedures, (iv) to reflect a change in the Realized Tax Benefit, or the 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 the Realized Tax Detriment for such Taxable Year attributable to an amended Tax Return filed for such Taxable Year or (vi) to adjust an applicable TRA Party’s 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 TRA Party when the Corporate Taxpayer delivers the Basis Schedule for the following Taxable Year.
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ARTICLE III
TAX BENEFIT PAYMENTS
SECTION 3.1 Payments.
(a) Payments. Within five (5) Business Days after a Tax Benefit Schedule delivered to a TRA Party becomes final in accordance with Section 2.3(a) and Section 7.9, if applicable, the Corporate Taxpayer shall pay such TRA Party for such Taxable Year the Tax Benefit Payment determined pursuant to Section 3.1(b) that is Attributable to the relevant TRA Party. Each such Tax Benefit Payment 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, (x) no Tax Benefit Payment shall be made in respect of estimated Tax payments, including, without limitation, U.S. federal estimated income Tax payments and (y) the payments provided for pursuant to the above sentence shall be computed separately for each TRA Party. Notwithstanding anything to the contrary in this Agreement, with respect to each Exchange by or with respect to any TRA Party, if such TRA Party notifies the Corporate Taxpayer in writing of a stated maximum selling price (within the meaning of Treasury Regulations Section 15A.453-1(c)(2)), then the amount of the consideration received in connection with such Exchange and the aggregate Tax Benefit Payments to such TRA Party in respect of such Exchange (other than amounts accounted for as interest under the Code) shall not exceed such stated maximum selling price.
(b) A “Tax Benefit Payment” in respect of a TRA Party for a Taxable Year means an amount, not less than zero, equal to the Net Tax Benefit that is Attributable to such TRA Party and the Interest Amount with respect thereto. For the avoidance of doubt, for Tax purposes, the Interest Amount shall not be treated as interest, but instead, shall be treated as additional consideration in the applicable transaction, unless otherwise required by law. Subject to Section 3.3, the “Net Tax Benefit” for a Taxable Year shall be an amount equal to the excess, if any, of 90% of the Cumulative Net Realized Tax Benefit as of the end of such Taxable Year, over the total amount of payments previously made under the first sentence of Section 3.1(a) (excluding payments attributable to Interest Amounts); provided that, for the avoidance of doubt, no such recipient shall be required to return any portion of any previously made Tax Benefit Payment. The “Interest Amount” shall equal the interest on the unpaid amount of the Net Tax Benefit calculated at the Agreed Rate from the due date (without extensions) for filing IRS Form 1120 (or any successor form) of the Corporate Taxpayer with respect to Taxes for such Taxable Year until the earlier of (i) the date on which no remaining Tax Benefit Payment is due in respect of such Net Tax Benefit and (ii) the Payment Date under Section 3.1(a).
SECTION 3.2 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 3.3 Pro Rata Payments. Notwithstanding anything in Section 3.1 to the contrary, to the extent that the aggregate Realized Tax Benefit of the Corporate Taxpayer with respect to the Tax Attributes is limited in a particular Taxable Year because the Corporate
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Taxpayer does not have sufficient taxable income, the Net Tax Benefit for that Taxable Year shall be allocated among all parties then-eligible to receive Tax Benefit Payments under this Agreement in proportion to the amounts of Net Tax Benefit for that Taxable Year, respectively, that would have been Attributable to each TRA Party if the Corporate Taxpayer had sufficient taxable income so that there were no such limitation. The allocation under this Section 3.3 shall be made without regard to whether such Tax Attribute can actually be used by the Corporate Taxpayer in the particular Taxable Year. For the avoidance of doubt, the determination of whether Tax Benefit Payments are held back pursuant to Section 3.5 shall not be relevant in the determination of whether a Net Tax Benefit is eligible to be allocated to the relevant TRA Party for purposes of this Section 3.3.
SECTION 3.4 Payment Ordering. 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) Tax Benefit Payments for such Taxable Year shall be allocated to all parties eligible to receive Tax Benefit Payments under this Agreement in such Taxable Year in proportion to the amounts of Tax Benefit Payments, respectively, that would have been made to each TRA Party if the Corporate Taxpayer had sufficient cash available to make such Tax Benefit Payments and (ii) no Tax Benefit Payments shall be made in respect of any Taxable Year until all Tax Benefit Payments to all TRA Parties in respect of all prior Taxable Years have been made in full; provided however, that any payments that were previously held by the Corporate Taxpayer on behalf of a TRA Party and have now become due and payable pursuant to Section 3.5 or Section 3.6 shall be made prior to any other Tax Benefit Payments.
SECTION 3.5 Unvested Unit Payments. Notwithstanding anything to the contrary herein, any and all Tax Benefit Payments or any and all other payments that would otherwise be made pursuant to this Agreement with respect to any Units attributable to any Unvested Unit shall be held by the Corporate Taxpayer for the benefit of the applicable TRA Party (without any interest thereon) until such time as such Unvested Unit becomes a Vested Unit. Promptly following the time any such Unvested Unit becomes a Vested Unit, such withheld amount shall be paid by the Corporate Taxpayer to the applicable TRA Party. Any amounts held by the Corporate Taxpayer pursuant to this Section 3.5 with respect to Unvested Units that are forfeited to OpCo or otherwise reacquired by OpCo shall no longer be withheld and shall be considered general assets of the Corporate Taxpayer as of the date of such forfeiture or acquisition.
SECTION 3.6 Certain Blocker Transferred Basis, Exchange Basis and IPO Basis. Notwithstanding anything to the contrary herein, any and all Tax Benefit Payments that would otherwise be made pursuant to this Agreement with respect to any Blocker Transferred Basis, Exchange Basis or IPO Basis shall be held by the Corporate Taxpayer for the benefit of the applicable TRA Party (without any interest thereon) until such time as such TRA Party has exchanged Units in one or more Exchanges equal to five percent (5%) of the Units held by such TRA Party determined prior to the Reorganization (such Units, with respect to each TRA Party, such TRA Party’s “Threshold Exchange Units”). In connection with the first Tax Benefit Payment following the time any such TRA Party has exchanged, in the aggregate, a number of Units equal to or exceeding the Threshold Exchange Units, such withheld amount shall be paid by the Corporate Taxpayer to the applicable TRA Party. Notwithstanding anything herein to the contrary, all Blocker Shareholders (with respect to the Acquired Units) shall be deemed to have
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exchanged any Threshold Exchange Units held by such Blocker Shareholders in the Reorganization, and, therefore, no amounts shall be held back pursuant to this Section 3.6.
SECTION 3.7 Overpayments. Subject to the procedures described in Section 2.3(a), to the extent the Corporate Taxpayer makes a Tax Benefit Payment to a TRA Party in respect of a particular Taxable Year under Section 3.1(a) in an amount in excess of the amount of such Tax Benefit Payment that should have been made to such TRA Party in respect of such Taxable Year under the terms of this Agreement then such TRA Party shall not receive further Tax Benefit Payments under Section 3.1(a) or Section 4.1(a) until such TRA Party has foregone an amount of Tax Benefit Payments equal to such excess; provided, that for the avoidance of the doubt, no TRA Party shall be required to return any payment paid by the Corporate Taxpayer to such TRA Party.
ARTICLE IV
TERMINATION
SECTION 4.1 Early Termination of Agreement; Breach of Agreement; Change of Control.
(a) The Corporate Taxpayer may terminate this Agreement with respect to (i) all amounts payable to the TRA Parties and with respect to all of the Units held by the TRA Parties at any time by paying to each TRA Party the Early Termination Payment in respect of such TRA Party or (ii) the amount payable to any individual TRA Party having a Total Percentage Interest of less than three percent (3%) (except that such threshold shall be determined, in the case of any Founder TRA Party, by aggregating the Total Percentage Interests of the Founder TRA Parties) by paying to any such individual TRA Party the Early Termination Payment in respect of such TRA Party; provided, however, that this Agreement shall only terminate under Section 4.1(a)(i) above upon the receipt of the Early Termination Payment by all TRA Parties, and provided, further, that the Corporate Taxpayer may withdraw any notice to execute its termination rights under this Section 4.1(a) prior to the time at which any Early Termination Payment has been paid. Upon payment of the Early Termination Payment in respect of each TRA Party by the Corporate Taxpayer the Corporate Taxpayer shall have no further payment obligations under this Agreement, other than for any (a) Tax Benefit Payments due and payable and that remain unpaid as of the Early Termination Notice and (b) Tax Benefit Payments 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 (b) is included in the Early Termination Payment). If an Exchange occurs after the Corporate Taxpayer makes all of the required Early Termination Payments, the Corporate Taxpayer shall have no obligations under this Agreement with respect to such Exchange.
(b) In the event that the Corporate Taxpayer (1) breaches any of its material obligations under this Agreement, whether as a result of failure to make any payment when due, failure to honor any other material obligation required hereunder or by operation of law as a result of the rejection of this Agreement in a case commenced under Title 11 of the United States Code (i.e., the United States Bankruptcy Code) or otherwise or (2)(A) shall commence any case, proceeding or other action (i) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an
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order for relief entered with respect to it, or seeking to adjudicate a bankruptcy or insolvency, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts or (ii) seeking an appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets, or it shall make a general assignment for the benefit of creditors or (B) there shall be commenced against the Corporate Taxpayer any case, proceeding or other action of the nature referred to in clause (A) above that remains undismissed or undischarged for a period of sixty (60) calendar days, all obligations hereunder shall be automatically accelerated and shall be immediately due and payable, 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, (x) the Early Termination Payments calculated as if an Early Termination Notice had been delivered on the date of a breach, (y) any Tax Benefit Payment due and payable and that remains unpaid as of the date of a breach, and (z) any Tax Benefit Payment in respect of any TRA Party due for the Taxable Year ending with or including the date of a breach; provided, that procedures similar to the procedures of Section 4.2 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, to the fullest extent permitted by applicable law, each TRA Party shall be entitled to elect to receive the amounts set forth in clauses (x), (y) and (z) 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 a material obligation of this Agreement if the Corporate Taxpayer fails to make any Tax Benefit Payment when due to the extent that the Corporate Taxpayer has insufficient funds to make such payment despite using commercially reasonable efforts to obtain funds to make such payment (it being understood that this sentence shall not apply to, and shall not limit or defer the obligation to pay when due, any Early Termination Payment that becomes due as a result of a Change of Control); provided, that the interest provisions of Section 5.2 shall apply to such late payment (unless the Corporate Taxpayer does not have sufficient funds to make such payment as a result of limitations imposed by any Senior Obligations, in which case Section 5.2 shall apply, but the Default Rate shall be replaced by the Agreed Rate).
(c) In the event of a Change of Control, then all obligations hereunder shall be accelerated and such obligations shall be calculated as if an Early Termination Notice had been delivered on the date of such Change of Control and utilizing the Valuation Assumptions by substituting in each case the terms “the closing date of a Change of Control” in each place where the phrase “Early Termination Date” appears. Such obligations shall include (1) the Early Termination Payments calculated as if the Early Termination Date is the date of such Change of Control, (2) any Tax Benefit Payment due and payable and that remains unpaid as of the date of such Change of Control, and (3) any Tax Benefit Payment in respect of any TRA Party due for any Taxable Year ending prior to, with or including the date of such Change of Control (except to the extent any amounts described in clause (2) or (3) are included in the Early Termination
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Payment). For the avoidance of doubt, Sections 4.2 and 4.3 shall apply to a Change of Control, mutatis mutandis.
SECTION 4.2 Early Termination Notice. If the Corporate Taxpayer chooses to exercise its right of early termination under Section 4.1(a) above, the Corporate Taxpayer shall deliver to each TRA Party Representative 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 under either clause (i) or (ii) thereof and showing in reasonable detail the calculation of the Early Termination Payment(s) due for each relevant TRA Party. Each Early Termination Schedule shall become final and binding on all parties thirty (30) calendar days from the first date on which the TRA Party Representatives are treated as having received such Schedule or amendment thereto under Section 7.1 unless a TRA Party Representative (i) within thirty (30) calendar days after such date 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. If the Corporate Taxpayer and a TRA Party Representative, for any reason, are unable to successfully resolve the issues raised in such notice within thirty (30) calendar days after receipt by the Corporate Taxpayer of the Material Objection Notice, the Corporate Taxpayer and such TRA Party Representative shall employ the Reconciliation Procedures in which case such Schedule becomes binding ten (10) calendar days after the conclusion of the Reconciliation Procedures. Each TRA Party Representative will fairly represent the interests of each TRA Party it represents and shall timely raise and pursue, in accordance with this Section 4.2, any reasonable objection to an Early Termination Schedule or amendment thereto timely communicated in writing to such TRA Party Representative by an applicable TRA Party.
SECTION 4.3 Payment upon Early Termination.
(a) Within three (3) calendar days after an Early Termination Effective Date, the Corporate Taxpayer shall pay to each relevant 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 or, in the absence of such designation or agreement, by check mailed to the last mailing address provided by such TRA Party to the Corporate Taxpayer.
(b) “Early Termination Payment” in respect of a TRA Party shall equal the present value, discounted at the Early Termination Rate as of the applicable 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 the Valuation Assumptions in respect of such TRA Party are applied and that each Tax Benefit Payment for the relevant Taxable Year would be due and payable on the due date (without extensions) under applicable law as of the Early Termination Effective Date for filing of IRS Form 1120 (or any successor form) of the Corporate Taxpayer.
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ARTICLE V
SUBORDINATION AND LATE PAYMENTS
SECTION 5.1 Subordination. Notwithstanding any other provision of this Agreement to the contrary, any Tax Benefit Payment required to be made by the Corporate Taxpayer to the TRA Parties 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 (“Senior Obligations”) and shall rank pari passu in right of payment with all current or future unsecured obligations of the Corporate Taxpayer that are not Senior Obligations. To the extent that any payment under this Agreement is not permitted to be made at the time payment is due as a result of this Section 5.1 and the terms of agreements governing Senior Obligations, such payment obligation nevertheless shall accrue for the benefit of TRA Parties and the Corporate Taxpayer shall make such payments at the first opportunity that such payments are permitted to be made in accordance with the terms of the Senior Obligations. Notwithstanding any other provision of this Agreement to the contrary, to the extent that the Corporate Taxpayer or any of its Affiliates enters into future Tax receivable or other similar agreements (“Future TRAs”), the Corporate Taxpayer shall ensure that the terms of any such Future TRA shall provide that the Tax Attributes subject to this Agreement are considered senior in priority to any Tax attributes subject to any such Future TRA for purposes of calculating the amount and timing of payments under any such Future TRA and that there is no duplication of Tax Attributes (and payments with respect thereto) that are subject to this Agreement and Tax attributes (and payment obligations with respect thereto) that are subject to any Future TRAs.
SECTION 5.2 Late Payments by the Corporate Taxpayer. Subject to the proviso in the last sentence of Section 4.1(b), the amount of all or any portion of any Tax Benefit Payment or Early Termination Payment not made to the TRA Parties when due under the terms of this Agreement, whether as a result of Section 5.1 or otherwise, 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 first due and payable to the date of actual payment.
ARTICLE VI
NO DISPUTES; CONSISTENCY; COOPERATION
SECTION 6.1 Participation in the Corporate Taxpayer’s and OpCo’s Tax Matters. Except as otherwise provided herein, and except as provided in the OpCo Agreement, the Corporate Taxpayer shall have full responsibility for, and sole discretion over, all Tax matters concerning the Corporate Taxpayer and OpCo, including without limitation 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 the applicable TRA Party Representative and shall keep the applicable TRA Party Representative reasonably informed with respect to the portion of any audit of the Corporate Taxpayer or OpCo by a Taxing Authority the outcome of which is reasonably expected to materially affect the rights and obligations of a TRA Party under this Agreement which such TRA Party Representative
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represents and shall provide to the applicable TRA Party Representative, at the applicable TRA Party Representative’s expense, reasonable opportunity to provide information and other input to the Corporate Taxpayer or OpCo (and their respective advisors) concerning the conduct of 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 OpCo Agreement.
SECTION 6.2 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, without limitation, the Basis Adjustments and each Tax Benefit Payment) in a manner consistent with that contemplated by this Agreement or 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. The Corporate Taxpayer shall (and shall cause OpCo and its other Subsidiaries to) use commercially reasonable efforts (for the avoidance of doubt, taking into account the interests and entitlements of all TRA Parties under this Agreement) to defend the Tax treatment contemplated by this Agreement and any Schedule in any audit, contest or similar proceeding with any Taxing Authority.
SECTION 6.3 Cooperation. Each of the TRA Parties shall (a) furnish to the Corporate Taxpayer in a timely manner such information, documents and other materials as the Corporate Taxpayer may reasonably request for purposes of making any determination or computation necessary or appropriate under this Agreement, or preparing any Tax Return or contesting or defending any audit, examination or controversy with any Taxing Authority in respect of the matters contemplated by this Agreement, (b) make itself reasonably available to the Corporate Taxpayer and each of the TRA Party Representatives to provide explanations of documents and materials and such other information as the Corporate Taxpayer or a TRA Party Representative 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 (subject to the terms of clauses (a) and (b) above). The Corporate Taxpayer shall reimburse each such TRA Party for any reasonable and documented out-of-pocket costs and expenses incurred pursuant to this Section 6.3. Upon the request of any TRA Party, the Corporate Taxpayer shall use commercially reasonable efforts to execute such documents and provide such information (including taxable income and Tax Benefit Payment projections and underlying workpapers), and otherwise cooperate in taking any action, reasonably requested by such TRA Party or any potential assignee or transferee of such TRA Party’s rights or obligations under this Agreement in connection with such TRA Party’s, or such potential assignee or transferee’s, tax or financial reporting or underwriting and/or otherwise in connection with the consummation of any assignment or transfer of any of its rights or obligations under this Agreement.
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ARTICLE VII
MISCELLANEOUS
SECTION 7.1 Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be deemed duly given and received (a) on the date of delivery if delivered personally, or by facsimile or email with confirmation of transmission by the transmitting equipment or (b) on the first Business Day following the date of dispatch if delivered by a recognized next-day courier service. All notices hereunder shall be delivered 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: |
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Jersey Mike’s Subs Inc. |
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1 Commvault Way, S300 |
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Tinton Falls, NJ 07724 |
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Attention: |
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Scott McLester, General Counsel |
Email: |
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[email address] |
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If to the TRA Parties, to the respective addresses, fax numbers and email addresses set forth in the records of OpCo. |
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Any party may change its address, fax number or email by giving the other party written notice of its new address, fax number or email in the manner set forth above.
SECTION 7.2 Counterparts. This Agreement may be executed in one or more counterparts (including counterparts transmitted electronically in portable document format (pdf), or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) with the same effect as if the signatures to each counterpart were upon a single instrument, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties, it being understood that all parties need not sign the same counterpart. Delivery of an executed signature page to this Agreement by facsimile or electronic transmission shall be as effective as delivery of a manually signed counterpart of this Agreement. The parties hereto irrevocably and unreservedly agree that this Agreement may be executed by way of electronic signatures and the parties agree that this Agreement, or any part thereof, shall not be challenged or denied any legal effect, validity and/or enforceability solely on the group that it is in the form of an electronic record.
SECTION 7.3 Entire Agreement; No Third Party Beneficiaries. This Agreement constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof. This Agreement shall be binding upon and inure solely to the benefit of each party hereto and their respective successors and permitted assigns, and nothing in this Agreement, express or implied, is
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intended to or shall confer upon any other Person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.
SECTION 7.4 Governing Law. This Agreement shall be governed by, and construed in accordance with, the law of the State of New York.
SECTION 7.5 Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any law or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect 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 determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto 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 greatest extent possible.
SECTION 7.6 Successors; Assignment; Amendments; Waivers.
(a) Each TRA Party may assign all or any portion of its rights under this Agreement to any Person as long as such transferee has executed and delivered, or, in connection with such transfer, executes and delivers to PubCo a joinder to this Agreement, substantially in form of Exhibit A hereto, agreeing to become a TRA Party for all purposes of this Agreement, except as otherwise provided in such joinder.
(b) No provision of this Agreement may be amended unless such amendment is approved in writing by each of the Corporate Taxpayer and by the Sponsor TRA Party Representative (such approval not to be unreasonably withheld, conditioned or delayed); provided that, no such amendment shall be effective if such amendment will have a disproportionate, material and adverse effect on one TRA Party compared to any other TRA Party unless such amendment is consented to in writing by one or more TRA Parties representing a majority of the Total Percentage Interest of all TRA Parties so affected (such consent not to be unreasonably withheld, conditioned or delayed).
(c) All of the terms and provisions of this Agreement shall be binding upon, shall inure to the benefit of and shall be enforceable by the parties hereto and their respective successors, assigns, heirs, executors, administrators and legal representatives. 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.
(d) If all or a portion of a TRA Party’s rights pursuant to this agreement are transferred, sold, assigned or otherwise disposed of, then the transferor shall have no further right to receive any further payments in respect of such rights and any subsequent payments to the transferee shall be determined with regard to amounts previously paid to the transferor.
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SECTION 7.7 Titles and Subtitles. The titles of the sections and subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.
SECTION 7.8 Resolution of Disputes.
(a) Any and all disputes which are not governed by Section 7.9 and cannot be settled amicably, including any ancillary claims of any party, arising out of, relating to or in connection with the validity, negotiation, execution, interpretation, performance or non-performance of this Agreement (including the validity, scope and enforceability of this arbitration provision) (each a “Dispute”) shall be finally settled by arbitration conducted by a single arbitrator in New York in accordance with the then-existing Rules of Arbitration of the International Chamber of Commerce. If the parties to the Dispute fail to agree on the selection of an arbitrator within thirty (30) calendar days of the receipt of the request for arbitration, the International Chamber of Commerce shall make the appointment. The arbitrator shall be a lawyer admitted to the practice of law in the State of New York and shall conduct the proceedings in the English language. Performance under this Agreement shall continue if reasonably possible during any arbitration proceedings.
(b) Notwithstanding the provisions of paragraph (a), any TRA Party Representative may bring an action or special proceeding in any court of competent jurisdiction for the purpose of compelling a party to arbitrate, seeking temporary or preliminary relief in aid of an arbitration hereunder, and/or enforcing an arbitration award and, for the purposes of this paragraph (b), the Corporate Taxpayer and each TRA Party (i) expressly consent to the application of paragraph (c) of this Section 7.8 to any such action or proceeding, (ii) agree that proof shall not be required that monetary damages for breach of the provisions of this Agreement would be difficult to calculate and that remedies at law would be inadequate, and (iii) irrevocably appoint the Corporate Taxpayer as agent of such TRA Party, and each TRA Party Representative as agent of the Corporate Taxpayer, for service of process in connection with any such action or proceeding and agrees that service of process upon such agent, who shall promptly advise the TRA Party or the Corporate Taxpayer, as applicable, of any such service of process, shall be deemed in every respect effective service of process upon the TRA Party or Corporate Taxpayer, as applicable, in any such action or proceeding.
(c) (i) EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF COURTS LOCATED IN NEW YORK, NEW YORK FOR THE PURPOSE OF ANY JUDICIAL PROCEEDING BROUGHT IN ACCORDANCE WITH THE PROVISIONS OF THIS SECTION 7.8, OR ANY JUDICIAL PROCEEDING ANCILLARY TO AN ARBITRATION OR CONTEMPLATED ARBITRATION ARISING OUT OF OR RELATING TO OR CONCERNING THIS AGREEMENT. Such ancillary judicial proceedings include any suit, action or proceeding to compel arbitration, to obtain temporary or preliminary judicial relief in aid of arbitration, or to confirm an arbitration award. The parties acknowledge that the forum designated by this paragraph (c) have a reasonable relation to this Agreement, and to the parties’ relationship with one another; and
(ii) The parties hereby waive, to the fullest extent permitted by applicable law, any objection which they now or hereafter may have to personal
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jurisdiction or to the laying of venue of any such ancillary suit, action or proceeding brought in any court referred to in the preceding paragraph of this Section 7.8 and such parties agree not to plead or claim the same.
SECTION 7.9 Reconciliation. In the event that the Corporate Taxpayer and any TRA Party Representative, as applicable, are unable to resolve a disagreement with respect to the matters governed by Sections 2.3 and 4.2 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 the applicable TRA Party Representative agree otherwise, the Expert shall not, and the firm that employs the Expert shall not, have any material relationship with the Corporate Taxpayer or the applicable TRA Party Representative or other actual or potential conflict of interest. If the Corporate Taxpayer and the applicable TRA Party Representative 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, then the Expert shall be appointed by the International Chamber of Commerce Centre for Expertise. The Expert shall resolve any matter relating to the applicable TRA Party’s Basis 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 or the Early Termination Schedule 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 the applicable TRA Party Representative shall bear their own costs and expenses of such proceeding, unless (i) the Expert adopts the applicable TRA Party Representative’s position in which case the Corporate Taxpayer shall reimburse the applicable TRA Party Representative for any reasonable out-of-pocket costs and expenses in such proceeding, or (ii) the Expert adopts the Corporate Taxpayer’s position, in which case the applicable TRA Party Representative 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 7.9 shall be decided by the Expert. The Expert shall finally determine any Reconciliation Dispute and the determinations of the Expert pursuant to this Section 7.9 shall be binding on the Corporate Taxpayer and all the TRA Parties and may be entered and enforced in any court having jurisdiction.
SECTION 7.10 Withholding. The Corporate Taxpayer and its Affiliates shall be entitled to deduct and withhold from any payment payable pursuant to this Agreement such amounts as the Corporate Taxpayer or its Affiliates are 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. Tax law. To the extent that amounts are so withheld and paid over to the appropriate Taxing Authority by the Corporate Taxpayer or its Affiliates, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Person in respect of whom such
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withholding was made. To the extent that any payment pursuant to this Agreement is not reduced by such deductions or withholdings, such recipient shall indemnify the applicable withholding agent for any amounts imposed by any Taxing Authority together with any costs and expenses related thereto. Each TRA Party shall promptly provide the Corporate Taxpayer, OpCo or other applicable withholding agent with any applicable Tax forms and certifications (including IRS Form W-9 or the applicable version of IRS Form W-8) reasonably requested, in connection with determining whether any such deductions and withholdings are required under the Code or any provision of U.S. state, local or non-U.S. Tax law.
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, 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 the Corporate Taxpayer (or any member of a group described in Section 7.11(a)) transfers or is deemed to transfer any Unit or any Reference Asset to a transferee that is treated as a corporation for U.S. federal income Tax purposes (other than a member of a group described in Section 7.11(a)) in a transaction in which the transferee’s basis in the property acquired is determined in whole or in part by reference to such transferor’s basis in such property, then the Corporate Taxpayer shall cause such transferee to assume the obligation to make payments hereunder with respect to the applicable Tax Attributes associated with any Reference Asset or interest therein acquired (directly or indirectly) in such transfer (taking into account any gain recognized in the transaction) in a manner consistent with the terms of this Agreement as the transferee (or one of its Affiliates) actually realizes Tax benefits from the Tax Attributes. If OpCo transfers (or is deemed to transfer for U.S. federal income Tax purposes) any Reference Asset to a transferee that is treated as a corporation for U.S. federal income Tax purposes (other than a member of a group described in Section 7.11(a)) in a transaction in which the transferee’s basis in the property acquired is determined in whole or in part by reference to such transferor’s basis in such property, OpCo shall be treated as having disposed of the Reference Asset in a wholly taxable transaction. The consideration deemed to be received by OpCo in a transaction contemplated in the prior sentence shall be equal to the fair market value of the deemed transferred asset, plus (i) the amount of debt to which such asset is subject, in the case of a transfer of an encumbered asset or (ii) the amount of debt allocated to such asset, in the case of a transfer of a partnership interest. If any member of a group described in Section 7.11(a) that owns any Unit deconsolidates from the group (or the Corporate Taxpayer deconsolidates from the group), then the Corporate Taxpayer shall cause such member (or the parent of the consolidated group in a case where the Corporate Taxpayer deconsolidates from the group) to assume the obligation to make payments hereunder with respect to the applicable Tax Attributes associated with any Reference Asset it owns (directly or indirectly) in a manner consistent with the terms of this Agreement as the member (or one of its Affiliates) actually realizes Tax benefits. If a transferee or a member of a group described in
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Section 7.11(a) assumes an obligation to make payments hereunder pursuant to either of the foregoing sentences, then the initial obligor shall be relieved of the obligation assumed.
(c) If the Corporate Taxpayer (or any member of a group described in Section 7.11(a)) transfers (or is deemed to transfer for U.S. federal income Tax purposes) any Unit in a transaction that is wholly or partially taxable, then for purposes of calculating payments under this Agreement, OpCo shall be treated as having disposed of the portion of any Reference Asset that is indirectly transferred by the Corporate Taxpayer (i.e., taking into account the number of Units transferred) in a wholly or partially taxable transaction in which all income, gain or loss is allocated to the Corporate Taxpayer. The consideration deemed to be received by OpCo shall be equal to the fair market value of the deemed transferred asset, plus (i) the amount of debt to which such asset is subject, in the case of a transfer of an encumbered asset or (ii) the amount of debt allocated to such asset, in the case of a transfer of a partnership interest.
SECTION 7.12 Confidentiality.
(a) Subject to the last sentence of Section 6.3, each TRA Party and each of their assignees acknowledge and agree that the information of the Corporate Taxpayer is confidential and, except in the course of performing any duties as necessary for the Corporate Taxpayer and its Affiliates, as required by law or legal process or to enforce the terms of this Agreement, such person shall keep and retain in the strictest confidence and not disclose to any Person any confidential matters, acquired pursuant to this Agreement, of the Corporate Taxpayer and its Affiliates and successors, concerning OpCo and its Affiliates and successors or the members, learned by the TRA Party heretofore or hereafter. This Section 7.12 shall not apply to (i) any information that has been made publicly available by the Corporate Taxpayer or any of its Affiliates, becomes public knowledge (except as a result of an act of the TRA Party in violation of this Agreement) or is generally known to the business community, (ii) the disclosure of information to the extent necessary for the TRA Party to prepare and file its Tax Returns, to respond to any inquiries regarding the same from any Taxing Authority or to prosecute or defend any action, proceeding or audit by any Taxing Authority with respect to such returns, (iii) the disclosure of information to a prospective assignee or transferee of the TRA Party to the extent reasonably necessary for such TRA Party to market its rights or obligations under this Agreement or to consummate a transfer or assignment of its rights or obligations under this Agreement so long as such prospective transferee agrees to be bound by the confidentiality obligations pursuant to this Agreement prior to such disclosure, (iv) the disclosure of information to current and prospective limited partners of the TRA Party so long as such current or prospective limited partner agrees to be bound by the confidentiality obligations pursuant to this Agreement prior to such disclosure and (v) the disclosure of information to any direct or indirect beneficial owner of an interest in a TRA Party (and such Person’s Affiliates, and its and their respective officers, directors and employees) that is subject to existing confidentiality obligations containing customary terms with respect to such information at the time of. Notwithstanding anything to the contrary herein, each TRA Party and each of its assignees (and each employee, representative or other agent of the TRA Party or its assignees, as applicable) may disclose to any and all Persons, without limitation of any kind, the Tax treatment and Tax structure of the Corporate Taxpayer, OpCo and their Affiliates, and any of their transactions, and all materials of any kind (including opinions or other Tax analyses) that are provided to the TRA Party relating to such Tax treatment and Tax structure.
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(b) If a TRA Party or an assignee commits a breach, or threatens to commit a breach, of any of the provisions of this Section 7.12, the Corporate Taxpayer shall have the right and remedy to have the provisions of this Section 7.12 specifically enforced by injunctive relief or otherwise by any court of competent jurisdiction without the need to post any bond or other security, it being acknowledged and agreed that any such breach or threatened breach shall cause irreparable injury to the Corporate Taxpayer or any of its Subsidiaries or the TRA Parties and the accounts and funds managed by the Corporate Taxpayer and that money damages alone shall not provide an adequate remedy to such Persons. Such rights and remedies shall be in addition to, and not in lieu of, any other rights and remedies available at law or in equity.
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 the TRA Party upon any Exchange by such TRA Party 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 such 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 by such TRA Party occurring after a date specified by such TRA Party, or (iii) shall otherwise be amended in a manner determined by such TRA Party and PubCo as it relates to such TRA Party, provided that, such amendment shall not result in an increase in payments under this Agreement at any time as compared to the amounts and times of payments that would have been due in the absence of such amendment.
SECTION 7.14 TRA Party Representative.
(a) By executing this Agreement, each of the (A) Sponsor TRA Parties shall be deemed to have irrevocably constituted the Sponsor TRA Party Representative and the (B) Founder TRA Parties shall be deemed to have irrevocably constituted the Founder TRA Party Representative, in each case, as his, her or 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 applicable TRA Parties which may be necessary, convenient or appropriate to facilitate any matters under this Agreement, including but not limited to: (i) execution of the documents and certificates required pursuant to this Agreement; (ii) except to the extent specifically provided in this Agreement, receipt and forwarding of notices and communications pursuant to this Agreement; (iii) administration of the provisions of this Agreement; (iv) any and all consents, waivers, amendments or modifications deemed by the Sponsor TRA Party Representative or the Founder TRA Party Representative, as applicable, in its sole and absolute discretion, 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; (v) amending this Agreement or any of the instruments to be delivered to the Corporate Taxpayer pursuant to this Agreement; (vi) taking actions the Sponsor TRA Party Representative or the Founder TRA Party Representative, as applicable, is expressly authorized to take pursuant to the other provisions of this Agreement; (vii) negotiating and compromising, on behalf of such applicable TRA Parties, any dispute that may arise under, and exercising or refraining from exercising any remedies available under, this Agreement or any other agreement contemplated hereby and executing, on behalf of such applicable TRA Parties, any settlement agreement, release
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or other document with respect to such dispute or remedy; and (viii) engaging attorneys, accountants, agents or consultants on behalf of such applicable TRA Parties in connection with this Agreement or any other agreement contemplated hereby and paying any fees related thereto; provided, however, that in the event there is no longer a Founder TRA Party Representative, the rights and obligations vested in the Founder TRA Party Representative under this Agreement with respect to the Founder TRA Parties shall become vested in the Sponsor TRA Party Representative.
(b) Each of the Sponsor TRA Party Representative or Founder TRA Party Representative may resign upon thirty (30) days’ written notice to the Corporate Taxpayer. If at any time a TRA Party Representative resigns, the Person then-serving as the applicable TRA Party Representative shall be entitled to appoint its successor. If a TRA Party Representative fails to appoint a successor that will serve as of the effective date of the resignation of the then-serving TRA Party Representative, the Corporate Taxpayer shall be entitled to appoint the successor.
(c) All reasonable, documented out-of-pocket costs and expenses incurred by each of the Sponsor TRA Party Representative or Founder TRA Party Representative in its capacity as such shall be promptly reimbursed by the Corporate Taxpayer upon invoice and reasonable support therefor by the applicable TRA Party Representative including, for the avoidance of doubt, any settlements or judgments in respect of such persons in their capacity as a TRA Party Representative.
(d) To the fullest extent permitted by law, none of the Sponsor TRA Party Representative, Founder TRA Party Representative, or any of their respective Affiliates, directors, officers, employees or other agents (each a “Covered Person”) shall be liable, responsible or accountable in damages or otherwise to any TRA Party, OpCo or the Corporate Taxpayer for damages arising from any action taken or omitted to be taken by the Sponsor TRA Party Representative or Founder TRA Party Representative, as applicable, or any other Person with respect to OpCo or the Corporate Taxpayer, except in the case of any action or omission which constitutes, with respect to such Person, willful misconduct or fraud. Each of the Covered Persons may consult with legal counsel, accountants, and other experts selected by it, and any act or omission suffered or taken by it on behalf of OpCo or the Corporate Taxpayer or in furtherance of the interests of OpCo or the Corporate Taxpayer in good faith in reliance upon and in accordance with the advice of such counsel, accountants, or other experts shall create a rebuttable presumption of the good faith and due care of such Covered Person with respect to such act or omission; provided that, such counsel, accountants, or other experts were selected with reasonable care. Each of the Covered Persons may rely in good faith upon, and shall have no liability to OpCo, the Corporate Taxpayer or the TRA Parties for acting or refraining from acting upon, any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, debenture, or other paper or document reasonably believed by it to be genuine and to have been signed or presented by the proper party or parties.
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(e) Notwithstanding anything in this Agreement, the rights and obligations of a TRA Party Representative under this Agreement shall terminate in the event no TRA Party represented by such TRA Party Representative has a right to receive a future payment pursuant to this Agreement. For the avoidance of doubt, a Tax Benefit Payment received but disputed in good faith shall be considered a right to receive a future payment pursuant to this Agreement for purposes of this Section 7.14(e).
SECTION 7.15 Effectiveness. This Agreement shall become effective at the effective time prescribed in the Master Reorganization Agreement, dated on or about the date hereof, among PubCo and the other parties thereto.
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IN WITNESS WHEREOF, PubCo and each TRA Party have duly executed this Agreement as of the date first written above.
PubCo: |
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JERSEY MIKE’S SUBS INC. |
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By: |
/s/ Scott G. McLester |
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Name: Scott G. McLester |
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Title: General Counsel |
Sponsor TRA Parties: |
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SUBMARINE BUYER L.L.C. |
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By: Submarine Buyer Holdco LLC, its sole member |
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By: Boardwalk I Aggregator L.P, its managing member |
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By: BCP 9 Holdings Manager L.L.C., its general partner |
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By: |
/s/ Robert Brooks |
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Name: Robert Brooks |
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Title: Authorized Signatory |
BOARDWALK II AGGREGATOR L.P. |
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By: BCP 9 Holdings Manager L.L.C., its general partner |
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By: |
/s/ Robert Brooks |
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Name: Robert Brooks |
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Title: Authorized Signatory |
Founder Corp: |
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Original 56ers, Inc. |
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By: |
/s/ Peter Cancro |
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Name: Peter Cancro |
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Title: Authorized Signatory |
Founder TRA Parties: |
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CHRISTINE CANCRO EXEMPT TRUST UA CANCRO FAMILY DYNASTY TRUST |
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By: |
/s/ Lisa Morgan |
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Name: Lisa Morgan |
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Title: Authorized Signatory |
CAROLINE JONES EXEMPT TRUST UA CANCRO FAMILY DYNASTY TRUST |
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By: |
/s/ Lisa Morgan |
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Name: Lisa Morgan |
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Title: Authorized Signatory |
ROBERT CANCRO EXEMPT TRUST UA CANCRO FAMILY DYNASTY TRUST |
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By: |
/s/ Lisa Morgan |
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Name: Lisa Morgan |
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Title: Authorized Signatory |
PAUL CANCRO EXEMPT TRUST UA CANCRO FAMILY DYNASTY TRUST |
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By: |
/s/ Lisa Morgan |
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Name: Lisa Morgan |
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Title: Authorized Signatory |
Management TRA Parties: |
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JERSEY MIKE’S MANAGEMENT AGGREGATOR LLC. |
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By: |
/s/ Charles R. Morrison |
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Name: Charles R. Morrison |
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Title: Authorized Signatory |
Exhibit A
Form of Joinder
JOINDER (this “Joinder”) to the Tax Receivable Agreement, dated as of July 29, 2026, between Jersey Mike’s Subs Inc., a Delaware corporation (including any successor corporation, “PubCo”) and the TRA Parties (as defined therein) (the “Tax Receivable Agreement”), is made as of ______________ by ______________________ (“New TRA Party”).
WHEREAS, New TRA Party is executing and delivering this Joinder pursuant to Section 7.6(a) of the Tax Receivable Agreement.
NOW, THEREFORE, in consideration of the foregoing and the respective covenants and agreements set forth in the Tax Receivable Agreement, and intending to be legally bound hereby, the New TRA Party hereto agrees as follows:
Section 1.1 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 1.2 Joinder. By executing and delivering this Joinder to PubCo, New TRA Party hereby acknowledges and agrees (i) that it has received and read the Tax Receivable Agreement, (ii) that it is a “TRA Party” (as defined in the Tax Receivable Agreement) for all purposes of the Tax Receivable Agreement and (iii) that it is bound by and subject to all of the terms and conditions of a TRA Party contained in the Tax Receivable Agreement, with all attendant rights, duties and obligations of a TRA Party thereunder. The parties to the Tax Receivable Agreement shall treat the execution and delivery hereof by the New TRA Party as the execution and delivery of the Tax Receivable Agreement by the New TRA Party and, upon receipt of this Joinder by PubCo, the signature of the New TRA Party set forth below shall constitute a counterpart signature to the signature page of the Tax Receivable Agreement.
Section 1.3 Notice. Any notice, request, consent, claim, demand, approval, waiver or other communication hereunder to New TRA Party shall be delivered or sent to New TRA Party at the address set forth on the signature page hereto in accordance with Section 7.1 of the Tax Receivable Agreement.
Section 1.4 Governing Law. This Joinder shall be governed by and construed in accordance with the law of the State of New York.
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IN WITNESS WHEREOF, this Joinder has been duly executed and delivered by New TRA Party as of the date first above written.
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Exhibit 10.3
EXCHANGE AGREEMENT
EXCHANGE AGREEMENT (this “Agreement”), dated as of July 29, 2026, among Jersey Mike’s Subs Inc., a Delaware corporation, Jersey Mike’s HoldCo, LLC, a Delaware limited liability company, and the holders, other than the Corporation (as defined herein), of Common Units (as defined herein) from time to time party hereto.
WHEREAS, the parties hereto desire to provide for the exchange of Common Units for shares of Class A Common Stock (as defined herein), on the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and undertakings contained herein and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
SECTION 1.1. Definitions
The following definitions shall be for all purposes, unless otherwise clearly indicated to the contrary, applied to the terms used in this Agreement.
“Agreement” has the meaning set forth in the preamble of this Agreement.
“Blackstone Member” has the meaning set forth in the LLC Agreement.
“Cash Payment” has the meaning set forth in Section 2.2(e) of this Agreement.
“Class A Common Stock” means the Class A common stock, par value $0.0001 per share, of the Corporation.
“Class B Common Stock” means the Class B common stock, par value $0.0001 per share, of the Corporation.
“Code” means the Internal Revenue Code of 1986, as amended from time to time, or any successor statute. Any reference herein to a particular provision of the Code shall mean, where appropriate, the corresponding provision in any successor statute.
“Common Unit” means (i) each Common Unit (as such term is defined in the LLC Agreement) issued as of the date hereof and (ii) each Common Unit or other interest in Jersey Mike’s Holdings that may be issued by Jersey Mike’s Holdings in the future that is designated by the Corporation as a “Common Unit.” For the avoidance of doubt, “Common Unit” shall include any Common Units received in exchange for Incentive Units (as defined in the LLC Agreement) pursuant to the LLC Agreement.
“Common Unitholder” means each holder of one or more Common Units that may from time to time be a party to this Agreement. For the avoidance of doubt, any holder of Common
Units received upon conversion of Incentive Units (as defined in the LLC Agreement) pursuant to the LLC Agreement will be a “Common Unitholder” hereunder.
“Corporation” means Jersey Mike’s Subs Inc., a Delaware corporation, and any successor thereto.
“Exchange” has the meaning set forth in Section 2.1(a) of this Agreement.
“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, and the rules and regulations promulgated pursuant thereto.
“Exchange Rate” means, at any time, the number of shares of Class A Common Stock for which a Common Unit is entitled to be exchanged at such time. On the date of this Agreement, the Exchange Rate shall be 1 for 1, subject to adjustment pursuant to Section 2.4 of this Agreement.
“Exchanging Common Unitholder” means a Common Unitholder initiating an Exchange.
“Founder Member” has the meaning set forth in the LLC Agreement.
“IPO” means the initial public offering and sale of the Corporation’s Class A Common Stock.
“Jersey Mike’s Holdings” means Jersey Mike’s HoldCo, LLC, a Delaware limited liability company, and any successor thereto.
“LLC Agreement” means the Third Amended and Restated Limited Liability Company Agreement of Jersey Mike’s Holdings, dated on or about the date hereof, as such agreement may be amended and/or restated from time to time.
“Per Share Cash Settlement Price” has the meaning set forth in Section 2.2(e) of this Agreement.
“Per Share Cash Settlement Threshold Price” means (i) in the event that there is a concurrent sale of shares of Class A Common Stock by the exchanging Common Unitholder or an Affiliate thereof, the amount received by such seller on a per share basis in such concurrent sale and (ii) in the event that there is no such concurrent sale of shares of Class A Common Stock by the exchanging Common Unitholder or an Affiliate thereof, the greater of (A) the highest trading price for a share of Class A Common Stock on the U.S. national securities exchange on which the Class A Common Stock is listed on the date of the Exchange and (B) the arithmetic average of the volume weighted average prices for a share of Class A Common Stock on the U.S. national securities exchange on which the Class A Common Stock is listed, as reported for each of the three (3) consecutive full Trading Days ending on and including the date of the related Exchange.
“Permitted Transferee” has the meaning given to such term in Section 3.1 of this Agreement.
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“Registration Rights Agreement” means the Registration Rights Agreement of Jersey Mike’s Subs Inc., dated on or about the date hereof, as such agreement may be amended from time to time.
“Securities Act” means the U.S. Securities Act of 1933, as amended from time to time, and the rules and regulations promulgated pursuant thereto.
“Trading Day” means a day on which the U.S. national 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).
ARTICLE II
SECTION 2.1. Exchange of Common Units for Class A Common Stock and Transfer of Class B Common Stock.
(a) Subject to adjustment as provided in this Article II and to the provisions of the LLC Agreement, each Common Unitholder shall be entitled, at any time and from time to time, upon the terms and subject to the conditions hereof and subject to the limitations set forth herein, to surrender Common Units to Jersey Mike’s Holdings in exchange for the delivery to the exchanging Common Unitholder of a number of shares of Class A Common Stock that is equal to the product of the number of Common Units surrendered multiplied by the Exchange Rate (such exchange, an “Exchange”).
(b) Upon any Exchange, a number of shares of Class B Common Stock held by such exchanging Common Unitholder equal to the number of Common Units surrendered in such Exchange will be automatically transferred to the Corporation and cancelled and retired by the Corporation.
SECTION 2.2. Exchange Procedures.
(a) A Common Unitholder shall exercise its right to make an Exchange as set forth in Section 2.1 above by providing a written notice of Exchange substantially in the form of Exhibit A hereto, duly executed by such holder or such holder’s duly authorized attorney, in each case delivered during normal business hours at the principal executive offices of the Corporation and to Jersey Mike’s Holdings. Notwithstanding anything to the contrary herein, a notice of Exchange delivered by a Blackstone Member or a Founder Member (i) may specify that the Exchange is conditioned upon the pricing of a sale or other disposition of the shares of Class A Common Stock issuable upon such Exchange (including a block trade, underwritten offering or other capital markets transaction) or upon any other conditions specified therein, and (ii) may be revoked or the settlement thereof delayed by such holder at any time prior to the consummation of such Exchange.
(b) As promptly as practicable following the delivery of a notice of Exchange in accordance with Section 2.2(a) (and in any event, within the prevailing settlement period on the national securities exchange on which the Class A Common Stock is listed, subject to any later settlement date specified in, or contemplated by any condition set forth in, such notice of Exchange), Jersey Mike’s Holdings shall deliver or cause to be delivered at the offices of the
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then-acting registrar and transfer agent of the Class A Common Stock or, if there is no then-acting registrar and transfer agent of the Class A Common Stock, at the principal executive offices of the Corporation, the number of shares of Class A Common Stock deliverable upon such Exchange registered in the name of the relevant exchanging Common Unitholder. To the extent the Class A Common Stock is settled through the facilities of The Depository Trust Company, Jersey Mike’s Holdings will, subject to Section 2.2(c) below, upon the written instruction of an exchanging Common Unitholder, use its commercially reasonable efforts to deliver the shares of Class A Common Stock deliverable to such exchanging Common Unitholder, through the facilities of The Depository Trust Company, to the account of the participant of The Depository Trust Company designated by such exchanging Common Unitholder. The Corporation, including in its capacity as the Managing Member of Jersey Mike’s Holdings, shall take such actions as may be required to ensure the performance by Jersey Mike’s Holdings of its obligations under this Article II, including the issuance and sale of shares of Class A Common Stock to or for the account of Jersey Mike’s Holdings (or, at the direction of the Corporation, to or for the account of a wholly owned subsidiary of the Corporation, which subsidiary would deliver such shares to the exchanging Common Unitholder) in exchange for the delivery to the Corporation or such wholly owned subsidiary of the Corporation, as applicable, of a number of Common Units that is equal to the number of Common Units surrendered by an exchanging Common Unitholder. The Corporation shall take such actions (or cause its wholly owned subsidiary to take such as actions, as applicable) as may be required to ensure the performance of its obligations under this Article II.
(c) Jersey Mike’s Holdings and each Exchanging Common Unitholder shall bear their own expenses in connection with the consummation of any Exchange, whether or not any such Exchange is ultimately consummated, except that Jersey Mike’s Holdings shall bear any transfer taxes, stamp taxes or duties, or other similar taxes in connection with, or arising by reason of, any Exchange; provided, however, that if any shares of Class A Common Stock are to be delivered in a name other than that of the Common Unitholder that requested the Exchange, then such Common Unitholder and/or the person in whose name such shares are to be delivered shall pay to Jersey Mike’s Holdings the amount of any transfer taxes, stamp taxes or duties, or other similar taxes in connection with, or arising by reason of, such Exchange or shall establish to the reasonable satisfaction of Jersey Mike’s Holdings that such tax has been paid or is not payable.
(d) The Corporation may adopt reasonable procedures for the implementation of the Exchange provisions set forth in this Article II (including policies regarding the use of specified brokers, restrictions on exchanges during blackout periods, restrictions on the frequency or timing of exchanges for administrative convenience, reasonable notice periods and/or minimum volume thresholds) provided, that no such procedures may be imposed on a Blackstone Member or a Founder Member without the prior written consent of such Blackstone Member or Founder Member, respectively.
(e) Notwithstanding anything to the contrary herein, the Corporation may in its sole discretion elect to settle any Exchange hereunder: (i) by delivering shares of Class A Common Stock directly to an exchanging Common Unitholder in exchange for such Common Unitholder’s delivery to the Corporation (or, at the direction of the Corporation, a wholly owned subsidiary of the Corporation), of the corresponding Common Units; or (ii) in the event that the
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Class A Common Stock is listed on a U.S. national securities exchange and the Corporation is utilizing the proceeds from a concurrent primary issuance of Class A Common Stock, by delivering an amount in U.S. dollars in immediately available funds equal to the product of (A) the price per share of Class A Common Stock received by the Corporation in the relevant primary issuance (the “Per Share Cash Settlement Price”), net of reasonable underwriting (or similar) discounts and commissions actually incurred, (B) the number of Common Units surrendered, and (C) the Exchange Rate (such product the “Cash Payment”) in exchange for such Common Unitholder’s delivery to the Corporation (or, at the direction of the Corporation, a wholly owned subsidiary of the Corporation), of the corresponding Common Units, provided that the Per Share Cash Settlement Price is not less than the Per Share Cash Settlement Threshold Price. Notwithstanding clause (ii) of the preceding sentence, the Corporation shall not have the right to cash settle any Exchange if the aggregate Cash Payments made by the Corporation would exceed the aggregate amount of cash received by the Corporation in such concurrent primary issuance and the Corporation may not cash settle any Exchange unless all concurrent Exchanges are similarly cash settled. Underwriting (or similar) discounts and commissions in excess of those incurred in a concurrent sale of shares of Class A Common Stock by the exchanging Common Unitholder or an Affiliate thereof will not be considered reasonable. Any such transaction shall otherwise be effected on the terms and in the manner provided herein and shall constitute an “Exchange” for all purposes of this Agreement.
(f) Notwithstanding anything to the contrary herein, to the extent a Common Unitholder surrenders for exchange a fraction of a Common Unit, Jersey Mike’s Holdings may in its sole discretion deliver to such holder a cash amount equal to the market value of such fraction (as determined by Jersey Mike’s Holdings in its sole discretion) in lieu of delivering a fraction of a share of Class A Common Stock.
SECTION 2.3. Limitations on Exchanges.
(a) For the avoidance of doubt, and notwithstanding anything to the contrary herein, a Common Unitholder shall not be entitled to Exchange Common Units to the extent the Corporation determines in good faith that such Exchange would be prohibited by law; provided, that nothing in this Agreement shall be construed to limit the rights and remedies of any Common Unitholder pursuant to the Registration Rights Agreement. For the avoidance of doubt, no Exchange shall be deemed to be prohibited by law pertaining to the registration of securities if such securities have been so registered or if any exemption from such registration requirements is reasonably available.
(b) Notwithstanding anything to the contrary herein, (i) if the board of directors of the Corporation shall determine in good faith that additional restrictions on Exchanges are necessary so that Jersey Mike’s Holdings is not treated as a “publicly traded partnership” under Section 7704 of the Code, the Corporation or Jersey Mike’s Holdings may impose such additional restrictions on Exchanges as the board of directors of the Corporation has determined in good faith to be so necessary; and (ii) no Exchange shall be permitted if, in the good faith determination of the Corporation or Jersey Mike’s Holdings, such an Exchange would pose a material risk that Jersey Mike’s Holdings would be a “publicly traded partnership” under Section 7704 of the Code; provided, that no such restriction in clause (i) or (ii) of this Section
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2.3(b) may be imposed on a Blackstone Member or a Founder Member without the prior written consent of such Blackstone Member or Founder Member, respectively.
SECTION 2.4. Adjustment.
(a) The Exchange Rate shall be adjusted accordingly if there is: (i) any subdivision (by any unit split, unit distribution, reclassification, reorganization, recapitalization or otherwise) or combination (by reverse unit split, reclassification, reorganization, recapitalization or otherwise) of the Common Units that is not accompanied by an identical subdivision or combination of the Class A Common Stock; or (ii) any subdivision (by any stock split, stock dividend or distribution, reclassification, reorganization, recapitalization or otherwise) or combination (by reverse stock split, reclassification, reorganization, recapitalization or otherwise) of the Class A Common Stock that is not accompanied by an identical subdivision or combination of the Common Units, in each case, to the extent necessary to maintain the economic equivalency in the value surrendered for exchange and the value received, as determined by the Corporation in good faith. If there is any reclassification, reorganization, recapitalization or other similar transaction in which the Class A Common Stock is converted or changed into another security, securities or other property, then upon any subsequent Exchange, an exchanging Common Unitholder shall be entitled to receive the amount of such security, securities or other property that such exchanging Common Unitholder would have received if such Exchange had occurred immediately prior to the effective date of such reclassification, reorganization, recapitalization or other similar transaction, taking into account any adjustment as a result of any subdivision (by any split, distribution or dividend, reclassification, reorganization, recapitalization or otherwise) or combination (by reverse split, reclassification, recapitalization or otherwise) of such security, securities or other property that occurs after the effective time of such reclassification, reorganization, recapitalization or other similar transaction. For the avoidance of doubt, an exchanging Common Unitholder shall remain entitled to receive any distribution declared or otherwise payable in respect of the Common Units surrendered by it in an Exchange with a record date occurring prior to the consummation of such Exchange, notwithstanding the consummation of such Exchange. Except as provided in this Section 2.4, no adjustments in respect of distributions shall be made upon the Exchange of any Common Unit.
SECTION 2.5. Class A Common Stock to be Issued.
(a) The Corporation shall at all times reserve and keep available out of its authorized but unissued Class A Common Stock, solely for the purpose of issuance upon an Exchange, such number of shares of Class A Common Stock as shall be deliverable upon any such Exchange; provided, that nothing contained herein shall be construed to preclude Jersey Mike’s Holdings from satisfying its obligations in respect of the Exchange of the Common Units by delivery of shares of Class A Common Stock which are held in the treasury of the Corporation or Jersey Mike’s Holdings or any of their subsidiaries or by delivery of purchased shares of Class A Common Stock (which may or may not be held in the treasury of the Corporation or any subsidiary thereof). The Corporation and Jersey Mike’s Holdings covenant that all Class A Common Stock issued upon an Exchange will, upon issuance, be validly issued, fully paid and non-assessable.
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(b) The Corporation and Jersey Mike’s Holdings covenant and agree that, to the extent that a registration statement under the Securities Act is effective and available for shares of Class A Common Stock to be delivered with respect to any Exchange, shares that have been registered under the Securities Act shall be delivered in respect of such Exchange. In the event that any Exchange in accordance with this Agreement is to be effected at a time when any required registration has not become effective or otherwise is unavailable, upon the request and with the reasonable cooperation of the Common Unitholder requesting such Exchange, the Corporation and Jersey Mike’s Holdings shall use commercially reasonable efforts to promptly facilitate such Exchange pursuant to any reasonably available exemption from such registration requirements. The Corporation and Jersey Mike’s Holdings shall use commercially reasonable efforts to list the Class A Common Stock required to be delivered upon Exchange prior to such delivery upon each national securities exchange or inter-dealer quotation system upon which the outstanding Class A Common Stock may be listed or traded at the time of such delivery.
ARTICLE III
SECTION 3.1. Additional Common Unitholders. To the extent a Common Unitholder validly transfers any or all of such holder’s Common Units to another person in a transaction in accordance with, and not in contravention of, the LLC Agreement or any other agreement or agreements with the Corporation or any of its subsidiaries to which a transferring Common Unitholder may be party, then such transferee (each, a “Permitted Transferee”) shall have the right to execute and deliver a joinder to this Agreement, substantially in the form of Exhibit B hereto, whereupon such Permitted Transferee shall become a Common Unitholder hereunder. To the extent Jersey Mike’s Holdings issues Common Units in the future, Jersey Mike’s Holdings shall be entitled, in its sole discretion, to make any holder of such Common Units a Common Unitholder hereunder through such holder’s execution and delivery of a joinder to this Agreement, substantially in the form of Exhibit B hereto.
SECTION 3.2. Addresses and Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in person, by courier service, by fax, by electronic mail (delivery receipt requested) or by registered or certified mail (postage prepaid, return receipt requested) to the respective parties at the following addresses (or at such other address for a party as shall be as specified in a notice given in accordance with this Section 3.2):
(a) If to the Corporation, to:
Jersey Mike’s Subs Inc.
1 Commvault Way, S300
Tinton Falls, NJ 07724
Attention: Scott G. McLester, General Counsel
Email: [email address]
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With a copy to: [email address]
Jersey Mike’s HoldCo, LLC
1 Commvault Way, S300
Tinton Falls, NJ 07724
Attention: Scott G. McLester, General Counsel
Email: [email address]
(b) If to Jersey Mike’s Holdings, to:
Jersey Mike’s HoldCo, LLC
1 Commvault Way, S300
Tinton Falls, NJ 07724
Attention: Scott G. McLester, General Counsel
Email: [email address]
(c) If to any Common Unitholder, to the address and other contact information set forth in the records of Jersey Mike’s Holdings from time to time.
SECTION 3.3. Further Action. The parties shall execute and deliver all documents, provide all information and take or refrain from taking action as may be necessary or appropriate to achieve the purposes of this Agreement.
SECTION 3.4. Binding Effect. This Agreement shall be binding upon and inure to the benefit of all of the parties and, to the extent permitted by this Agreement, their successors, executors, administrators, heirs, legal representatives and assigns.
SECTION 3.5. Severability. If any term or other provision of this Agreement is held to be invalid, illegal or incapable of being enforced by any rule of law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions is not affected in any manner materially adverse to any party. Upon a determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.
SECTION 3.6. Amendment. The provisions of this Agreement may be amended only by the affirmative vote or written consent of each of (i) the Corporation, (ii) Jersey Mike’s Holdings and (iii) Common Unitholders holding a majority of the then outstanding Common Units (excluding Common Units held by the Corporation); provided, however, that no amendment, supplement, waiver or modification of this Agreement shall be effective as to a Blackstone Member or a Founder Member without the prior written consent of such Blackstone Member or Founder Member, respectively.
SECTION 3.7. Waiver. No failure by any party to insist upon the strict performance of any covenant, duty, agreement or condition of this Agreement or to exercise any
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right or remedy consequent upon a breach thereof shall constitute waiver of any such breach of any other covenant, duty, agreement or condition.
SECTION 3.8. Submission to Jurisdiction; Waiver of Jury Trial.
(a) To the extent that any party has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself, or to such party’s property, to the fullest extent permitted by law, each such party hereby irrevocably waives such immunity in respect of such party’s obligations with respect to this Agreement.
(b) WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY LAW, EACH PARTY HERETO HEREBY WAIVES ITS RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES HERETO AGAINST ANY OTHER PARTY OR PARTIES HERETO, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. EACH PARTY HERETO HEREBY AGREES THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES HERETO FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT, OR ANY PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
(c) EXCLUSIVE JURISDICTION AND VENUE. EACH OF THE PARTIES HERETO AGREES THAT ANY DISPUTE BASED ON OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS OR ACTIONS OR OMISSIONS OF ANY PARTY HERETO RELATING TO THIS AGREEMENT SHALL BE LITIGATED IN AND MUST BE BROUGHT IN THE DELAWARE COURT OF CHANCERY (OR, IF SUCH COURT DOES NOT POSSESS OR REFUSES TO ACCEPT JURISDICTION, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY COURT OF THE STATE OF NEW YORK LOCATED IN NEW YORK COUNTY OR, IN THE CASE OF CLAIMS TO WHICH THE FEDERAL COURTS HAVE EXCLUSIVE SUBJECT MATTER JURISDICTION, THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK (AND IN THE CASE OF APPEALS IN THE COURTS IN WHICH APPEALS FROM SUCH COURTS ARE TO BE HEARD)). EACH OF THE PARTIES HERETO IRREVOCABLY SUBMITS TO THE PERSONAL JURISDICTION OF SUCH COURTS, AND TO THE FULLEST EXTENT PERMITTED BY LAW WAIVES ANY OBJECTION THEY MAY HAVE CONCERNING THE VENUE OR CONVENIENCE OF SUCH FORUM. NOTWITHSTANDING THE FOREGOING, HOWEVER, ANY PARTY MAY COMMENCE ANY ACTION OR PROCEEDING TO ENFORCE ANY JUDGMENT OBTAINED AGAINST ANOTHER
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PARTY IN COMPLIANCE WITH THE FOREGOING PROVISIONS IN ANY APPROPRIATE JURISDICTION OR COURT. TO THE FULLEST EXTENT PERMITTED BY LAW, SERVICE OF PROCESS MAY BE MADE ON ANY PARTY HERETO BY PREPAID CERTIFIED MAIL WITH A PROOF OF MAILING RECEIPT VALIDATED BY THE U.S. POSTAL SERVICE CONSTITUTING EVIDENCE OF VALID SERVICE, AND THAT, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, SERVICE MADE PURSUANT TO THE ABOVE SHALL HAVE THE SAME LEGAL FORCE AND EFFECT AS IF SERVED UPON SUCH PARTY PERSONALLY WITHIN THE STATE OF DELAWARE. EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, AND AGREES NOT TO ASSERT AS A DEFENSE, COUNTERCLAIM OR OTHERWISE, IN ANY ACTION BROUGHT BY ANY PARTY WITH RESPECT TO THIS AGREEMENT (I) ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF THE AFORESAID COURTS FOR ANY REASON OTHER THAN THE FAILURE TO SERVE PROCESS IN ACCORDANCE WITH THIS SECTION 3.8; (II) ANY CLAIM THAT IT OR ITS PROPERTY IS EXEMPT OR IMMUNE FROM THE JURISDICTION OF ANY SUCH COURT OR FROM ANY LEGAL PROCESS COMMENCED IN SUCH COURTS (WHETHER THROUGH SERVICE OF NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OF JUDGMENT, EXECUTION OF JUDGMENT OR OTHERWISE); OR (III) ANY OBJECTION WHICH SUCH PARTY MAY NOW OR HEREAFTER HAVE (A) TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT BROUGHT IN THE COURTS REFERRED TO ABOVE; (B) THAT SUCH ACTION BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM AND (C) THAT THIS AGREEMENT, OR THE SUBJECT MATTER HEREOF OR THEREOF, MAY NOT BE ENFORCED IN OR BY SUCH COURTS.
SECTION 3.9. Counterparts. This Agreement may be executed in any number of counterparts (including counterparts transmitted electronically in portable document format (pdf), or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) with the same effect as if the signatures to each counterpart were upon a single instrument, all of which will be an original and together shall constitute a single instrument. The parties hereto irrevocably and unreservedly agree that this Agreement may be executed by way of electronic signatures and the parties agree that this Agreement, or any part thereof, shall not be challenged or denied any legal effect, validity and/or enforceability solely on the ground that it is in the form of an electronic record.
SECTION 3.10. Tax Treatment; Tax Withholding.
(a) This Agreement shall be treated as part of the partnership agreement of Jersey Mike’s Holdings 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 promulgated thereunder. As required by the Code and the Treasury Regulations, the parties shall report any Exchange consummated hereunder as a taxable sale of the Common Units by a Common Unitholder to the Corporation, and no party shall take a contrary position on any income tax return, amendment thereof or communication with a taxing authority unless an alternate position is permitted under the Code
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and Treasury Regulations and the Corporation and the applicable Exchanging Common Unitholder consents in writing.
(b) Notwithstanding any other provision in this Agreement, the Corporation, Jersey Mike’s Holdings and their agents and affiliates shall have the right to deduct and withhold taxes (including Class A Common Stock with a fair market value equal to the closing price of the Class A Common Stock on the date of the applicable Exchange (provided that if an Exchange occurs on a day this is not a Trading Day, the fair market value shall be the closing price of the last Trading Day preceding the date of the applicable Exchange) equal to the amount of such taxes) from any payments to be made pursuant to the transactions contemplated by this Agreement if, in their opinion, such withholding is required by law, and shall be provided with any necessary tax forms, including Form W-9 or the appropriate series of Form W-8, as applicable, and any similar information; provided, that the Corporation may, in its sole discretion, allow an exchanging Common Unitholder to pay such taxes owed on the exchange of Common Units for Class A Common Stock in cash in lieu of the Corporation withholding or deducting such taxes; provided, further, that the Corporation shall use commercially reasonable efforts to provide the applicable exchanging Common Unitholder with written notice of any taxes it intends to withhold pursuant to this Section 3.10(b) at least five (5) days prior to the date of such withholding (or, if the applicable Exchange is to occur less than five (5) days after delivery of the notice of Exchange, as promptly as practicable). To the extent that any of the aforementioned amounts are so withheld, such withheld amounts shall be treated for all purposes of this Agreement as having been delivered and paid to the recipient of the payments in respect of which such deduction and withholding was made. To the extent that any payment pursuant to this Agreement is not reduced by such deductions or withholdings, such recipient shall indemnify the applicable withholding agent for any amounts imposed by any taxing authority together with any costs and expenses related thereto.
SECTION 3.11. Specific Performance. The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to specific performance of the terms and provisions hereof, in addition to any other remedy to which they are entitled at law or in equity.
SECTION 3.12. Independent Nature of Common Unitholders’ Rights and Obligations. The obligations of each Common Unitholder hereunder are several and not joint with the obligations of any other Common Unitholder, and no Common Unitholder shall be responsible in any way for the performance of the obligations of any other Common Unitholder hereunder. The decision of each Common Unitholder to enter into to this Agreement has been made by such Common Unitholder independently of any other Common Unitholder. Nothing contained herein, and no action taken by any Common Unitholder pursuant hereto, shall be deemed to constitute the Common Unitholders as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Common Unitholders are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated hereby and the Corporation acknowledges that the Common Unitholders are not acting in concert or as a group, and the Corporation will not assert any such claim, with respect to such obligations or the transactions contemplated hereby.
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SECTION 3.13. Applicable Law. This Agreement shall be governed by, and construed in accordance with, the law of the State of Delaware, without regards to its principles of conflicts of laws.
SECTION 3.14. Effective Time. This Agreement shall become effective at the effective time prescribed in the Master Reorganization Agreement, dated on or about the date hereof, among the Corporation, Jersey Mike’s Holdings and the other parties thereto.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered, all as of the date first set forth above.
JERSEY MIKE’S SUBS INC. |
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By: |
/s/ Scott G. McLester |
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Name: Scott G. McLester Title: General Counsel |
JERSEY MIKE’S HOLDCO, LLC |
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By: |
/s/ Scott G. McLester |
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Name: Scott G. McLester Title: General Counsel |
COMMON UNITHOLDERS: |
SUBMARINE BUYER LLC By: Submarine Buyer Holdco LLC, its sole member
By: Boardwalk I Aggregator L.P, its managing member
By: BCP 9 Holdings Manager L.L.C., its general partner |
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By: |
/s/ Robert Brooks |
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Name: Robert Brooks |
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Title: Authorized Signatory |
ORIGINAL 56ERS, INC. |
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By: |
/s/ Peter Cancro |
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Name: Peter Cancro |
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Title: Authorized Signatory |
CHRISTINE CANCRO EXEMPT TRUST UA CANCRO FAMILY DYNASTY TRUST |
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By: |
/s/ Lisa Morgan |
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Name: Lisa Morgan |
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Title: Authorized Signatory |
CAROLINE JONES EXEMPT TRUST UA CANCRO FAMILY DYNASTY TRUST |
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By: |
/s/ Lisa Morgan |
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Name: Lisa Morgan |
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Title: Authorized Signatory |
ROBERT CANCRO EXEMPT TRUST UA CANCRO FAMILY DYNASTY TRUST |
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By: |
/s/ Lisa Morgan |
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Name :Lisa Morgan |
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Title: Authorized Signatory |
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PAUL CANCRO EXEMPT TRUST UA CANCRO FAMILY DYNASTY TRUST |
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By: |
/s/ Lisa Morgan |
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Name: Lisa Morgan |
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Title: Authorized Signatory |
JERSEY MIKE'S MANAGEMENT AGGREGATOR LLC |
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By: |
/s/ Charles R. Morrison |
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Name: Charles R. Morrison |
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Title: Authorized Signatory |
EXHIBIT A
[FORM OF]
ELECTION OF EXCHANGE
Jersey Mike’s Subs Inc.
1 Commvault Way, S300
Tinton Falls, NJ 07724
Attention: Scott McLester, General Counsel
Jersey Mike’s HoldCo, LLC
1 Commvault Way, S300
Tinton Falls, NJ 07724
Attention: Scott McLester, General Counsel
Reference is hereby made to the Exchange Agreement, dated as of July 29, 2026 (the “Exchange Agreement”), among Jersey Mike’s Subs Inc., a Delaware corporation, Jersey Mike’s HoldCo, LLC, a Delaware limited liability company, and the holders of Common Units from time to time party thereto. Capitalized terms used but not defined herein shall have the meanings given to them in the Exchange Agreement.
Subject to Section 2.2(a) of the Exchange Agreement (including any conditions or revocation rights specified therein or herein), the undersigned Common Unitholder hereby transfers to Jersey Mike’s Holdings or a wholly owned subsidiary of the Corporation, the number of Common Units set forth below in exchange for the issuance to the undersigned Common Unitholder of the number of shares of Class A Common Stock to be issued in its name as set forth below, in accordance with the Exchange Agreement.
Jersey Mike’s Holdings or the applicable wholly owned subsidiary of the Corporation and the exchanging Common Unitholder intend for the foregoing transaction to be treated as a taxable sale or exchange pursuant to Section 1001 of the Code.
Legal Name of Common Unitholder: |
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Address: |
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Number of Common Units to be exchanged: |
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The undersigned hereby represents and warrants that (i) the undersigned has full legal capacity to execute and deliver this Election of Exchange and to perform the undersigned’s obligations hereunder; (ii) this Election of Exchange has been duly executed and delivered by the undersigned and is the legal, valid and binding obligation of the undersigned enforceable against it in accordance with the terms thereof or hereof, as the case may be, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally and the availability of equitable remedies; (iii) the Common Units subject to this Election of Exchange are being transferred to Jersey Mike’s Holdings, the Corporation or the applicable wholly owned subsidiary of the Corporation, as applicable, free and clear of any pledge, lien, security interest,
encumbrance, equities or claim; and (iv) no consent, approval, authorization, order, registration or qualification of any third party or with any court or governmental agency or body having jurisdiction over the undersigned or the Common Units subject to this Election of Exchange is required to be obtained by the undersigned for the transfer of such Common Units to the Corporation or the applicable wholly owned subsidiary of the Corporation.
The undersigned hereby irrevocably constitutes and appoints any officer of the Corporation, the applicable wholly owned subsidiary of the Corporation or of Jersey Mike’s Holdings as the attorney of the undersigned, with full power of substitution and resubstitution in the premises, to do any and all things and to take any and all actions that may be necessary to transfer to the Corporation or the applicable wholly owned subsidiary of the Corporation, the Common Units subject to this Election of Exchange and to deliver to the undersigned the shares of Class A Common Stock to be delivered in exchange therefor.
IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this Election of Exchange to be executed and delivered by the undersigned or by its duly authorized attorney.
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Dated: |
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EXHIBIT B
[FORM OF]
JOINDER AGREEMENT
This Joinder Agreement (“Joinder Agreement”) is a joinder to the Exchange Agreement, dated as of July 29, 2026 (the “Agreement”), among Jersey Mike’s Subs Inc., a Delaware corporation (the “Corporation”), Jersey Mike’s HoldCo, LLC, a Delaware limited liability company, and each of the Common Unitholders from time to time party thereto. Capitalized terms used but not defined in this Joinder Agreement shall have their meanings given to them in the Agreement. This Joinder Agreement shall be governed by, and construed in accordance with, the law of the State of Delaware. In the event of any conflict between this Joinder Agreement and the Agreement, the terms of this Joinder Agreement shall control.
The undersigned hereby joins and enters into the Agreement having acquired Common Units in Jersey Mike’s Holdings. By signing and returning this Joinder Agreement to the Corporation, the undersigned accepts and agrees to be bound by and subject to all of the terms and conditions of and agreements of a Common Unitholder contained in the Agreement, with all attendant rights, duties and obligations of a Common Unitholder thereunder. The parties to the Agreement shall treat the execution and delivery hereof by the undersigned as the execution and delivery of the Agreement by the undersigned and, upon receipt of this Joinder Agreement by the Corporation and by Jersey Mike’s Holdings, the signature of the undersigned set forth below shall constitute a counterpart signature to the signature page of the Agreement.
Name: |
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Address for Notices: |
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With copies to: |
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Attention: |
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[INSERT APPROPRIATE INDIVIDUAL OR ENTITY SIGNATURE BLOCK FOR JOINING PARTY]
Exhibit 10.4
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (as amended from time to time, this “Agreement”) is dated as of July 29, 2026 and is between Jersey Mike’s Subs Inc., a Delaware corporation (the “Company”), the Blackstone Stockholders (as defined below) and the Founder Stockholders (as defined below).
W I T N E S S E T H
WHEREAS, the Company is effecting an IPO (as defined below) of its shares (as defined below);
WHEREAS, the Company desires to grant registration rights to the Blackstone Stockholders and the Founder Stockholders on the terms and conditions set out in this Agreement.
NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the Company, the Blackstone Stockholders and the Founder Stockholders agree as follows:
ARTICLE i
Definitions
In this Agreement:
“Blackstone Stockholders” means collectively, the signatories listed on the signature pages hereto under the heading “Blackstone Stockholders” and each transferee to whom it transfers shares and related rights under this Agreement in accordance with Section 6.1 (unless the Blackstone Stockholder notifies the Company prior to any such transfer that such transferee shall not be a Blackstone Stockholder), and individually, a “Blackstone Stockholder.” References to a Blackstone Stockholder include all of its affiliated private equity funds, co-invest and side-by-side entities, and other affiliated investment vehicles that hold shares.
“Business Day” means any day other than a Saturday, a Sunday, or a holiday on which national banking associations in the State of New York are authorized by law to close.
“Derivative Counterparty” means a broker-dealer registered under Section 15(b) of the Exchange Act, any other financial institution, or an affiliate thereof, that enters into a Derivative Transaction with a Stockholder.
“Derivative Transaction” means any transaction which transfers some or all of the economic risk of ownership of the shares, including, without limitation, any forward contract, variable prepaid forward, contingent forward, equity swap, put or call, put or call equivalent position, collar, non-recourse loan, sale of an exchangeable security or any similar transaction that references the shares. For the avoidance of doubt, the following transactions shall be deemed to be Derivative Transactions: (i) transactions by a Stockholder in which a Derivative
Counterparty engages in short sales of shares pursuant to a prospectus and may use shares beneficially owned by the Stockholder to close out its short position, or in which the Derivative Counterparty uses shares beneficially owned by the Stockholder to settle its initial hedging sales; (ii) transactions pursuant to which a Stockholder engages in a short sale of shares pursuant to a prospectus and delivers shares beneficially owned by the Stockholder to close out its short position; (iii) transactions by a Stockholder in which the Stockholder delivers, in a transaction exempt from registration under the Securities Act, shares to the Derivative Counterparty who then publicly resells or otherwise transfers such shares pursuant to a prospectus or an exemption from registration under the Securities Act; (iv) a loan or pledge of shares to a Derivative Counterparty who may then become a selling stockholder and sell the loaned shares or, in an event of default in the case of a pledge, sell the pledged shares, in each case, in a public transaction pursuant to a prospectus and (v) any other transaction with respect to the shares intended to be effected as contemplated by the Interpretive Letters.
“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, and the rules and regulations of the SEC promulgated thereunder.
“Founder Permitted Transferee” means, with respect to any Founder Stockholder, Peter Cancro, any descendant or spouse of Peter Cancro or of any such descendant, any estate, trust, guardianship, custodianship or other fiduciary arrangement for the benefit of any of the foregoing, any entity controlled exclusively by any of the foregoing, and any other Permitted Transferee of a Founder Member under the LLC Agreement.
“Founder Representative” means Peter Cancro or such other person as the Founder Stockholders holding a majority of the shares beneficially owned by the Founder Stockholders may designate by written notice to the Company and the Blackstone Stockholders.
“Founder Stockholders” means collectively, the signatories listed on the signature pages hereto under the heading “Founder Stockholders” and each Founder Permitted Transferee or other transferee to whom it transfers shares and related rights under this Agreement in accordance with Section 6.1 (unless the Founder Stockholder notifies the Company prior to any such transfer that such transferee shall not be a Founder Stockholder), and individually, a “Founder Stockholder.”
“Interpretive Letters” means each of (i) the letter dated December 14, 1999 submitted by Robert W. Reeder and Alan L. Beller to Michael Hayatte of the staff of the Securities and Exchange Commission (the “Staff”) to which the staff responded in an interpretive letter dated December 20, 1999, (ii) the letter dated October 6, 2003 submitted by Robert W. Reeder and Leslie Silverman to Paula Dubberly of the Staff, to which the Staff responded in an interpretive letter dated October 9, 2003 and (iii) the letter dated November 30, 2011 submitted by Robert T. Plenarski and Glen A. Rae to Thomas Kim of the Staff, to which the Staff responded in an interpretive letter dated December 1, 2011.
“IPO” means a direct listing or firm commitment underwritten registered public offering of the Company’s common stock in connection with which the common stock first becomes listed on the NYSE or The NASDAQ Stock Market.
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“Requesting Holder” has the meaning set forth in Section 2.1.
“SEC” means the U.S. Securities and Exchange Commission.
“Securities Act” means the Securities Act of 1933, as amended from time to time, and the rules and regulations of the SEC promulgated thereunder.
“shares” means (i) shares of Class A common stock of the Company, (ii) any shares or other securities issued or issuable as a distribution with respect to, or in exchange for or in replacement of any of the foregoing shares or other securities beneficially owned by such Stockholder and (iii) any other securities issued or transferred in exchange for or upon conversion of any of the foregoing shares as a result of a merger, consolidation, reorganization or otherwise and any other securities issued to any other holders of shares in connection with any such transaction. Shares beneficially owned by or on behalf of a Stockholder the certificate or book-entry record for which does not bear a Securities Act restrictive legend, which shares may be resold freely without restriction on volume or manner of sale and without registration under the Securities Act, will not be considered shares for purposes of the demand and piggyback provisions of this Agreement, provided that notwithstanding the absence of any such legend, shares beneficially owned by any Stockholder shall continue to be treated as shares for purposes of this Agreement.
“Specified Transferees” has the meaning set forth in Section 6.1.
“Stockholders” mean collectively, (a) the Blackstone Stockholders, (b) the Founder Stockholders and (c) each person who becomes a party to this Agreement pursuant to Section 6.1(a).
“WKSI” means a well-known seasoned issuer, as defined in the SEC’s Rule 405.
ARTICLE II
Demand and Piggyback Rights
2.1 Right to Demand a Non-Shelf Registered Offering. Upon the demand of any Blackstone Stockholder (the “Requesting Holder”) made at any time and from time to time after, the Company will facilitate in the manner described in this Agreement a non-shelf registered offering of the shares requested by the Requesting Holder and any Stockholder exercising piggyback rights pursuant to this Agreement to be included in such offering. Any demanded non-shelf registered offering may, at the Company’s option, include shares to be sold by the Company for its own account and will also include shares to be sold by Stockholders that exercise their related piggyback rights in accordance with this Agreement.
2.2 Right to Piggyback on a Non-Shelf Registered Offering. In connection with any registered offering of shares covered by a non-shelf registration statement (whether pursuant to the exercise of demand rights or at the initiative of the Company), the Stockholders may, in accordance with this Agreement, exercise piggyback rights to have included in such
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offering shares held by them. The Company will facilitate in the manner described in this Agreement any such non-shelf registered offering.
2.3 Right to Demand and be Included in a Shelf Registration. Upon the demand of (a) the Blackstone Stockholders made at any time and from time to time or (b) the Founder Stockholders after the first anniversary of the IPO, when the Company is eligible to sell shares in a secondary offering on a delayed or continuous basis in accordance with Rule 415 promulgated under the Exchange Act (or any successor rule or regulation), the Company will facilitate in the manner described in this Agreement a shelf registration of shares beneficially owned by such Stockholder; provided, however, that the Founder Stockholders may only make one (1) demand under this Section 2.3. Any shelf registration statement filed by the Company covering shares (whether pursuant to a Stockholder demand or at the initiative of the Company) will cover shares beneficially owned by each of the Stockholders (regardless of whether they demanded the filing of such shelf or not) up to the amount of shares requested by each such Stockholder. If at the time of such request the Company is a WKSI, such shelf registration statement would, at the request of the Stockholders, cover an unspecified number of shares to be sold by the Stockholders and, if the Company so elects, the Company.
2.4 Demand and Piggyback Rights for Shelf Takedowns. Upon the demand of the Blackstone Stockholders or the Founder Stockholders made at any time and from time to time, the Company will facilitate in the manner described in this Agreement a “takedown” off of an effective shelf registration statement of shares beneficially owned by them that are registered on such shelf; provided, however, that the Founder Stockholders may only make two demands (which shall be reduced to one demand upon the Founder Stockholders collectively ceasing to beneficially own at least 10% of the equity interests of the Company), determined on an as exchanged basis, under this Section 2.4; provided, further that the Founder Stockholders may not make a demand if the Founder Stockholders had the opportunity to exercise piggyback rights in connection with any underwritten shelf takedown in the last 180 days prior to the date of its demand under this Section 2.4. In connection with any shelf takedown (whether pursuant to the exercise of such demand rights or at the initiative of the Company) in connection with which a lockup will be imposed, the Stockholders may exercise piggyback rights to have included in such takedown shares beneficially owned by them that are registered on such shelf. Notwithstanding the foregoing, neither the Blackstone Stockholders nor the Founder Representative, on behalf of the Founder Stockholders, may demand a shelf takedown for an offering that will result in the imposition of a lockup on the Company or any Stockholder unless the shares requested to be sold in such takedown have an aggregate market value, based on the most recent closing price of the Company’s common stock at the time of the demand, of at least $10 million.
2.5 Right to Reload a Shelf. Upon the written request of the Blackstone Stockholders or the Founder Stockholders, the Company will file and seek the effectiveness of a post-effective amendment to an existing shelf in order to register up to the number of shares previously taken down off of such shelf by each of the Stockholders and not yet “reloaded” onto such shelf (or such higher number as may be agreed by Stockholders). The Stockholders and the Company will consult and coordinate with each other in order to accomplish such replenishments on behalf of all Stockholders from time to time in a sensible manner.
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2.6 Limitations on Demand and Piggyback Rights.
(a) Any demand for the filing of a registration statement or for a registered offering or takedown will be subject to any applicable lockup restrictions pursuant to Section 3.7, and such demand must be deferred until such lockup restrictions no longer apply. If a demand has been made for a non-shelf registered offering or for an underwritten shelf takedown, no further demands may be made so long as the related offering is still being pursued. Notwithstanding anything in this Agreement to the contrary, the Stockholders will not have piggyback or other registration rights with respect to registered primary offerings by the Company (i) of shares covered by a Form S-8 registration statement or a successor form applicable to employee benefit-related offers and sales, (ii) where the shares are not being sold for cash or (iii) where the offering is a bona fide offering of securities other than shares, even if such securities are convertible into or exchangeable or exercisable for shares that are registered as part of such offering.
(b) The Company may postpone the filing of a demanded registration statement or suspend the effectiveness of any shelf registration statement, or defer initiating the process for a demanded shelf takedown, in any such case for a reasonable “blackout period” that shall not exceed the applicable limits specified below if the board of directors of the Company determines that such registration, offering or takedown could materially interfere with a bona fide business or financing transaction of the Company or is reasonably likely to require premature disclosure of information, the premature disclosure of which could materially and adversely affect the Company. The blackout period will not be in excess of an aggregate of 60 days in any 12-month period and will end upon the earlier to occur of, (i) in the case of a bona fide business or financing transaction, a date not later than 60 days from the date such deferral commenced, and (ii) in the case of disclosure of non-public information, the earlier to occur of (x) the filing by the Company of its next succeeding Form 10-K or Form 10-Q, or (y) the date upon which such information otherwise is or becomes public knowledge.
ARTICLE iii
procedures regarding demands and piggybacks
3.1 Notifications Regarding Demands and Piggyback Opportunities. In order for the Blackstone Stockholders or the Founder Stockholders to exercise their right to demand that a registration statement be filed or that an underwritten takedown occur, they must so notify the Company indicating the number of shares sought to be registered or taken down and the proposed plan of distribution. The Company will keep the Stockholders contemporaneously apprised of all pertinent aspects of its pursuit of any public offering or other registration or underwritten shelf takedown of shares, as the case may be (whether pursuant to a Stockholder demand or otherwise), including the anticipated timing of the filing of a registration statement or amendment and the finalization of related preliminary and final prospectuses and the timing of pricing, in order that the Stockholders have a reasonable opportunity to exercise their piggyback rights in accordance with this Agreement. Without derogating from the Company’s obligation to keep Stockholders contemporaneously apprised, as described above, having such a “reasonable opportunity” means that Stockholders must be notified of a piggyback opportunity no later than 5:00 pm, New York City time, on the second Business Day following receipt by the Company of
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such demand or the fifth Business Day prior to the filing of such registration statement, as applicable. Pending any required public disclosure and subject to applicable legal requirements, the parties will maintain the confidentiality of these discussions and notifications.
3.2 Notifications Regarding Exercise of Piggyback Rights. Any Stockholder wishing to exercise its piggyback rights with respect to a non-shelf registration statement or underwritten shelf takedown must notify the Company and the other Stockholders of the number of shares it seeks to have included in such registration statement or takedown, as the case may be. Such notice must be given as soon as practicable, but in no event later than (a) in the case of a non-shelf registration statement, 5:00 pm, New York City time, on the fifth Business Day prior to (i) if applicable, the date on which the preliminary prospectus intended to be used in connection with pre-effective marketing efforts for the relevant offering is expected to be finalized and (ii) in any case, the date on which the pricing of the relevant offering is expected to occur or (b) in the case of a shelf registration statement, 5:00 pm, New York City time, on the second Business Day prior to the anticipated filing or submission date of such shelf registration statement. Pending any required public disclosure and subject to applicable legal requirements, the parties will maintain the confidentiality of these notifications.
3.3 Notifications Regarding Demanded Underwritten Takedowns. The Company will keep the Stockholders contemporaneously apprised of all pertinent aspects of any underwritten shelf takedown in order that they may have a reasonable opportunity to exercise their related piggyback rights. Without limiting the Company’s obligation as described in the preceding sentence, having a reasonable opportunity requires that the Stockholders be notified by the Company of an anticipated underwritten takedown (whether pursuant to a demand made by a requesting Stockholder or made at the Company’s own initiative) no later than 5:00 pm, New York City time, (A) if applicable, the second Business Day prior to the date on which the preliminary prospectus or prospectus supplement intended to be used in connection with pre pricing marketing efforts for such takedown is finalized, and (B) in all cases, on the second Business Day prior to the date on which the pricing of the relevant takedown is expected to occur. Any Stockholder wishing to exercise its piggyback rights with respect to an underwritten shelf takedown must notify the Company and the other Stockholders of the number of shares it seeks to have included in such takedown. Such notice must be given as soon as practicable, but in no event later than 5:00 pm, New York City time, on (a) if applicable, the Business Day prior to the date on which the preliminary prospectus or prospectus supplement intended to be used in connection with marketing efforts for the relevant offering is expected to be finalized, and (b) in all cases, the first Business Day prior to the date on which the pricing of the relevant takedown is expected to occur.
3.4 Plan of Distribution, Underwriters and Counsel. If a majority of the shares proposed to be sold in an underwritten offering through a non-shelf registration statement or through a shelf takedown are being sold by the Company for its own account, the Company will be entitled to determine the plan of distribution and select the managing underwriters for such offering, which managing underwriters shall be reasonably acceptable to the Blackstone Stockholders. Otherwise, Stockholders holding a majority of the shares requested to be included in such offering will be entitled to determine the plan of distribution and select the managing underwriters, and any provider of capital markets advisory services, which may include affiliates of the Stockholders. The Blackstone Stockholders will be entitled to select a single counsel for
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all selling Blackstone Stockholders (which counsel may be the same as the Company’s) and the Founder Stockholders will be entitled to select a single counsel for all selling Founder Stockholders (which counsel may be the same as the Company’s and/or the Blackstone Stockholders). In the case of a shelf registration statement, the plan of distribution will provide as much flexibility as is reasonably possible, including with respect to resales by transferee Stockholders.
3.5 Cutbacks. If the managing underwriters advise the Company and the selling Stockholders that, in their opinion, the number of shares requested to be included in an underwritten offering exceeds the amount that can be sold in such offering without adversely affecting the distribution of the shares being offered, such offering will include only the number of shares that the underwriters advise can be sold in such offering. Except in the case of a demand offering, if the Company is selling shares for its own account in such offering, the Company will have first priority and to the extent of any remaining capacity, the selling Stockholders will be subject to cutback pro rata based on the number of shares beneficially owned by each such Stockholder that is subject to cutback. In a demand offering, the selling Stockholders shall have priority over any other person participating in the offering (including the Company) and shall be subject to cutback pro rata based on the number of shares beneficially owned by each such Stockholder that is subject to cutback. To the extent that there is any remaining capacity after such Stockholder requesting the demand and the selling Stockholders have been included, any other person participating in the offering (including the Company) will be included and will be subject to cutback pro rata based on the number of shares beneficially owned by them to be included in such offering. Subject to the last sentence of Section 2.1, other selling equityholders will be included in an underwritten offering only with the consent of the applicable Stockholder requesting such demand (in the event of a demand offering) or the Company (in the event of an offering initiated by the Company).
3.6 Withdrawals. Even if shares beneficially owned by a Stockholder have been included as part of a registered underwritten offering, such Stockholder may, no later than the time at which the public offering price and underwriters’ discount are determined with the managing underwriter, decline to sell all or any portion of the shares being offered for its account.
3.7 Lockups.
(a) In connection with any underwritten offering of shares (including, for the avoidance of doubt, the Company’s IPO), the Company and each Stockholder will (in the case of Stockholders, with respect to shares respectively beneficially owned by them) enter into the applicable underwriting agreement and/or the lockup agreement entered into in connection therewith so as to be bound by such agreement’s reasonable and customary lockup restrictions as required by the managing underwriters (which restrictions shall not apply to any margin loan with respect to the shares or any pledge of the shares or any transfer on foreclosure thereof) that are agreed to (i) by the Company, if a majority of the shares being sold in such offering are being sold for its account or (ii) by the Requesting Holder, if a majority of the shares being sold in such offering are being sold by Stockholder. The Company shall cause its executive officers and directors (and managers, if applicable) and shall use commercially reasonable efforts to cause other holders of shares who beneficially own (within the meaning of Rules 13d-3 and 13d-5
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under the Exchange Act as in effect on the date of this Agreement) at least 5% of the Company’s outstanding common stock, to enter into lockup agreements that contain restrictions that are no less restrictive than the restrictions contained in the lockup agreements executed by the Stockholders. For the avoidance of doubt, no Stockholder shall be required to agree to any lock-up provisions that are more restrictive than lock-up provisions applicable to any other Stockholder and any lock-up provisions agreed to by a Stockholder shall provide that if any Stockholder is released from any of its lock-up restrictions, all other Stockholders shall be released to the same extent.
3.8 Founder Representative.
The Founder Stockholders may act under this Agreement by and through the Founder Representative. Any demand, request, election, consent, waiver, notice, withdrawal, instruction, selection of managing underwriters, selection of counsel or other action by the Founder Representative on behalf of the Founder Stockholders will be deemed to be the demand, request, election, consent, waiver, notice, withdrawal, instruction, selection or other action of the Founder Stockholders. Any notice or communication to or from the Founder Representative will constitute notice or communication to or from each Founder Stockholder. The Founder Stockholders may change the Founder Representative from time to time by written notice to the Company and the Blackstone Stockholders.
article IV
FACILITATING REGISTRATIONS AND OFFERINGS
4.1 General. If the Company becomes obligated under this Agreement to facilitate a registration and offering of shares on behalf of Stockholders, the Company will do so with the same degree of care and dispatch as would reasonably be expected in the case of a registration and offering by the Company of shares for its own account. Without limiting this general obligation, the Company will fulfill its specific obligations as described in this Article IV.
4.2 Registration Statements. In connection with each registration statement that is demanded by any Stockholder in accordance with this Agreement or as to which piggyback rights otherwise apply, the Company will:
(a) (i) prepare and file with the SEC a registration statement covering the applicable shares, (ii) file amendments thereto as warranted, (iii) seek the effectiveness thereof, and (iv) file with the SEC prospectuses and prospectus supplements as may be required, all in consultation with the Stockholders and as may be reasonably necessary in order to permit the offer and sale of such shares in accordance with the applicable plan of distribution;
(b) (i) within a reasonable time prior to the filing of any registration statement, any prospectus, any amendment to a registration statement, amendment or supplement to a prospectus or any free writing prospectus, provide copies of such documents to the selling Stockholders and to the underwriter or underwriters of an underwritten offering, if applicable, and to their respective counsel; fairly consider such reasonable changes to any such documents
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prior to or after the filing thereof as counsel to the Stockholders or the underwriter or the underwriters may request; and make such of the representatives of the Company as shall be reasonably requested by the selling Stockholders or any underwriter available for discussion of such documents; and
(ii) within a reasonable time prior to the filing of any document which is to be incorporated or deemed incorporated by reference into a registration statement or a prospectus, provide copies of such document to counsel for the Stockholders and underwriters; fairly consider such reasonable changes in such document prior to or after the filing thereof as counsel for such Stockholders or such underwriter shall request; and make such of the representatives of the Company as shall be reasonably requested by such counsel available for discussion of such document;
(c) use all reasonable efforts to cause each registration statement and the related prospectus and any amendment or supplement thereto, as of the effective date of such registration statement, amendment or supplement and during the distribution of the registered shares, (x) to comply in all material respects with the requirements of the Securities Act and the rules and regulations of the SEC and (y) not to contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading;
(d) promptly notify each Stockholder, its respective counsel and the sole underwriter or managing underwriter, if any, and, if requested by such Stockholder, confirm such notice in writing, (i) when any registration statement, any prospectus, any amendment to a registration statement, amendment or supplement to a prospectus or any free writing prospectus has been filed, when a registration statement has become effective and when any post-effective amendments and supplements thereto become effective if such registration statement or post-effective amendment is not automatically effective upon filing pursuant to Rule 462, (ii) of any request by the SEC or any other federal or state governmental authority for amendments or supplements to a registration statement or related prospectus or for additional information, (iii) of the issuance by the SEC or any state securities authority of any stop order, injunction or other order or requirement suspending the effectiveness of a registration statement or the initiation of any proceedings for that purpose, (iv) if, between the effective date of a registration statement and the expiration or earlier closing of any over-allotment option under any underwriting, placement or purchase agreement to which the Company is a party, the representations and warranties of the Company contained in such agreement cease to be true and correct in all material respects or if the Company receives any notification with respect to the suspension of the qualification of the shares for sale in any jurisdiction or the initiation of any proceeding for such purpose, and (v) of the happening of any event during the period a registration statement is effective as a result of which such registration statement or the related prospectus contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading;
(e) furnish counsel for each underwriter, if any, and counsel for the Stockholders copies of any correspondence with the SEC or any state securities authority relating to the registration statement or prospectus;
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(f) otherwise use all reasonable efforts to comply with all applicable rules and regulations of the SEC, including making available to its security holders an earnings statement covering at least 12 months which shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any similar provision then in force);
(g) use all reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of a registration statement at the earliest possible time;
(h) its best efforts to cause all such shares covered by such registration statement to be listed on the principal securities exchange on which the shares are then listed (if any), if the listing of such shares is then permitted under the rules of such exchange, or (ii) if no shares are then so listed, use its best efforts to, either (as the Company may elect) (x) cause all such shares to be listed on a national securities exchange or (y) to secure authorization from a national securities exchange for such shares and, without limiting the generality of the foregoing, to arrange for at least two market makers to register as such with respect to such shares with the Financial Industry Regulatory Authority (“FINRA”); and
(i) provide and cause to be maintained a transfer agent and registrar for all shares covered by a registration statement from and after a date not later than the effective date of such registration statement.
4.3 Non-Shelf Registered Offerings and Shelf Takedowns. In connection with any non-shelf registered offering or shelf takedown that is demanded by any Stockholder or with respect to which piggyback rights have been exercised, the Company will:
(a) cooperate with the Stockholders selling shares and the sole underwriter or managing underwriter of an underwritten offering, if any, to facilitate the timely preparation and delivery of any certificates representing the shares to be sold and not bearing any restrictive legends; and enable such shares to be in such denominations (consistent with the provisions of the governing documents thereof) and registered in such names as the selling Stockholders or the sole underwriter or managing underwriter of an underwritten offering, if any, may reasonably request at least five days prior to any sale of such shares;
(b) furnish to each Stockholder and to each underwriter, if any, participating in the relevant offering, without charge, as many copies of the applicable prospectus, including each preliminary prospectus, and any amendment or supplement thereto, and such other documents as such Stockholder or underwriter may reasonably request in order to facilitate the public sale or other disposition of the shares; the Company hereby consents to the use of the prospectus, including each preliminary prospectus, by each such Stockholder and underwriter in connection with the offering and sale of the shares covered by the prospectus or the preliminary prospectus;
(c) (i) use all reasonable efforts to register or qualify the shares being offered and sold, no later than the date on which the pricing of the relevant offering is expected to occur, under all applicable state securities or “blue sky” laws of such jurisdictions as each underwriter, if any, or any Stockholder holding shares covered by a registration statement, shall reasonably request; (ii) use all reasonable efforts to keep each such registration or qualification effective
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during the distribution of the registered shares; (iii) do any and all other acts and things which may be reasonably necessary or advisable to enable each such underwriter, if any, and Stockholder to consummate the disposition in each such jurisdiction of such shares owned by such Stockholder; provided, however, that the Company shall not be obligated to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so qualified or to consent to be subject to general service of process (other than service of process in connection with such registration or qualification or any sale of shares in connection therewith) in any such jurisdiction; and (iv) use all reasonable efforts to cause the shares being offered and sold, no later than the date on which the pricing of the relevant offering is expected to occur, to be registered with or approved by such other governmental agencies or authorities within the United States, except as may be required solely as a consequence of the nature of the business of any Stockholder, in which case the Company will cooperate in all reasonable respects with the filing of the applicable registration statement and the granting of such approvals, as may be necessary to enable any Stockholder or the underwriters, if any, to consummate the disposition of such shares;
(d) cause all shares being sold to be qualified for inclusion in or listed on any securities exchange on which shares issued by the Company are then so qualified or listed if so requested by the Stockholders, or if so requested by the underwriter or underwriters of an underwritten offering, if any;
(e) cooperate and assist in any filings required to be made with FINRA and in the performance of any due diligence investigation by any underwriter in an underwritten offering;
(f) use all reasonable efforts to facilitate the distribution and sale of any shares to be offered pursuant to this Agreement, including without limitation by making road show presentations, holding meetings with and making calls to potential investors and taking such other actions as shall be requested by the Stockholders or the lead managing underwriter of an underwritten offering;
(g) in the case of an offering that includes a provider of capital markets advisory services, enter into and perform its obligations under customary agreements (including an advisory services agreement and an indemnification agreement in customary form);
(h) prior to the date on which the pricing of the relevant offering is expected to occur, provide a CUSIP number for the shares; and
(i) enter into customary agreements (including, in the case of an underwritten offering, one or more underwriting agreements in customary form, and including provisions with respect to indemnification and contribution in customary form and consistent with the provisions relating to indemnification and contribution contained herein) and take all other customary and appropriate actions in order to expedite or facilitate the disposition of such shares, and in connection therewith:
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1. make such representations and warranties to the selling Stockholders and the underwriters, if any, in form, substance and scope as are customarily made by issuers to underwriters in similar underwritten offerings;
2. obtain opinions of counsel to the Company and updates thereof (which counsel and opinions (in form, scope and substance) shall be reasonably satisfactory to the lead managing underwriter, if any) addressed to each selling Stockholder and the underwriters, if any, covering the matters customarily covered in opinions requested in sales of securities or underwritten offerings and such other matters as may be reasonably requested by such Stockholders and underwriters;
3. obtain “cold comfort” letters and updates thereof from the Company’s independent certified public accountants addressed to the selling Stockholders, if permissible, and the underwriters, if any, which letters shall be customary in form and shall cover matters of the type customarily covered in “cold comfort” letters to underwriters in connection with primary underwritten offerings;
4. to the extent requested and customary for the relevant transaction, enter into a securities sales agreement with the Stockholders providing for, among other things, the appointment of a representative as agent for the selling Stockholders for the purpose of soliciting purchases of shares, which agreement shall be customary in form, substance and scope and shall contain customary representations, warranties and covenants; and
5. deliver such documents and certificates as the sole underwriter or managing underwriter, if any, any Stockholder, or their respective counsel, shall reasonably request to evidence the continued validity of the representations and warranties made in accordance with Section 4.3(i)(1) above and to evidence compliance with any customary conditions contained in the underwriting agreement or other agreement entered into by the Company.
(j) if required by the Company’s transfer agent for the shares (the “Transfer Agent”) and/or The Depository Trust Company (“DTC”), the Company will use reasonable efforts to cause opinions of counsel to be delivered to and maintained with the Transfer Agent and/or DTC, together with any other agreements, authorizations, certificates and directions required by the Transfer Agent and/or DTC which authorize and direct the Transfer Agent to transfer shares without any restrictive legend and which allow DTC to accept such shares for settlement; and
(k) use all reasonable efforts to facilitate the settlement of the shares to be sold pursuant to this Agreement, including through the facilities of DTC.
The above shall be done at such times as customarily occur in similar registered offerings or shelf takedowns.
4.4 Due Diligence. In connection with each registration and offering of shares to be sold by Stockholders, the Company will, in accordance with customary practice, make available for inspection by representatives of the Stockholders and underwriters and any counsel or accountant retained by such Stockholders or underwriters all relevant financial and
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other records, pertinent corporate documents and properties of the Company and cause appropriate officers, managers, employees, outside counsel and accountants of the Company to supply all information reasonably requested by any such representative, underwriter, counsel or accountant in connection with their due diligence exercise, including through in-person meetings, but subject to customary privilege constraints.
4.5 Information from Stockholders. Each Stockholder that beneficially owns shares covered by any registration statement will furnish to the Company such information regarding itself as is required to be included in the registration statement or prospectus, the ownership of shares by such Stockholder and the proposed distribution by such Stockholder of such shares as the Company may from time to time reasonably request in writing.
4.6 Expenses. All expenses incurred in connection with any registration statement or registered offering or shelf takedown, Rule 144 sale, Derivative Transactions, margin loans, and in-kind distributions covering shares beneficially owned by Stockholders, including, without limitation, all registration and filing fees, printing expenses, roadshow, fees and disbursements of counsel (including the fees and disbursements of outside counsel for selling Stockholders) and of the independent certified public accountants, and the expense of qualifying such shares under state blue sky laws, will be borne by the Company. However, underwriters’, brokers’ and dealers’ discounts and commissions applicable to shares sold for the account of a Stockholder will be borne by such Stockholder and no Stockholder shall bear any expenses, fees, indemnity obligations or commissions attributable to shares other than those sold by such Stockholder.
ARTICLE V
INDEMNIFICATION
5.1 Indemnification by the Company. In the event of any registration under the Securities Act by any registration statement pursuant to rights granted in this Agreement of shares beneficially owned by Stockholders, the Company will indemnify and hold harmless Stockholders, their officers, directors and affiliates (and the officers, directors, employees, general and limited partners, affiliates and controlling persons of any of the foregoing), and each underwriter of such securities and each other person, if any, who controls any Stockholder or such underwriter within the meaning of the Securities Act, against any losses, claims, damages, expenses, judgments or liabilities (including, without limitation, legal fees and costs of court), joint or several, to which Stockholders or such underwriter or controlling person may become subject under the Securities Act, common law or otherwise, including any amount paid in settlement of any litigation commenced or threatened, and shall promptly reimburse such persons, as and when incurred, for any legal or other expenses reasonably incurred by them in connection with investigating any claims and defending any actions, insofar as such losses, claims, damages, or liabilities (or any actions in respect thereof) arise out of or are based upon any violation or alleged violation by the Company of the Securities Act, any blue sky laws, securities laws or other applicable laws or rules of any state or country in which such shares are offered and relating to action taken or action or inaction required of the Company in connection with such offering, or arise out of or are based upon any untrue statement or alleged untrue statement of any material fact (i) contained in any registration statement under which such
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securities were registered under the Securities Act or any amendment or supplement to any of the foregoing, or in any document incorporated by reference therein or related document or report, or any issuer free writing prospectus (including any “road show,” whether or not required to be filed with the SEC), or which arise out of or are based upon the omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading or (ii) contained in any preliminary prospectus, if used prior to the effective date of such registration statement, or in the final prospectus (as amended or supplemented if the Company shall have filed with the SEC any amendment or supplement to the final prospectus), or which arise out of or are based upon the omission or alleged omission (if so used) to state a material fact required to be stated in such prospectus or necessary to make the statements in such prospectus not misleading; and will reimburse Stockholders and each such underwriter and each such controlling person for any legal or any other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, or liability; provided, however, that the Company shall not be liable to any Stockholder or its underwriters or controlling persons in any such case to the extent that any such loss, claim, damage, or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in such registration statement or such amendment or supplement or other document, in reliance upon and in conformity with information furnished to the Company through a written instrument duly executed by the applicable Stockholders or such underwriter specifically for use in the preparation of the information with respect to such Stockholder or such underwriter required under Items 403 and 507 of Regulation S-K under the Securities Act.
5.2 Indemnification by Stockholders. Each Stockholder (as to itself, severally and not jointly) will indemnify and hold harmless (in the same manner and to the same extent as set forth in Section 5.1) the Company, each director of the Company, each officer of the Company who shall sign the registration statement, and any person who controls the Company within the meaning of the Securities Act, arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in any registration statement, prospectus (including free-writing prospectuses), or form of prospectus, or arising out of or based upon any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, to the extent, but only to the extent, that such untrue or alleged untrue statement is contained in, or such omission or alleged omission is required to be contained in, any information which (i) relates solely to such holders individual ownership of the shares, (ii) is furnished in writing to the Company by such holder solely in its capacity as a holder of shares, expressly for use in such registration statement or prospectus, and (iii) that such statement or omission was relied upon by the Company in preparation of such registration statement, prospectus or form of prospectus; provided, however, that such Stockholder of shares shall not be liable in any such case to the extent that the holder has furnished in writing to the Company within a reasonable period of time prior to the filing of any such registration statement or prospectus or amendment or supplement thereto information expressly for use in such registration statement or prospectus or any amendment or supplement thereto which corrected or made not misleading, information previously furnished to the Company, and the Company failed to include such information therein. In no event shall the liability of any selling holder of shares hereunder be greater in amount than the dollar amount of the proceeds (net of payment of all expenses) received by such holder upon the sale of the shares giving rise to such indemnification obligation. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such indemnified party.
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5.3 Indemnification Procedures. Promptly after receipt by an indemnified party of notice of the commencement of any action involving a claim referred to in the preceding Sections of this Article V, the indemnified party will, if a resulting claim is to be made or may be made against any indemnifying party, give written notice to the indemnifying party of the commencement of the action. The failure of any indemnified party to give notice shall not relieve the indemnifying party of its obligations in this Article V, except to the extent that the indemnifying party is actually prejudiced by the failure to give notice. If any such action is brought against an indemnified party, the indemnifying party will be entitled to participate in and to assume the defense of the action with counsel reasonably satisfactory to the indemnified party, and after notice from the indemnifying party to such indemnified party of its election to assume defense of the action, the indemnifying party will not be liable to such indemnified party for any legal or other expenses incurred by the latter in connection with the action’s defense. An indemnified party shall have the right to employ separate counsel in any action or proceeding and participate in the defense thereof, but the fees and expenses of such counsel shall be at such indemnified party’s expense unless (i) the employment of such counsel has been specifically authorized in writing by the indemnifying party, which authorization shall not be unreasonably withheld, (ii) the indemnifying party has not assumed the defense and employed counsel reasonably satisfactory to the indemnified party within 30 days after notice of any such action or proceeding, or (iii) the named parties to any such action or proceeding (including any impleaded parties) include the indemnified party and the indemnifying party and the indemnified party shall have been advised by such counsel that there may be one or more legal defenses available to the indemnified party that are different from or additional to those available to the indemnifying party (in which case the indemnifying party shall not have the right to assume the defense of such action or proceeding on behalf of the indemnified party), it being understood, however, that the indemnifying party shall not, in connection with any one such action or separate but substantially similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys (in addition to all local counsel which is necessary, in the good faith opinion of both counsel for the indemnifying party and counsel for the indemnified party in order to adequately represent the indemnified parties) for the indemnified party and that all such fees and expenses shall be reimbursed as they are incurred upon written request and presentation of invoices. Whether or not a defense is assumed by the indemnifying party, the indemnifying party will not be subject to any liability for any settlement made without its consent (but such consent will not be unreasonably withheld). No indemnifying party will consent to entry of any judgment or enter into any settlement which (i) does not include as an unconditional term the giving by the claimant or plaintiff, to the indemnified party, of a release from all liability in respect of such claim or litigation or (ii) involves the imposition of equitable remedies or the imposition of any non-financial obligations on the indemnified party.
5.4 Contribution. If the indemnification provided for in Sections 5.1 or 5.2 is unavailable to an indemnified party or is insufficient to hold such indemnified party harmless for any Losses in respect of which such sections would otherwise apply by their terms, then each applicable indemnifying party, in lieu of indemnifying such indemnified party, shall have a several and not joint obligation to contribute to the amount paid or payable by such indemnified party as a result of such Losses, in such proportion as is appropriate to reflect the relative fault of the indemnifying party, on the one hand, and such indemnified party, on the other hand, in connection with the actions, statements or omissions that resulted in such Losses as well as any
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other relevant equitable considerations. The relative fault of such indemnifying party, on the one hand, and indemnified party, on the other hand, shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, has been taken by, or relates to information supplied by, such indemnifying party or indemnified party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent any such action, statement or omission. The amount paid or payable by a party as a result of any Losses shall be deemed to include any legal or other fees or expenses incurred by such party in connection with any proceeding, to the extent such party would have been indemnified for such expenses if the indemnification provided for in Sections 5.1 or 5.2 was available to such party. The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 5.4 were determined by pro-rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in this Section 5.4.
Notwithstanding the provisions of this Section 5.4, no indemnifying party shall be required to contribute any amount in excess of the amount by which the net proceeds received by such indemnifying party exceeds the amount of any damages which such indemnifying party has otherwise been required to pay by reason of an untrue statement or omission, in the case of an indemnifying party that is an underwriter. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such a fraudulent misrepresentation.
ARTICLE VI
other agreements
6.1 Transfer of Rights.
(a) Any Stockholder may transfer all or any portion of its rights under this Agreement to any transferee of shares beneficially owned by such Stockholder to the extent such transfer is not in violation of any requirements applicable under any agreement such Stockholder has with the Company. Any such transfer of registration rights will be effective upon receipt by the Company of (i) written notice from such Stockholder stating the name and address of any transferee and identifying the number of shares with respect to which rights under this Agreement are being transferred and the nature of the rights so transferred, and (ii) a written agreement from such Stockholder to be bound by the terms of this Agreement (for the avoidance of doubt, clauses (i) and (ii) above shall also apply to transfers to partners or members of Boardwalk Blocked Consortium L.P. or any successor entity thereto). However, if such transferees constitute the direct or indirect partners, members or holders of Submarine Buyer LLC, Boardwalk II Aggregator L.P., Blackstone Capital Partners IX L.P. and their respective affiliated investment vehicles utilized in connection with the investment in the Company, including relevant co-invest and side-by-side entities and their respective investment vehicles and such partners or members are receiving shares through an in-kind distribution as contemplated by Section 6.5 (the “Specified Transferees”) (i) no such written agreement is required, and (ii) such Specified Transferees (as well as other persons or entities to whom such Specified Transferees transfer such shares) will, as transferee Stockholders, be entitled solely to the rights set forth in the subsequent sentence and in Article V and Section 6.5 as third-party
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beneficiaries to the rights under this Agreement so transferred. In that regard, Specified Transferees and their transferees that receive shares pursuant to Section 6.5 will not be given demand or piggyback rights; rather, their means of registered resale will be limited to sales off a shelf registration statement with respect to which no special actions are required by the Company or the other Stockholders. Other than in the case of an in-kind distribution by any Blackstone Stockholder described in this Section 6.1(a), the Company and the transferring Stockholder will notify the other Stockholders as to who the transferees are and the nature of the rights so transferred. Any transfer by a Founder Stockholder to a Founder Permitted Transferee shall include the transfer of the related rights under this Agreement unless the transferring Founder Stockholder and the Founder Representative otherwise agree in writing, and such Founder Permitted Transferee shall be treated as a Founder Stockholder for purposes of this Agreement.
(b) In the event the Company engages in a merger or consolidation in which the shares are converted into securities of another company, appropriate arrangements will be made so that the registration rights provided under this Agreement continue to be provided to Stockholders by the issuer of such securities. To the extent such new issuer, or any other company acquired by the Company in a merger or consolidation, was bound by registration rights obligations that would conflict with the provisions of this Agreement, the Company will use its commercially reasonable efforts to modify any such “inherited” registration rights obligations so as not to interfere in any material respects with the rights provided under this Agreement.
(c) In the event that the Company effects the separation of any portion of its business into one or more entities (each, a “NewCo”), whether existing or newly formed, including without limitation by way of spin-off, split-off, carve-out, demerger, recapitalization, reorganization or similar transaction, and any Stockholders will receive equity interests in any such NewCo as part of such separation, the Company shall cause any such NewCo to enter into a registration rights agreement with each such Stockholder that provides each such Stockholder with registration rights vis-à-vis such NewCo that are substantially identical to those set forth in this Agreement.
6.2 Limited Liability. Notwithstanding any other provision of this Agreement, neither the members, general partners, limited partners or managing directors, or any directors or officers of any members, general or limited partner, advisory director, nor any future members, general partners, limited partners, advisory directors, or managing directors, if any, of any Stockholder shall have any personal liability in respect of any obligation of such Stockholder under this Agreement.
6.3 Rule 144 and 144A. If the Company is subject to the requirements of Section 13, 14 or 15(d) of the Exchange Act, the Company covenants that it will file any reports required to be filed by it under the Securities Act and the Exchange Act (or, if the Company is subject to the requirements of Section 13, 14 or 15(d) of the Exchange Act but is not required to file such reports, it will, upon the request of any Stockholder, make publicly available such information so long as such information is necessary to permit sales under Rule 144A), and it will take such further action as any Stockholder may reasonably request so as to enable such Stockholder to sell shares or enter into Derivative Transactions without registration under the Securities Act within the limitation of the exemptions provided by (a) Rule 144 or Rule 144A
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under the Securities Act, as such Rule may be amended from time to time, or (b) any similar rule or regulation hereafter adopted by the SEC. Upon the request of any Stockholder, the Company will deliver to such Stockholder a written statement as to whether it has complied with such requirements.
6.4 Underwritten Registrations. No holder of shares may participate in any underwritten registration or takedown hereunder unless such holder (a) agrees to sell such holder’s shares on the basis provided in any underwriting arrangements approved by the persons entitled hereunder to approve such arrangements and (b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements, each in a form that is customary for transactions of a similar type.
6.5 In-Kind Distributions. If any Blackstone Stockholder seeks to effectuate an in-kind distribution of all or part of its shares to its direct or indirect equityholders, the Company will, subject to applicable lockups, work with such Blackstone Stockholder, as applicable and the Company’s transfer agent to facilitate such in-kind distribution in the manner reasonably requested by such Blackstone Stockholder, as well as any resales by such transferees under a shelf registration statement covering such distributed shares. The Company shall provide substantially similar cooperation with respect to any transfer by a Founder Stockholder to a Founder Permitted Transferee and any resale by such Founder Permitted Transferee under an effective shelf registration statement covering such shares.
6.6 Derivative Transactions; Financing Cooperation.
(a) The provisions of this Agreement relating to the registration, offer and sale of shares apply also to Derivative Transactions entered into by a Stockholder where the initial hedging of the Derivative Counterparty is executed pursuant to a registration statement; provided that, in any event, piggyback rights to participate in such Derivative Transactions by a Stockholder shall not be required to be offered to the other Stockholders. In such connection, references to “shares” shall be deemed to refer to common stock of the Company or any other securities of the same class as the shares sold short in connection with any Derivative Transaction, as the context requires, and the obligations of the Company under Article IV shall apply, irrespective of what type of demand or other registration the Derivative Transaction is deemed to be executed in connection with. Any prospectus in connection with a Derivative Transaction shall be in form and substance acceptable to the Derivative Counterparty, the Stockholder and their counsel to permit a Derivative Counterparty to sell the shares (or common stock or other securities of the same class as shares) covered by such prospectus and any applicable prospectus supplement, including in short sale transactions (whether any shares sold short are borrowed from such Stockholder or otherwise) in compliance with applicable securities laws (including pursuant to the Interpretive Letters). If in connection with a Derivative Transaction, a Derivative Counterparty or any affiliate thereof is (or may reasonably be considered) an underwriter or selling stockholder, then such Derivative Counterparty may be required to provide customary indemnities to the Company regarding the plan of distribution and related matters.
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(b) Without limiting the foregoing, the Company agrees to cooperate with each Stockholder in taking any action reasonably necessary to consummate a Derivative Transaction entered into by such Stockholder (whether executed on a registered basis, under Rule 144 or otherwise) and any pledge, hypothecation or grant of security over shares related thereto, including without limitation, (x) delivery of Issuer Agreements (as defined below), and, in the case of a registered offering, underwriting or registration agreements in form customary for registered Derivative Transactions, and (y) taking such action as such Stockholder or the Derivative Counterparty may reasonably request from time to time to enable such Stockholder and Derivative Counterparty to sell or hedge shares or common stock of the Company or securities of the same class as the shares in compliance with the Securities Act (including as may be needed to comply with the Interpretive Letters). Notwithstanding anything to the contrary in this Agreement, the Company agrees to maintain the effectiveness of any registration statement, and to amend as necessary any prospectus contained therein (and to provide, on at least a quarterly basis, if required by the Derivative Counterparty, such “bring downs” of the documentation and other obligations listed in Article IV hereunder, which “bring-downs” shall not be deemed to constitute a new “demand” under the Agreement) until the Derivative Counterparty or its affiliates have completed the sale of all shares (or short sales of shares) offered pursuant to such Derivative Transaction as contemplated by the Interpretive Letters.
(c) For avoidance of doubt, the clarifications provided in this Section 6.6 to the effect that Derivative Transactions are among the types of transactions covered by the provisions of this Agreement relating to the registration, offer, and sale of shares shall not be read to imply that any other particular types of transactions, by virtue of not having a similar clarifying provision in this Agreement, are not among the types of transactions covered by the provisions of this Agreement relating to the registration, offer, and sale of shares.
(d) Upon the request of any Stockholder that wishes to pledge, hypothecate or grant security interests in any or all of the shares beneficially owned by it, including to banks, financial institutions or other financial entities, as collateral or security for loans, advances or other extensions of credit, the Company agrees to cooperate with each such Stockholder in taking any action reasonably necessary to consummate any such pledge, hypothecation or grant, including without limitation, delivery of letter agreements (“Issuer Agreement”) to lenders in form and substance reasonably satisfactory to such lenders (which may include, without limitation, (i) agreements by the Company in respect of the exercise of remedies by such lenders, including agreements to effect the transfer of the shares to the lender or purchasers in a foreclosure sale within specified timeframes and pursuant to agreed processes and documentation, (ii) agreements to cause the transfer agent to transfer any such shares subject to the pledge, hypothecation or grant into the facilities of The Depository Trust Company without restricted legends and represented by an unrestricted CUSIP, whether in connection with the grant of the pledge or upon foreclosure, subject to customary representations, warranties and agreements by the Stockholder and Derivative Counterparty necessary to establish compliance with applicable securities laws, and (iii) customary representations and warranties by the Company reasonably necessary to establish compliance with the Company’s policies and applicable securities laws).
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ARTICLE VII
MISCELLANEOUS
7.1 Notices. All notices, consents, confirmations, requests, permissions, waivers and other communications hereunder shall be in writing and shall be deemed to have been duly given (a) five Business Days following sending by registered or certified mail, postage prepaid; (b) when delivered, if before 5:00 p.m. U.S. Eastern time on a Business Day, or on the next succeeding Business Day otherwise, if delivered personally to the intended recipient; (c) one Business Day following sending by overnight delivery via a national or international courier service; or (d) when sent, if before 5:00 p.m. U.S. Eastern time on a Business Day, or on the next succeeding Business Day otherwise, if sent by email and either (x) return receipt or confirmation reply is subsequently received or (y) a copy is delivered personally or sent by overnight delivery via a national or international courier service within one Business Day thereafter, and, in each case, addressed to a party at the following address for such party:
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If to the Company, to: |
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Jersey Mike’s Subs Inc. |
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1 Commvault Way, S300 |
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Tinton Falls, NJ 07724 |
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Attention: |
Scott G. McLester |
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Email: |
[email address] |
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with a copy to: [email protected] |
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Simpson Thacher & Bartlett LLP |
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900 G Street N.W. |
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Washington, D.C. 20001 |
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Attention: |
Joshua Ford Bonnie |
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William R. Golden III |
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Katharine L. Thompson |
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Email: |
[email addresses] |
or to such other person or address as the Company shall furnish to the Stockholders in writing;
(b) |
If to Blackstone, to: |
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Blackstone Inc. |
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345 Park Avenue |
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New York, NY 10154 |
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Attention: |
Michael Staub; Devon Rinker |
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Email: |
[email addresses] |
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with a copy to: |
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Simpson Thacher & Bartlett LLP |
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900 G Street N.W. |
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Washington, D.C. 20001 |
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Attention: |
Joshua Ford Bonnie |
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William R. Golden III |
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Katharine L. Thompson |
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Email: |
[email addresses] |
or to such other person or address as Blackstone shall furnish to the Company and the other Stockholders in writing;
(c) |
If to the Founder Stockholders, to: |
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[address]
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Email: |
[email address] |
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with a copy to: |
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McDermott Will & Schulte 444 West Lake Street, Suite 4000 Chicago, IL 60606 |
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Attention: |
Stanley Meadows |
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Email: |
[email address]
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7.2 Section Headings. The article and section headings in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement. References in this Agreement to a designated “Article” or “Section” refer to an Article or Section of this Agreement unless otherwise specifically indicated.
7.3 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York.
7.4 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 this Agreement or the transactions contemplated hereby.
7.5 Consent to Jurisdiction and Service of Process. The parties to this Agreement hereby agree to submit to the jurisdiction of the courts of the State of New York, the courts of the United States of America for the Southern District of New York, and appellate courts from any thereof in any action or proceeding arising out of or relating to this Agreement.
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7.6 Amendments. This Agreement may be amended only by an instrument in writing executed by the Company and the Blackstone Stockholders holding a majority of the shares collectively beneficially owned by them; provided that an amendment to this Agreement that has a disproportionately material and adverse effect on the rights of the Founder Stockholders shall require the written consent of the Founder Stockholders. Any such amendment will apply to all Stockholders equally, without distinguishing between them.
7.7 Entire Agreement. This Agreement constitutes the entire agreement and understanding of the parties with respect to the transactions contemplated hereby and thereby. The registration rights granted under this Agreement supersede any registration, qualification or similar rights with respect to any of the shares granted to one or more Stockholders under any other agreement, and any of such preexisting registration rights are hereby terminated.
7.8 Severability. The invalidity or unenforceability of any specific provision of this Agreement shall not invalidate or render unenforceable any of its other provisions. Any provision of this Agreement held invalid or unenforceable shall be deemed reformed, if practicable, to the extent necessary to render it valid and enforceable and to the extent permitted by law and consistent with the intent of the parties to this Agreement.
7.9 Counterparts. This Agreement may be executed in multiple counterparts, including by means of facsimile, each of which shall be deemed an original, but all of which together shall constitute the same instrument.
7.10 Third Party Beneficiaries. Except as specifically provided below, this Agreement (including the documents and instruments referred to in this Agreement) is not intended to and does not confer upon any person other than the parties hereto any rights or remedies under this Agreement, except that the indemnified persons under Article V, the protected persons under Section 6.2 and permitted transferees entitled to rights under Section 6.1 or Section 6.5 are express third-party beneficiaries of those provisions. Notwithstanding any provision hereof to the contrary, no consent, approval or agreement of any third-party beneficiary will be required to amend, modify or waive any provision of this Agreement.
7.11 Equitable Remedies. The parties hereto agree that irreparable harm would occur in the event that any of the agreements and provisions of this Agreement were not performed fully by the parties hereto in accordance with their specific terms or conditions or were otherwise breached, and that money damages are an inadequate remedy for breach of this Agreement because of the difficulty of ascertaining and quantifying the amount of damage that will be suffered by the parties hereto in the event that this Agreement is not performed in accordance with its terms or conditions or is otherwise breached. It is accordingly hereby agreed that the parties hereto shall be entitled to an injunction or injunctions to restrain, enjoin and prevent breaches of this Agreement by the other parties and to enforce specifically the terms and provisions hereof in any court of the United States or any state having jurisdiction, such remedy being in addition to and not in lieu of, any other rights and remedies to which the other parties are entitled to at law or in equity.
7.12 No Inconsistent Agreements. From and after the date of this Agreement, the Company shall not enter into any agreement with any person, including any holder or
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prospective holder of any securities of the Company, giving or granting any registration (or related) rights the terms of which are more favorable than, senior to or conflict with, the registration or other rights granted to Stockholders hereunder. Without limiting the foregoing, the Company shall not enter into any such agreement that would adversely affect the rights of any Blackstone Stockholder or Founder Stockholder without the prior written consent of the Blackstone Stockholder or Founder Representative, as applicable.
7.13 Termination of Registration Rights. The rights of any particular Stockholder under Article II, Article III, Article IV, Section 6.3, Section 6.5 and Section 6.6 hereof, and the obligations of any Stockholder pursuant to Section 3.7 shall, in each case, terminate as to any Stockholder on the date such Stockholder no longer beneficially owns any shares and the Company has fulfilled all of its obligations with respect to shares previously sold by such Stockholder in one or more registered offerings covered by this Agreement. Notwithstanding anything to the contrary in this Section 7.13, any lock-up entered into pursuant to Section 3.7 shall survive the termination of this Agreement until such lock-up expires in accordance with its terms.
[Rest of page intentionally left blank]
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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this Agreement to be duly executed and delivered as of the date first written above.
JERSEY MIKE’S SUBS INC. |
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By: |
/s/ Scott G. McLester |
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Name: Scott G. McLester |
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Title: General Counsel |
BLACKSTONE STOCKHOLDERS:
SUBMARINE BUYER LLC By: Submarine Buyer Holdco LLC, its sole member
By: Boardwalk I Aggregator L.P, its managing member
By: BCP 9 Holdings Manager L.L.C., its general partner |
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By: |
/s/ Robert Brooks |
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Name: Robert Brooks |
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Title: Authorized Signatory |
BOARDWALK II AGGREGATOR L.P. By: BCP 9 Holdings Manager L.L.C., its general partner |
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By: |
/s/ Robert Brooks |
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Name: Robert Brooks |
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Title: Authorized Signatory |
FOUNDER STOCKHOLDERS:
ORIGINAL 56ERS, INC. |
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By: |
/s/ Peter Cancro |
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Name: Peter Cancro |
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Title: Authorized Signatory |
CHRISTINE CANCRO EXEMPT TRUST UA CANCRO FAMILY DYNASTY TRUST |
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By: |
/s/ Lisa Morgan |
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Name: Lisa Morgan |
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Title: Authorized Signatory |
CAROLINE JONES EXEMPT TRUST UA CANCRO FAMILY DYNASTY TRUST |
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By: |
/s/ Lisa Morgan |
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Name: Lisa Morgan |
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Title: Authorized Signatory |
ROBERT CANCRO EXEMPT TRUST UA CANCRO FAMILY DYNASTY TRUST |
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By: |
/s/ Lisa Morgan |
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Name: Lisa Morgan |
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Title: Authorized Signatory |
PAUL CANCRO EXEMPT TRUST UA CANCRO FAMILY DYNASTY TRUST |
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By: |
/s/ Lisa Morgan |
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Name: Lisa Morgan |
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Title: Authorized Signatory |
Exhibit 10.5
STOCKHOLDERS AGREEMENT
DATED AS OF JULY 29, 2026
BETWEEN
JERSEY MIKE’S SUBS INC.
AND
THE OTHER PARTIES HERETO
TABLE OF CONTENTS
Page
ARTICLE I. INTRODUCTORY MATTERS |
1 |
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1.1 |
Defined Terms |
1 |
1.2 |
Construction |
5 |
ARTICLE II. CORPORATE GOVERNANCE MATTERS |
5 |
|
2.1 |
Election of Directors |
5 |
2.2 |
Compensation |
7 |
2.3 |
Board Committees |
7 |
ARTICLE III. INFORMATION; VCOC |
8 |
|
3.1 |
Books and Records; Access |
8 |
3.2 |
Certain Reports |
8 |
3.3 |
VCOC |
8 |
3.4 |
Confidentiality |
10 |
3.5 |
Information Sharing |
11 |
ARTICLE IV. ADDITIONAL COVENANTS |
11 |
|
4.1 |
Pledges or Transfers |
11 |
4.2 |
Spin-Offs or Split-Offs |
12 |
4.3 |
Expense Reimbursement |
12 |
ARTICLE V. INDEMNIFICATION; LIABILITY INSURANCE |
12 |
|
5.1 |
Indemnification of Designating Stockholders |
12 |
5.2 |
Jointly Indemnifiable Claims |
13 |
5.3 |
Non-Exclusive Right |
14 |
5.4 |
Directors and Officers Insurance |
15 |
5.5 |
Other Rights of Designees |
15 |
ARTICLE VI. GENERAL PROVISIONS |
15 |
|
6.1 |
Termination |
15 |
6.2 |
Notices |
15 |
6.3 |
Amendment; Waiver |
16 |
6.4 |
Further Assurances |
16 |
6.5 |
Assignment |
17 |
6.6 |
Third Parties |
17 |
6.7 |
Governing Law |
17 |
6.8 |
Jurisdiction; Waiver of Jury Trial |
17 |
6.9 |
Specific Performance |
18 |
6.10 |
Entire Agreement |
18 |
6.11 |
Severability |
18 |
6.12 |
Table of Contents, Headings and Captions |
18 |
6.13 |
Grant of Consent |
18 |
6.14 |
Counterparts |
18 |
6.15 |
Effectiveness |
19 |
6.16 |
No Recourse |
19 |
i
STOCKHOLDERS AGREEMENT
This Stockholders Agreement is entered into as of July 29, 2026 between Jersey Mike’s Subs Inc., a Delaware corporation (the “Company”), and each of the other parties from time to time party hereto.
RECITALS:
WHEREAS, the Company is effecting an underwritten initial public offering (“IPO”) of shares of its Class A Common Stock (as defined below); and
WHEREAS, in connection with the IPO, the Company and the Designating Stockholders (as defined below) wish to set forth certain understandings between such parties, including with respect to certain governance matters.
NOW, THEREFORE, the parties agree as follows:
ARTICLE I.
INTRODUCTORY MATTERS
1.1 Defined Terms. In addition to the terms defined elsewhere herein, the following terms have the following meanings when used herein with initial capital letters:
“Affiliate” has the meaning set forth in Rule 12b-2 promulgated under the Exchange Act, as in effect on the date hereof; provided, however, that notwithstanding the foregoing, an Affiliate shall not include any Portfolio Company of any Person or the Designating Stockholders and neither the Company nor any of its Affiliates shall be deemed an Affiliate of a Designating Stockholder or its Affiliates or Portfolio Companies.
“Agreement” means this Stockholders Agreement, as the same may be amended, supplemented, restated or otherwise modified from time to time in accordance with the terms hereof.
“Beneficially Own” has the meaning set forth in Rule 13d-3 promulgated under the Exchange Act.
“Board” means the board of directors of the Company.
“Business Day” means any day other than a Saturday, a Sunday, or a holiday on which national banking associations in the State of New York are authorized by law to close.
“Class A Common Stock” means shares of class A common stock, par value $0.0001 per share, of the Company, and any securities issued in respect thereof, or in substitution therefor, in connection with any stock split, dividend or combination, or any reclassification, recapitalization, merger, consolidation or similar transaction.
“Class B Common Stock” means shares of class B common stock, par value $0.0001 per share, of the Company, and any securities issued in respect thereof, or in substitution
therefor, in connection with any stock split, dividend or combination, or any reclassification, recapitalization, merger, consolidation or similar transaction.
“Common Stock” means collectively, the shares of Class A Common Stock and Class B Common Stock.
“Common Units” has the meaning set forth in the LLC Agreement.
“Company” has the meaning set forth in the Preamble.
“Confidential Information” means any information concerning the Company or its Subsidiaries that is furnished after the date of this Agreement by or on behalf of the Company or its designated representatives to a Designating Stockholder or its designated representatives, together with any notes, analyses, reports, models, compilations, studies, documents, records or extracts thereof containing, based upon or derived from such information, in whole or in part; provided, however, that Confidential Information does not include information:
(i) that is or has become publicly available other than as a result of a disclosure by a Designating Stockholder or its designated representatives in violation of this Agreement;
(ii) that was already known to a Designating Stockholder or its designated representatives or was in the possession of a Designating Stockholder or its designated representatives prior to its being furnished by or on behalf of the Company or its designated representatives;
(iii) that is received by a Designating Stockholder or its designated representatives from a source other than the Company or its designated representatives, provided, that the source of such information was not actually known by a Designating Stockholder or designated representative to be bound by a confidentiality agreement with, or other contractual obligation of confidentiality to, the Company; or
(iv) that was independently developed or acquired by a Designating Stockholder or its designated representatives or on its or their behalf without the violation of the terms of this Agreement.
“Control” (including its correlative meanings, “Controlled by” and “under common Control with”) means possession, directly or indirectly, of the power to direct or cause the direction of management or policies (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise) of a Person.
“Designating Stockholders” means the entities listed on the signature pages hereto under the heading “Designating Stockholders” and each Person that executes a joinder agreement pursuant to Section 6.5 as a Permitted Transferee.
“Designating Stockholder Representative” means the Designating Stockholder, or any group of Designating Stockholders collectively, then holding of record a majority of Total Outstanding Securities held of record by all Designating Stockholders.
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“Designee” has the meaning assigned to such term in Section 2.1(a).
“Director” means any director of the Company from time to time.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder, as the same may be amended from time to time.
“Exchange Agreement” means the Exchange Agreement, dated on or about the date hereof, by and among the Company, Jersey Mike’s Holdings and the holders of Common Units party thereto, as the same may be amended, supplemented, restated or otherwise modified from time to time.
“Governmental Authority” means any: (i) nation, state, commonwealth, province, territory, county, municipality, district or other jurisdiction of any nature; (ii) U.S. and other federal, state, local, municipal, foreign or other government; or (iii) governmental or quasi‑governmental authority of any nature (including any governmental division, department, agency, commission, instrumentality, official, organization, unit, body or entity and any court or other tribunal).
“Information” has the meaning set forth in Section 3.1 hereof.
“IPO” has the meaning set forth in the Recitals.
“Jersey Mike’s Holdings” means Jersey Mike’s HoldCo, LLC, a Delaware limited liability company.
“Law” means any statute, law, regulation, ordinance, rule, injunction, order, decree, governmental approval, directive, requirement, or other governmental restriction or any similar form of decision of, or determination by, or any interpretation or administration of any of the foregoing by, any Governmental Authority.
“LLC Agreement” means the Third Amended and Restated Limited Liability Company Agreement of Jersey Mike’s Holdings, dated on or about the date hereof, as such agreement may be amended, supplemented, restated or otherwise modified from time to time.
“NewCo” has the meaning set forth in Section 4.2 hereof.
“Non-Recourse Party” has the meaning set forth in Section 6.16 hereof.
“Permitted Transferee” means with respect to a Designating Stockholder, a Transferee of shares of Common Stock that agrees to become party to, and be bound to the same extent as its transferor, by the terms of this Agreement.
“Person” means an individual, a partnership, a limited partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, bank trust company, land trust, business trust, a joint venture, an unincorporated organization, or other form of business organization, whether or not regarded as a legal entity, custodian, trustee-executor, administrator,
3
nominee or entity in a representative capacity under applicable Law, or any Governmental Authority or any department, agency or political subdivision thereof.
“Plan Asset Regulation” has the meaning set forth in Section 3.3(a) hereof.
“Portfolio Companies” has the meaning set forth in the LLC Agreement.
“Registration Rights Agreement” means the Registration Rights Agreement by and among the Company and the other parties thereto, dated on or about the date hereof, as such agreement may be amended, supplemented, restated or otherwise modified from time to time.
“Restated Certificate of Incorporation” means the Amended and Restated Certificate of Incorporation of the Company, dated on or about the date hereof, as such certificate may be amended and/or restated from time to time.
“Subsidiary” means, with respect to any Person, any corporation, limited liability company, partnership, association or other business entity of which: (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, representatives or trustees thereof is at the time owned or Controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or any combination thereof; or (ii) if a limited liability company, partnership, association or other business entity, a majority of the total voting power of stock (or equivalent ownership interest) of the limited liability company, partnership, association or other business entity is at the time owned or Controlled, directly or indirectly, by that Person or one or more Subsidiaries of that Person or any combination thereof. For purposes hereof, a Person or Persons shall be deemed to have a majority ownership interest in a limited liability company, partnership, association or other business entity if such Person or Persons shall (a) be allocated a majority of limited liability company, partnership, association or other business entity gains or losses or shall be or (b) Control the managing member, managing director or other governing body or general partner of such limited liability company, partnership, association or other business entity.
“Total Number of Directors” means the total number of directors comprising the Board from time to time.
“Total Outstanding Securities” means, at any time, the total number of outstanding shares of Class A Common Stock, plus the number of shares of Class A Common Stock that would be outstanding assuming all holders of Common Units other than the Company or any wholly owned subsidiary of the Company had exchanged such Common Units (together with a corresponding number of shares of Class B Common Stock) for shares of Class A Common Stock pursuant to the Exchange Agreement.
“Transfer” (including its correlative meanings, “Transferor,” “Transferee” and “Transferred”) shall mean, with respect to any security, directly or indirectly, to sell, contract to sell, give, assign, hypothecate, pledge, encumber, grant a security interest in, offer, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of any economic, voting or other rights in or to such security. When used as a noun, “Transfer” shall have such correlative meaning as the context may require. For the avoidance of doubt, it is understood that a Permitted Pledge (as such term is
4
defined in the LLC Agreement) shall not be a Transfer and the bank or financial institution in respect of whom the Permitted Pledge is made shall not be treated as a transferee or entitled to any rights under this Agreement as a result of such Permitted Pledge or any foreclosure thereunder.
“VCOC Investor” has the meaning set forth in Section 3.3(a) hereof.
1.2 Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction will be applied against any party. Unless the context otherwise requires: (a) “or” is disjunctive but not exclusive, (b) words in the singular include the plural, and in the plural include the singular, and (c) the words “hereof,” “herein,” and “hereunder” and words of similar import when used in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section references are to this Agreement unless otherwise specified.
ARTICLE II.
CORPORATE GOVERNANCE MATTERS
2.1 Election of Directors.
(a) The Designating Stockholder Representative shall have the right, but not the obligation, to designate a number of individuals serving as directors of the Company equal to: (i) if the Designating Stockholders and their Affiliates collectively Beneficially Own 50% or more of the Total Outstanding Securities, the lowest whole number that is greater than 50% of the Total Number of Directors; (ii) if the Designating Stockholders and their Affiliates collectively Beneficially Own at least 40% (but less than 50%) of the Total Outstanding Securities, the lowest whole number that is greater than 40% of the Total Number of Directors; (iii) if the Designating Stockholders and their Affiliates collectively Beneficially Own at least 30% (but less than 40%) of the Total Outstanding Securities, the lowest whole number that is greater than 30% of the Total Number of Directors; (iv) if the Designating Stockholders and their Affiliates collectively Beneficially Own at least 20% (but less than 30%) of the Total Outstanding Securities, the lowest whole number that is greater than 20% of the Total Number of Directors; and (v) if the Designating Stockholders and their Affiliates collectively Beneficially Own at least 5% (but less than 20%) of the Total Outstanding Securities, the lowest whole number (such number always being equal to or greater than one) that is greater than 10% of the Total Number of Directors (in each case, each such person a “Designee”).
(b) If the Designating Stockholders and their Affiliates collectively Beneficially Own at least 5% of the Total Outstanding Securities, the Designating Stockholder Representative may designate one (1) non-voting observer to attend meetings of the Board. Except to the extent that the Board determines in its reasonable discretion that the receipt of such materials would prevent the Company from asserting attorney-client privilege, such non-voting observer shall have the same right to receive at the same time and in the same manner as a Director copies of all materials (including copies of all resolutions, consents and meeting minutes) given to Directors in connection with any meetings of the Board and if the Board proposes to act by consent in lieu of a meeting, the Company shall provide such non-voting observer at the same time and in the same manner with copies of the form of consent and all materials given to any Director in connection with such action. The non-voting observer may be required by the Board to temporarily
5
leave a meeting of the Board if the presence of the non-voting observer would prevent the Company from asserting attorney-client privilege with respect to matters discussed before the Board at such time.
(c) If at any time the Designating Stockholder Representative has designated fewer than the total number of individuals that it is then entitled to designate pursuant to Section 2.1(a) hereof, the Designating Stockholder Representative shall have the right, at any time and from time to time, to appoint or cause to be appointed to the Board as Designees an additional number of individuals up to the difference between the total number of individuals that the Designating Stockholder Representative is then entitled to designate and the number of individuals theretofore designated by such Designating Stockholder Representative. Upon the election of a Designating Stockholder Representative to appoint or cause the appointment of any individual pursuant to this Section 2.1(c), the Total Number of Directors shall be automatically increased to enable the appointment of such individual as a Designee. The Company will ensure at all times during the term of this Agreement that its Restated Certificate of Incorporation and bylaws will not contain any limitation on the number of authorized Directors that would prevent it from complying with the foregoing sentence.
(d) Directors are subject to removal or disqualification pursuant to the applicable provisions of the Restated Certificate of Incorporation and applicable law; provided, however, for as long as the Designating Stockholder Representative is entitled to designate a Designee pursuant to Section 2.1(a) hereof, the removal of any Designee shall require, in addition to any vote of stockholders otherwise required by the Restated Certificate of Incorporation and applicable law, and so long as the applicable Designating Stockholder continues to own shares of Common Stock, such director may only be removed without cause by the Designating Stockholders who shall be the only holders of Common Stock entitled to vote on such removal and all other holders of Common Stock, as such, and the holders of any other class or series of capital stock of the Corporation, shall have no voting power on such removal.
(e) Notwithstanding anything to the contrary set forth in the Restated Certificate of Incorporation or bylaws, if the Designating Stockholder Representative is entitled to designate a Designee pursuant to Section 2.1(a) hereof, in the event of a vacancy on the Board with respect to any Designee of the Designating Stockholder Representative (whether resulting from the death, disability, retirement, removal (with or without cause), disqualification, resignation or otherwise) or in the event of an increase of the Total Number of Directors pursuant to Section 2.1(c) or Section 2.1(g) hereof, the Designating Stockholder Representative shall have the power, at its election, to appoint or cause to be appointed a new Designee to fill such vacancy or the newly created directorship resulting from such increase.
(f) If the Designating Stockholder Representative is entitled to designate a Designee pursuant to Section 2.1(a) hereof, the Company shall, to the fullest extent permitted by law, include in the slate of nominees recommended by the Board at any meeting of stockholders called for the purpose of electing directors (or consent in lieu of meeting) the persons designated pursuant to this Section 2.1 and use its best efforts to cause the election of each such Designee to the Board, including nominating each such individual to be elected as a Director as provided herein. Unless the Board in good faith, after consultation with the Company’s outside counsel, determines that it is otherwise required by its fiduciary duties, the Board shall, to the fullest extent
6
permitted by law, recommend such individual’s election and solicit proxies or consents in favor thereof.
(g) In the event that any Designee shall fail to be elected to the Board at any meeting of stockholders called for the purpose of electing directors (or consent in lieu of meeting), if the Designating Stockholder Representative is entitled to designate a Designee pursuant to Section 2.1(a) hereof, the Designating Stockholder Representative shall have the right to appoint (or cause to be appointed) to the Board such Designee (or a new designee of the Designating Stockholder Representative). Upon the election of a Designating Stockholder Representative to appoint or cause the appointment to the Board of an individual pursuant to this Section 2.1(g), the Total Number of Directors shall be automatically increased to enable the appointment of such individual as a Designee. For the avoidance of doubt, it is understood that the failure of the stockholders of the Company to elect any Designee shall not affect the right of the Designating Stockholder Representative who nominated such Designee to exercise its rights under this Section 2.1, including its right to designate a Designee for election pursuant to Section 2.1(a) hereof in connection with any future election of directors of the Company.
2.2 Compensation. Except to the extent the Designating Stockholder Representative may otherwise notify the Company and if the Designating Stockholder Representative is entitled to designate a Designee pursuant to Section 2.1(a) hereof, the Designees shall be entitled to compensation consistent with the compensation received by other non-employee Directors, including any fees and equity awards, provided, that (x) to the extent any Director compensation is payable in the form of equity awards, at the election of a Designee, in lieu of any equity award, such compensation shall be paid in an amount of cash equal to the value of the equity award as of the date of the award, with any such cash subject to the same vesting terms, if any, as the equity awarded to other Directors and (y) at the election of a Designee, any Director compensation (whether cash, equity awards and/or cash in lieu of equity as may be designated by the electing Designee) shall be paid to the Designating Stockholder or an Affiliate thereof specified by the Designee rather than to the Designee. If the Company adopts a policy that Directors own a minimum amount of equity in the Company, no Designee that is an Affiliate, partner, personnel or employee of the Designating Stockholder Representative or its Affiliate shall be subject to such policy unless otherwise determined by the Designating Stockholder Representative in its sole discretion. All Directors and non-voting observers will be entitled to reimbursement for documented, reasonable out of-pocket expenses incurred in attending meetings of the Board (including any committee thereof).
2.3 Board Committees. If the Designating Stockholder Representative is entitled to designate a Designee pursuant to Section 2.1(a) hereof, to the extent permitted by Law, the Restated Certificate of Incorporation and the rules of any stock exchange on which the Class A Common Stock is listed for trading, and subject to requisite independence or other eligibility requirements applicable to such committee, the Designating Stockholder Representative shall have the right, but not the obligation, to appoint (or cause to be appointed) at least one (1) Designee to each committee of the Board, other than the Litigation Demand Committee.
7
ARTICLE III.
INFORMATION; VCOC
3.1 Books and Records; Access. The Company shall, and shall cause its Subsidiaries to, keep proper books, records and accounts, in which full and correct entries shall be made of all financial transactions and the assets and business of the Company and each of its Subsidiaries in accordance with generally accepted accounting principles. The Company shall, and shall cause its Subsidiaries to, (a) permit the Designating Stockholders and their respective designated representatives (or other designees), at reasonable times and upon reasonable prior notice to the Company, to review the books and records of the Company or any of such Subsidiaries and to discuss the affairs, finances and condition of the Company or any of such Subsidiaries with the officers of the Company or any such Subsidiary and (b) provide the Designating Stockholders all information of a type, at such times and in such manner as is consistent with the Company’s and its predecessor’s past practice or that is otherwise reasonably requested by such Designating Stockholders from time to time (all such information so furnished pursuant to this Section 3.1, the “Information”). Subject to Section 3.4, any Designating Stockholder (and any party receiving Information from a Designating Stockholder) who shall receive Information shall maintain the confidentiality of such Information. Notwithstanding the foregoing, the Company shall not be required to disclose any privileged Information of the Company so long as the Company has used commercially reasonable efforts to enter into an arrangement pursuant to which it may provide such information to the Designating Stockholders without the loss of any such privilege. The information rights pursuant to this Section 3.1 shall terminate at the time the Designating Stockholders and their Affiliates collectively Beneficially Own less than 1% of the Total Outstanding Securities. The Designating Stockholders may elect from time to time by written notice to the Company not to have such information rights for a predetermined period of time (which may be indefinite).
3.2 Certain Reports. Until such time as the Designating Stockholders and their Affiliates collectively Beneficially Own less than 1% of the Total Outstanding Securities, the Company shall deliver or cause to be delivered to the Designating Stockholders, at their request:
(a) to the extent otherwise prepared by the Company, operating and capital expenditure budgets and periodic information packages relating to the operations and cash flows of the Company and its Subsidiaries; and
(b) to the extent otherwise prepared by the Company, such other reports and information as may be reasonably requested by the Designating Stockholders; provided, however, that in the cases of clauses (a) and (b), the Company shall not be required to disclose any privileged information of the Company so long as the Company has used commercially reasonable efforts to enter into an arrangement pursuant to which it may provide such information to the Designating Stockholders without the loss of any such privilege.
3.3 VCOC.
(a) With respect to each Designating Stockholder that is intended to qualify its direct or indirect investment in the Company as a “venture capital investment” as defined in the Department of Labor regulations codified at 29 CFR Section 2510.3-101 (the “Plan Asset
8
Regulation”) (each, a “VCOC Investor”, and together, the “VCOC Investors”), for so long as a VCOC Investor, directly or through one or more subsidiaries, continues to hold any Common Stock (or other securities of the Company into which such Common Stock may be converted or for which such Common Stock may be exchanged), without limitation or prejudice of any of the rights provided to the Designating Stockholders hereunder, the Company shall, with respect to each such VCOC Investor:
(i) provide each VCOC Investor or its designated representative with:
(A) upon reasonable notice and at mutually convenient times, the right to visit and inspect any of the offices and properties of the Company and its Subsidiaries and inspect and copy the books and records of the Company and its Subsidiaries;
(B) as soon as available and in any event within 45 days after the end of each of the first three quarters of each fiscal year of the Company, consolidated balance sheets of the Company and its Subsidiaries as of the end of such period, and consolidated statements of income and cash flows of the Company and its Subsidiaries for the period then ended prepared in conformity with generally accepted accounting principles in the United States applied on a consistent basis, except as otherwise noted therein, and subject to the absence of footnotes and to year-end adjustments;
(C) as soon as available and in any event within 120 days after the end of each fiscal year of the Company, a consolidated balance sheet of the Company and its Subsidiaries as of the end of such year, and consolidated statements of income and cash flows of the Company and its Subsidiaries for the year then ended prepared in conformity with generally accepted accounting principles in the United States applied on a consistent basis, except as otherwise noted therein, together with an auditor’s report thereon of a firm of established national reputation;
(D) to the extent the Company is required by law or pursuant to the terms of any outstanding indebtedness of the Company to prepare such reports, any annual reports, quarterly reports and other periodic reports pursuant to Section 13 or 15(d) of the Exchange Act, actually prepared by the Company as soon as available; and
(E) upon written request by a VCOC Investor, copies of all materials provided to the Board, subject to appropriate protections with respect to confidentiality and preservation of attorney-client privilege; provided, that, in each case, if the Company makes the information described in clauses (B), (C) and (D) of this Section 3.3(a)(i) available through public filings on the EDGAR System or any successor or replacement system of the U.S. Securities and Exchange Commission, the requirement to deliver such information shall be deemed satisfied;
(ii) make appropriate officers and/or Directors of the Company available, and cause the officers and directors of its Subsidiaries to be made available, periodically and at such times as reasonably requested by each VCOC Investor, upon reasonable notice and at mutually convenient times, for consultation with such VCOC Investor or its designated representative with respect to matters relating to the business and affairs of the Company and its Subsidiaries; and
9
(iii) provide each VCOC Investor or its designated representative with such other rights of consultation which such VCOC Investor’s counsel may determine in writing to be necessary under applicable legal authorities promulgated after the date hereof to qualify its investment in the Company as a “venture capital investment” for purposes of the Plan Asset Regulation; provided that the parties agree that any such rights of consultation shall be of a nature consistent with those granted above and nothing in this Agreement shall be deemed to require the Company to grant to a VCOC Investor any additional rights with respect to the governance or management of the Company.
(b) The Company agrees to consider, in good faith, the recommendations of each VCOC Investor or its designated representative in connection with the matters on which it is consulted as described above in this Section 3.3, recognizing that the ultimate discretion with respect to all such matters shall be retained by the Company.
(c) In the event a VCOC Investor or any of its Affiliates Transfers all or any portion of their investment in the Company to an affiliated entity that is intended to qualify its investment in the Company as a “venture capital investment” (as defined in the Plan Asset Regulation), such Transferee shall be afforded the same rights with respect to the Company afforded to such VCOC Investor hereunder and shall be treated, for such purposes, as a third party beneficiary hereunder.
(d) For so long as a VCOC Investor, directly or through one or more subsidiaries, continues to hold any Common Stock (or other securities of the Company into which such Common Stock may be converted or for which such Common Stock may be exchanged) and upon the written request of such VCOC Investor, without limitation or prejudice of any of the rights provided to the Designating Stockholders hereunder, the Company shall, with respect to each such VCOC Investor, furnish and deliver a letter covering the matters set forth in Sections 3.3(a), 3.3(b), and 3.3(c) hereof in a form and substance satisfactory to such VCOC Investor.
(e) In the event a VCOC Investor is an Affiliate of a Designating Stockholder, as described in Section 3.3(a) above, such affiliated entity shall be afforded the same rights with respect to the Company and afforded to the Designating Stockholders under this Section 3.3 and shall be treated, for such purposes, as a third party beneficiary hereunder.
3.4 Confidentiality. Each Designating Stockholder agrees that it will, and will direct its designated representatives to, keep confidential and not disclose any Confidential Information; provided, however, that such Designating Stockholder and its designated representatives may disclose Confidential Information to any other Designating Stockholders (including any Designating Stockholders, Designees, or non-voting observers pursuant to any other stockholders agreements entered into on or about the date hereof by the Company and any other party with similar designation or information rights), to the Designees or non-voting observers and to (a) its Affiliates and its Affiliates’ partners, members, stockholders, directors, managers, officers, employees, agents, attorneys, accountants, consultants, insurers, financing sources and other advisors in connection with such Designating Stockholder’s investment in the Company, (b) any Person, including a prospective purchaser of Common Stock or Common Units, as long as such Person has agreed, in writing, to maintain the confidentiality of such Confidential Information, (c) any of such Designating Stockholder’s or its respective Affiliates’ partners,
10
members, stockholders, directors, managers, officers, employees, agents, attorneys, accountants, consultants, insurers, financing sources and other advisors in the ordinary course of business (the Persons referenced in clauses (a), (b) and (c), a Designating Stockholder’s “designated representatives”), (d) as the Company may otherwise consent in writing, (e) to the extent necessary in connection with the exercise of any remedy hereunder, or (f) to the extent that the Designating Stockholder or its designated representatives is required, in the good faith determination of such Designating Stockholder or designated representative, to disclose by applicable law, regulation or legal process, or upon the request or demand of any regulatory agency or authority having or claiming jurisdiction over such party or any of its properties or assets, provided, that such Designating Stockholder or designated representative takes reasonable steps to minimize the extent of any such required disclosure, provided, further, that no such steps to minimize disclosure shall be required where disclosure is made (i) in response to a request by a regulatory or self-regulatory authority or (ii) in connection with a routine audit or examination by a bank examiner or auditor and such audit or examination does not specifically reference the Company or this Agreement; provided, further, however, that each Designating Stockholder agrees to be responsible for any breaches of this Section 3.4 by such Designating Stockholder’s designated representatives.
3.5 Information Sharing. Each party hereto acknowledges and agrees that Designees may share any information concerning the Company and its Subsidiaries received by them from or on behalf of the Company or its designated representatives with each Designating Stockholder and its designated representatives (subject to such Designating Stockholder’s obligation to maintain the confidentiality of Confidential Information in accordance with Section 3.4).
ARTICLE IV.
ADDITIONAL COVENANTS
4.1 Pledges or Transfers. Upon the request of any Designating Stockholder that wishes to (x) pledge, hypothecate or grant security interests in any or all of the shares of Common Stock or Common Units held by it including to banks or financial institutions as collateral or security for loans, advances or extensions of credit or (y) Transfer any or all of the shares of Common Stock or Common Units held by it, including to third party investors, the Company agrees to cooperate with such Designating Stockholder in taking any action reasonably necessary to consummate any such pledge, hypothecation, grant or Transfer, including without limitation, delivery of letter agreements to lenders in form and substance reasonably satisfactory to such lenders (which may include agreements by the Company in respect of the exercise of remedies by such lenders), instructing the transfer agent to Transfer any such shares of Common Stock subject to the pledge, hypothecation or grant into the facilities of The Depository Trust Company without restricted legends and cooperating in diligence or other matters as may reasonably requested by any Designating Stockholder in connection with a proposed Transfer.
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4.2 Spin-Offs or Split-Offs. In the event that the Company effects the separation of any portion of its business into one or more entities (each, a “NewCo”), whether existing or newly formed, including without limitation by way of spin-off, split-off, carve-out, demerger, recapitalization, reorganization or similar transaction, and any Designating Stockholder will receive equity interests in any such NewCo as part of such separation, the Company shall cause any such NewCo to enter into a stockholders agreement with the Designating Stockholders that provides the Designating Stockholders with rights vis-à-vis such NewCo that are substantially identical to those set forth in this Agreement.
4.3 Expense Reimbursement. The Company shall, and shall cause its respective Subsidiaries to, pay directly or reimburse, or cause to be paid directly or reimbursed, the Designating Stockholders and each of their respective Affiliates the actual and reasonable out-of-pocket costs and expenses incurred or accrued by or on behalf the Designating Stockholders and their respective Affiliates in connection with the enforcement of rights or taking of actions relating to (i) this Agreement, (ii) the certificate of incorporation and bylaws (or equivalent documentation) of the Company or its Subsidiaries, including the LLC Agreement, or (iii) any registration rights agreements, subscription agreements, stockholders or investor rights agreements, voting agreements or other agreements entered into with the Company or any of its Subsidiaries in connection with direct or indirect investments by the Designating Stockholders or their respective Affiliates in, or financing by any of them of, the Company or any of its Subsidiaries (subject to any applicable limitations on expense reimbursement rights expressly set forth in such agreements). All payments or reimbursement for such expenses will be made by wire transfer in same-day funds to the bank account designated by the relevant Designating Stockholder or Affiliate thereof promptly upon or as soon as practicable following request for reimbursement and delivery to the Company of any supporting documentation reasonably requested by the Company.
ARTICLE V.
INDEMNIFICATION; LIABILITY INSURANCE
5.1 Indemnification of Designating Stockholders. (a) To the fullest extent permitted by law, the Company will, and will cause its Subsidiaries to, jointly and severally, indemnify and hold each Designating Stockholder, its Affiliates and any of such Designating Stockholder’s or its respective Affiliates’ respective partners, members, stockholders, directors, managers, officers, employees and agents (including any non-voting observer appointed or designated pursuant to this Agreement) of each of the foregoing (collectively, the “Indemnitees”) free and harmless from and against any and all liabilities, losses, damages and costs and out-of-pocket expenses in connection therewith (including reasonable attorneys’ fees and expenses) incurred by the Indemnitees or any of them before or after the date of this Agreement (collectively, the “Indemnified Liabilities”), arising out of any action, cause of action, suit, litigation, investigation, inquiry, arbitration or claim by any Person (other than the Company or any of its Subsidiaries) against any Indemnitee (each, an “Action”) arising directly or indirectly out of, or in any way relating to, (i) (x) any actual or alleged fiduciary or similar duties to the Company, any of its Subsidiaries or their respective current or former stockholders arising from such Designating Stockholder’s, or its Affiliates’ ownership of shares of Common Stock or other securities of the Company or any of its Subsidiaries, (y) such Designating Stockholder’s or its Affiliates’ control or ability to influence the Company or any of its Subsidiaries or (z) such Designating Stockholder’s or its Affiliates’ ownership of shares of Common Stock or other securities of the Company or any
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of its Subsidiaries; provided that the foregoing indemnification rights in this Section 5.1(a) shall not be available to the extent that (1) any such Indemnified Liabilities are incurred as a result of willful misconduct of such Indemnitee; or (2) such Indemnified Liabilities arise out of any breach of this Agreement by such Indemnitee or its Affiliates or other related Persons or the breach of any fiduciary or other duty or obligation of such Indemnitee to its direct or indirect equity holders, creditors or Affiliates or (ii) the business, operations, properties, assets or other rights or liabilities of the Company or any of its Subsidiaries; provided, however, that, if and to the extent that the foregoing undertaking may be unavailable or unenforceable for any reason, the Company will, and will cause its Subsidiaries to, jointly and severally, make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities that is permissible under applicable law. For the purposes of this Section 5.1, none of the circumstances described in the limitations contained in the immediately preceding sentence shall be deemed to apply absent a final non-appealable judgment of a court of competent jurisdiction to such effect, in which case to the extent any such limitation is so determined to apply to any Indemnitee as to any previously advanced indemnity payments made by the Company, then such payments shall be promptly repaid by such Indemnitee to the Company.
(b) To the fullest extent permitted by law, the Company will, and will cause its Subsidiaries to, jointly and severally, reimburse any Indemnitee for all reasonable costs and expenses (including reasonable attorneys’ fees and expenses and any other litigation-related expenses) as they are incurred in connection with investigating, preparing, pursuing, defending or assisting in the defense of any Action for which the Indemnitee would be entitled to indemnification under the terms of this Article V, or any action or proceeding arising therefrom, whether or not such Indemnitee is a party thereto. The Company or its Subsidiaries, in the defense of any Action for which an Indemnitee would be entitled to indemnification under the terms of this Article V, may, without the consent of such Indemnitee (which consent shall not be unreasonably withheld), consent to entry of any judgment or enter into any settlement if and only if it (i) includes as a term thereof the giving by the claimant or plaintiff therein to such Indemnitee of an unconditional release from all liability with respect to such Action and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of such Indemnitee, and provided that any sums payable in connection with such settlement are paid in full by the Company and/or its Subsidiaries.
5.2 Jointly Indemnifiable Claims. The Company acknowledges and agrees that the Company shall, and to the extent applicable shall cause its Subsidiaries to, be fully and primarily responsible for the payment to the Indemnitee in respect of Indemnified Liabilities in connection with any Jointly Indemnifiable Claims (as defined below), pursuant to and in accordance with (as applicable) the terms of (i) the Delaware General Corporation Law, as amended, (ii) the Restated Certificate of Incorporation, (iii) the bylaws, as amended, of the Company, (iv) any director or officer indemnification agreement, (v) this Agreement, (vi) any other agreement between the Company or any Subsidiary and the Indemnitee pursuant to which the Indemnitee is indemnified, (vii) the laws of the jurisdiction of incorporation or organization of any Subsidiary of the Company and/or (viii) 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 Subsidiary of the Company ((i) through (viii) collectively, the “Indemnification Sources”), irrespective of any right of recovery the Indemnitee may have from any corporation, limited liability company,
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partnership, joint venture, trust, employee benefit plan or other enterprise (other than the Company, any of its Subsidiaries or the insurer under and pursuant to an insurance policy of the Company or any of its Subsidiaries) from whom an Indemnitee may be entitled to indemnification with respect to which, in whole or in part, the Company or any of its Subsidiaries may also have an indemnification obligation (collectively, the “Indemnitee-Related Entities”). Under no circumstance shall the Company or any of its Subsidiaries be entitled to any right of subrogation or contribution by the Indemnitee-Related Entities and no right of advancement or recovery the Indemnitee may have from the Indemnitee-Related Entities shall reduce or otherwise alter the rights of the Indemnitee or the obligations of the Company or any of its Subsidiaries under the Indemnification Sources. In the event that any of the Indemnitee-Related Entities shall make any payment to the Indemnitee in respect of indemnification with respect to any Jointly Indemnifiable Claim, (x) the Company shall, and to the extent applicable shall cause its Subsidiaries to, reimburse the Indemnitee-Related Entity making such payment to the extent of such payment promptly upon written demand from such Indemnitee-Related Entity, (y) to the extent not previously and fully reimbursed by the Company and/or any of its Subsidiaries pursuant to clause (x), 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 Indemnitee against the Company and/or any of its Subsidiaries, as applicable, and (z) the Indemnitee 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 Indemnitee agree that each of the Indemnitee-Related Entities shall be third-party beneficiaries with respect to this Section 5.2, entitled to enforce this Section 5.2 as though each such Indemnitee-Related Entity were a party to this Agreement. The Company shall cause each of its Subsidiaries to perform the terms and obligations of this Section 5.2 as though each such Subsidiary was a party to this Agreement. For purposes of this Section 5.2, the term “Jointly Indemnifiable Claims” shall be broadly construed and shall include any Indemnified Liabilities for which the Indemnitee shall be entitled to indemnification from both (1) the Company and/or any of its Subsidiaries pursuant to the Indemnification Sources, on the one hand, and (2) any Indemnitee-Related Entity pursuant to any other agreement between any Indemnitee-Related Entity and the Indemnitee pursuant to which the Indemnitee 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.
5.3 Non-Exclusive Right. The rights of any Indemnitee to indemnification in this Article V will be in addition to any other rights any such Person may have under any other Section of this Agreement or any other agreement or instrument to which such Indemnitee is or becomes a party or is or otherwise becomes a beneficiary or under law or regulation or under the certificate of incorporation or bylaws (or equivalent governing documents) of the Company or any of its Subsidiaries.
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5.4 Directors and Officers Insurance. The Company shall use its reasonable best efforts to purchase and maintain a policy or policies of directors’ and officers’ liability insurance which insurance shall cover each member of the Board.
5.5 Other Rights of Designees. Except as provided in Section 2.2, each Designee serving on the Board shall be entitled to the same rights and privileges applicable to all other members of the Board generally or to which all such members of the Board are entitled. In furtherance of the foregoing, the Company shall indemnify, exculpate, and reimburse fees and expenses of the Designees and, subject to execution of an observer agreement, non-voting observers (including by entering into an indemnification agreement in a form substantially similar to the Company’s form director indemnification agreement) and provide the Designees with director and officer insurance to the same extent it indemnifies, exculpates, reimburses and provides insurance for the other members of the Board pursuant to the Restated Certificate of Incorporation or bylaws of the Company, applicable law or otherwise.
ARTICLE VI.
GENERAL PROVISIONS
6.1 Termination. Subject to the early termination of any provision as a result of an amendment to this Agreement agreed to by the Board and the Designating Stockholders, as provided under Section 6.3, and except for Section 3.1, Section 3.2 and Section 3.3 hereof, which shall terminate as provided in those Sections, and the rest of this Agreement, excluding Article VI hereof, will terminate upon the delivery of written notice by the Designating Stockholder Representative to the Company requesting that this Agreement terminate. The VCOC Investors shall advise the Company when they collectively first cease to Beneficially Own any Common Stock (or other securities of the Company into which such Common Stock may be converted or for which such Common Stock may be exchanged), whereupon Section 3.3 hereof shall terminate.
6.2 Notices. Any notice, designation, request, request for consent or consent provided for in this Agreement shall be in writing and shall be either personally delivered, sent by electronic mail or sent by reputable overnight courier service (charges prepaid) to the Company at the address set forth below and to any other recipient at the address indicated on the Company’s records, or at such address or to the attention of such other Person as the recipient party has specified by prior written notice to the sending party. Notices and other such documents will be deemed to have been given or made hereunder when delivered personally or sent by electronic mail and one (1) Business Day after deposit with a reputable overnight courier service.
The Company’s address is: |
Jersey Mike’s Subs Inc. |
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Attention: Email: |
Scott G. McLester |
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With a copy to: [email address] |
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Each Designating Stockholder’s address is: |
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Blackstone Inc. |
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Attention:
Email: |
Devon L. Rinker Michael J. Staub [email addresses] |
6.3 Amendment; Waiver.
(a) The terms and provisions of this Agreement may be modified or amended only with the written approval of the Company and the Designating Stockholder Representative.
(b) Except as expressly set forth in this Agreement, neither the failure nor delay on the part of any party hereto to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy power or privilege preclude any other or further exercise of the same or of any other right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence.
(c) No party shall be deemed to have waived any claim arising out of this Agreement, or any right, remedy, power or privilege under this Agreement, unless the waiver of such claim, right, remedy, power or privilege is expressly set forth in a written instrument duly executed and delivered on behalf of such party; and any such waiver shall not be applicable or have any effect except in the specific instance in which it is given.
(d) Each Designating Stockholder, in its sole discretion, may withdraw from this Agreement at any time by written notice to the Company. Thereafter, such Designating Stockholder shall cease to be a party to this Agreement, shall have no further rights or obligations hereunder and none of the terms or provisions hereof shall have any continuing force and effect with respect to such Designating Stockholder.
(e) Any party hereto may unilaterally waive any of its rights hereunder in a signed writing delivered to the Company.
6.4 Further Assurances. The parties hereto will sign such further documents, cause such meetings to be held, resolutions passed, exercise their votes and do and perform and cause to be done such further acts and things necessary, proper or advisable in order to give full effect to this Agreement and every provision hereof. To the fullest extent permitted by law, the Company shall not directly or indirectly take any action that is intended to, or would reasonably be expected to result in, any Designating Stockholder being deprived of the rights contemplated by this Agreement.
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6.5 Assignment. This Agreement may not be assigned without the express prior written consent of the other party hereto, and any attempted assignment, without such consent, will be null and void; provided, however, that, without the prior written consent of any other party hereto, a Designating Stockholder may assign or transfer, in its sole discretion, its rights and obligations under this Agreement, in whole or in part, to any transferee (“Permitted Transferee”) of Common Stock and/or Common Units, whereupon such Permitted Transferee shall become a party to this Agreement, so long as such Permitted Transferee, if not already a party to this Agreement, executes and delivers to the Company a joinder to this Agreement evidencing its agreement to become a party to and to be bound by certain or all, as applicable, of the provisions of this Agreement as a Designating Stockholder hereunder, whereupon such Permitted Transferee shall be deemed a “Designating Stockholder” hereunder. This Agreement will inure to the benefit of and be binding on the parties hereto and their respective successors and permitted assigns.
6.6 Third Parties. Except as provided for in Article II, Article III and Article IV with respect to any Designating Stockholder, Article V with respect to any Indemnitee or in Section 6.16 with respect to a Non-Recourse Party, this Agreement does not create any rights, claims or benefits inuring to any person that is not a party hereto nor create or establish any third party beneficiary hereto.
6.7 Governing Law. THIS AGREEMENT AND ITS ENFORCEMENT AND ANY CONTROVERSY ARISING OUT OF OR RELATING TO THE MAKING OR PERFORMANCE OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE.
6.8 Jurisdiction; Waiver of Jury Trial. Each party hereto hereby (i) agrees that any action, directly or indirectly, arising out of, under or relating to this Agreement shall exclusively be brought in and shall exclusively be heard and determined in the Delaware Chancery Court, if such court shall not have jurisdiction, any federal court located in the State of Delaware, or, if neither of such courts shall have jurisdiction, any other Delaware state court, and (ii) solely in connection with the action(s) contemplated by subsection (i) hereof, (A) irrevocably and unconditionally consents and submits to the exclusive jurisdiction of the courts identified in subsection (i) hereof, (B) irrevocably and unconditionally waives any objection to the laying of venue in any of the courts identified in clause (i) of this Section 6.8, (C) irrevocably and unconditionally waives and agrees not to plead or claim that any of the courts identified in such clause (i) is an inconvenient forum or does not have personal jurisdiction over any party hereto, and (D) agrees that mailing of process or other papers in connection with any such action in the manner provided herein or in such other manner as may be permitted by applicable law shall be valid and sufficient service thereof. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any claim or action directly or indirectly arising out of, under or in connection with this Agreement or the services contemplated hereby.
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6.9 Specific Performance. Each party hereto acknowledges and agrees that in the event of any breach of this Agreement by any of them, the other parties hereto would be irreparably harmed and could not be made whole by monetary damages. Each party accordingly agrees to waive the defense in any action for specific performance that a remedy at law would be adequate and agrees that the parties, in addition to any other remedy to which they may be entitled at law or in equity, shall be entitled to specific performance of this Agreement without the posting of a bond.
6.10 Entire Agreement. This Agreement sets forth the entire understanding of the parties hereto with respect to the subject matter hereof. There are no agreements, representations, warranties, covenants or understandings with respect to the subject matter hereof or thereof. This Agreement supersedes all other prior agreements and understandings between the parties with respect to such subject matter.
6.11 Severability. If any provision of this Agreement, or the application of such provision to any Person or circumstance or in any jurisdiction, shall be held to be invalid or unenforceable to any extent, (i) the remainder of this Agreement shall not be affected thereby, and each other provision hereof shall be valid and enforceable to the fullest extent permitted by law, (ii) as to such Person or circumstance or in such jurisdiction such provision shall be reformed to be valid and enforceable to the fullest extent permitted by law, and (iii) the application of such provision to other Persons or circumstances or in other jurisdictions shall not be affected thereby.
6.12 Table of Contents, Headings and Captions. The table of contents, headings, subheadings and captions contained in this Agreement are included for convenience of reference only, and in no way define, limit or describe the scope of this Agreement or the intent of any provision hereof.
6.13 Grant of Consent. Any vote, consent or approval of, or designation by, or other action of, the Designating Stockholder Representative hereunder shall be effective if notice of such vote, consent, approval, designation or action is provided in accordance with Section 6.2 hereof by the Designating Stockholder Representative as of the latest date any such notice is so provided to the Company.
6.14 Counterparts. This Agreement and any amendment hereto may be executed in any number of counterparts (including counterparts transmitted electronically in portable document format (pdf), or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) with the same effect as if the signatures to each counterpart were upon a single instrument, all of which will be an original and together shall constitute a single instrument. The parties hereto irrevocably and unreservedly agree that this Agreement may be executed by way of electronic signatures and the parties agree that this Agreement, or any part thereof, shall not be challenged or denied any legal effect, validity and/or enforceability solely on the ground that it is in the form of an electronic record.
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6.15 Effectiveness. This Agreement shall become effective as of the date hereof, among the Company, Jersey Mike’s Holdings and the other parties hereto.
6.16 No Recourse. This Agreement may only be enforced against, and any claims or cause of action that may be based upon, arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement, the transactions contemplated hereby or the subject matter hereof may only be made against the parties hereto and no Person who is not a named party to this Agreement, including any past, present or future Affiliate, Portfolio Company, director, officer, employee, incorporator, member, manager, partner, stockholder, agent, attorney or representative of any named party hereto or any past, present or future Affiliate, Portfolio Company, director, officer, employee, incorporator, member, manager, partner, stockholder, agent, attorney or representative of any of the foregoing (each, a “Non-Recourse Party”) shall have any liability (whether in contract or in tort, in law or in equity, or otherwise based upon any theory that seeks to impose liability of an entity party against its owners or Affiliates) for any obligations or liabilities arising under, in connection with or related to this Agreement or for any claim based on, in respect of, or by reason of, this Agreement or the transactions contemplated hereby and each party hereby waives and releases all such liabilities against any such Non-Recourse Party. Without limiting the rights of any party against the other parties hereto, in no event shall any party or any of its Affiliates seek to enforce this Agreement against, make any claims for breach of this Agreement against, or seek to recover monetary damages from, any Non-Recourse Party. Each Non-Recourse Party is expressly intended as third-party beneficiaries of this Section 6.16. Notwithstanding the foregoing, nothing in this Section 6.16 shall limit any Person’s liability to the extent such Person has committed fraud.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written.
JERSEY MIKE’S SUBS INC. |
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By: |
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/s/ Scott G. McLester |
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Scott G. McLester |
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General Counsel |
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DESIGNATING STOCKHOLDERS |
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SUBMARINE BUYER LLC |
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By: |
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Submarine Buyer Holdco LLC, its sole member |
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By: |
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Boardwalk I Aggregator L.P, its managing member |
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By: |
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BCP 9 Holdings Manager L.L.C., its general partner |
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By: |
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/s/ Robert Brooks |
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Robert Brooks |
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Authorized Signatory |
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BOARDWALK II AGGREGATOR L.P. |
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By: |
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BCP 9 Holdings Manager L.L.C., its general partner |
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By: |
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/s/ Robert Brooks |
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Robert Brooks |
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Authorized Signatory |