UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 29, 2018

 

 

GREENSKY, Inc.

(Exact name of registrant as specified in its charter)

 

 

 

         
Delaware   001-38506   82-2135346

(State or other jurisdiction

of incorporation)

  (Commission File Number)   (I.R.S. Employer Identification No.)

 

5565 Glenridge Connector, Suite 700

Atlanta, Georgia

(Address of principal executive offices)

 

30342

(Zip Code)

Registrant’s telephone number, including area code: (678) 264-6105

N/A

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

   

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

 

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

 

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

 

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

 

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

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.

 

On May 23, 2018, GreenSky, Inc., a Delaware corporation (the “Company”), priced the initial public offering (“IPO”) of its Class A common stock, $0.01 par value per share, at an offering price of $23.00 per share, pursuant to the Company’s registration statement on Form S-1 (File No. 333-224505), as amended (the “Registration Statement”), and the Company’s registration statement on Form S-1 (File No. 333-225161). On May 23, 2018, in connection with the pricing of the IPO, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC, as representatives of the several underwriters listed on Schedule I thereto (the “Underwriters”), pursuant to which the Company agreed to offer and sell 38,000,000 shares of its Class A common stock to the Underwriters at the IPO price less underwriting discounts. The Underwriters were granted a 30-day option to purchase up to an additional 5,700,000 shares of Class A common stock. The Company made customary representations, warranties and covenants and agreed to indemnify the Underwriters against (or contribute to the payment of) certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”).

 

This description of the Underwriting Agreement is qualified in its entirety by reference to the full text of the Underwriting Agreement attached hereto as Exhibit 1.1, which is hereby incorporated by reference into this Item 1.01.

 

Any terms used, but not defined, herein shall have the meaning set forth in the Registration Statement.

 

Prior to execution of the Underwriting Agreement, the Company entered into the following agreements, forms of which previously were filed as exhibits to the Registration Statement:

· a Tax Receivable Agreement, dated May 23, 2018, by and among the Company, GreenSky Holdings, LLC, a Georgia limited liability company (“GS Holdings”), GreenSky, LLC, a Georgia limited liability company (“GSLLC”), and the TRA Parties, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference;
· an Exchange Agreement, dated May 23, 2018, by and among GS Holdings and the holders of Holdco Units of GS Holdings, a copy of which is filed as Exhibit 10.2 to this Current Report on Form 8-K and is incorporated herein by reference;
· a Second Amended and Restated Operating Agreement of GS Holdings, dated May 23, 2018, by and among GS Holdings and its members, a copy of which is filed as Exhibit 10.3 to this Current Report on Form 8-K and is incorporated herein by reference; and
· a Registration Rights Agreement, dated May 23, 2018, by and among the Company and the other signatories party thereto, a copy of which is filed as Exhibit 4.1 to this Current Report on Form 8-K and is incorporated herein by reference.

 

The terms of these agreements are substantially the same as the terms set forth in the forms of such agreements filed as exhibits to the Registration Statement and as described therein.

 

On May 21, 2018, GSLLC and Synovus Bank (“Synovus”) entered into the (i) Fifth Amendment to Loan Origination Agreement and (ii) Fourth Amendment to Servicing Agreement (the “Synovus Amendments”), pursuant to which GSLLC agreed to service certain additional groups of loans that were acquired by Synovus from another financial institution in February and May 2018. The foregoing is only a summary of the material terms of the Synovus Amendments and is qualified in its entirety by reference to the Synovus Amendments, which are filed as Exhibits 10.6 and 10.7 to this Current Report on Form 8-K and are incorporated herein by reference.

 

Item 3.02 Unregistered Sales of Equity Securities.

 

Prior to execution of the Underwriting Agreement, the Company effected certain reorganizational transactions (referred to as the “Reorganization Transactions”), as described in the Registration Statement.

 

In connection with the Reorganization Transactions, the Company issued an aggregate of 128,983,353 shares of Class B common stock, $0.001 par value per share, to the Continuing LLC Members, for consideration in the amount of $0.001 per share. The aggregate consideration received by the Company for the Class B common stock was $128,983. The Class B common stock initially entitles holders to ten votes per share and will vote as a single class with the Class A common stock, but the Class B common stock does not have any economic rights. The description in Item 5.03 below of the Certificate of Incorporation is incorporated herein by reference. The issuance of those shares of Class B common stock was made in reliance on Section 4(a)(2) of the Securities Act.

 

 

 

Additionally, in connection with the Reorganization Transactions, (i) Holdco Units received by some of the smaller Original Profits Interests Holders were contributed to the Company in exchange for 383,231 shares of Class A common stock; and (ii) equity holders of the Former Corporate Investors contributed their equity in the Former Corporate Investors to the Company in exchange for 15,433,036 shares of Class A common stock and the right to certain payments under the Tax Receivable Agreement, and Former Corporate Investors merged with and into subsidiaries of the Company. The issuances of those shares of Class A common stock were made in reliance on Section 3(a)(9) or Section 4(a)(2) of the Securities Act or other exemptions from registration.

 

In connection with the Reorganization Transactions, the Company also issued 125,398 shares of Class A common stock to certain option holders of GS Holdings upon exercise of options pursuant to Rule 701 or Section 4(a)(2) of the Securities Act. Those options were exercised on a cashless basis at a weighted average exercise price of $7.01 per share.

 

The Company has agreed to issue 434,783 shares of Class A common stock to FTP Securities LLC, with a value of $23.00 per share, as compensation for financial advisory services rendered in connection with the IPO, pursuant to Section 4(a)(2) of the Securities Act or another exemption from registration.

 

Item 3.03 Material Modifications to Rights of Security Holders.

 

The description in Item 5.03 below of the Certificate of Incorporation and Bylaws is incorporated herein by reference.

 

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

 

On or about May 29, 2018, the Company entered into indemnification agreements with each of its directors and executive officers in connection with the closing of the IPO. Those agreements require the Company to indemnify those individuals to the fullest extent permitted under Delaware law against liabilities that may arise by reason of their service to the Company, and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified.

 

Those indemnification rights are not exclusive of any other right which an indemnified person may have or hereafter acquire under any statute, provision of the Certificate of Incorporation, the Bylaws, agreement, vote of stockholders or disinterested directors or otherwise.

 

The foregoing is only a summary of the material terms of the indemnification agreements and is qualified in its entirety by reference to the form of indemnification agreement, which is filed as Exhibit 10.4 to this Current Report on Form 8-K and is incorporated herein by reference.

 

On May 23, 2018, the Company adopted the GreenSky, Inc. 2018 Omnibus Incentive Compensation Plan (the “Plan”). The Plan is filed herewith as Exhibit 10.5 and is incorporated herein by reference. The description and form of the Plan is substantially the same as the description and the form set forth in and filed as an exhibit to the Registration Statement.

 

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

 

On May 22, 2018, the Company’s amended and restated certificate of incorporation (the “Certificate of Incorporation”), substantially in the form previously filed as Exhibit 3.1 to the Registration Statement, became effective. On May 23, 2018, the Company’s amended and restated bylaws, substantially in the form previously filed as Exhibit 3.2 to the Registration Statement, became effective. The Certificate of Incorporation and the Bylaws are filed herewith as Exhibits 3.1 and 3.2, respectively, and are incorporated herein by reference. The descriptions and forms of the Certificate of Incorporation and Bylaws are substantially the same as the descriptions and forms set forth in and filed as exhibits to the Registration Statement.

 

Item 8.01 Other Events.

 

On May 29, 2018, the Company closed its IPO of 43,700,000 shares of its Class A common stock at a price to the public of $23.00 per share, which includes the exercise in full of the Underwriters’ option to purchase an additional 5,700,000 shares of its Class A common stock, for a total of approximately $1.01 billion in aggregate gross proceeds, pursuant to the Registration Statement.

 

On the same day, the Company issued a press release announcing the closing of the IPO. A copy of the press release is filed as Exhibit 99.1 hereto and is incorporated herein by reference.

 

 

 

 

Item 9.01 Financial Statements and Exhibits.

 

d) Exhibits

 

The following exhibits are filed herewith:

 

Exhibit
No.

 

Description

1.1*   Underwriting Agreement, dated May 23, 2018
3.1*   Certificate of Incorporation, dated May 22, 2018
3.2*   Bylaws, dated May 23, 2018
4.1*   Registration Rights Agreement, dated May 23, 2018
10.1*   Tax Receivable Agreement, dated May 23, 2018
10.2*   Exchange Agreement, dated May 23, 2018
10.3*   Operating Agreement of GS Holdings, dated May 23, 2018
10.4   Form of Indemnification Agreement with each of GreenSky, Inc.’s directors and executive officers (incorporated by reference to Exhibit 10.7 to the Company’s Registration Statement on Form S-1 filed with the SEC on April 27, 2018)
10.5   Form of GreenSky, Inc. 2018 Omnibus Incentive Compensation Plan (incorporated by reference to Exhibit 10.22 to the Company’s Amendment No. 2 to Registration Statement on Form S-1 filed with the SEC on May 14, 2018)
10.6*^   Fifth Amendment to Loan Origination Agreement, dated May 21, 2018, with Synovus Bank
10.7*^   Fourth Amendment to Servicing Agreement, dated May 21, 2018, with Synovus Bank
99.1*   Press release dated May 29, 2018

____________

 

* Filed herewith.
^ Confidential treatment requested as to certain portions of this exhibit, which portions have been omitted and filed separately with the SEC.

 


 

 

SIGNATURES

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

 

 

 

 

  GREENSKY, INC.
   
Date: May 29, 2018 By: /s/ Steven Fox
  Name: Steven Fox
  Title: Executive Vice President and Chief Legal Officer

 

 

Exhibit 1.1

 

EXECUTION VERSION

 

GreenSky, Inc.

 

Class A Common Stock

 

Underwriting Agreement

 

May 23, 2018

 

Goldman Sachs & Co. LLC
J.P. Morgan Securities LLC

Morgan Stanley & Co. LLC

 

As representatives (the “Representatives”) of the several Underwriters named in Schedule I hereto,

 

c/o Goldman Sachs & Co. LLC
200 West Street
New York, New York 10282-2198

 

c/o J.P. Morgan Securities LLC
383 Madison Avenue
New York, New York 10179-0001

 

c/o Morgan Stanley & Co. LLC

1585 Broadway

New York, New York 10036-8293

 

Ladies and Gentlemen:

 

GreenSky, Inc., a Delaware corporation (the “ Company ”), proposes, subject to the terms and conditions stated in this agreement (this “Agreement”), to issue and sell to the Underwriters named in Schedule I hereto (the “ Underwriters ”) an aggregate of 38,000,000 shares (the “ Firm Shares ”) and, at the election of the Underwriters, up to 5,700,000 additional shares (the “ Optional Shares ”) of Class A common stock (“ Stock ”) of the Company (the Firm Shares and the Optional Shares that the Underwriters elect to purchase pursuant to Section 2 hereof being collectively called the “ Shares ”).

 

1.  The Company represents and warrants to, and agrees with, each of the Underwriters that:

 

(a)  A registration statement on Form S-1 (File No. 333-224505) (the “ Initial Registration Statement ”) in respect of the Shares has been filed with the Securities and Exchange

 

Commission (the “ Commission ”); the Initial Registration Statement, as amended by any pre-effective amendments, and any post-effective amendment thereto, each in the form heretofore delivered to you, have been declared effective by the Commission in such form; other than a registration statement, if any, increasing the size of the offering (a “ Rule 462(b) Registration Statement ”), filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended (the “ Act ”), which became effective upon filing, no other document with respect to the Initial Registration Statement has been filed with the Commission; and no stop order suspending the effectiveness of the Initial Registration Statement, any post-effective amendment thereto or the Rule 462(b) Registration Statement, if any, has been issued and no proceeding for that purpose has been initiated or threatened by the Commission (any preliminary prospectus included in the Initial Registration Statement or filed with the Commission pursuant to Rule 424(a) of the rules and regulations of the Commission under the Act is hereinafter called a “ Preliminary Prospectus; ” the various parts of the Initial Registration Statement and the Rule 462(b) Registration Statement, if any, including all exhibits thereto and including the information contained in the form of final prospectus filed with the Commission pursuant to Rule 424(b) under the Act in accordance with Section 5(a) hereof and deemed by virtue of Rule 430A under the Act to be part of the Initial Registration Statement at the time it was declared effective, each as amended at the time such part of the Initial Registration Statement became effective or such part of the Rule 462(b) Registration Statement, if any, became or hereafter becomes effective, are hereinafter collectively called the “ Registration Statement; ” the Preliminary Prospectus relating to the Shares that was included in the Registration Statement immediately prior to the Applicable Time (as defined in Section 1(c) hereof) is hereinafter called the “ Pricing Prospectus; ” and such final prospectus, in the form first filed pursuant to Rule 424(b) under the Act, is hereinafter called the “ Prospectus; ” any oral or written communication with potential investors undertaken in reliance on Section 5(d) of the Act is hereinafter called a “Section 5(d) Communication”; and any Section 5(d) Communication that is a written communication within the meaning of Rule 405 under the Act is hereinafter called a “Section 5(d) Writing;” and any “issuer free writing prospectus” as defined in Rule 433 under the Act relating to the Shares is hereinafter called an “ Issuer Free Writing Prospectus ”);

 

(b)  (A) No order preventing or suspending the use of any Preliminary Prospectus or any Issuer Free Writing Prospectus has been issued by the Commission, and (B) each Preliminary Prospectus, at the time of filing thereof, conformed in all material respects to the requirements of the Act and the rules and regulations of the Commission thereunder, and did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided , however , that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with the Underwriter Information (as defined in Section 9(b) of this Agreement);

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(c) For the purposes of this Agreement, the “ Applicable Time ” is 8:00 p.m. (Eastern time) on the date of this Agreement. The Pricing Prospectus, as supplemented by the information listed on Schedule II(c) hereto, taken together (collectively, the “Pricing Disclosure Package”), as of the Applicable Time, did not, and as of each Time of Delivery (as defined in Section 4(a) of this Agreement) will not, include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and each Issuer Free Writing Prospectus and each Section 5(d) Writing does not conflict with the information contained in the Registration Statement, the Pricing Prospectus or the Prospectus, and each Issuer Free Writing Prospectus and each Section 5(d) Writing, as supplemented by and taken together with the Pricing Disclosure Package as of the Applicable Time, did not, and as of each Time of Delivery will not, include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to statements or omissions made in reliance upon and in conformity with the Underwriter Information;

 

(d) The Registration Statement conforms, and the Prospectus and any further amendments or supplements to the Registration Statement and the Prospectus will conform, in all material respects, to the requirements of the Act and the rules and regulations of the Commission thereunder and do not and will not, as of the applicable effective date as to each part of the Registration Statement, as of the applicable filing date as to the Prospectus and any amendment or supplement thereto, and as of each Time of Delivery, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided , however , that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with the Underwriter Information;

 

(e) Neither the Company nor any of its subsidiaries has, since the date of the latest audited financial statements included in the Pricing Prospectus, (i) sustained any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree or (ii) entered into any transaction or agreement (whether or not in the ordinary course of business) that is material to the Company and its subsidiaries taken as a whole or incurred any liability or obligation, direct or contingent, that is material to the Company and its subsidiaries taken as a whole, in each case, otherwise than as set forth or contemplated in the Pricing Prospectus; and, since the respective dates as of which information is given in the Registration Statement and the Pricing Prospectus, there has not been (x) any change in the capital stock (other than as a result of (i) the exercise, if any, of equity awards or the grant, if any, of equity awards in the ordinary course of business pursuant to the Company’s equity plans that are

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described in the Pricing Prospectus and the Prospectus, (ii) the issuance, if any, of units upon exercise of Company securities as described in the Pricing Prospectus and the Prospectus or (iii) the issuance of Stock and units pursuant to the “Reorganization Transactions” as defined in the Pricing Prospectus) or long-term debt of the Company or any of its subsidiaries or (y) any Material Adverse Effect (as defined below); as used in this Agreement, “Material Adverse Effect” shall mean any material adverse change or effect, or any development involving a prospective material adverse change or effect, in or affecting (i) the business, properties, general affairs, management, financial position, stockholders’ or members’ equity or results of operations of the Company and its subsidiaries, taken as a whole, except as set forth or contemplated in the Pricing Prospectus, or (ii) the ability of the Company to perform its obligations under this Agreement, including the issuance and sale of the Shares, or to consummate the transactions contemplated in the Pricing Prospectus and the Prospectus;

 

(f) The Company and its subsidiaries have good and marketable title in fee simple to all real property and good and marketable title to all personal property owned by them, in each case free and clear of all liens, encumbrances and defects except such as are described in the Pricing Prospectus or such as do not materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company and its subsidiaries; and any real property and buildings held under lease by the Company and its subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as are not material and do not materially interfere with the use made and proposed to be made of such property and buildings by the Company and its subsidiaries;

 

(g) Each of the Company and each of its subsidiaries has been (i) duly organized and is validly existing and in good standing under the laws of its jurisdiction of organization, with power and authority (corporate and other) to own its properties and conduct its business as described in the Pricing Prospectus, and (ii) duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties or conducts any business so as to require such qualification, except, in the case of this clause (ii), where the failure to be so qualified or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, and each subsidiary of the Company required to be listed in the Registration Statement has been listed in the Registration Statement;

 

(h) The Company has an authorized capitalization as set forth in the Pricing Prospectus and all of the issued shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable and conform to the description of the Stock and the Class B common stock (the “Class B Common Stock”) of the Company contained in the Pricing Disclosure Package and Prospectus; and all of the issued shares of capital stock or equity interests of each subsidiary of the Company have been duly and validly authorized and issued, are fully paid and non-assessable and except as described in the

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Pricing Prospectus and the Prospectus, are owned directly or indirectly by the Company, free and clear of all liens, encumbrances, equities or claims;

 

(i) The Company has full right, power and authority to execute and deliver this Agreement and the Transaction Agreements (as defined below) and to perform its obligations hereunder and thereunder; and all action required to be taken for the due and proper authorization, execution and delivery by it of this Agreement and each of the Transaction Agreements and the consummation by it of the transactions contemplated hereby and thereby has been duly and validly taken. As used herein, “Transaction Agreements” means the amended and restated operating agreement (the “GS Holdings LLC Agreement”) of GreenSky Holdings, LLC (“GS Holdings”), the tax receivable agreement (the “Tax Receivable Agreement”) among the Company, GS Holdings and the other parties thereto, the exchange agreement (the “Exchange Agreement”) among the Company, GS Holdings and the other parties thereto (the Company, together with GS Holdings and GSLLC, the “ GS Parties ”), the registration rights agreement between the Company and the parties thereto, the merger agreement between the Company and the parties thereto (the “Merger Agreement”) and the reorganization agreement between the Company and the parties thereto (the “Reorganization Agreement”), each substantially in the form filed as an exhibit to the Registration Statement;

 

(j) This Agreement has been duly authorized, executed and delivered by the Company;

 

(k) Each of the GS Holdings LLC Agreement, Tax Receivable Agreement, the Exchange Agreement, the Merger Agreement and the Reorganization Agreement has been duly authorized by the Company and, when duly executed and delivered in accordance with its terms by each of the parties thereto, will constitute a valid and legally binding agreement of the Company enforceable against the Company in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting creditors’ rights generally or by equitable principles relating to enforceability;

 

(l) The Shares have been duly and validly authorized and, when issued and delivered against payment therefor as provided herein, will be duly and validly issued and fully paid and non-assessable and will conform to the description of the Stock contained in the Pricing Disclosure Package and the Prospectus, and the issuance of the Shares is not subject to any preemptive or similar rights;

 

(m) The Class B Common Stock has been duly and validly authorized and, when issued and delivered as contemplated by the Certificate of Incorporation and By-laws of the Company, will be duly and validly issued and fully paid and non-assessable and will conform to the description of the Class B Common Stock contained in the Pricing Disclosure Package and the Prospectus;

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(n) The issue and sale of the Shares, the use of proceeds therefrom, the issue of the Class B Common Stock and the compliance by the Company with this Agreement and the consummation of the transactions contemplated in this Agreement and the Pricing Prospectus will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, (A) any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject, except, in the case of this clause (A) for such defaults, breaches, or violations that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (B) the certificate of incorporation or by-laws (or other applicable organizational document) of the Company or any of its subsidiaries, or (C) any statute or any judgment, order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of its subsidiaries or any of their properties except, in the case of this clause (C), for such violations that would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect; and no consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the issue and sale of the Shares, the issue of the Class B Common Stock or the consummation by the Company of the transactions contemplated by this Agreement, except such as have been obtained under the Act, the approval by the Financial Industry Regulatory Authority (“FINRA”) of the underwriting terms and arrangements and such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or Blue Sky laws in connection with the purchase and distribution of the Shares by the Underwriters;

 

(o) Neither the Company nor any of its subsidiaries is (i) in violation of its certificate of incorporation or by-laws (or other applicable organizational document), (ii) in violation of any statute or any judgment, order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of its subsidiaries or any of their properties, or (iii) in default in the performance or observance of any obligation, agreement, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which it is a party or by which it or any of its properties may be bound, except, in the case of the foregoing clauses (ii) and (iii), for such defaults as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect;

 

(p) The statements set forth in the Pricing Prospectus and Prospectus under the caption “Description of Capital Stock,” insofar as they purport to constitute a summary of the terms of the Stock, under the captions “United States Federal Income Tax Considerations for Non-U.S. Holders,” “Organizational Structure,” “Certain Relationships and Related Party Transactions” and “Underwriting,” insofar as they purport to describe the provisions of the laws and documents referred to therein, are accurate, complete and fair in all material respects;

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(q) Other than as set forth in the Pricing Prospectus, there are no legal or governmental proceedings pending to which the Company or any of its subsidiaries is a party or of which any property of the Company or any of its subsidiaries is the subject which, if determined adversely to the Company or any of its subsidiaries (or such officer or director), would individually or in the aggregate reasonably be expected to have a Material Adverse Effect; and to the Company’s knowledge, no such proceedings are threatened or contemplated by governmental authorities or others;

 

(r) The Company is not and, after giving effect to the offering and sale of the Shares and the application of the proceeds thereof, will not be an “investment company,” as such term is defined in the Investment Company Act of 1940, as amended (the “ Investment Company Act ”);

 

(s) At the time of filing the Initial Registration Statement and any post-effective amendment thereto, at the earliest time thereafter that the Company or any offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) under the Act) of the Shares, and at the date hereof, the Company was not and is not an “ineligible issuer,” as defined under Rule 405 under the Act;

 

(t) PricewaterhouseCoopers LLP, who have certified certain financial statements of the Company and its subsidiaries, are independent public accountants as required by the Act and the rules and regulations of the Commission thereunder;

 

(u) The Company maintains a system of internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that (i) complies with the requirements of the Exchange Act, (ii) has been designed by the Company’s principal executive officer and principal financial officer, or under their supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and (iii) is sufficient to provide reasonable assurance that (A) transactions are executed in accordance with management’s general or specific authorization, (B) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain accountability for assets, (C) access to assets is permitted only in accordance with management’s general or specific authorization and (D) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences; and the Company’s internal control over financial reporting is effective and the Company is not aware of any material weaknesses in its internal control over financial reporting;

 

(v) Except as disclosed in the Pricing Prospectus, since the date of the latest audited financial statements included in the Pricing Prospectus, there has been no change in the

7

Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting;

 

(w) The Company maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act) that comply with the requirements of the Exchange Act; such disclosure controls and procedures have been designed to ensure that material information relating to the Company and its subsidiaries is made known to the Company’s principal executive officer and principal financial officer by others within those entities; and such disclosure controls and procedures are effective;

 

(x) None of the Company or any of its subsidiaries nor, to the knowledge of the Company, any director, officer, agent, employee, affiliate or other person associated with or acting on behalf of the Company or any of its subsidiaries has (i) made, offered, promised or authorized any unlawful contribution, gift, entertainment or other unlawful expense; (ii) made, offered, promised or authorized any direct or indirect unlawful payment; or (iii) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977, the Bribery Act 2010 of the United Kingdom or any other applicable anti-bribery or anti-corruption law;

 

(y) The operations of the Company and its subsidiaries are and have been conducted at all times in compliance with the requirements of applicable anti-money laundering laws, including, but not limited to, the Bank Secrecy Act of 1970, as amended by the USA PATRIOT ACT of 2001, and the rules and regulations promulgated thereunder, and the anti-money laundering laws of the various jurisdictions in which the Company and its subsidiaries conduct business (collectively, the “ Money Laundering Laws ”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened;

 

(z) None of the Company or any of its subsidiaries nor, to the knowledge of the Company, any director, officer, agent, employee or affiliate of the Company or any of its subsidiaries is currently the subject or the target of any sanctions administered or enforced by the U.S. Government, including, without limitation, the Office of Foreign Assets Control of the U.S. Department of the Treasury (“ OFAC ”), or the U.S. Department of State and including, without limitation, the designation as a “specially designated national” or “blocked person,” the European Union, Her Majesty’s Treasury, the United Nations Security Council, or other relevant sanctions authority (collectively, “ Sanctions ”), and the Company will not directly or indirectly use the proceeds of the offering of the Shares hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity (i) to fund or facilitate any activities of or business with any person, or in any country or territory, that, at the time of such funding, is the subject or the target of Sanctions or (ii) in any other manner

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that will result in a violation by any person (including any person participating in the transaction, whether as underwriter, advisor, investor or otherwise) of Sanctions;

 

(aa)  The financial statements included in the Registration Statement, the Pricing Prospectus and the Prospectus, together with the related schedules and notes, present fairly the financial position of the Company and its subsidiaries at the dates indicated and the statement of operations, stockholders’ or members’ equity and cash flows of the Company and its subsidiaries for the periods specified; said financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) applied on a consistent basis throughout the periods involved. The supporting schedules, if any, present fairly in accordance with GAAP the information required to be stated therein. The selected financial data, the pro forma financial data and the summary financial information included in the Registration Statement, the Pricing Prospectus and the Prospectus present fairly the information shown therein and have been compiled on a basis consistent with that of the audited financial statements included therein. Except as included therein, no historical or pro forma financial statements or supporting schedules are required to be included in the Registration Statement, the Pricing Prospectus or the Prospectus under the Act or the rules and regulations promulgated thereunder. All disclosures contained in the Registration Statement, the Pricing Prospectus and the Prospectus regarding “non-GAAP financial measures” (as such term is defined by the rules and regulations of the Commission) comply in all material respects with Regulation G of the Exchange Act and Item 10 of Regulation S-K of the Act, to the extent applicable;

 

(bb)  From the time of initial confidential submission of a registration statement relating to the Shares with the Commission (or, if earlier, the first date on which a Section 5(d) Communication was made) through the date hereof, the Company has been and is an “emerging growth company” as defined in Section 2(a)(19) of the Act (an “Emerging Growth Company”);

 

(cc) The Company and its subsidiaries have filed all federal, state, local and non-U.S. tax returns with the appropriate tax authorities that are required to be filed by them or have requested extensions thereof (except in any case in which the failure so to file would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect); and, except as disclosed in the Pricing Prospectus and Prospectus, the Company and its subsidiaries have paid all taxes (including any assessments, fines or penalties) required to be paid by them, except for any such taxes, assessments, fines or penalties currently being contested in good faith and for which appropriate reserves have been established under generally accepted accounting principles, or as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. There is no pending dispute with, nor any audit currently being conducted by, any tax authority relating to any tax returns that are required to be filed by the Company and its subsidiaries; and there is no tax deficiency that has been, or could reasonably be expected to be, asserted against the Company nor any of its respective subsidiaries, properties or assets, except where such tax deficiency would not, individually or in the aggregate,

9

reasonably be expected to have a Material Adverse Effect. Except as disclosed in the Pricing Prospectus and the Prospectus, neither the Company nor any of its subsidiaries is nor at any time has been a party to or bound by any tax sharing agreement, tax indemnity obligation or similar agreement, arrangement or practice with respect to taxes. GS Holdings is treated as a partnership for U.S. federal income tax purposes and GSLLC is treated as an entity disregarded as separate from GS Holdings for U.S. federal income tax purposes;

 

(dd) The Company and its subsidiaries own or possess adequate rights to use all material patents, patent applications, trademarks, service marks, trade names, trademark registrations, service mark registrations, copyrights, licenses and know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures) necessary for the conduct of their respective businesses as currently conducted and as proposed to be conducted, and the conduct of their respective businesses will not conflict in any material respect with any such rights of others. The Company and its subsidiaries have not received any notice of any claim of infringement, misappropriation or conflict with any such rights of others in connection with its patents, patent rights, licenses, inventions, trademarks, service marks, trade names, copyrights and know-how, which could reasonably be expected to result in a Material Adverse Effect; and

 

(ee) The Company and its subsidiaries possess all licenses, certificates, permits and other authorizations issued by, and have made all declarations and filings with, the appropriate federal, state, local or foreign governmental or regulatory authorities that are necessary for the conduct of their respective businesses as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, except where the failure to possess or make the same would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; and except as described in the Pricing Prospectus and the Prospectus, neither the Company nor any of its subsidiaries has received notice of any revocation or modification of any such license, certificate, permit or authorization or has any reason to believe that any such license, certificate, permit or authorization will not be renewed in the ordinary course.

 

2.  Subject to the terms and conditions herein set forth, (a) the Company agrees to issue and sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Company, at a purchase price per share of $21.85, the number of Firm Shares set forth opposite the name of such Underwriter in Schedule I hereto and (b) in the event and to the extent that the Underwriters shall exercise the election to purchase Optional Shares as provided below, the Company agrees to issue and sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Company, at the purchase price per share set forth in clause (a) of this Section 2 (provided that the purchase price per Optional Share shall be reduced by an amount per share equal to any dividends or distributions declared by the Company and payable on the Firm Shares but not payable on the Optional Shares), that portion of the number of Optional Shares as to which such election shall

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have been exercised (to be adjusted by you so as to eliminate fractional shares) determined by multiplying such number of Optional Shares by a fraction, the numerator of which is the maximum number of Optional Shares which such Underwriter is entitled to purchase as set forth opposite the name of such Underwriter in Schedule I hereto and the denominator of which is the maximum number of Optional Shares that all of the Underwriters are entitled to purchase hereunder.

 

The Company hereby grants to the Underwriters the right to purchase at their election up to 5,700,000 Optional Shares, at the purchase price per share set forth in the paragraph above, for the sole purpose of covering sales of shares in excess of the number of Firm Shares, provided that the purchase price per Optional Share shall be reduced by an amount per share equal to any dividends or distributions declared by the Company and payable on the Firm Shares but not payable on the Optional Shares. Any such election to purchase Optional Shares may be exercised only by written notice from the Representatives to the Company, given within a period of 30 calendar days after the date of this Agreement, setting forth the aggregate number of Optional Shares to be purchased and the date on which such Optional Shares are to be delivered, as determined by you but in no event earlier than the First Time of Delivery (as defined in Section 4 hereof) or, unless you and the Company otherwise agree in writing, earlier than two or later than ten business days after the date of such notice.

 

3.  Upon the authorization by you of the release of the Firm Shares, the several Underwriters propose to offer the Firm Shares for sale upon the terms and conditions set forth in the Pricing Prospectus and the Prospectus.

 

4.  (a) The Shares to be purchased by each Underwriter hereunder, in book-entry form, and in such authorized denominations and registered in such names as the Representatives may request upon at least forty-eight hours’ prior notice to the Company shall be delivered by or on behalf of the Company to the Representatives, through the facilities of the Depository Trust Company (“ DTC ”), for the account of such Underwriter, against payment by or on behalf of such Underwriter of the purchase price therefor by wire transfer of Federal (same-day) funds to the account specified by the Company to the Representatives at least forty-eight hours in advance. The time and date of such delivery and payment shall be, with respect to the Firm Shares, 9:30 a.m., New York City time, on May 29, 2018 or such other time and date as the Representatives and the Company may agree upon in writing, and, with respect to the Optional Shares, 9:30 a.m., New York time, on the date specified by the Representatives in the written notice given by the Representatives of the Underwriters’ election to purchase such Optional Shares, or such other time and date as the Representatives and the Company may agree upon in writing. Such time and date for delivery of the Firm Shares is herein called the “ First Time of Delivery, ” such time and date for delivery of the Optional Shares, if not the First Time of Delivery, is herein called the “ Second Time of Delivery, ” and each such time and date for delivery is herein called a “ Time of Delivery.

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(b) The documents to be delivered at each Time of Delivery by or on behalf of the parties hereto pursuant to Section 8 hereof, including the cross receipt for the Shares and any additional documents requested by the Underwriters pursuant to Section 8(k) hereof, will be delivered at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, Four Times Square, New York, New York 10014 (the “ Closing Location ”), and the Shares will be delivered at the Designated Office, all at such Time of Delivery. A meeting will be held at the Closing Location at 10:00 a.m., New York City time, on the New York Business Day next preceding such Time of Delivery, at which meeting the final drafts of the documents to be delivered pursuant to the preceding sentence will be available for review by the parties hereto. For the purposes of this Section 4, “ New York Business Day ” shall mean each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which banking institutions in New York City are generally authorized or obligated by law or executive order to close.

 

5.  The Company agrees with each of the Underwriters:

 

(a) To prepare the Prospectus in a form approved by you and to file such Prospectus pursuant to Rule 424(b) under the Act not later than the Commission’s close of business on the second business day following the execution and delivery of this Agreement, or, if applicable, such earlier time as may be required by Rule 430A(a)(3) under the Act; to make no further amendment or any supplement to the Registration Statement or the Prospectus prior to the last Time of Delivery that shall be disapproved by you promptly after reasonable notice thereof; to advise you, promptly after it receives notice thereof, of the time when any amendment to the Registration Statement has been filed or becomes effective or any amendment or supplement to the Prospectus has been filed and to furnish you with copies thereof; to file promptly all material required to be filed by the Company with the Commission pursuant to Rule 433(d) under the Act; to advise you, promptly after it receives notice thereof, of the issuance by the Commission of any stop order or of any order preventing or suspending the use of any Preliminary Prospectus or other prospectus in respect of the Shares, of the suspension of the qualification of the Shares for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding for any such purpose, or of any request by the Commission for the amending or supplementing of the Registration Statement or the Prospectus or for additional information; and, in the event of the issuance of any stop order or of any order preventing or suspending the use of any Preliminary Prospectus or other prospectus or suspending any such qualification, to promptly make every reasonable effort to obtain the withdrawal of such order;

 

(b) Promptly from time to time to take such action as you may reasonably request to qualify the Shares for offering and sale under the securities laws of such jurisdictions as you may request and to comply with such laws so as to permit the continuance of sales and dealings therein in such jurisdictions for as long as may be necessary to complete the distribution of the Shares, provided that in connection therewith the Company shall not be required to qualify as a foreign corporation or to file a general consent to service of process in any jurisdiction;

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(c) Prior to 10:00 a.m., New York City time, on the New York Business Day next succeeding the date of this Agreement and from time to time, to furnish the Underwriters with written and electronic copies of the Prospectus in New York City in such quantities as you may reasonably request, and, if the delivery of a prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the Act) is required at any time prior to the expiration of nine months after the time of issue of the Prospectus in connection with the offering or sale of the Shares and if at such time any event shall have occurred as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such Prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the Act) is delivered, not misleading, or, if for any other reason it shall be necessary during such same period to amend or supplement the Prospectus in order to comply with the Act, to notify you and upon your request to prepare and furnish without charge to each Underwriter and to any dealer in securities as many written and electronic copies as you may from time to time reasonably request of an amended Prospectus or a supplement to the Prospectus that will correct such statement or omission or effect such compliance; and in case any Underwriter is required to deliver a prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the Act) in connection with sales of any of the Shares at any time nine months or more after the time of issue of the Prospectus, upon your request but at the expense of such Underwriter, to prepare and deliver to such Underwriter as many written and electronic copies as you may request of an amended or supplemented Prospectus complying with Section 10(a)(3) of the Act;

 

(d) To make generally available to its securityholders as soon as practicable, but in any event not later than sixteen months after the effective date of the Registration Statement (as defined in Rule 158(c) under the Act), an earning statement (which need not be audited) complying with Section 11(a) of the Act and the rules and regulations of the Commission thereunder (including, at the option of the Company, Rule 158);

 

(e) (1) During the period beginning from the date hereof and continuing to and including the date 180 days after the date of the Prospectus (the “ Lock-Up Period ”), not to (i) offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale or otherwise transfer or dispose of, directly or indirectly, or file with or confidentially submit to the Commission a registration statement under the Act relating to, any securities of the Company that are substantially similar to the Shares, including but not limited to any options or warrants to purchase shares of Stock or any securities that are convertible into or exchangeable for, or that represent the right to receive, Stock or any such substantially similar securities (including shares of Class B Common Stock), or publicly disclose the intention to make any offer, sale, pledge, disposition or filing, (ii) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Stock or any such other securities, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of

13

Stock or such other securities, in cash or otherwise, without the prior written consent of the Representatives or (iii) permit any exchange of units of GS Holdings for Stock, unless the holder has executed a lock-up letter and the exchange complies with the terms of such lock-up letter; provided, however, that the restrictions in the foregoing sentence shall not apply to (A) the Shares to be sold hereunder, (B) the filing of a registration statement on Form S-8 relating to the issuance of any securities of the Company pursuant to the terms of an equity plan described in the Pricing Prospectus, (C) awards issued or to be issued pursuant to employee equity plans described in the Pricing Prospectus, and (D) stock and units issued pursuant to the “Reorganization Transactions” as defined in the Pricing Prospectus; and provided, further, that in the case of clauses (B) and (C), (aa) each recipient of such securities shall execute and deliver to the Representatives, on or prior to the issuance of such securities, a lock-up letter described in Section 8(i) hereof and (bb) the Company shall enter stop transfer instructions with the Company’s transfer agent and registrar on such securities, which the Company agrees it will not waive or amend without the prior written consent of the Representatives;

 

(e) (2) If the Representatives agree to release or waive the restrictions set forth in a lock-up letter described in Section 8(i) hereof for an officer or director of the Company and provides the Company with notice of the impending release or waiver at least three business days before the effective date of the release or waiver, the Company agrees to announce the impending release or waiver by a press release substantially in the form of Annex III hereto through a major news service at least two business days before the effective date of the release or waiver.

 

(f) To furnish (including through electronic means, including filing with the Commission) to its stockholders as soon as practicable after the end of each fiscal year an annual report (including a balance sheet and statements of income, stockholders’ equity and cash flows of the Company and its consolidated subsidiaries certified by independent public accountants) and, as soon as practicable after the end of each of the first three quarters of each fiscal year (beginning with the fiscal quarter ending after the effective date of the Registration Statement), to make available (including through electronic means, including filing with the Commission) to its stockholders consolidated summary financial information of the Company and its subsidiaries for such quarter in reasonable detail;

 

(g) During a period of three years from the effective date of the Registration Statement, to furnish to you copies of all reports or other communications (financial or other) furnished to stockholders, and to deliver to you (i) as soon as they are available, copies of any reports and financial statements furnished to or filed with the Commission or any national securities exchange on which any class of securities of the Company is listed; and (ii) such additional information concerning the business and financial condition of the Company as you may from time to time reasonably request (such financial statements to be on a consolidated basis to the extent the accounts of the Company and its subsidiaries are consolidated in reports

14

furnished to its stockholders generally or to the Commission); provided  that no documents or other information need to be furnished pursuant to this Section 5(g) to the extent they are available on the Commission’s Electronic Data Gathering, Analysis and Retrieval System or the investors section of the Company’s website;  provided further  that no additional information shall be required if the disclosure of such additional information would result in a violation of Regulation FD;

 

(h) To use the net proceeds received by it from the sale of the Shares pursuant to this Agreement in the manner specified in the Pricing Prospectus under the caption “Use of Proceeds”;

 

(i) To use its best efforts to list for quotation the Shares on The Nasdaq Stock Market LLC (“ NASDAQ ”);

 

(j) To file with the Commission such information on Form 10-Q or Form 10-K as may be required by Rule 463 under the Act;

 

(k) If the Company elects to rely upon Rule 462(b), the Company shall file a Rule 462(b) Registration Statement with the Commission in compliance with Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the date of this Agreement, and the Company shall at the time of filing either pay to the Commission the filing fee for the Rule 462(b) Registration Statement or give irrevocable instructions for the payment of such fee pursuant to Rule 111(b) under the Act;

 

(l) Upon request of any Underwriter, to furnish, or cause to be furnished, to such Underwriter an electronic version of the Company’s trademarks, servicemarks and corporate logo for use on the website, if any, operated by such Underwriter for the purpose of facilitating the on-line offering of the Shares (the “ License ”); provided, however , that the License shall be used solely for the purpose described above, is granted without any fee and may not be assigned or transferred; and

 

(m) To promptly notify you if the Company ceases to be an Emerging Growth Company at any time prior to the later of (i) completion of the distribution of the Shares within the meaning of the Act and (ii) the last Time of Delivery.

 

6.  (a) The Company represents and agrees that, without the prior consent of the Representatives, it has not made and will not make any offer relating to the Shares that would constitute a “free writing prospectus” as defined in Rule 405 under the Act or a “prospectus” as defined in Section 2(a)(10) of the Act (other than the Prospectus included in the Registration Statement); each Underwriter represents and agrees that, without the prior consent of the Company and the Representatives, it has not made and will not make any offer relating to the Shares that would constitute a free writing prospectus required to be filed with the Commission;

15

any such free writing prospectus the use of which has been consented to by the Company and the Representatives is listed on Schedule II(a) or Schedule II(c) hereto;

 

(b) The Company has complied and will comply with the requirements of Rule 433 under the Act applicable to any Issuer Free Writing Prospectus, including timely filing with the Commission or retention where required and legending; and the Company represents that it has satisfied and agrees that it will satisfy the conditions under Rule 433 under the Act to avoid a requirement to file with the Commission any electronic roadshow;

 

(c) The Company agrees that if at any time following issuance of an Issuer Free Writing Prospectus or Section 5(d) Writing, any event occurred or occurs as a result of which such Issuer Free Writing Prospectus or Section 5(d) Writing would conflict with the information in the Registration Statement, the Pricing Prospectus or the Prospectus or would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances then prevailing, not misleading, the Company will give prompt notice thereof to the Representatives and, if requested by the Representatives, will prepare and furnish without charge to each Underwriter an Issuer Free Writing Prospectus, Section 5(d) Writing or other document which will correct such conflict, statement or omission; provided , however , that this representation and warranty shall not apply to any statements or omissions in an Issuer Free Writing Prospectus made in reliance upon and in conformity with the Underwriter Information;

 

(d)  The Company represents and agrees that (i) it has not engaged in, or authorized any other person to engage in, any Section 5(d) Communications, other than Section 5(d) Communications with the prior consent of the Representatives with entities that are qualified institutional buyers as defined in Rule 144A under the Act or institutions that are accredited investors as defined in Rule 501(a) under the Act; and (ii) it has not distributed, or authorized any other person to distribute, any Section 5(d) Writings, other than those distributed with the prior consent of the Representatives that are listed on Schedule II(d) hereto; and the Company reconfirms that the Underwriters have been authorized to act on its behalf in engaging in Section 5(d) Communications; and

 

(e)  Each Underwriter represents and agrees that any Section 5(d) Communications undertaken by it were with entities that are qualified institutional buyers as defined in Rule 144A under the Act or institutions that are accredited investors as defined in Rule 501(a) under the Act.

 

7.  The Company covenants and agrees with the several Underwriters that the Company will pay or cause to be paid the following: (i) the fees, disbursements and expenses of the Company’s counsel and accountants in connection with the registration of the Shares under the Act and all other expenses in connection with the preparation, printing, reproduction and filing of the Registration Statement, any Preliminary Prospectus, any Section 5(d) Writing, any

16

Issuer Free Writing Prospectus and the Prospectus and amendments and supplements thereto and the mailing and delivering of copies thereof to the Underwriters and dealers; (ii) the cost of printing or producing any Blue Sky Memorandum, closing documents (including any compilations thereof) and any other documents in connection with the offering, purchase, sale and delivery of the Shares; (iii) all expenses in connection with the qualification of the Shares for offering and sale under state securities laws as provided in Section 5(b) hereof, including the reasonable fees and disbursements of counsel for the Underwriters in connection with such qualification and in connection with any Blue Sky survey (iv) all fees and expenses in connection with listing the Shares on NASDAQ; (v) the filing fees incident to, and reasonable fees and disbursements of counsel for the Underwriters in connection with, any required review by FINRA of the terms of the sale of the Shares, up to a maximum of $75,000; (vi) the cost of preparing stock certificates, if applicable; (vii) the cost and charges of any transfer agent or registrar; (viii) any transfer or other taxes on the sale and delivery of the Shares to the Underwriters and (ix) all other costs and expenses incident to the performance of its obligations hereunder which are not otherwise specifically provided for in this Section. It is understood, however, that, except as provided in this Section, and Sections 9 and 12 hereof, the Underwriters will pay all of their own costs and expenses, including the fees of their counsel, stock transfer taxes on resale of any of the Shares by them, and any advertising expenses connected with any offers they may make.

 

8.  The obligations of the Underwriters hereunder, as to the Shares to be delivered at each Time of Delivery, shall be subject, in their discretion, to the condition that all representations and warranties and other statements of the Company herein are, at and as of the Applicable Time and such Time of Delivery, true and correct, the condition that the Company shall have performed all of its obligations hereunder theretofore to be performed, and the following additional conditions:

 

(a) The Prospectus shall have been filed with the Commission pursuant to Rule 424(b) under the Act within the applicable time period prescribed for such filing by the rules and regulations under the Act and in accordance with Section 5(a) hereof; all material required to be filed by the Company pursuant to Rule 433(d) under the Act shall have been filed with the Commission within the applicable time period prescribed for such filing by Rule 433; if the Company has elected to rely upon Rule 462(b) under the Act, the Rule 462(b) Registration Statement shall have become effective by 10:00 P.M., Washington, D.C. time, on the date of this Agreement; no stop order suspending the effectiveness of the Registration Statement or any part thereof shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission; no stop order suspending or preventing the use of the Pricing Prospectus, Prospectus or any Issuer Free Writing Prospectus shall have been initiated or threatened by the Commission; and all requests for additional information on the part of the Commission shall have been complied with to your reasonable satisfaction;

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(b) Skadden, Arps, Slate, Meagher & Flom LLP, counsel for the Underwriters, shall have furnished to you such written opinion or opinions, dated such Time of Delivery, in form and substance satisfactory to you, and such counsel shall have received such papers and information as they may reasonably request to enable them to pass upon such matters;

 

(c) Troutman Sanders LLP, counsel for the Company, shall have furnished to you their written opinion, dated such Time of Delivery, in form and substance satisfactory to you, to the effect provided in Exhibit A hereto;

 

(d) On the date of the Prospectus at a time prior to the execution of this Agreement, at 9:30 a.m., New York City time, on the effective date of any post-effective amendment to the Registration Statement filed subsequent to the date of this Agreement and also at each Time of Delivery, PricewaterhouseCoopers LLP shall have furnished to you a letter or letters, dated the respective dates of delivery thereof, in form and substance satisfactory to you, to the effect set forth in Annex I hereto (the executed copy of the letter delivered prior to the execution of this Agreement is attached as Annex I(a) hereto and a draft of the form of letter to be delivered on the effective date of any post-effective amendment to the Registration Statement and as of each Time of Delivery is attached as Annex I(b) hereto);

 

(e) (i) Neither the Company nor any of its subsidiaries shall have sustained since the date of the latest audited financial statements included in the Pricing Prospectus any loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Pricing Prospectus, and (ii) since the respective dates as of which information is given in the Pricing Prospectus there shall not have been any change in the capital stock or long-term debt of the Company or any of its subsidiaries or any change or effect, or any development involving a prospective change or effect, in or affecting (x) the business, properties, general affairs, management, financial position, stockholders’ equity or results of operations of the Company and its subsidiaries, taken as a whole, except as set forth or contemplated in the Pricing Prospectus and the Prospectus, or (y) the ability of the Company to perform its obligations under this Agreement, including the issuance and sale of the Shares, or to consummate the transactions contemplated in the Pricing Prospectus and the Prospectus, the effect of which, in any such case described in clause (i) or (ii), is in your judgment so material and adverse as to make it impracticable or inadvisable to proceed with the public offering or the delivery of the Shares being delivered at such Time of Delivery on the terms and in the manner contemplated in the Pricing Prospectus and the Prospectus;

 

(f) On or after the Applicable Time (i) no downgrading shall have occurred in the rating accorded the Company’s debt securities by any “nationally recognized statistical rating organization,” as that term is defined by the Commission for purposes of Rule 436(g)(2) under the Act, and (ii) no such organization shall have publicly announced that it has under

18

surveillance or review, with possible negative implications, its rating of any of the Company’s debt securities;

 

(g) On or after the Applicable Time there shall not have occurred any of the following: (i) a suspension or material limitation in trading in securities generally on the Exchange or on NASDAQ; (ii) a suspension or material limitation in trading in the Company’s securities on NASDAQ; (iii) a general moratorium on commercial banking activities declared by either Federal or New York or State authorities or a material disruption in commercial banking or securities settlement or clearance services in the United States; (iv) the outbreak or escalation of hostilities involving the United States or the declaration by the United States of a national emergency or war or (v) the occurrence of any other calamity or crisis or any change in financial, political or economic conditions in the United States or elsewhere, if the effect of any such event specified in clause (iv) or (v) in your judgment makes it impracticable or inadvisable to proceed with the public offering or the delivery of the Shares being delivered at such Time of Delivery on the terms and in the manner contemplated in the Pricing Prospectus and the Prospectus;

 

(h) The Shares to be sold at such Time of Delivery shall have been duly listed for quotation on NASDAQ;

 

(i) The Company shall have obtained and delivered to the Underwriters executed copies of an agreement from officers, directors and the equityholders of the Company listed on Schedule III hereto substantially to the effect set forth in Annex II hereto;

 

(j) The Company shall have complied with the provisions of Section 5(c) hereof with respect to the furnishing of prospectuses on the New York Business Day next succeeding the date of this Agreement; and

 

(k) The Company shall have furnished or caused to be furnished to you at such Time of Delivery certificates of officers of the Company satisfactory to you as to the accuracy of the representations and warranties of the Company herein at and as of such Time of Delivery, as to the performance by the Company of all of its obligations hereunder to be performed at or prior to such Time of Delivery, as to the matters set forth in subsections (a) and (e) of this Section and as to such other matters as you may reasonably request.

 

9.  (a) The Company will indemnify and hold harmless each Underwriter against any losses, claims, damages or liabilities, joint or several, to which such Underwriter may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or supplement thereto, any Issuer Free Writing Prospectus, any “roadshow” as defined in Rule 433(h) under the Act (a

19

“roadshow”), any “issuer information” filed or required to be filed pursuant to Rule 433(d) under the Act, any Section 5(d) Writing or any information included in Schedule II(e) hereof, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse each Underwriter for any legal or other expenses reasonably incurred by such Underwriter in connection with investigating or defending any such action or claim as such expenses are incurred; provided , however , that the Company shall not be liable 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 the Registration Statement, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing Prospectus or any Section 5(d) Writing, in reliance upon and in conformity with the Underwriter Information.

 

(b) Each Underwriter will indemnify and hold harmless the Company against any losses, claims, damages or liabilities to which the Company may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing Prospectus, or any roadshow or any Section 5(d) Writing, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in the Registration Statement, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing Prospectus, or any roadshow or any Section 5(d) Writing, in reliance upon and in conformity with the Underwriter Information; and will reimburse the Company for any legal or other expenses reasonably incurred by the Company in connection with investigating or defending any such action or claim as such expenses are incurred. As used in this Agreement with respect to an Underwriter and an applicable document, “Underwriter Information” shall mean the written information furnished to the Company by such Underwriter through the Representatives expressly for use therein; it being understood and agreed upon that the only such information furnished by any Underwriter consists of the following information in the Prospectus furnished on behalf of each Underwriter: the information in the ninth, twelfth, thirteenth and fourteenth paragraphs under the heading “Underwriting”.

 

(c) Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof; provided that the failure to notify

20

the indemnifying party shall not relieve it from any liability that it may have under the preceding paragraphs of this Section 9 except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided further that the failure to notify the indemnifying party shall not relieve it from any liability that it may have to an indemnified party otherwise than under the preceding paragraphs of this Section 9. In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under such subsection for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall, without the written consent of the indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all liability arising out of such action or claim 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 any indemnified party.

 

(d) If the indemnification provided for in this Section 9 is unavailable to or insufficient to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other from the offering of the Shares. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand and the Underwriters on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Company bear to the total underwriting discounts and commissions received by the Underwriters, in each case as set forth in the table on the cover

21

page of the Prospectus. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or the Underwriters on the other and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to this subsection (d) were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (d), no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Shares underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters’ obligations in this subsection (d) to contribute are several in proportion to their respective underwriting obligations and not joint.

 

(e) The obligations of the Company under this Section 9 shall be in addition to any liability which the Company may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Underwriter within the meaning of the Act and each broker-dealer affiliate of any Underwriter; and the obligations of the Underwriters under this Section 9 shall be in addition to any liability which the respective Underwriters may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Company (including any person who, with his or her consent, is named in the Registration Statement as about to become a director of the Company) and to each person, if any, who controls the Company within the meaning of the Act.

 

10.  (a) If any Underwriter shall default in its obligation to purchase the Shares which it has agreed to purchase hereunder at a Time of Delivery, you may in your discretion arrange for you or another party or other parties to purchase such Shares on the terms contained herein. If within thirty-six hours after such default by any Underwriter you do not arrange for the purchase of such Shares, then the Company shall be entitled to a further period of thirty-six hours within which to procure another party or other parties satisfactory to you to purchase such Shares on such terms. In the event that, within the respective prescribed periods, you notify the Company that you have so arranged for the purchase of such Shares, or the Company notifies you that it

22

has so arranged for the purchase of such Shares, you or the Company shall have the right to postpone such Time of Delivery for a period of not more than seven days, in order to effect whatever changes may thereby be made necessary in the Registration Statement or the Prospectus, or in any other documents or arrangements, and the Company agrees to file promptly any amendments or supplements to the Registration Statement or the Prospectus which in your opinion may thereby be made necessary. The term “Underwriter” as used in this Agreement shall include any person substituted under this Section with like effect as if such person had originally been a party to this Agreement with respect to such Shares.

 

(b) If, after giving effect to any arrangements for the purchase of the Shares of a defaulting Underwriter or Underwriters by you and the Company as provided in subsection (a) above, the aggregate number of such Shares which remains unpurchased does not exceed one-eleventh of the aggregate number of all the Shares to be purchased at such Time of Delivery, then the Company shall have the right to require each non-defaulting Underwriter to purchase the number of shares which such Underwriter agreed to purchase hereunder at such Time of Delivery and, in addition, to require each non-defaulting Underwriter to purchase its pro rata share (based on the number of Shares which such Underwriter agreed to purchase hereunder) of the Shares of such defaulting Underwriter or Underwriters for which such arrangements have not been made; but nothing herein shall relieve a defaulting Underwriter from liability for its default.

 

(c) If, after giving effect to any arrangements for the purchase of the Shares of a defaulting Underwriter or Underwriters by you and the Company as provided in subsection (a) above, the aggregate number of such Shares which remains unpurchased exceeds one-eleventh of the aggregate number of all the Shares to be purchased at such Time of Delivery, or if the Company shall not exercise the right described in subsection (b) above to require non-defaulting Underwriters to purchase Shares of a defaulting Underwriter or Underwriters, then this Agreement (or, with respect to the Second Time of Delivery, the obligations of the Underwriters to purchase and of the Company to sell the Optional Shares) shall thereupon terminate, without liability on the part of any non-defaulting Underwriter or the Company, except for the expenses to be borne by the Company and the Underwriters as provided in Section 7 hereof and the indemnity and contribution agreements in Section 9 hereof; but nothing herein shall relieve a defaulting Underwriter from liability for its default.

 

11.  If this Agreement shall be terminated pursuant to Section 10 hereof, the Company shall not then be under any liability to any Underwriter except as provided in Sections 7 and 9 hereof; but, if for any other reason, any Shares are not delivered by or on behalf of the Company as provided herein, the Company will reimburse the Underwriters through you for all out-of-pocket expenses approved in writing by you, including fees and disbursements of counsel, reasonably incurred by the Underwriters in making preparations for the purchase, sale and delivery of the Shares not so delivered, but the Company shall then be under no further liability to any Underwriter except as provided in Sections 7 and 9 hereof.

23

12.  In all dealings hereunder, the Representatives shall act on behalf of each of the Underwriters, and the parties hereto shall be entitled to act and rely upon any statement, request, notice or agreement on behalf of any Underwriter made or given by you jointly on behalf of you as the Representatives.

 

All statements, requests, notices and agreements hereunder shall be in writing, and if to the Underwriters shall be delivered or sent by mail, telex or facsimile transmission to you as the representatives in care of Goldman Sachs & Co. LLC, 200 West Street, New York, New York 10282-2198, Attention: Registration Department, J.P. Morgan Securities LLC, 383 Madison Avenue, New York, New York 10179-0001, Attention: Equity Syndicate Desk and Morgan Stanley & Co. LLC, 1585 Broadway, New York, New York 10036-8293, Attention: Legal Department; and if to the Company shall be delivered or sent by mail, telex or facsimile transmission to the address of the Company set forth in the Registration Statement, Attention: Secretary; provided , however , that any notice to an Underwriter pursuant to Section 9(c) hereof shall be delivered or sent by mail, telex or facsimile transmission to such Underwriter at its address set forth in its Underwriters’ Questionnaire, or telex constituting such Questionnaire, which address will be supplied to the Company by you upon request; provided , however , that notices under subsection 5(e) shall be in writing, and if to the Underwriters shall be delivered or sent by mail, telex or facsimile transmission to you as the Representatives at Goldman Sachs & Co. LLC, 200 West Street, New York, New York 10282-2198, Attention: Control Room, J.P. Morgan Securities LLC, 383 Madison Avenue, New York, New York 10179-0001, Attention: Equity Syndicate Desk and Morgan Stanley & Co. LLC, 1585 Broadway, New York, New York 10036-8293, Attention: Legal Department. Any such statements, requests, notices or agreements shall take effect upon receipt thereof.

 

In accordance with the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), the underwriters are required to obtain, verify and record information that identifies their respective clients, including the Company, which information may include the name and address of their respective clients, as well as other information that will allow the underwriters to properly identify their respective clients.

 

13.  This Agreement shall be binding upon, and inure solely to the benefit of, the Underwriters, the Company and, to the extent provided in Sections 9 and 11 hereof, the officers and directors of the Company and each person who controls the Company or any Underwriter, and their respective heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement. No purchaser of any of the Shares from any Underwriter shall be deemed a successor or assign by reason merely of such purchase.

24

14.  Time shall be of the essence of this Agreement. As used herein, the term “business day” shall mean any day when the Commission’s office in Washington, D.C. is open for business.

 

15.  The Company acknowledges and agrees that (i) the purchase and sale of the Shares pursuant to this Agreement is an arm’s-length commercial transaction between the Company, on the one hand, and the several Underwriters, on the other, (ii) in connection therewith and with the process leading to such transaction each Underwriter is acting solely as a principal and not the agent or fiduciary of the Company, (iii) no Underwriter has assumed an advisory or fiduciary responsibility in favor of the Company with respect to the offering contemplated hereby or the process leading thereto (irrespective of whether such Underwriter has advised or is currently advising the Company on other matters) or any other obligation to the Company except the obligations expressly set forth in this Agreement and (iv) the Company has consulted its own legal and financial advisors to the extent it deemed appropriate. The Company agrees that it will not claim that the Underwriters, or any of them, has rendered advisory services of any nature or respect, or owes a fiduciary or similar duty to the Company, in connection with such transaction or the process leading thereto.

 

16.  This Agreement supersedes all prior agreements and understandings (whether written or oral) between the Company and the Underwriters, or any of them, with respect to the subject matter hereof.

 

17.  This Agreement and any transaction contemplated by this Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflict of laws that would result in the application of any other law than the laws of the State of New York. The Company agrees that any suit or proceeding arising in respect of this Agreement or any transaction contemplated by this Agreement will be tried exclusively in the U.S. District Court for the Southern District of New York or, if that court does not have subject matter jurisdiction, in any state court located in The City and County of New York and the Company agrees to submit to the jurisdiction of, and to venue in, such courts.

 

18.  The Company and each of the Underwriters hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.

 

19.  This Agreement may be executed by any one or more of the parties hereto in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same instrument.

 

20.  Notwithstanding anything herein to the contrary, the Company is authorized to disclose to any persons the U.S. federal and state income tax treatment and tax structure of the

25

potential transaction and all materials of any kind (including tax opinions and other tax analyses) provided to the Company relating to that treatment and structure, without the Underwriters imposing any limitation of any kind. However, any information relating to the tax treatment and tax structure shall remain confidential (and the foregoing sentence shall not apply) to the extent necessary to enable any person to comply with securities laws. For this purpose, “tax structure” is limited to any facts that may be relevant to that treatment.

26

If the foregoing is in accordance with your understanding, please sign and return to us counterparts hereof, and upon the acceptance hereof by you, on behalf of each of the Underwriters, this letter and such acceptance hereof shall constitute a binding agreement between each of the Underwriters and the Company. It is understood that your acceptance of this letter on behalf of each of the Underwriters is pursuant to the authority set forth in a form of Agreement among Underwriters, the form of which shall be submitted to the Company for examination upon request, but without warranty on your part as to the authority of the signers thereof.

 

  Very truly yours,
     
  GreenSky, Inc.
     
  By: /s/ David Zalik
    Name: David Zalik
    Title: Chief Executive Officer

  

Accepted as of the date hereof:

 

Goldman Sachs & Co. LLC

 

By: /s/ Elizabeth Wood  
  Name: Elizabeth Wood  
  Title: Managing Director  
     
J.P. Morgan Securities LLC
     
By: /s/ Alaoui Zenere  
  Name: Alaoui Zenere  
  Title: Vice President  
     
Morgan Stanley & Co. LLC
     
By: /s/ Salvatore Giglio  
  Name: Salvatore Giglio  
  Title: Vice President  

 

On behalf of each of the Underwriters

27

SCHEDULE I

 

Underwriter   Total
Number of
Firm Shares
to be Purchased
    Number of
Optional
Shares to be
Purchased if
Maximum
Option
Exercised
 
                 
Goldman Sachs & Co. LLC     10,108,000       1,516,200  
J.P. Morgan Securities LLC     10,108,000       1,516,200  
Morgan Stanley & Co. LLC     6,498,000       974,700  
Citigroup Global Markets Inc.     2,736,000       410,400  
Credit Suisse Securities (USA) LLC     2,736,000       410,400  
Merrill Lynch, Pierce, Fenner & Smith Incorporated     2,736,000       410,400  
SunTrust Robinson Humphrey, Inc.     1,026,000       153,900  
Raymond James & Associates, Inc.     684,000       102,600  
Sandler O ’Neill & Partners, L.P.     684,000       102,600  
Fifth Third Securities, Inc.     342,000       51,300  
Guggenheim Securities, LLC     342,000       51,300  
Total     38,000,000       5,700,000  
 

SCHEDULE II

 

(a) Issuer Free Writing Prospectuses not included in the Pricing Disclosure Package:

 

Roadshow presentation dated May 2018

 

(b) Additional Documents Incorporated by Reference:

 

None

 

(c) Information other than the Pricing Prospectus that comprise the Pricing Disclosure Package:

 

The initial public offering price per share for the Shares is $23.00.
The number of Shares purchased by the Underwriters is 38,000,000.

 

(d) Section 5(d) Writings:

 

None

 

(e) Information included in:

 

The free writing prospectus filed by the Company with the Commission on May 8, 2018.

 

SCHEDULE III

 

List of Persons and Entities Subject to Lock-Up

 

Adam Brantley

 

Adrien Salomon

 

Alan Mustacchi

 

Alex Humphreys

 

Alex Ocoro

 

Alex Santiago

 

Alexander H. Betts

 

Allen Nance

 

Amanda Soberick

 

Amelia Freeman

 

Andrea Feinberg

 

Andrey Skripnikov

 

Angel Rattay

 

Ann Broussard

 

Anne S. Byrd

 

AnnieJo, LLC

 

Anup Mehendale

 

Ashish Parikh

 

Ashley Harper

 

Balaguhan Raaghavan

Ben Swenson

 

Bobby Pavao

 

BRAVO III Holding Fund AIV I Lux LP

 

Bravo III Holding Fund AIV I US LP

 

Brett Hoyle

 

Brett Walisever

 

Brian Laneheart

 

Brian Madonia

 

Brian Sexton

 

Brinson Neidlinger

 

Bryan Cook

 

Carlos Diaz

 

Carly Armstrong Nowacki

 

Catlin Zuniga

 

Charles Goetz

 

Chevonna Thomas

 

Christopher Scott Forshay

 

Chris Young

 

Claire Degenhardt

 

Coy McLaughlin

 

Crowe Family Ventures, LLC

 

Crystal Casper-Escalante

 

Dan Yankley

 

Danetra Thompson

 

David Palmer

 

David Segur

 

David Stilwell

 

David Zalik

 

DDFS Partnership LP

 

Dennis Kelly

 

Derrel Brown

 

Deshawn Simmons

 

Dexter Hall

 

Donna Rodman

 

Doug Daniels

 

Douglas John

 

DST Global IV, L.P.

 

DuJuan Brooks

 

Eddie Ortega

 

Elizabeth Phillips

 

Eric Bernard

 

Eric Korth

 

Erik Sampsell

Ethan Reiter

 

Fifth Third Capital Holdings, LLC

 

Financial Technology Investors, LLC

 

Founders Technology Investors, LLC

 

Gene Burke

 

Gerald Benjamin

 

Gil Shillcutt

 

Gregg Steven Freishtat

 

FTP Securities LLC

 

GS Investment Holdings, LLC

 

Hannah Weston

 

Ian Twomey

 

Ibsen Benk

 

ICONIQ G-B Series Coinvest Fund Blocker, Inc.

 

ICONIQ-GB Fund Blocker, Inc.

 

ICONIQ Strategic Partners, L.P.

 

ICONIQ Strategic Partners-B, L.P.

 

ICONIQ Strategic Partners Co-Invest, L.P.

 

ICONIQ Strategic Partners Co-Invest, L.P., G-B Series

 

ISP Main Fund GS LLC

 

Ithan Creek Master Investors (Cayman) L.P.

 

Jaquetta Watson

 

Jasjeev Sawhney

 

Jason Haselhuhn

 

Jason Rozenblat

 

Jay Puentes

 

Jean Sharice Black

 

Jeanne Simon

 

Jeffrey Gold

 

Jeffrey Wagner

 

Jen Martin

 

Jere McDevitt

 

Jeremy Beebe

 

Jerry Bartlett

 

Jesse Davis

 

Jim Peters

 

Joel Babbit

 

John Cullerton

 

John Flynn

 

John Haralson

 

Jonathan Watson

 

Jonna F. Schwalb

 

Jordan Tishman

 

Joseph Ranieri

 

Joseph Thor

Josh Melcher

 

Joshua Primeaux

 

Julio C. Mendoza

 

Kaliban 2014, LLC

 

Katherine Dunham

 

Kim Paton

 

Kimberly Schentur

 

Kyle Cochran

 

Laura Brackmann

 

Lawrence Bayer

 

LBG Holdings, LLC

 

Lena McDearmid

 

Leonardo Pontier

 

Lewis Brodnax

 

Liz Kim

 

Lois Rickard

 

Luis Dragonetti

 

Lyndon Wear

 

Marekus Smith

 

Mark Babbitt

 

Mark Dellaratta

 

Mark Hammerstrom

 

Mark Huemoeller

 

Mark Pienkos

 

Martin Smith

 

Mary Andrews

 

Massa Hoff

 

Matt Baxter

 

Matt Bivons

 

Matt Lekawa

 

Matthew Armington

 

Matthew Norris

 

Metz Bizzel

 

Michael O’Brien

 

Michael Schuman

 

Michael Schwartz

 

MIS Investment Holdings, LLC

 

Nathan Coleman

 

Nigel Morris

 

Nnamdi Nwoke

 

Norman Cohn

 

Patrick Cone

 

Paul Anderson

 

Paul Gilman

 

Pavel Tsyrlin

 

Peter Naclerio

Phillip Porter

 

PIMCO Bravo Fund II Offshore Feeder AIV I, L.P.

 

PIMCO Corporate Opportunities Fund II Lux Feeder SCS

 

PIMCO Corporate Opportunities Fund II Offshore Feeder AIV I, L.P.

 

PLD Ventures, LLC

 

Portia Jackson

 

QED Fund II, LP

 

R. Jerry Bartlett, Jr.

 

Rahul Kulkarni

 

Ramond Garth

 

Rebecca Gardy

 

Reid Benjamin

 

Richard Awbrey

 

Richard Bayardelle

 

Richard Choate

 

Richard Dobb

 

Richard McNamara

 

Robert A. Lanier IRA

 

Robert Partlow

 

Robert Sheft

 

Scott Buffum

 

Scott Miller

 

Shannon Shipp

 

Sharmonaca Coleman

 

Shawn Petterson

 

Sheila Atiogbe

 

Shelli Howard

 

Siva Gowrishankar - PI

 

Stefan Woulfin

 

Stephanie Foerst

 

Steve Landuyt

 

Steven E. Fox

 

Tamara Dolce

 

Tayanda Mills

 

Tiffany White

 

Timothy D. Kaliban

 

Tom Greco

 

Tom Stanley

 

TPG Georgia Holdings, L.P.

 

TPG Growth II BDH, L.P.

 

Vic Bancroft

 

Victor Natic

 

Vincent Banks

 

Whitney Smith

 

William Still

Xavier Santos

 

ANNEX II

 

GreenSky, Inc.

 

Lock-Up Agreement

 

May [●], 2018

 

Goldman Sachs & Co. LLC

J.P. Morgan Securities LLC
Morgan Stanley & Co. LLC

 

c/o Goldman Sachs & Co. LLC

200 West Street

New York, NY 10282-2198

 

c/o J.P. Morgan Securities LLC
383 Madison Avenue
New York, New York 10179-0001

 

c/o Morgan Stanley & Co. LLC

1585 Broadway

New York, New York 10036-8293

 

Re: GreenSky, Inc. - Lock-Up Agreement

 

Ladies and Gentlemen:

 

The undersigned understands that you, as representatives (the “Representatives”), propose to enter into an Underwriting Agreement (the “Underwriting Agreement”) on behalf of the several Underwriters named in Schedule I to such agreement (collectively, the “Underwriters”), with GreenSky, Inc., a Delaware corporation (the “Company”), providing for a public offering of the Class A Common Stock of the Company (the “Class A Common Stock”) pursuant to a Registration Statement on Form S-1 (the “offering”) to be filed with the Securities and Exchange Commission (the “SEC”).

 

In consideration of the agreement by the Underwriters to offer and sell the Class A Common Stock, and of other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the undersigned agrees that, during the period beginning from the date of this Lock-Up Agreement and continuing to and including the date 180 days after the date set forth on the final prospectus (the “Prospectus”) used to sell the Class A Common Stock (the “Lock-Up Period”), the undersigned will not offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale or otherwise dispose of any shares of Common Stock of the Company, or any options or warrants to purchase any shares of Common Stock of the Company, or any securities convertible into, exchangeable for or that represent the right to receive shares of Common Stock of the Company (including shares of the Class B Common Stock of the Company (“Class B Common Stock”) or any common membership units (“Holdco Units”) of GreenSky Holdings, LLC (“GS Holdings”)), whether now owned or hereinafter acquired, owned directly by the undersigned (including holding as a custodian) or with respect to which the undersigned has beneficial ownership within the rules and regulations of the SEC (collectively “Shares” and with respect to the undersigned, the “Undersigned’s Shares”). The foregoing restriction is expressly agreed to preclude the undersigned from engaging in any hedging or other transaction which is designed to or which reasonably could be expected to lead to or result in a sale or disposition of the Undersigned’s Shares even if such Shares would be disposed of by someone other than the undersigned. Such prohibited hedging or other transactions would include without limitation any short sale or any purchase, sale or grant of any right (including without limitation any put or call option) with respect to any of the Undersigned’s Shares or with respect to any security that includes, relates to, or derives any significant part of its value from such Shares. If the undersigned is an officer or director of the issuer, the undersigned further agrees that the foregoing provisions shall be equally applicable to any issuer-directed Shares the undersigned may purchase in the offering.

 

If the undersigned is an officer or director of the Company, (i) the Representatives agree that, at least three business days before the effective date of any release or waiver of the foregoing restrictions in connection with a transfer of shares of Common Stock, they will notify the Company of the impending release or waiver, and (ii) the Company has agreed in the Underwriting Agreement to announce the impending release or waiver by press release through a major news service at least two business days before the effective date of the release or waiver. Any release or waiver granted by the Representatives hereunder to any such officer or director shall only be effective two business days after the publication date of such press release. The provisions of this paragraph will not apply if (a) the release or waiver is effected solely to permit a transfer not for consideration and (b) the transferee has agreed in writing to be bound by the same terms described in this Lock-Up Agreement to the extent and for the duration that such terms remain in effect at the time of the transfer.

 

Notwithstanding the foregoing, the undersigned may:

 

(i) transfer the Undersigned’s Shares by bona fide gift, will or intestacy, provided that each donee, transferee or distributee thereof agrees to be bound in writing by the restrictions set forth herein;

 

(ii) transfer the Undersigned’s Shares to any trust for the direct or indirect benefit of the undersigned or the immediate family of the undersigned, provided that the trustee of the trust agrees to be bound in writing by the restrictions set forth herein, and provided further that any such transfer shall not involve a disposition for value;

 

(iii) transfer the Undersigned’s Shares with the prior written consent of the Representatives on behalf of the Underwriters;

 

(iv) sell Holdco Units to the Company, together with an equal number of shares of Class B Common Stock, as applicable, as described in the preliminary prospectus used to sell the Class A Common Stock (the “Pricing Prospectus”) and the Prospectus;

 

(v) sell shares of Class A Common Stock to the Company as described in the Pricing Prospectus and the Prospectus;

 

(vi) transfer Holdco Units to the Company in exchange for Class A Common Stock (or cash, as applicable) as described in the Pricing Prospectus and the Prospectus;

 

(vii) exercise options or other similar awards for cash pursuant to equity incentive plans disclosed in the Prospectus;

 

(viii) transfer the Undersigned’s Shares to the Company (a) pursuant to the exercise, on a “cashless” or “net exercise” basis, of any option or other similar award pursuant to equity incentive plans described in the Prospectus or otherwise outstanding on the date hereof, or (b) for the purpose of satisfying any withholding taxes (including estimated taxes) due as a result of the exercise of any option or other similar award pursuant to equity incentive plans described in the Prospectus or otherwise outstanding on the date hereof, provided, however, that the foregoing provisions are limited to any option or other similar award that expires during the Lock-Up Period;

 

(ix) transfer the Undersigned’s Shares pursuant to a bona fide third party tender offer made to all holders of shares of Common Stock of the Company or Holdco Units or a merger, purchase, consolidation or other similar transaction, involving a change of control of the Company occurring after the consummation of the offering, that has been approved by the board of directors of the Company (and nothing in this Lock-Up Agreement shall prohibit the undersigned from voting in favor of any such transaction or taking any other action in connection with such transaction), provided that in the event that the tender offer, merger, purchase, consolidation or other such transaction is not completed, the Undersigned’s Shares shall remain subject to the restrictions contained in this Lock-Up Agreement;

 

(x) transfer the Undersigned’s Shares to an investment fund which controls or manages, or is controlled by or managed by, or is under common control or management with the undersigned or its affiliates, provided that each transferee thereof agrees to be bound in writing by the restrictions set forth herein; and

 

(xi) transfers of Shares acquired in the offering or in open market transactions after the completion of the offering .

 

provided , however , that in the case of any transfer pursuant to clauses (i) and (ii), no filing by any party under Section 16 of the Exchange Act, or other public announcement, shall be voluntarily made during the Lock-Up Period and any filing required to be made under Section 16 of the Exchange Act shall include a statement to the effect that such transfer is not a transfer for value; provided , further , that in the case of any transfer pursuant to clause (vi), (a) the underlying shares of Class A Common Stock shall continue to be subject to the terms of this Lock-Up Agreement and (b) no filing under Section 16 of the Exchange Act, or other public announcement, shall be voluntarily made during the Lock-Up Period and any filing required to be made under Section 16 of the Exchange Act shall include a statement to the effect that such exchange occurred pursuant to the exchange agreement among the Company, GS Holdings and certain owners of GS Holdings and such shares of Class A Common Stock received upon exchange shall be subject to the terms of this Lock-Up Agreement; provided , further , that in the case of any transfer pursuant to clause (vii), (a) any securities received upon such exercise shall be subject to the terms of this Lock-Up Agreement, (b) no filing under Section 16 of the Exchange Act, or other public announcement, shall be voluntarily made during the Lock-Up Period, and (c) any filing required to be made under Section 16 of the Exchange Act shall clearly indicate that the filing relates to the circumstances described in clause (vii), no securities were sold by the reporting person and the securities received upon exercise of the options (or other similar awards) are subject to a lock-up agreement with the Underwriters; provided , further , that in the case of any transfer pursuant to clause (viii), (a) any securities received upon such exercise shall be subject to this Lock-Up Agreement, (b) no filing under Section 16 of the Exchange Act, or other public announcement, shall be voluntarily made during the Lock-Up Period and (c) any filing required to be made pursuant to Section 16 of the Exchange Act shall clearly indicate that the filing relates to the circumstances described in clause (viii); provided, further, that in the case of any transfer pursuant to clause (x) and (xi), (a) no filing under Section 16 of the Exchange Act, or other public announcement, shall be voluntarily made during the Lock-Up Period and (b) any filing required to be made pursuant to Section 16 of the Exchange Act shall clearly indicate that the filing relates to the circumstances described in clause (x) or (xi), as applicable.

 

For purposes of this Lock-Up Agreement, “immediate family” shall mean any relationship by blood, marriage or adoption, not more remote than first cousin. For purposes of clause (ix), “change of control” shall mean the consummation of any bona fide third party tender offer, merger, purchase, consolidation or other similar transaction the result of which is that any “person” (as

 

defined in Section 13(d)(3) of the Exchange Act), or group of persons, other than the Company, becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act) of more than 65 percent (65%) of total voting power of the voting stock of the Company or GS Holdings. In addition, notwithstanding the foregoing, if the undersigned is a corporation, partnership, limited liability company or other entity, the undersigned may transfer the Undersigned’s Shares to (a) another corporation, partnership, limited liability company or other entity that controls, is controlled by or is under common control with the undersigned or (b) as part of a disposition, transfer or distribution by the undersigned to its partners, limited liability company members or other equity holders or if the undersigned is a corporation, to any wholly-owned subsidiary of such corporation; provided , however , that in any such case, it shall be a condition to the transfer that the transferee execute an agreement stating that the transferee is receiving and holding such capital stock subject to the provisions of this Lock-Up Agreement and there shall be no further transfer of such capital stock except in accordance with this Lock-Up Agreement; provided , further , that any such transfer shall not involve a disposition for value; and provided , further , that during the Lock-Up Period no filing under Section 16 of the Exchange Act reporting a reduction in beneficial ownership of the Undersigned’s Shares shall be required or shall be voluntarily made. The undersigned now has, and, except as contemplated by clause (i) through (ix) above, for the duration of this Lock-Up Agreement will have, good and marketable title to the Undersigned’s Shares, free and clear of all liens, encumbrances, and claims whatsoever. The undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of the Undersigned’s Shares except in compliance with the foregoing restrictions.

 

The restrictions set forth in this Lock-Up Agreement shall not apply to any transfer in connection with, and as contemplated by, the “Reorganization Transactions” described in the Prospectus related to the offering; provided that any of the Undersigned’s Shares received in such transactions remain subject to the terms of this Lock-Up Agreement.

 

If the Representatives (i) release from the restrictions contained in any lock-up agreement any Shares held by a director, officer or a holder that holds at least 3.0% of the total outstanding Shares of the Company based on the number of shares of Class A Common Stock outstanding immediately prior to the consummation of the offering assuming the conversion of the Class B Common Stock and HoldCo Units into Class A Common Stock and who has executed a lock-up agreement in connection with the offering (each a “Released Party”), and (ii) such waiver or series of waivers granted to a Released Party cumulatively relates to more than 0.5% of the total outstanding Shares of the Company based on the number of shares of Class A Common Stock outstanding immediately prior to the consummation of the offering assuming the conversion of the Class B Common Stock and HoldCo Units into Class A Common Stock, whether in one or multiple releases, then the undersigned shall also be granted an early release from its obligations hereunder on the same terms and on a pro-rata basis with respect to such number of shares rounded down to the nearest whole share equal to the product of (i) the percentage of Shares owned by the

 

Released Party that are being released multiplied by (ii) the total number of Shares held by the undersigned; provided that , the provisions of this paragraph will not apply if (a) the release or waiver is effected solely to permit a transfer not for consideration, and (b) the transferee has agreed in writing to be bound by the same terms described in this agreement to the extent and for the duration that such terms remain in effect at the time of the transfer. Notwithstanding the foregoing, if such early release or waiver is granted in connection with an underwritten public offering of Common Stock registered pursuant to the Securities Act of 1933, as amended (a “Secondary Offering”), then the undersigned shall only be granted an early release with respect to such number of shares of Class A Common Stock (and if applicable, such Holdco Units and shares of Class B Common Stock to be transferred to the Company in exchange for Class A Common Stock) held by the undersigned that are sold in such Secondary Offering.

 

Notwithstanding anything to the contrary herein contained, this Lock-Up Agreement will automatically terminate and the undersigned will be released from all of his, her or its obligations hereunder if (i) the Underwriting Agreement (other than the provisions thereof that survive termination) shall terminate or be terminated prior to payment for and delivery of the shares of Class A Common Stock in the offering, or (ii) the Representatives advise the Company, or the Company advises the Representatives, prior to the execution of the Underwriting Agreement, that they have determined not to proceed with the offering.

 

The undersigned understands that the Company and the Underwriters are relying upon this Lock-Up Agreement in proceeding toward consummation of the offering. The undersigned further understands that this Lock-Up Agreement is irrevocable and shall be binding upon the undersigned’s heirs, legal representatives, successors, and assigns.

 
  Very truly yours,
   
   
   
  Exact Name of Shareholder
   
   
   
  Authorized Signature
   
   
   
  Title
 

ANNEX III

 

[Form of Press Release]

 

GreenSky, Inc.
5565 Glenridge Connector, Suite 700
Atlanta, Georgia 30342

 

(“ GreenSky Inc .”) announced today that Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC, the lead book-running managers in the Company’s recent public sale of _ shares of common stock, are [waiving] [releasing] a lock-up restriction with respect to _____ shares of the Company’s common stock held by [certain officers or directors] [an officer or director] of the Company. The [waiver] [release] will take effect on _____, _________20_______, and the shares may be sold on or after such date.

 

This press release is not an offer for sale of the securities in the United States or in any other jurisdiction where such offer is prohibited, and such securities may not be offered or sold in the United States absent registration or an exemption from registration under the United States Securities Act of 1933, as amended.

 

Exhibit 3.1

 

AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
GREENSKY, INC.

 

GREENSKY, INC., a corporation organized and existing under the laws of the State of Delaware (the “ Corporation ”), DOES HEREBY CERTIFY AS FOLLOWS:

 

1. The name of the Corporation is GreenSky, Inc. The original Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on July 12, 2017.

 

2. This Amended and Restated Certificate of Incorporation (this “ Certificate ”) has been duly adopted in accordance with Sections 228, 242 and 245 of the General Corporation Law of the State of Delaware (the “ DGCL ”) and shall be effective as of the date and time that it is filed with the Secretary of State of the State of Delaware.

 

3. Immediately prior to the effective time of this Certificate, the Corporation had authorized 100 shares of common stock, par value $0.01 per share (the “ Original Common Stock ”), and had issued 100 shares of Original Common Stock.

 

4. The text of the original Certificate of Incorporation of the Corporation is hereby amended and restated to read in its entirety as follows:

 

ARTICLE I

 

Section 1.01 Name . The name of the Corporation is “GreenSky, Inc.”

 

ARTICLE II

 

Section 2.01 Registered Office and Registered Agent . The address of the Corporation’s registered office in the State of Delaware is The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801, County of New Castle. The name of the Corporation’s registered agent at such address is The Corporation Trust Company.

 

ARTICLE III

 

Section 3.01 Purpose . The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the DGCL.

 

ARTICLE IV

 

Section 4.01 Authorized Shares . The total number of shares of all classes of stock which the Corporation shall have authority to issue is 510,000,000 shares, consisting of (1) 10,000,000 shares of preferred stock, par value $0.01 per share (“ Preferred Stock ”), and (2) 500,000,000 shares of common stock, divided into 300,000,000 shares of Class A common stock, par value $0.01 per share (the “ Class A Common Stock ”), and 200,000,000 shares of Class B common stock, par value $0.001 per share (the “ Class B Common Stock ” and, together with the Class A

 

Common Stock, the “ Common Stock ”). Subject to the rights of the holders of any one or more series of Preferred Stock then outstanding, the number of authorized shares of any of the Preferred Stock, the Class A Common Stock or the Class B Common Stock may be increased or decreased by the affirmative vote of the holders of a majority in voting power of the stock of the Corporation entitled to vote thereon irrespective of the provisions of Section 242(b)(2) of the DGCL (or any successor provision thereto), and no vote of the holders of any of the Preferred Stock, the Class A Common Stock or the Class B Common Stock voting separately as a class shall be required therefor. Notwithstanding the foregoing, the number of authorized shares of any particular class may not be decreased below the number of shares of such class then outstanding plus, (i) in the case of Class A Common Stock, the number of shares of Class A Common Stock issuable in connection with (a) the exchange of all outstanding Common Units that are exchangeable (with automatic cancellation of all outstanding Class B Common Stock) pursuant to the Exchange Agreement and (b) the exercise of outstanding options, warrants, profits interests, or similar rights for Class A Common Stock and (ii) in the case of Class B Common Stock, the number of shares of Class B Common Stock issuable in connection with the exercise of outstanding options, warrants, profits interests, or similar rights for Common Units and Class B Common Stock.

 

Immediately prior to the effective time of this Certificate, (i) no shares of Class A Common Stock were authorized, issued or outstanding, no shares of Class B Common Stock were authorized, issued or outstanding, and no shares of Preferred Stock were authorized, issued or outstanding and (ii) 100 shares of Original Common Stock were authorized, issued and outstanding, which shares of Original Common Stock shall be redeemed for $10.00 prior to the issuance of any other shares in accordance with Section 151(b) of the DGCL, until then shall in all respects be treated as if they are shares of Class A Common Stock, and immediately following the redemption of such shares of Original Common Stock, shares of Class A Common Stock and Class B Common Stock will be issued in accordance with Section 151(b) of the DGCL.

 

Section 4.02 Preferred Stock .

 

(a) The board of directors of the Corporation (the “ Board ”) is hereby expressly authorized, by resolution or resolutions and by filing a certificate pursuant to applicable law, and subject to any limitations prescribed by law, to provide, out of the 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 preferences and relative, participating, optional or other special rights, if any, and any qualifications, limitations or restrictions thereof, of the shares of such series. 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 this Certificate or by applicable 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 to such holders by this Certificate (including any certificate of designation relating to such series).

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Section 4.03 Common Stock .

 

(a) Voting Rights .

 

(1) Except as may otherwise be provided in this Certificate or by applicable law, each holder 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 and each holder of Class B Common Stock, as such, shall be entitled to ten votes for each share of Class B Common Stock held of record by such holder ( provided , however , that from and after the Trigger Event, each holder 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 are entitled to vote and shall vote together as a single class on all matters (or, if any holders of Preferred Stock are entitled to vote together with the holders of Common Stock, as a single class with the holders of Preferred Stock); provided , however , that, except as otherwise required by law, holders of Common Stock, as such, shall not be entitled to vote on any amendment to this Certificate (including any certificate of designation relating to any series of Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to this Certificate (including any certificate of designation relating to any series of Preferred Stock) or pursuant to the DGCL.

 

(2) The holders of the outstanding shares of Class A Common Stock and Class B Common Stock shall be entitled to vote separately as a class upon any amendment to this Certificate (including by merger, consolidation, reorganization or similar event) that would increase or decrease the par value of the shares of such class or alter or change the powers, preferences or special rights of such class of such stock so as to affect them adversely.

 

(b) Permitted Class B Owners . From and after the effective time of this Certificate, additional shares of Class B Common Stock may be issued only to, and registered in the name of, the Continuing LLC Members, their respective successors and assigns as well as their respective transferees permitted in accordance with the LLC Agreement (including all subsequent successors, assigns and permitted transferees) (the Continuing LLC Members together with such persons, collectively, “ Permitted Class B Owners ”) in accordance with Section 4.04 and the aggregate number of shares of Class B Common Stock following any such issuance registered in the name of each such Permitted Class B Owner must be equal to the aggregate number of Common Units held of record by such Permitted Class B Owner under the LLC Agreement.

 

(c) Exchanges of Common Units . Common Units not held by the Corporation may be exchanged (with automatic cancellation of a corresponding share of Class B Common Stock) for Class A Common Stock or the Cash Settlement Amount in accordance with, and on the terms and conditions of, the Exchange Agreement and the LLC Agreement. Upon exchange of a Common Unit for Class A Common Stock or the Cash Settlement Amount, a corresponding

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share of Class B Common Stock shall automatically be canceled and such canceled shares of Class B Common Stock shall thereafter no longer be outstanding, and all rights with respect to such shares shall automatically cease and terminate.

 

(d) Automatic Transfer . No share of Class B Common Stock may be sold, exchanged or otherwise transferred, other than as part of (i) the exchange of a Common Unit as set forth in Section 4.03(c) of this Certificate, and (ii) the transfer of a Common Unit by a holder of Common Units to a permitted transferee of such holder in accordance with the LLC Agreement. In the event that any outstanding shares of Class B Common Stock are sold, exchanged or otherwise transferred other than as provided in the foregoing clauses (i) and (ii), or such outstanding shares of Class B Common Stock shall otherwise cease to be held by a holder of a corresponding number, based on the exchange rate then in effect, of Common Units (including a transferee of a Common Unit) for any reason, such shares of Class B Common Stock shall automatically and without further action on the part of the Corporation or any holder of Class B Common Stock be deemed to be transferred to the Corporation and thereupon shall be retired.

 

(e) Dividends, Distributions, Merger Consideration, etc .

 

(1) 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 senior to or the right to participate with the Class A Common Stock with respect to the payment of dividends, dividends of cash, stock or property may be declared and paid on the Class A Common Stock out of the assets or funds of the Corporation that are by law available therefor, at the times and in the amounts as the Board in its discretion may determine.

 

(2) Except as provided in Section 4.04 with respect to stock adjustments, dividends of cash, stock or property or any distributions or consideration in connection with any merger or consolidation may not be declared or paid on the Class B Common Stock.

 

(f) Liquidation and Other Events . 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 of the preferential and other amounts, if any, to which the holders of Preferred Stock, if any, are entitled the holders of all outstanding shares of Class A Common Stock will be entitled to receive the remaining assets of the Corporation available for distribution ratably in proportion to the number of shares of Class A Common Stock held by them. Without limiting the rights of any holders of Class B Common Stock to exchange their Common Units for shares of Class A Common Stock (with automatic cancellation of an equal number of shares of Class B Common Stock) in accordance with the Exchange Agreement (or for the consideration payable in respect of shares of Class A Common Stock in such voluntary or involuntary liquidation, dissolution or winding up), the holders of shares of Class B Common Stock, as such, will not be entitled to receive, with respect to such shares, any assets of the Corporation in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation.

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(g) Shares Deliverable in Exchange . The Corporation covenants that it will at all times reserve and keep available out of its authorized but unissued shares of Class A Common Stock, solely for the purpose of issuance upon exchange of the outstanding Common Units exchangeable for Class A Common Stock, such number of shares of Class A Common Stock that are issuable upon any such exchange; provided that nothing contained herein shall be construed to preclude the Corporation from satisfying its obligations in respect of any such exchange by delivery of purchased shares of Class A Common Stock (which may or may not be held in the treasury of the Corporation). The Corporation covenants that all shares of Class A Common Stock issued upon any such exchange will, upon issuance, be validly issued, fully paid and non-assessable.

 

(h) Reclassifications . In the event of a reclassification or other similar transaction as a result of which the shares of Class A Common Stock are converted into another security, then a holder of shares of Class B Common Stock shall be entitled to receive upon exchange of such shares (together with a commensurate number of Common Units) the amount of such security that such holder would have received if such exchange had occurred immediately prior to the record date of such reclassification or other similar transaction, taking into account any adjustment as a result of any subdivision (by any stock split or dividend, reclassification or otherwise) or combination (by reverse stock split, reclassification or otherwise) of such security that occurs after the effective time of such reclassification or other similar transaction.

 

(i) No Preemptive or Subscription Rights . No holder of shares of Common Stock shall be entitled to preemptive or subscription rights.

 

Section 4.04 Stock Adjustments .

 

(a) The Corporation shall undertake all actions, including, without limitation, a reclassification, dividend, division or recapitalization, with respect to the shares of Class A Common Stock necessary to maintain at all times a one-to-one ratio between the number of Common Units owned by the Corporation and the number of outstanding shares of Class A Common Stock, disregarding, for purposes of maintaining the one-to-one ratio, (i) shares of Class A Common Stock issued pursuant to the 2018 Omnibus Incentive Plan, and any other equity incentive plan adopted by the Corporation from time to time, that have not vested thereunder, (ii) treasury stock, or (iii) Preferred Stock or other debt or equity securities (including, without limitation, warrants, options and rights) issued by the Corporation that are convertible or exercisable or exchangeable for Class A Common Stock.

 

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

 

(c) The Corporation shall not undertake or authorize (i) any subdivision (by any stock split, stock dividend, reclassification, recapitalization or similar event) or combination (by reverse stock split, reclassification, recapitalization or similar event) of the Class A Common Stock that is not accompanied by an identical subdivision or combination of the Common Units

5

to maintain at all times a one-to-one ratio between the number of Common Units owned by the Corporation and the number of outstanding shares of Class A Common Stock; or (ii) any subdivision (by any stock split, stock dividend, reclassification, recapitalization or similar event) or combination (by reverse stock split, reclassification, recapitalization or similar event) of the Class B Common Stock that is not accompanied by an identical subdivision or combination of the Common Units to maintain at all times, subject to the provisions of this Certificate, a one-to-one ratio between the number of Common Units owned by the Permitted Class B Owners and the number of outstanding shares of Class B Common Stock, unless, in the case of clause (i) or (ii) of this Section 4.04(c), such action is necessary to maintain at all times both a one-to-one ratio between the number of Common Units owned by the Corporation and the number of outstanding shares of Class A Common Stock and a one-to-one ratio between the number of Common Units owned by the Permitted Class B Owners and the number of outstanding shares of Class B Common Stock.

 

(d) The Corporation shall not issue, transfer or deliver from treasury stock or repurchase shares of Class A Common Stock unless in connection with any such issuance, transfer, delivery or repurchase the Corporation takes or authorizes all requisite action such that, after giving effect to all such issuances, transfers, deliveries or repurchases, the number of Common Units owned by the Corporation will equal on a one-for-one basis the number of outstanding shares of Class A Common Stock, disregarding, for purposes of maintaining the one-to-one ratio, (i) shares of Class A Common Stock issued pursuant to the 2018 Omnibus Incentive Plan, and any other equity incentive plan adopted by the Corporation from time to time, that have not vested thereunder, (ii) treasury stock or (iii) Preferred Stock or other debt or equity securities (including, without limitation, warrants, options and rights) issued by the Corporation that are convertible or exercisable or exchangeable for Class A Common Stock (except to the extent the net proceeds from such other securities, including, without limitation, any exercise or purchase price payable upon conversion, exercise or exchange thereof, has been contributed by the Corporation to the equity capital of the LLC). The Corporation shall not issue, transfer or deliver from treasury stock or repurchase or redeem shares of Preferred Stock unless in connection with any such issuance, transfer, delivery, repurchase or redemption the Corporation takes all requisite action such that, after giving effect to all such issuances, transfers, repurchases or redemptions, the Corporation holds (in the case of any issuance, transfer or delivery) or ceases to hold (in the case of any repurchase or redemption) equity interests in the LLC which (in the good faith determination by the Board) are in the aggregate substantially equivalent in all respects to the outstanding Preferred Stock so issued, transferred, delivered, repurchased or redeemed.

 

(e) The Corporation shall not consolidate, merge, combine or consummate any other transaction (other than an action or transaction for which an adjustment is provided in Article IV) in which shares of Class A Common Stock are exchanged for or converted into other stock or securities, or the right to receive cash and/or any other property, unless in connection with any such consolidation, merger, combination or other transaction each Common Unit shall be entitled to be exchanged for or converted into (without duplication of any corresponding share of Class A Common Stock that the Corporation may issue upon exchange of such Common Unit by the holder thereof pursuant to the Exchange Agreement) the same kind and amount of stock or securities, cash and/or any other property, as the case may be, into which or for which each share of Class A Common Stock is exchanged or converted, in each case to maintain at all times a one-to-one ratio between (x) the stock or securities, or rights to receive cash and/or any other

6

property issuable in such transaction in exchange for or conversion of one share of Class A Common Stock and (y) the stock or securities, or rights to receive cash and/or any other property issuable in such transaction in exchange for or conversion of one Common Unit. The foregoing provisions of this Section 4.04(e) shall not apply to any action or transaction (including any consolidation, merger or combination) approved by the holders of a majority of the voting power of the Class A Common Stock and Class B Common Stock, each voting as a separate class.

 

(f) Notwithstanding anything to the contrary in this Section 4.04, in the event that (i) the Corporation repurchases Class A Common Stock using cash on the balance sheet of the Corporation, which cash was not received pursuant to a redemption by the Corporation of an equivalent number of Common Units, or (ii) the Corporation purchases Common Units, which purchase was funded by cash on the balance sheet of the Corporation, which cash was not received by the Corporation in a public offering of an equivalent number of shares of Class A Common Stock nor in a redemption by the Company of Common Units, then, in each such case, the requirement to maintain a one-to-one ratio shall not apply. In the event of a merger or other consolidation, the Corporation also shall not be required to maintain a one-to-one ratio to the extent that such one-to-one ratio would not take into account any cash on the balance sheet of the Corporation at the time of such merger or consolidation. In any such case described in this Section 4.04(f), appropriate adjustments to the Exchange Rate shall be made pursuant to Section 2.3 of the Exchange Agreement.

 

ARTICLE V

 

Section 5.01 Board of Directors . (a) The business and affairs of the Corporation shall be managed by or under the direction of the Board. Except as otherwise fixed by or pursuant to the provisions of Article IV of this Certificate relating to the rights of the holders of any series of Preferred Stock or any class or series of stock having a preference over the Common Stock as to dividends or upon dissolution, liquidation or winding up, the number of directors that shall constitute the Board shall be fixed from time to time exclusively by resolution of the Board.

 

(b) During any period when the holders of any series of Preferred Stock have the right to elect additional directors as provided for or fixed pursuant to the provisions of Article IV, then upon the commencement, and for the duration, of the period during which such right continues: (i) the then total authorized number of directors of the Corporation shall automatically be increased by such specified number of additional directors, and the holders of such Preferred Stock shall be entitled to elect the additional directors pursuant to the provisions of the Board’s designation for the series of Preferred Stock, and (ii) each such additional director shall serve until such director’s successor shall have been duly elected and qualified, or until such director’s right to hold such office terminates pursuant to such provisions, whichever occurs earlier, subject to his or her earlier death, disqualification, resignation or removal. 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 and the total and authorized number of directors of the Corporation shall be reduced accordingly.

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Section 5.02 Classified Board . The Board (other than those directors elected by the holders of any series of Preferred Stock provided for or fixed pursuant to Article IV (the “ Preferred Stock Directors ”)) shall be divided into three classes, as nearly equal in number as possible, designated Class I, Class II and Class III. Class I directors shall initially serve until the first annual meeting of stockholders following the effectiveness of this Article V; Class II directors shall initially serve until the second annual meeting of stockholders following the effectiveness of this Article V; and Class III directors shall initially serve until the third annual meeting of stockholders following the effectiveness of this Article V. Commencing with the first annual meeting of stockholders following the effectiveness of this Article V, each director of each class the term of which shall then expire shall be elected to hold office for a three-year term and until such director’s successor has been duly elected and qualified. In case of any increase or decrease, from time to time, in the number of directors (other than Preferred Stock Directors), the number of directors in each class shall be apportioned as nearly equal as possible. The Board is authorized to assign members of the Board already holding office to Class I, Class II or Class III. Nothing in this Certificate shall preclude a director from serving consecutive terms.

 

Section 5.03 Advance Notice of Stockholder Business and Nominations . Advance notice of nominations for the election of directors and of business to be brought by stockholders before any meeting of the stockholders of the Corporation shall be given in the manner and to the extent provided in the Bylaws.

 

Section 5.04 Vacancies and Newly Created Directorships . Except as otherwise provided for or fixed by or pursuant to the provisions of Article IV relating to the rights of the holders of any series of Preferred Stock or any class or series of stock having a preference over the Common Stock as to dividends or upon dissolution, liquidation or winding up, newly created directorships resulting from any increase in the number of directors or any vacancies on the Board resulting from death, resignation, retirement, disqualification, removal or other cause shall only be filled by the Board, and not by the stockholders, by the affirmative vote of a majority of the remaining directors then in office, or by a sole remaining director, even though less than a quorum of the Board. Any director so chosen shall hold office until the next election of the class for which such director shall have been chosen and until his or her successor shall be elected and qualified. No decrease in the number of directors constituting the Board shall shorten the term of any director then in office.

 

Section 5.05 Removal of Directors . Except for such additional directors, if any, as are elected by the holders of any series of Preferred Stock as provided for or fixed pursuant to Article IV, any director or the entire Board may be removed from office at any time, but only for cause and only by the affirmative vote of at least 66 2/3% of the total voting power of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class.

 

Section 5.06 No Cumulative Voting . There shall be no cumulative voting in the election of directors.

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ARTICLE VI

 

Section 6.01 No Action by Written Consent . Subject to the rights of the holders of any series of Preferred Stock or any class or series of stock having a preference over the Common Stock as to dividends or upon dissolution, liquidation or winding up, any action required or permitted to be taken by the stockholders of the Corporation may be effected only at a duly called annual or special meeting of stockholders of the Corporation and may not be effected by any consent in writing by such stockholders.

 

Section 6.02 Special Meetings . Except as otherwise required by law and subject to the rights of the holders of any series of Preferred Stock or any class or series of stock having a preference over the Common Stock as to dividends or upon dissolution, liquidation or winding up, special meetings of stockholders of the Corporation may be called only by (a) the Chairman of the Board, (b) the Chief Executive Officer of the Corporation or (c) the Board pursuant to a resolution approved by a majority of the entire Board. Any business transacted at any special meeting of stockholders shall be limited to matters relating to the purpose or purposes stated in the notice of meeting.

 

Section 6.03 No Written Ballot Requirement . Unless and except to the extent that the Bylaws shall so require, the election of directors need not be by written ballot.

 

ARTICLE VII

 

Section 7.01 Adoption, Amendment or Repeal of Bylaws . In furtherance and not in limitation of the powers conferred by law, the Board is expressly authorized to make, alter, amend or repeal the Bylaws without the assent or vote of the stockholders in any manner not inconsistent with the DGCL or this Certificate. Notwithstanding the foregoing and anything contained in this Certificate to the contrary, the Bylaws shall not be amended or repealed by the stockholders, and no provision inconsistent therewith shall be adopted by the stockholders, without the affirmative vote of the holders of at least 66 2/3% of the total voting power of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class.

 

ARTICLE VIII

 

Section 8.01 Amendments . The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate, in the manner now or hereafter prescribed by this Certificate and the DGCL, and all rights, preferences and privileges herein conferred upon stockholders by and pursuant to this Certificate in its present form or as hereafter amended are granted subject to the right reserved in this Article VIII. Notwithstanding the foregoing, the provisions set forth in Article V, Sections 6.01 and 6.02 of Article VI, Articles VII, VIII, IX, X and XI may not be repealed or amended in any respect, and no other provision may be adopted, amended or repealed that would have the effect of modifying or permitting the circumvention of the provisions set forth in Article V, Sections 6.01 and 6.02 of Article VI, Articles VII, VIII, IX, X and XI, unless such action is approved by the affirmative vote of the holders of not less than 66 2/3% of the voting power of the outstanding shares of capital stock of the Corporation entitled to vote with respect thereto, voting together as a single class.

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ARTICLE IX

 

Section 9.01 Limitation of Liability . The Corporation is authorized to indemnify, and to advance expenses to, each current, former or prospective director, officer, employee or agent of the Corporation to the fullest extent permitted by Section 145 of the DGCL. To the fullest extent permitted by the laws of the State of Delaware, no director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. No amendment to, or modification or repeal of, this Article IX shall adversely affect any right or protection of a director or of any officer, employee or agent of the Corporation existing hereunder with respect to any act or omission occurring prior to such amendment, modification or repeal.

 

ARTICLE X

 

Section 10.01 Section 203 of the DGCL . The Corporation expressly elects to be governed by Section 203 of the DGCL.

 

ARTICLE XI

 

Section 11.01 Exclusive Forum . Unless the Corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, the United States District Court for the District 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 asserting a claim of breach of a fiduciary duty owed by any director, officer, employee or stockholder of the Corporation to the Corporation or the Corporation’s stockholders, (iii) any action asserting a claim arising pursuant to any provision of the DGCL or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware, the Certificate or the Bylaws, or (iv) any action asserting a claim governed by the internal affairs doctrine; provided , however , that this exclusive forum provision shall not apply to any actions under United States federal securities laws.

 

Section 11.02 Notice . Any person purchasing or otherwise acquiring or holding any interest in shares of capital stock of the Corporation (including, without limitation, shares of Preferred Stock and/or Common Stock) shall be deemed to have notice of and to have consented to the provisions of this Article XI.

 

ARTICLE XII

 

Section 12.01 Severability . If any provision or provisions of this Certificate 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 Certificate (including, without limitation, each portion of any paragraph of this Certificate containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and (ii) to the fullest extent possible, the provisions of this Certificate (including, without limitation, each such portion of any paragraph of this Certificate containing any such provision held to be invalid, illegal or unenforceable) shall be construed so

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as to permit the Corporation to protect its directors, officers, employees and agents from personal liability in respect of their good faith service to or for the benefit of the Corporation to the fullest extent permitted by law.

 

If a provision of this Certificate is held to be invalid as written, then the arbitrator(s) or the court making such a determination shall interpret such provision as having been modified to the least extent possible to find it to be binding.

 

ARTICLE XIII

 

Section 13.01 Definitions . As used in this Certificate, unless the context requires otherwise, the term:

 

2018 Omnibus Incentive Plan ” means the GreenSky Holdings, LLC 2018 Omnibus Incentive Plan.

 

Board ” is defined in Section 4.02.

 

Bylaws ” means the bylaws of the Corporation, as such bylaws may be amended from time to time.

 

Cash Settlement Amount ” is defined in the Exchange Agreement.

 

Certificate ” is defined in the preamble.

 

Class A Common Stock ” is defined in Section 4.01.

 

Class B Common Stock ” is defined in Section 4.01.

 

Common Stock ” is defined in Section 4.01.

 

Common Unit ” means a membership interest in the LLC, authorized and issued under the LLC Agreement, and constituting a “Common Unit” as defined in the LLC Agreement as in effect as of the effective time of this Certificate.

 

Continuing LLC Members ” means the holders of Common Units (other than the Corporation) that are parties to the Exchange Agreement from time to time.

 

Corporation ” is defined in the preamble.

 

DGCL ” is defined in the preamble.

 

Equity Holder ” means any current or former holder (or group of holders) of any Equity Security.

 

Equity Security ” means any interest in the capital stock of the Corporation and/or any equity interest in any subsidiary of the Corporation.

 

Exchange Act ” means the United States Securities Exchange Act of 1934, as amended.

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Exchange Agreement ” means the Exchange Agreement among the Corporation, the LLC and the other parties thereto, as such may be amended from time to time.

 

Exchange Rate ” is defined in the Exchange Agreement.

 

LLC ” means GreenSky Holdings, LLC, a Georgia limited liability company, or any successor entity thereto.

 

LLC Agreement ” means the Amended and Restated Operating Agreement of the LLC, as such agreement may be further amended, restated, amended and restated, supplemented or otherwise modified from time to time.

 

Original Common Stock ” is defined in the preamble.

 

Permitted Class B Owners ” is defined in Section 4.03(b).

 

Preferred Stock ” is defined in Section 4.01.

 

Preferred Stock Directors ” is defined in Section 5.02.

 

Trigger Event ” means the first date on which the Continuing LLC Members cease collectively to beneficially own (directly or indirectly) 15% or more of the outstanding shares of Class A Common Stock (determined assuming that each Common Unit held by holders other than the Corporation was exchanged for Class A Common Stock in accordance with the terms and conditions of the Exchange Agreement).

 

[ Remainder of page intentionally left blank ]

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IN WITNESS WHEREOF, the undersigned has caused this Certificate to be executed by the officer below this 22 nd day of May, 2018.

 

  By:  /s/ David Zalik
  Name: David Zalik
  Title: Chief Executive Officer

 

[ Signature Page to Amended and Restated Certificate of Incorporation ]

 

Exhibit 3.2 

 

AMENDED AND RESTATED BYLAWS OF

 

GREENSKY, INC.

 

Effective as of May 23, 2018

 

TABLE OF CONTENTS

 

      Page
       
ARTICLE I   Offices 1
       
1.01   Registered Office 1
1.02   Other Offices 1
       
ARTICLE II   Meetings of Stockholders 1
       
2.01   Place of Meeting 1
2.02   Annual Meetings 1
2.03   Special Meetings 1
2.04   Notice of Meetings 1
2.05   Quorum 2
2.06   Adjournments 2
2.07   Order of Business; Stockholder Proposals 2
2.08   List of Stockholders 4
2.09   Voting 4
2.10   Inspectors 5
       
ARTICLE III   Board of Directors 5
       
3.01   General Powers 5
3.02   Number, Qualification and Election 5
3.03   Notification of Nominations 6
3.04   Quorum and Manner of Acting 8
3.05   Place of Meeting 8
3.06   Regular Meetings 8
3.07   Special Meetings 8
3.08   Notice of Meetings 8
3.09   Rules and Regulations 9
3.10   Participation in Meeting by Means of Communications Equipment 9
3.11   Action Without Meeting 9
3.12   Removals; Resignations 9
3.13   Compensation 9
       
ARTICLE IV   Committees of the Board of Directors 9
       
4.01   Committees of the Board 9
4.02   Conduct of Business 10
       
ARTICLE V   Officers 10
       
5.01   Number; Term of Office 10
5.02   Removal 10
5.03   Resignation 10
5.04   Chairman of the Board 10
5.05   Chief Executive Officer 10
5.06   President 10
5.07   Chief Operating Officer 11
5.08   Chief Financial Officer 11
5.09   Vice Presidents 11
5.10   Treasurer 11
5.11   Controller 11
5.12   Secretary 11
5.13   Assistant Treasurers, Assistant Controllers and Assistant Secretaries 11
5.14   Additional Matters 12
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TABLE OF CONTENTS
(Continued)

 

      Page
       
ARTICLE VI   Indemnification and Advancement of Expenses 12
       
6.01   Right to Indemnification 12
6.02   Advancement of Expenses 12
6.03   Claims 12
6.04   Non-exclusivity of Rights 12
6.05   Other Sources 12
6.06   Amendment or Repeal 13
6.07   Other Indemnification and Advancement of Expenses 13
       
ARTICLE VII   Capital Stock 13
       
7.01   Certificates 13
7.02   Transfer of Shares 13
7.03   Registered Stockholders and Addresses of Stockholders 13
7.04   Lost, Stolen or Destroyed Stock Certificates; Issuance of New Certificates 14
7.05   Regulations 14
7.06   Fixing Date for Determination of Stockholders of Record 14
7.07   Transfer Agents and Registrars 14
       
ARTICLE VIII   Seal 14
       
8.01   Seal 14
       
ARTICLE IX   Fiscal Year 14
       
9.01   Fiscal Year 14
       
ARTICLE X   Waiver of Notice 14
       
10.01   Waiver of Notice 14
       
ARTICLE XI   Amendments 15
       
11.01   Amendments 15
       
ARTICLE XII   Miscellaneous 15
       
12.01   Execution of Documents 15
12.02   Deposits 15
12.03   Checks 15
12.04   Proxies in Respect of Stock or Other Securities of Other Corporations 15
12.05   Subject to Law and Certificate of Incorporation 16
       
ARTICLE XIII   Severability 16
       
13.01   Severability 16
       
ARTICLE XIV   Definitions 16
       
14.01   Definitions 16
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AMENDED AND RESTATED BYLAWS OF

GREENSKY, INC.

Effective as of May 23, 2018

 

ARTICLE I
Offices

 

1.01 Registered Office . The registered office of GREENSKY, INC. (hereinafter called the “ Corporation ”) in the State of Delaware shall be at Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801, County of New Castle, and the registered agent shall be The Corporation Trust Company, or such other office or agent as the board of directors of the Corporation (the “ Board ”) shall from time to time select.

 

1.02 Other Offices . The Corporation may also have an office or offices, and keep the books and records of the Corporation, except as may otherwise be required by law, at such other place or places, either within or without the State of Delaware, as the Board may from time to time determine or the business of the Corporation may require.

 

ARTICLE II
Meetings of Stockholders

 

2.01 Place of Meeting . All meetings of the stockholders of the Corporation (the “ stockholders ”) shall be at a place to be determined by the Board.

 

2.02 Annual Meetings . The annual meeting of the stockholders for the election of directors and for the transaction of such other business as may properly come before the meeting shall be held on such date and at such hour as shall from time to time be fixed by the Board. Any previously scheduled annual meeting of the stockholders may be postponed by action of the Board taken prior to the time previously scheduled for such annual meeting of the stockholders.

 

2.03 Special Meetings . Special meetings of the stockholders may be called only in the manner set forth in the Certificate. Notice of every special meeting of the stockholders shall state the purpose or purposes of such meeting. Except as otherwise required by law, the business conducted at a special meeting of stockholders shall be limited exclusively to the business set forth in the Corporation’s notice of meeting, and the individual or group calling such meeting shall have exclusive authority to determine the business included in such notice.

 

2.04 Notice of Meetings . Except as otherwise provided by law, notice of each meeting of the stockholders, whether annual or special, shall be given by the Corporation not less than 10 days nor more than 60 days before the date of the meeting to each stockholder of record entitled to notice of the meeting and shall be called by the Corporation. If mailed, such notice shall be deemed given 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. Each such notice shall state the place, date and hour of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called. Notice of any meeting of the stockholders shall not be required to be given to any stockholder who shall attend such meeting in person or by proxy without protesting, prior to or at the commencement of the meeting, the lack of proper notice to such stockholder, or who shall waive notice thereof as provided in Article X of these Bylaws. Notice of adjournment of a meeting of the stockholders need not be given if the time and place to which it is adjourned are announced at such meeting, unless the adjournment is for more than 30 days or, after adjournment, a new record date is fixed for the adjourned meeting.

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2.05 Quorum . Except as otherwise provided by law or by the Certificate, the holders of a majority of the votes entitled to be cast by the stockholders entitled to vote generally, present in person or by proxy, shall constitute a quorum at any meeting of the stockholders; provided , however , that in the case of any vote to be taken by classes or series, the holders of a majority of the votes entitled to be cast by the stockholders of a particular class or series, present in person or by proxy, shall constitute a quorum of such class or series.

 

2.06 Adjournments . The chairman of the meeting or the holders of a majority of the votes entitled to be cast by the stockholders who are present in person or by proxy may adjourn the meeting from time to time whether or not a quorum is present. In the event that a quorum does not exist with respect to any vote to be taken by a particular class or series, the chairman of the meeting or the holders of a majority of the votes entitled to be cast by the stockholders of such class or series who are present in person or by proxy may adjourn the meeting with respect to the vote(s) to be taken by such class or series. At any such adjourned meeting at which a quorum may be present, any business may be transacted which might have been transacted at the meeting as originally called.

 

2.07 Order of Business; Stockholder Proposals . (a) At each meeting of the stockholders, the Chairman, or, in the absence of the Chairman, the Chief Executive Officer (if the position is held by an individual other than the Chairman) or, in the absence of the Chairman and the Chief Executive Officer, such person as shall be selected by the Board shall act as chairman of the meeting. The order of business at each such meeting shall be as determined by the chairman of the meeting. Except to the extent inconsistent with the rules and procedures as adopted by the Board or these Bylaws, the chairman of the meeting shall have the right and authority to prescribe such rules, regulations and procedures and to do all such acts and things as are necessary or desirable for the proper conduct of the meeting, including, without limitation, the establishment of procedures for the maintenance of order and safety, limitations on the time allotted to questions or comments on the affairs of the Corporation, restrictions on entry to such meeting after the time prescribed for the commencement thereof and the opening and closing of the voting polls.

 

(b) At any annual meeting of the stockholders, only such business shall be conducted as shall have been brought before the annual meeting (i) by or at the direction of the chairman of the meeting or (ii) by any stockholder who is a holder of record at the time of the giving of the notice provided for in this Section 2.07, who is entitled to vote at the meeting and who complies with the procedures set forth in this Section 2.07.

 

(c) For business properly to be brought before an annual meeting of stockholders by a stockholder, the stockholder must have given timely notice thereof in proper written form to the Secretary. To be timely, a stockholder’s notice must be delivered to or mailed and received at the principal executive offices of the Corporation not less than 120 days nor more than 150 days prior to the first anniversary of the date of the immediately preceding annual meeting; provided , however , that in the event that the date of the annual meeting is more than 30 days earlier or more than 30 days later than such anniversary date or if no annual meeting was held in the preceding year, notice by the stockholder to be timely must be so delivered or received not later than the close of business on the 10th day following the day on which Public Announcement of the date of such meeting is first made. In no event shall an adjournment or postponement of an annual meeting commence a new time period for the giving of a stockholder’s notice as described in this Section 2.07.

 

(d) To be in proper written form, a stockholder’s notice to the Secretary shall set forth in writing as to each matter the stockholder proposes to bring before the annual meeting:

 

(1) the name and record address of each stockholder proposing such business, as they appear on the Corporation’s books;

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(2) as to each stockholder proposing such business, the name and address of (i) any other beneficial owner of stock of the Corporation that are owned by such stockholder and (ii) any person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the stockholder or such beneficial owner (each, a “ Stockholder Associated Person ”);

 

(3) as to each stockholder proposing such business and any Stockholder Associated Person, (i) the class or series and number of shares of stock directly or indirectly held of record and beneficially by the stockholder proposing such business or Stockholder Associated Person, (ii) the date such shares of stock were acquired, (iii) a description of any agreement, arrangement or understanding, direct or indirect, with respect to such business between or among the stockholder proposing such business, any Stockholder Associated Person or any others (including their names) acting in concert with any of the foregoing, (iv) a description of any agreement, arrangement or understanding (including any derivative or short positions, profit interests, options, hedging transactions and borrowed or loaned shares) that has been entered into, directly or indirectly, as of the date of such stockholder’s notice by, or on behalf of, the stockholder proposing such business or any Stockholder Associated Person, the effect or intent of which is to mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of the stockholder proposing such business or any Stockholder Associated Person with respect to shares of stock of the Corporation (a “ Derivative ”), (v) a description in reasonable detail of any proxy (including revocable proxies), contract, arrangement, understanding or other relationship pursuant to which the stockholder proposing such business or Stockholder Associated Person has a right to vote any shares of stock of the Corporation, (vi) any rights to dividends on the stock of the Corporation owned beneficially by the stockholder proposing such business or Stockholder Associated Person that are separated or separable from the underlying stock of the Corporation, (vii) any proportionate interest in stock of the Corporation or Derivatives held, directly or indirectly, by a general or limited partnership in which the stockholder proposing such business or Stockholder Associated Person is a general partner or, directly or indirectly, beneficially owns an interest in a general partner and (viii) any performance-related fees (other than an asset-based fee) that the stockholder proposing such business or Stockholder Associated Person is entitled to based on any increase or decrease in the value of stock of the Corporation or Derivatives thereof, if any, as of the date of such notice. The information specified in Section 2.07(d)(1) to (3) is referred to herein as “ Stockholder Information ”;

 

(4) a representation that each such stockholder is a holder of record of stock of the Corporation entitled to vote at the meeting and intends to appear in person or by proxy at the meeting to propose such business;

 

(5) a brief description of the business desired to be brought before the annual meeting, the text of the proposal (including the text of any resolutions proposed for consideration and, in the event that such business includes a proposal to amend these Bylaws, the text of the proposed amendment) and the reasons for conducting such business at the meeting;

 

(6) any material interest of the stockholder and any Stockholder Associated Person in such business;

 

(7) a representation as to whether such stockholder intends (i) to deliver a proxy statement and form of proxy to holders of at least the percentage of the Corporation’s outstanding capital stock required to approve or adopt such business or (ii) otherwise to solicit proxies from the stockholders in support of such business;

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(8) all other information that would be required to be filed with the SEC if the stockholder or any Stockholder Associated Person were participants in a solicitation subject to Section 14 of the Exchange Act; and

 

(9) a representation that the stockholder shall provide any other information reasonably requested by the Corporation.

 

(e) Such stockholders shall also provide any other information reasonably requested by the Corporation within five business days after such request.

 

(f) In addition, such stockholder shall further update and supplement the information provided to the Corporation in the notice or upon the Corporation’s request pursuant to Section 2.07(e) as needed, so that such information shall be true and correct as of the record date for the meeting and as of the date that is the later of 10 business days before the meeting or any adjournment or postponement thereof. Such update and supplement must be delivered personally or mailed to, and received at the office of the Corporation, addressed to the Secretary, by no later than five business days after the record date for the meeting (in the case of the update and supplement required to be made as of the record date), and not later than seven business days before the date for the meeting (in the case of the update and supplement required to be made as of 10 business days before the meeting or any adjournment or postponement thereof).

 

(g) The foregoing notice requirements shall be deemed satisfied by a stockholder if the stockholder has notified the Corporation of his or her intention to present a proposal at an annual meeting and such stockholder’s proposal has been included in a proxy statement that has been prepared by management of the Corporation to solicit proxies for such annual meeting; provided , however , that if such stockholder does not appear or send a Qualified Representative to present such proposal at such annual meeting, the Corporation need not present such proposal for a vote at such meeting, notwithstanding that proxies in respect of such vote may have been received by the Corporation; and provided further , that the foregoing shall not imply any obligation beyond that required by applicable law to include a stockholder’s proposal in a proxy statement prepared by management of the Corporation. Notwithstanding anything in these Bylaws to the contrary, no business shall be conducted at any annual meeting except in accordance with the procedures set forth in this Section 2.07.

 

(h) The chairman of an annual meeting may refuse to permit any business to be brought before an annual meeting that fails to comply with this Section 2.07 or, in the case of a stockholder proposal, if the stockholder solicits proxies in support of such stockholder’s proposal without having made the representation required by Section 2.07(d)(7).

 

(i) The provisions of this Section 2.07 shall govern all business related to stockholder proposals at the annual meeting of stockholders; provided that business related to the election or nomination of directors shall be governed by the provisions of Section 3.03 and not by this Section 2.07.

 

2.08 List of Stockholders . It shall be the duty of the Secretary or other officer who has charge of the stock ledger to prepare and make, at least 10 days before each meeting of the stockholders, a complete list of the stockholders entitled to vote thereat, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in such stockholder’s name. Such list shall be produced and kept available at the times and places required by law.

 

2.09 Voting .

 

(a) Except as otherwise provided by law or by the Certificate, each stockholder of record of any series of Preferred Stock shall be entitled at each meeting of the stockholders to such number

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of votes, if any, for each share of such stock as may be fixed in the Certificate or in the resolution or resolutions adopted by the Board providing for the issuance of such stock, each stockholder of record of Class B Common Stock shall be entitled at each meeting of the stockholders to 10 votes for each share of such stock ( provided , however , that from and after the Trigger Event, each stockholder of record of Class B Common Stock shall be entitled at each meeting of the stockholders to one vote for each share of such stock), and each stockholder of record of Class A Common Stock shall be entitled at each meeting of the stockholders to one vote for each share of such stock, in each case, registered in such stockholder’s name on the books of the Corporation:

 

(1) on the date fixed pursuant to Section 7.06 of these Bylaws as the record date for the determination of stockholders entitled to notice of and to vote at such meeting; or

 

(2) if no such record date shall have been so fixed, then at the close of business on the day next preceding the day on which notice of such meeting is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held.

 

(b) Each stockholder entitled to vote at any meeting of the stockholders may authorize not in excess of three persons to act for such stockholder by proxy. Any such proxy shall be delivered to the secretary of such meeting at or prior to the time designated for holding such meeting, but in any event not later than the time designated in the order of business for so delivering such proxies. No such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period.

 

(c) Except as otherwise required by law and except as otherwise provided in the Certificate or these Bylaws, at each meeting of the stockholders, all corporate actions to be taken by vote of the stockholders shall be authorized by a majority of the votes cast by the stockholders entitled to vote thereon who are present in person or represented by proxy, and where a separate vote by class or series is required, a majority of the votes cast by the stockholders of such class or series who are present in person or represented by proxy shall be the act of such class or series.

 

(d) Unless required by law or determined by the chairman of the meeting to be advisable, the vote on any matter, including the election of directors, need not be by written ballot.

 

2.10 Inspectors . The chairman of the meeting shall appoint one or more inspectors to act at any meeting of the stockholders. Such inspectors shall perform such duties as shall be required by law or specified by the chairman of the meeting. Inspectors need not be stockholders. No director or nominee for the office of director shall be appointed such inspector.

 

ARTICLE III
Board of Directors

 

3.01 General Powers . The business and affairs of the Corporation shall be managed by or under the direction of the Board, which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by law or by the Certificate directed or required to be exercised or done by the stockholders.

 

3.02 Number, Qualification and Election .

 

(a) Except as otherwise fixed by or pursuant to the provisions of Article IV of the Certificate relating to the rights of the holders of any series of Preferred Stock or any class or series of stock having preference over the Common Stock as to dividends or upon dissolution, liquidation or winding up, the number of directors that shall constitute the Board shall be fixed from time to time exclusively by

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resolution of the Board. The election and terms of office of directors shall be governed by the Certificate. Each director shall hold office until a successor is duly elected and qualified or until the director’s earlier death, resignation, disqualification or removal.

 

(b) Unless the Board determines otherwise, to be eligible to be a nominee for election or reelection as a director, a person must deliver (in accordance with the time periods prescribed for delivery of notice by the Board) to the Secretary at the office of the Corporation a written questionnaire with respect to the background and qualification of such person and the background of any other person or entity on whose behalf the nomination is being made (which questionnaire shall be provided by the Secretary upon written request) and a written representation and agreement (in the form provided by the Secretary upon written request) that such person (A) is not and will not become a party to (i) any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity as to how such person will act or vote as a director on any issue or question (a “ Voting Commitment ”) that has not been disclosed to the Corporation or (ii) any Voting Commitment that could limit or interfere with such person’s ability to comply with such person’s fiduciary duties as a director under applicable law, (B) is not and will not become a party to any agreement, arrangement or understanding with any person or entity other than the Corporation with respect to any direct or indirect compensation, reimbursement or indemnification in connection with service or action as a director that has not been disclosed therein and (C) in such person’s individual capacity and on behalf of any person or entity on whose behalf the nomination is being made, would be in compliance, and will comply with all applicable publicly disclosed corporate governance, conflict of interest, confidentiality and stock ownership and trading and other policies and guidelines of the Corporation that are applicable to directors.

 

3.03 Notification of Nominations . (a) Subject to the rights of the holders of any series of Preferred Stock or any class or series of stock having a preference over the Common Stock as to dividends or upon dissolution, liquidation or winding up, nominations for the election of directors may be made only by (1) the Board (or a designated committee thereof) or (2) by any stockholder who is a stockholder of record at the time of giving of the notice of nomination provided for in this Section 3.03 and who is entitled to vote for the election of directors.

 

(b) Subject to the rights of the holders of any series of Preferred Stock or any class or series of stock having a preference over the Common Stock as to dividends or upon dissolution, liquidation or winding up, any stockholder of record entitled to vote for the election of directors at a meeting may nominate persons for election as directors only if timely written notice of such stockholder’s intent to make such nomination is given, either by personal delivery or by United States mail, postage prepaid, to the Secretary. To be timely, a stockholder’s notice must be delivered to or mailed and received at the principal executive offices of the Corporation (i) with respect to an election to be held at an annual meeting of the stockholders, not less than 120 days nor more than 150 days prior to the first anniversary of the date of the immediately preceding annual meeting; provided , however , that in the event that the date of the annual meeting is more than 30 days earlier or more than 30 days later than such anniversary date or if no annual meeting was held in the preceding year, notice by the stockholder to be timely must be so delivered or received not earlier than the 120th day prior to such annual meeting and not later than the close of business on the 10th day following the day on which Public Announcement of the date of such meeting is first made and (ii) with respect to an election to be held at a special meeting of the stockholders for the election of directors, not earlier than the 60th day prior to such special meeting and not later than the close of business on the 40th day prior to such special meeting; provided , however , that if less than 50 days’ notice or prior Public Announcement of the date of the special meeting of the stockholders is given or made to the stockholders, then to be timely such notice must be received by the Corporation no later than the close of business on the 10th day following the day on which a notice of the date of the special meeting was mailed to the stockholders or the Public Announcement of the date of the meeting was made. In no event shall an adjournment or postponement, or Public Announcement of an adjournment or postponement of an annual

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or special meeting commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described in this Section 3.03.

 

(c) Each such notice shall set forth:

 

(1) the Stockholder Information with respect to such stockholder and any Stockholder Associated Persons;

 

(2) a representation that the stockholder is a holder of record of stock of the Corporation entitled to vote in the meeting and intends to appear in person or by proxy at the meeting to propose such nomination;

 

(3) a description of all arrangements or understandings between the stockholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the stockholder;

 

(4) a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three years, and any other material relationships, between or among the stockholder and any Stockholder Associated Person or any of their respective affiliates or associates or other parties with whom they are acting in concert, including all information that would be required to be disclosed pursuant to Item 404 of Regulation S-K if the stockholder, Stockholder Associated Person or any person acting in concert therewith, were the “registrant” for purposes of such rule and each nominee were a director or executive of such registrant;

 

(5) such other information regarding each nominee proposed by such stockholder and Stockholder Associated Person as would have been required to be included in a proxy statement filed pursuant to the proxy rules of the SEC had each nominee been nominated, or intended to be nominated, by the Board and a completed signed questionnaire, representation and agreement required by Section 3.02(b);

 

(6) a representation as to whether such stockholder intends (a) to deliver a proxy statement and form of proxy to holders of at least the percentage of the Corporation’s outstanding capital stock required to approve the nomination or (b) otherwise to solicit proxies from stockholders in support of such nomination; and

 

(7) a representation that the stockholders shall provide any other information reasonably requested by the Corporation.

 

(d) Such stockholders shall also provide any other information reasonably requested by the Corporation within five business days after such request.

 

(e) In addition, such stockholders shall further update and supplement the information provided to the Corporation in the notice of nomination or upon the Corporation’s request pursuant to Section 3.03(e) as needed, so that such information shall be true and correct as of the record date for the meeting and as of the date that is 10 business days before the meeting or any adjournment or postponement thereof. Such update and supplement must be delivered personally or mailed to, and received at the office of, the Corporation, addressed to the Secretary, by no later than five business days after the record date for the meeting (in the case of the update and supplement required to be made as of the record date), and not later than seven business days before the date for the meeting (in the case of the update and supplement

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required to be made as of 10 business days before the meeting or any adjournment or postponement thereof).

 

(f) The chairman of the meeting may refuse to acknowledge the nomination of any person not made in compliance with the foregoing procedure or if the stockholder solicits proxies in favor of such stockholder’s nominee(s) without having made the representations required Section 3.03(c)(7).

 

(g) If such stockholder does not appear or send a Qualified Representative to present such proposal at such meeting, the Corporation need not present such proposal for a vote at such meeting, notwithstanding that proxies in respect of such vote may have been received by the Corporation.

 

(h) Subject to the rights of the holders of any series of Preferred Stock or any class or series of stock having a preference over the Common Stock of the Corporation as to dividends or upon dissolution, liquidation or winding up, only such persons who are nominated in accordance with the procedures set forth in this Section 3.03 shall be eligible to serve as directors of the Corporation.

 

(i) Notwithstanding anything in Section 3.03 to the contrary, in the event that the number of directors to be elected to the Board at an annual meeting of the stockholders is increased and there is no Public Announcement naming all of the nominees for directors or specifying the size of the increased Board made by the Corporation at least 120 days prior to the first anniversary of the date of the immediately preceding annual meeting, a stockholder’s notice required by this Section 3.03 shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to or mailed to and received by the Secretary at the principal executive offices of the Corporation not later than the close of business on the 10th day following the day on which such Public Announcement is first made by the Corporation.

 

3.04 Quorum and Manner of Acting . Except as otherwise provided by law, the Certificate or these Bylaws, a majority of the Whole Board shall constitute a quorum for the transaction of business at any meeting of the Board, and, except as so provided, the vote of a majority of the directors present at any meeting at which a quorum is present shall be the act of the Board. The chairman of the meeting or a majority of the directors present may adjourn the meeting to another time and place whether or not a quorum is present. At any adjourned meeting at which a quorum is present, any business may be transacted which might have been transacted at the meeting as originally called.

 

3.05 Place of Meeting . Subject to Sections 3.06 and 3.07, the Board may hold its meetings at such place or places within or without the State of Delaware as the Board may from time to time determine, or as shall be specified or fixed in the respective notices or waivers of notice thereof.

 

3.06 Regular Meetings . Regular meetings of the Board shall be held at such times as the Board shall from time to time determine, at such locations as the Board may determine. If any day fixed for a regular meeting shall be a legal holiday under the laws of the place where the meeting is to be held, the meeting which would otherwise be held on that day shall be held at the same hour on the next succeeding business day. No fewer than four meetings of the Board shall be held per year.

 

3.07 Special Meetings . Special meetings of the Board shall be held whenever called (a) by the Chairman of the Board, (b) by the Chief Executive Officer or (c) by two or more directors, and shall be held at such place, on such date and at such time as he or they, as applicable, shall fix.

 

3.08 Notice of Meetings . Notice of regular meetings of the Board or of any adjourned meeting thereof need not be given. Notice of each special meeting of the Board shall be given by overnight delivery service or mailed to each director, in either case addressed to such director at such director’s residence or

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usual place of business, at least two days before the day on which the meeting is to be held or shall be sent to such director at such place by telecopy or by electronic transmission or shall be given personally or by telephone, not later than the day before the meeting is to be held, but notice need not be given to any director who shall, either before or after the meeting, submit a waiver of such notice or who shall attend such meeting without protesting, prior to or at its commencement, the lack of notice to such director. Unless otherwise required by these Bylaws, every such notice shall state the time and place but need not state the purpose of the meeting.

 

3.09 Rules and Regulations . The Board may adopt such rules and regulations not inconsistent with the provisions of law, the Certificate or these Bylaws for the conduct of its meetings and management of the affairs of the Corporation as the Board may deem proper.

 

3.10 Participation in Meeting by Means of Communications Equipment . Any one or more members of the Board or any committee thereof may participate in any meeting of the Board or of any such committee by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other or as otherwise permitted by law, and such participation in a meeting shall constitute presence in person at such meeting.

 

3.11 Action Without Meeting . Unless otherwise restricted by these Bylaws, any action required or permitted to be taken at any meeting of the Board or any committee thereof may be taken without a meeting if all of the members of the Board or of any such committee, as the case may be, consent thereto in writing, by electronic transmission or as otherwise permitted by law and, if required by law, the writings or electronic transmissions are filed with the minutes or proceedings of the Board or of such committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.

 

3.12 Removals; Resignations . The directors of the Corporation may be removed in accordance with the Certificate and the General Corporation Law of the State of Delaware (the “ DGCL ”). Any director of the Corporation may at any time resign by notice in writing or by electronic transmission to the Board, the Chairman of the Board, the Chief Executive Officer or the Secretary. Such resignation shall take effect at the time specified therein or, if the time be not specified therein, upon receipt thereof; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

 

3.13 Compensation . Each director that is not otherwise an employee of the Corporation, in consideration of such person serving as a director, shall be entitled to receive from the Corporation such amount per annum and such fees (payable in cash or stock-based compensation) for attendance at meetings of the Board or of committees of the Board, or both, as the Board or a committee thereof shall from time to time determine. In addition, each such director shall be entitled to receive from the Corporation reimbursement for the reasonable expenses incurred by such person in connection with the performance of such person’s duties as a director. Nothing contained in this Section 3.13 shall preclude any such director from serving the Corporation or any of its subsidiaries in any other capacity and receiving compensation therefor.

 

ARTICLE IV
Committees of the Board of Directors

 

4.01 Committees of the Board . The Board shall designate such committees as may be required by the rules of The NASDAQ Stock Market LLC (or any other principal United States exchange upon which the shares of the Corporation may be listed) and may from time to time designate other committees of the Board (including an executive committee), with such lawfully delegable powers and duties as it thereby confers, to serve at the pleasure of the Board and shall, for those committees and any others provided for

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herein, elect a director or directors to serve as the member or members, designating, if it desires, other directors as alternate members who may replace any absent or disqualified member at any meeting of the committee.

 

4.02 Conduct of Business . Any committee, to the extent allowed by law and provided in the resolution establishing such committee or the charter of such committee, shall have and may exercise all the duly delegated powers and authority of the Board in the management of the business and affairs of the Corporation. The Board shall have the power to prescribe the manner in which proceedings of any such committee shall be conducted. In the absence of any such prescription, any such committee shall have the power to prescribe the manner in which its proceedings shall be conducted. Unless the Board or such committee shall otherwise provide, regular and special meetings and other actions of any such committee shall be governed by the provisions of Article III applicable to meetings and actions of the Board. Each committee shall keep regular minutes and report on its actions to the Board.

 

ARTICLE V
Officers

 

5.01 Number; Term of Office . The officers of the Corporation shall be elected by the Board and shall consist of: a Chairman of the Board, a Chief Executive Officer, a Secretary and a Treasurer. In addition, the Board may elect a President, a Chief Operating Officer, a Chief Financial Officer, one or more Vice Presidents (including, without limitation, Assistant, Executive, Senior and Group Vice Presidents), a Controller and such other officers and agents with such titles and such duties as the Board may from time to time determine, each to have such authority, functions or duties as provided in these Bylaws or as the Board may from time to time determine, and each to hold office for such term as may be prescribed by the Board and until such person’s successor shall have been chosen and shall qualify, or until such person’s death or resignation, or until such person’s removal in the manner hereinafter provided. One person may hold the offices and perform the duties of any two or more of said officers; provided , however , that no officer shall execute, acknowledge or verify any instrument in more than one capacity if such instrument is required by law, the Certificate or these Bylaws to be executed, acknowledged or verified by two or more officers. The Board may require any officer or agent to give security for the faithful performance of such person’s duties. Any vacancy occurring in any office of the Corporation may be filled by the Board.

 

5.02 Removal . Subject to Section 5.14, any officer may be removed, either with or without cause, by the Board at any meeting thereof called for the purpose, by the Chief Executive Officer, or by any other superior officer upon whom such power may be conferred by the Board.

 

5.03 Resignation . Any officer may resign at any time by giving notice to the Board, the Chief Executive Officer or the Secretary. Any such resignation shall take effect at the date of receipt of such notice or at any later date specified therein; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

 

5.04 Chairman of the Board . The Chairman of the Board may be an officer of the Corporation, subject to the control of the Board, and shall report directly to the Board.

 

5.05 Chief Executive Officer . The Chief Executive Officer shall have general supervision and direction of the business and affairs of the Corporation, subject to the control of the Board, and shall report directly to the Board.

 

5.06 President . The President shall perform such senior duties as he may agree with the Chief Executive Officer (if the position is held by an individual other than the Chief Executive Officer) or as the Board shall from time to time determine.

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5.07 Chief Operating Officer . The Chief Operating Officer shall perform such senior duties in connection with the operations of the Corporation as he may agree with the Chief Executive Officer or as the Board shall from time to time determine.

 

5.08 Chief Financial Officer . The Chief Financial Officer shall perform all the powers and duties of the office of the chief financial officer and in general have overall supervision of the financial operations of the Corporation. The Chief Financial Officer shall, when requested, counsel with and advise the other officers of the Corporation and shall perform such other duties as he may agree with the Chief Executive Officer or as the Board may from time to time determine. The Chief Financial Officer shall report directly to the Chief Executive Officer.

 

5.09 Vice Presidents . Any Vice President shall have such powers and duties as shall be prescribed by his superior officer or the Board. A Vice President shall, when requested, counsel with and advise the other officers of the Corporation and shall perform such other duties as he may agree with the Chief Executive Officer or as the Board may from time to time determine. A Vice President need not be an officer of the Corporation and shall not be deemed an officer of the Corporation unless elected by the Board.

 

5.10 Treasurer . The Treasurer shall supervise and be responsible for all the funds and securities of the Corporation; the deposit of all moneys and other valuables to the credit of the Corporation in depositories of the Corporation; borrowings and compliance with the provisions of all indentures, agreements and instruments governing such borrowings to which the Corporation is a party; the disbursement of funds of the Corporation and the investment of its funds; and in general shall perform all of the duties incident to the office of the Treasurer. The Treasurer shall, when requested, counsel with and advise the other officers of the Corporation and shall perform such other duties as he or she may agree with the Chief Executive Officer or the Chief Financial Officer or as the Board may from time to time determine.

 

5.11 Controller . The Controller shall be the chief accounting officer of the Corporation. The Controller shall, when requested, counsel with and advise the other officers of the Corporation and shall perform such other duties as he may agree with the Chief Executive Officer or the Chief Financial Officer or as the Board may from time to time determine.

 

5.12 Secretary . It shall be the duty of the Secretary to act as secretary at all meetings of the Board, of the committees of the Board and of the stockholders and to record the proceedings of such meetings in a book or books to be kept for that purpose; the Secretary shall see that all notices required to be given by the Corporation are duly given and served; the Secretary shall be custodian of the seal of the Corporation and when deemed necessary shall affix the seal or cause it to be affixed to all certificates of stock, if any, of the Corporation (unless the seal of the Corporation on such certificates shall be a facsimile, as hereinafter provided) and to all documents, the execution of which on behalf of the Corporation under its seal is duly authorized in accordance with the provisions of these Bylaws; the Secretary shall have charge of the books, records and papers of the Corporation and shall see that the reports, statements and other documents required by law to be kept and filed are properly kept and filed; and in general shall perform all of the duties incident to the office of Secretary. The Secretary shall, when requested, counsel with and advise the other officers of the Corporation and shall perform such other duties as he or she may agree with the Chief Executive Officer or as the Board may from time to time determine.

 

5.13 Assistant Treasurers, Assistant Controllers and Assistant Secretaries . Any Assistant Treasurers, Assistant Controllers and Assistant Secretaries shall perform such duties as shall be assigned to them by the Board or by the Treasurer, Controller or Secretary, respectively, or by the Chief Executive Officer. An Assistant Treasurer, Assistant Controller or Assistant Secretary need not be an officer of the Corporation and shall not be deemed an officer of the Corporation unless elected by the Board.

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5.14 Additional Matters . The Chairman of the Board, the Chief Executive Officer, the President, the Chief Operating Officer and the Chief Financial Officer of the Corporation shall have the authority to designate employees of the Corporation to have the title of Vice President, Assistant Vice President, Assistant Treasurer, Assistant Controller or Assistant Secretary. Any employee so designated shall have the powers and duties determined by the officer making such designation. The persons upon whom such titles are conferred shall not be deemed officers of the Corporation unless elected by the Board.

 

ARTICLE VI
Indemnification and Advancement of Expenses

 

6.01 Right to Indemnification . The Corporation shall indemnify and hold harmless, to the fullest extent permitted by applicable law (including as it presently exists or may hereafter be amended), any person (a “ Covered Person ”) who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (any such action, suit or proceeding, a “ proceeding ”), by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was a director or officer of the Corporation or, while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, limited liability company, joint venture, trust, enterprise or nonprofit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses (including attorneys’ fees) reasonably incurred by such Covered Person. Notwithstanding the preceding sentence, except as otherwise provided in Section 6.03 of these Bylaws, the Corporation shall be required to indemnify a Covered Person in connection with a proceeding (or part thereof) commenced by such Covered Person only if the commencement of such proceeding (or part thereof) by the Covered Person was authorized in the specific case by the Board.

 

6.02 Advancement of Expenses . The Corporation shall to the fullest extent not prohibited by applicable law pay the expenses (including attorneys’ fees) incurred by a Covered Person in defending any proceeding in advance of its final disposition, provided , however , that, to the extent required by law, such payment of expenses in advance of the final disposition of the proceeding shall be made only upon receipt of an undertaking by the Covered Person to repay all amounts advanced if it should be ultimately determined that the Covered Person is not entitled to be indemnified under this Article VI or otherwise.

 

6.03 Claims . If a claim for indemnification under this Article VI (following the final disposition of such proceeding) is not paid in full within 60 days after the Corporation has received a claim therefor by the Covered Person, or if a claim for any advancement of expenses under this Article VI is not paid in full within 30 days after the Corporation has received a statement or statements requesting such amounts to be advanced, the Covered Person shall thereupon (but not before) be entitled to file suit to recover the unpaid amount of such claim. If successful in whole or in part, the Covered Person shall be entitled to be paid the expense of prosecuting such claim to the fullest extent permitted by law. In any such action, the Corporation shall have the burden of proving that the Covered Person is not entitled to the requested indemnification or advancement of expenses under applicable law.

 

6.04 Non-exclusivity of Rights . The rights conferred on any Covered Person by this Article VI shall not be exclusive of any other rights which such Covered Person may have or hereafter acquires under any statute, provision of the Certificate, these Bylaws, agreement, vote of stockholders or disinterested directors or otherwise.

 

6.05 Other Sources . The Corporation’s obligation, if any, to indemnify or to advance expenses to any Covered Person who was or is serving at its request as a director, officer, employee or agent of another corporation, partnership, limited liability company, joint venture, trust, enterprise or nonprofit entity shall be reduced by any amount such Covered Person may collect as indemnification or advancement

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of expenses from such other corporation, partnership, limited liability company, joint venture, trust, enterprise or non-profit enterprise.

 

6.06 Amendment or Repeal . Any right to indemnification or to advancement of expenses of any Covered Person arising hereunder shall not be eliminated or impaired by an amendment to or repeal of these Bylaws after the occurrence of the act or omission that is the subject of the proceeding for which indemnification or advancement of expenses is sought.

 

6.07 Other Indemnification and Advancement of Expenses . This Article VI shall not limit the right of the Corporation, to the extent and in the manner permitted by law, to indemnify and to advance expenses to persons other than Covered Persons when and as authorized by appropriate corporate action.

 

ARTICLE VII
Capital Stock

 

7.01 Certificates . The shares of capital stock of the Corporation shall be represented by certificates, provided that the Board may provide by resolution or resolutions that some or all of any or all classes or series of capital stock shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the Corporation. Every holder of capital stock of the Corporation represented by certificates shall be entitled to have a certificate signed by or in the name of the Corporation by (a) any one officer of the Corporation who is the Chairperson, a Vice Chairperson, the Chief Executive Officer or a Vice President, and (b) by any one officer of the Corporation who is the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary or any Assistant Secretary, with such signatories certifying the number of shares of the applicable class or series of capital stock owned by such holder in the Corporation. Any of or all the signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent, or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if such person were such officer, transfer agent, or registrar at the date of issue.

 

7.02 Transfer of Shares . Stock of the Corporation shall be transferable in the manner prescribed by applicable law and in these Bylaws. Transfers of stock shall be made on the books of the Corporation, and in the case of certificated shares of stock, only by the person named in the certificate or by such person’s attorney lawfully constituted in writing and upon the surrender of the certificate therefor, properly endorsed for transfer and payment of all necessary transfer taxes; or, in the case of uncertificated shares of stock, upon receipt of proper transfer instructions from the registered holder of the shares or by such person’s attorney lawfully constituted in writing, and upon payment of all necessary transfer taxes and compliance with appropriate procedures for transferring shares in uncertificated form; provided , however , that such surrender and endorsement, compliance or payment of taxes shall not be required in any case in which the officers of the Corporation shall determine to waive such requirement. With respect to certificated shares of stock, every certificate exchanged, returned or surrendered to the Corporation shall be marked “Cancelled,” with the date of cancellation, by the Secretary or Assistant Secretary of the Corporation or the transfer agent thereof. No transfer of stock shall be valid as against the Corporation for any purpose until it shall have been entered in the stock records of the Corporation by an entry showing from and to whom transferred.

 

7.03 Registered Stockholders and Addresses of Stockholders . The Corporation shall be entitled to recognize the exclusive right of a person registered on its records as the owner of shares of stock to receive dividends and to vote as such owner, shall be entitled to hold liable for calls and assessments a person registered on its records as the owner of shares of stock, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares of stock on the part of any other person,

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whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.

 

Each stockholder shall designate to the Secretary or transfer agent of the Corporation an address at which notices of meetings and all other corporate notices may be given to such person, and, if any stockholder shall fail to designate such address, corporate notices may be given to such person by mail directed to such person at such person’s post office address, if any, as the same appears on the stock record books of the Corporation or at such person’s last known post office address.

 

7.04 Lost, Stolen or Destroyed Stock Certificates; Issuance of New Certificates . The Corporation may issue a new certificate for shares of stock in the place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the Corporation may require the owner of the lost, stolen or destroyed certificate, or such owner’s legal representative, to give the Corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate.

 

7.05 Regulations . The Board may make such additional rules and regulations as it may deem expedient concerning the issue, transfer and registration of certificated or uncertificated shares of stock of each class and series of the Corporation and may make such rules and take such action as it may deem expedient concerning the issue of certificates in lieu of certificates claimed to have been lost, destroyed, stolen or mutilated.

 

7.06 Fixing Date for Determination of Stockholders of Record . In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of the stockholders or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board may fix, in advance, a record date, which shall not be more than 60 days nor less than 10 days before the date of such meeting, nor more than 60 days prior to any other action. A determination of stockholders entitled to notice of or to vote at a meeting of the stockholders shall apply to any adjournment of the meeting; provided , however , that the Board may fix a new record date for the adjourned meeting.

 

7.07 Transfer Agents and Registrars . The Board may appoint, or authorize any officer or officers to appoint, one or more transfer agents and one or more registrars.

 

ARTICLE VIII
Seal

 

8.01 Seal . The corporate seal shall have the name of the Corporation inscribed thereon and shall be in such form as may be approved from time to time by the Board.

 

ARTICLE IX
Fiscal Year

 

9.01 Fiscal Year . The fiscal year of the Corporation shall be fixed by resolution of the Board.

 

ARTICLE X
Waiver of Notice

 

10.01 Waiver of Notice . Whenever any notice whatsoever is required to be given by these Bylaws, by the Certificate or by law, the person entitled thereto may, either before or after the meeting or other matter in respect of which such notice is to be given, waive such notice in writing or as otherwise

14

permitted by law, which shall be filed with or entered upon the records of the meeting or the records kept with respect to such other matter, as the case may be, and in such event such notice need not be given to such person and such waiver shall be deemed equivalent to such notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.

 

ARTICLE XI
Amendments

 

11.01 Amendments . These Bylaws may be altered, amended or repealed, in whole or in part, or new Bylaws may be adopted by the stockholders or by the Board at any meeting thereof in accordance with the Certificate and the DGCL; provided , however , that notice of such alteration, amendment, repeal or adoption of new Bylaws is contained in the notice of such meeting of the stockholders or in the notice of such meeting of the Board and, in the latter case, such notice is given not less than 24 hours prior to the meeting.

 

ARTICLE XII
Miscellaneous

 

12.01 Execution of Documents . The Board or any committee thereof shall designate the officers, employees and agents of the Corporation who shall have power to execute and deliver deeds, contracts, mortgages, bonds, debentures, notes, checks, drafts and other orders for the payment of money and other documents for and in the name of the Corporation and may authorize (including authority to redelegate) by written instrument to other officers, employees or agents of the Corporation. Such delegation may be by resolution or otherwise and the authority granted shall be general or confined to specific matters, all as the Board or any such committee may determine. In the absence of such designation referred to in the first sentence of this Section, the officers of the Corporation shall have such power so referred to, to the extent incident to the normal performance of their duties.

 

12.02 Deposits . All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation or otherwise as the Board or any committee thereof or any officer of the Corporation to whom power in respect of financial operations shall have been delegated by the Board or any such committee or in these Bylaws shall select.

 

12.03 Checks . All checks, drafts and other orders for the payment of money out of the funds of the Corporation, and all notes or other evidences of indebtedness of the Corporation, shall be signed on behalf of the Corporation in such manner as shall from time to time be determined by resolution of the Board or of any committee thereof or by any officer of the Corporation to whom power in respect of financial operations shall have been delegated by the Board or any such committee thereof or as set forth in these Bylaws.

 

12.04 Proxies in Respect of Stock or Other Securities of Other Corporations . The Board or any committee thereof shall designate the officers of the Corporation who shall have authority from time to time to appoint an agent or agents of the Corporation to exercise in the name and on behalf of the Corporation the powers and rights which the Corporation may have as the holder of stock or other securities in any other corporation or other entity, and to vote or consent in respect of such stock or securities; such designated officers may instruct the person or persons so appointed as to the manner of exercising such powers and rights; and such designated officers may execute or cause to be executed in the name and on behalf of the Corporation and under its corporate seal, or otherwise, such written proxies, powers of attorney or other

15

instruments as they may deem necessary or proper in order that the Corporation may exercise its said powers and rights.

 

12.05 Subject to Law and Certificate of Incorporation . All powers, duties and responsibilities provided for in these Bylaws, whether or not explicitly so qualified, are qualified by the provisions of the Certificate and applicable laws. Whenever these Bylaws may conflict with any applicable law or the Certificate, such conflict shall be resolved in favor of such law or the Certificate.

 

12.06 Manner of Notice . Without limiting the manner by which notice otherwise may be given effectively to stockholders, and except as prohibited by applicable law, any notice to stockholders given by the Corporation under any provision of applicable law, the Certificate, or these Bylaws shall be effective if given by a single written notice to stockholders who share an address if consented to by the stockholders at that address to whom such notice is given. Any such consent shall be revocable by the stockholder by written notice to the Corporation. Any stockholder who fails to object in writing to the Corporation, within 60 days of having been given written notice by the Corporation of its intention to send the single notice permitted under this Section 12.06, shall be deemed to have consented to receiving such single written notice.

 

ARTICLE XIII
Severability

 

13.01 Severability . If any provision or provisions of these Bylaws 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 these Bylaws (including, without limitation, each portion of any paragraph of these Bylaws containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and (ii) to the fullest extent possible, the provisions of these Bylaws (including, without limitation, each such portion of any paragraph of these Bylaws containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to permit the Corporation to protect its directors, officers, employees and agents from personal liability in respect of their good faith service to or for the benefit of the Corporation to the fullest extent permitted by law.

 

ARTICLE XIV
Definitions

 

14.01 Definitions

 

As used in these Bylaws, unless the context otherwise requires, the term:

 

Assistant Controller ” means an Assistant Controller of the Corporation.

 

Assistant Secretary ” means an Assistant Secretary of the Corporation.

 

Assistant Treasurer ” means an Assistant Treasurer of the Corporation.

 

Board ” is defined in Section 1.01.

 

Bylaws ” means the bylaws of the Corporation, as such bylaws may be amended from time to time.

 

Certificate ” means the Amended and Restated Certificate of Incorporation of the Corporation.

 

Chairman ” means the Chairman of the Board.

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Chief Executive Officer ” means the Chief Executive Officer of the Corporation.

 

Chief Financial Officer ” means the Chief Financial Officer of the Corporation.

 

Chief Operating Officer ” means the Chief Operating Officer of the Corporation.

 

Class A Common Stock ” is defined in the Certificate.

 

Class B Common Stock ” is defined in the Certificate.

 

Common Stock ” is defined in the Certificate.

 

Common Unit ” means a membership interest in the LLC, authorized and issued under the LLC Agreement, and constituting a “Common Unit” as defined in the LLC Agreement as in effect as of the effective time of the Certificate.

 

Continuing LLC Members ” means the holders of Common Units (other than the Corporation) that are parties to the Exchange Agreement from time to time.

 

Controller ” means the Controller of the Corporation.

 

Corporation ” is defined in Section 1.01.

 

Covered Person ” is defined in Section 6.01.

 

Derivative ” is defined in Section 2.07(d).

 

DGCL ” is defined in Section 3.12.

 

Exchange Act ” means the United States Securities Exchange Act of 1934, as amended.

 

Exchange Agreement ” means the Exchange Agreement, dated as of May 23, 2018, among the Corporation, the LLC and the other parties thereto, as such may be amended from time to time.

 

LLC ” means GreenSky Holdings, LLC, a Georgia limited liability company, or any successor entity thereto.

 

LLC Agreement ” means the Amended and Restated Operating Agreement of the LLC, dated as of May 23, 2018, as such agreement may be further amended, restated, amended and restated, supplemented or otherwise modified from time to time.

 

Preferred Stock ” is defined in the Certificate.

 

President ” means the President of the Corporation.

 

proceeding ” is defined in Section 6.01.

 

Public Announcement ” means disclosure (i) in a press release reported by the Dow Jones News Service, Reuters Information Service or any similar or successor news wire service or (ii) in a communication distributed generally to stockholders and in a document publicly filed by the Corporation with the SEC pursuant to Sections 13, 14 or 15(d) of the Exchange Act or any successor provisions thereto.

 

Qualified Representative ” means that a person must be a duly authorized officer, manager or partner of a 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.

 

SEC ” means the United States Securities and Exchange Commission.

 

Secretary ” means the Secretary of the Corporation.

 

Stockholder Associated Person ” is defined in Section 2.07(d).

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Stockholder Information ” is defined in Section 2.07(d).

 

stockholders ” is defined in Section 2.01.

 

Treasurer ” means the Treasurer of the Corporation.

 

Trigger Event ” means the first date on which the Continuing LLC Members cease collectively to beneficially own (directly or indirectly) 15% or more of the outstanding shares of Class A Common Stock (determined assuming that each Common Unit held by holders other than the Corporation was exchanged for Class A Common Stock in accordance with the terms and conditions of the Exchange Agreement).

 

Vice President ” means a Vice President of the Corporation.

 

Voting Commitment ” is defined in Section 3.02(b).

 

Whole Board ” means the total number of authorized directors, whether or not there exist any vacancies or unfilled previously authorized directorships.

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Exhibit 4.1

 

GREENSKY, INC.

 

REGISTRATION RIGHTS AGREEMENT

 

TABLE OF CONTENTS

 

Page

 

1. Definitions 1
2. Registration Rights 4
  2.1 Demand Registration 4
  2.2 Company Registration 7
  2.3 Underwriting Requirements 7
  2.4 Registration Procedures 9
  2.5 Suspension by the Company 12
  2.6 Furnish Information 13
  2.7 Expenses of Registration 13
  2.8 Delay of Registration 13
  2.9 Indemnification; Contribution 14
  2.10 Reports Under Exchange Act 17
  2.11 Limitations on Subsequent Registration Rights 17
  2.12 Lock-Up Agreements 18
  2.13 Restrictions on Transfer 18
  2.14 Termination of Registration Rights 19
3. Miscellaneous 19
  3.1 Successors and Assigns 19
  3.2 Governing Law 19
  3.3 Counterparts; Facsimile 20
  3.4 Titles and Subtitles 20
  3.5 Notices 20
  3.6 Amendments and Waivers 20
  3.7 Severability 21
  3.8 Aggregation of Stock 21
  3.9 Entire Agreement; Termination of Investors Rights Agreement 21
  3.10 Jurisdiction; Waiver of Jury Trial 21
  3.11 Delays or Omissions 22
  3.12 Acknowledgment 22
  3.13 Prevailing Party 22
  3.14 MNPI 22
i

REGISTRATION RIGHTS AGREEMENT

 

THIS REGISTRATION RIGHTS AGREEMENT (“ Agreement ”) is dated as of May 23, 2018 (the “ Effective Date ”), by and among GreenSky, Inc., a Delaware corporation (the “ Company ”), and each Person identified on Schedule A hereto as of the Effective Date.

 

RECITALS

 

WHEREAS, on the Effective Date, the Company, GreenSky Holdings, LLC, a Georgia limited liability company (“ GS Holdings ”), and the holders of equity interests in GS Holdings entered into that certain Reorganization Agreement (the “ Reorganization Agreement ”), pursuant to which the parties thereto agreed to take the actions described in Section 4 of the Reorganization Agreement (collectively, the “ Reorganization ”) on the Effective Date and immediately prior to the consummation of the IPO (as defined below);

 

WHEREAS, as of the date hereof, the Company has consummated an offer and sale of its shares of Class A common stock, $0.01 par value per share (the “ Class A Common Stock ”), to the public in an underwritten initial public offering (the “ IPO ”);

 

WHEREAS, GS Holdings and the investors listed on Schedule A thereto are parties to that certain Second Amended and Restated Investors Rights Agreement, dated as of August 24, 2017 (the “ Investors Rights Agreement ”), governing the rights of such investors to cause GS Holdings to register securities held by such investors and certain other matters as set forth therein; and

 

WHEREAS, in light of the consummation of the Reorganization and the IPO, the parties hereto desire to supersede the Investors Rights Agreement with this Agreement.

 

NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereby agree as follows:

 

1. Definitions . For purposes of this Agreement:

 

Additional Investor ” means a transferee of Registrable Securities in a transaction in which the applicable rights under this Agreement are assigned pursuant to Section 3.1 .

 

Affiliate ” means, with respect to any Person, any of the following: (i) any Person who, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, another Person; (ii) any Person owning or controlling ten percent (10%) or more of the outstanding voting securities or beneficial interest of another Person; (iii) any Person who is an officer, director, general partner or trustee of such Person, or anyone acting in a substantially similar capacity to such Person; and (iv) any Person who is an officer, director, general partner, trustee or holder of ten percent (10%) or more of the voting securities or beneficial interest of any of the foregoing; provided , that, with respect to any

 

Holder, “Affiliate” shall include any mutual funds or similar pooled vehicles or accounts that are controlled by, under common control with, managed or advised by the same management company or registered investment advisor (or an affiliate of such management company or registered investment advisor) as such Holder; provided, further, however, that “Affiliate” shall not be deemed to include any Person providing legal, accounting or other professional services to the Company, its members or their Affiliates merely by reason of the provision of such services.

 

Agreement ” has the meaning set forth in the introductory paragraph.

 

Automatic Shelf Registration Statement ” means an “automatic shelf registration statement” as defined in Rule 405 promulgated under the Securities Act.

 

Chosen Court ” has the meaning set forth in Section 3.10 .

 

Class A Common Stock ” has the meaning set forth in the recitals.

 

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

 

Company ” has the meaning set forth in the introductory paragraph.

 

Covered MNPI ” has the meaning set forth in Section 3.14(a) .

 

Damages ” means any loss, damage, claim, expense or liability (joint or several) to which a party hereto may become subject under the Securities Act, the Exchange Act, or other federal or state law, insofar as such loss, damage, claim, expense or liability (or any action or proceeding in respect thereof) arises out of or is based upon (i) any untrue statement or alleged untrue statement of a material fact contained in the Disclosure Package, the Prospectus, any Free Writing Prospectus, or any registration statement of the Company, including any preliminary Prospectus or Final Prospectus contained therein or any amendments or supplements thereto, or other document filed in connection therewith; (ii) an omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading; or (iii) any violation or alleged violation by the indemnifying party (or any of its agents or Affiliates) of the Securities Act, the Exchange Act, any state securities law, or any rule or regulation promulgated under the Securities Act, the Exchange Act, or any state securities law.

 

Demand Notice ” has the meaning set forth in Section 2.1(a) .

 

Disclosure Package ” means, with respect to any offering of Registrable Securities, (i) the preliminary Prospectus, (ii) each Free Writing Prospectus and (iii) all other information, in each case, that is deemed, under Rule 159 promulgated under the Securities Act, to have been conveyed to purchasers of securities at the time of sale of such securities (including, without limitation, a contract of sale).

 

Effective Date ” has the meaning set forth in the introductory paragraph.

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Exchange Act ” means the United States Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

Exchange Agreement ” means the agreement or agreements among the Company, GS Holdings and the holders of GS Holdings Units whereby such holders have the right to exchange their GS Holdings Units, together with an equal number of shares of Class B Common Stock, for shares of Class A Common Stock on a one-for-one basis, subject to customary adjustments for stock splits, stock dividends and reclassifications, or for cash (based on the market price of the shares of Class A Common Stock), at the Company’s option.

 

Excluded Registration ” means (i) a registration relating to the issuance of securities to employees of the Company or a subsidiary pursuant to a stock option, stock purchase, or similar plan on Form S-8 or its successor; (ii) a registration relating to an SEC Rule 145 transaction on Form S-4 or its successor; or (iii) a registration in which the only common equity securities being registered are common equity securities issuable upon conversion of debt securities that are also being registered.

 

Fifth Third ” means Fifth Third Capital Holdings, LLC.

 

Final Prospectus ” means the form of prospectus included in the registration statement at the time it becomes effective, or any amendment or supplement thereto filed with the SEC pursuant to Rule 424(b) under the Securities Act.

 

Form S-1 ” means such form under the Securities Act as in effect on the date hereof or any successor registration form under the Securities Act subsequently adopted by the SEC.

 

Form S-3 ” means such form under the Securities Act as in effect on the date hereof or any registration form under the Securities Act subsequently adopted by the SEC that permits incorporation of substantial information by reference to other documents filed by the Company with the SEC.

 

Free Writing Prospectus ” means any “free writing prospectus” as defined in Rule 405 promulgated under the Securities Act.

 

GAAP ” means generally accepted accounting principles in the United States, consistently applied.

 

GS Holdings ” has the meaning set forth in the recitals.

 

GS Holdings Units ” means the single class of common membership interests of GS Holdings issued in connection with the Reorganization.

 

Holder ” means any holder of Registrable Securities who is a party to this Agreement or who becomes a party hereto in accordance with the definition of “Investor” herein.

 

Immediate Family Member ” means a child, stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-

3

law, brother-in-law, or sister-in-law, including adoptive relationships, of a natural person referred to herein.

 

Initiating Holders ” means, collectively, Holders who properly initiate a registration request under this Agreement.

 

Investors ” means (a) the parties listed on Schedule A hereto, and (b) any Additional Investor.

 

Investors Rights Agreement ” has the meaning set forth in the recitals.

 

IPO ” has the meaning set forth in the recitals.

 

Joinder ” means a joinder to this Agreement in the form of Exhibit A hereto, executed by an Additional Investor and the Company.

 

Lead B Investor ” means TPG Georgia Holdings, LP.

 

MIS ” means MIS Investment Holdings, LLC.

 

MNPI ” means material non-public information within the meaning of Regulation FD promulgated under the Exchange Act.

 

Opt-Out Request ” has the meaning set forth in Section 3.14(d) .

 

Person ” means any individual or corporation, partnership, trust, limited liability company, association or other entity.

 

Policies ” has the meaning set forth in Section 3.14(b) .

 

Potential Takedown Participant ” has the meaning set forth in Section 2.1(e)(i) .

 

Prospectus ” means the prospectus related to any registration statement (including, without limitation, a prospectus or prospectus supplement that discloses information previously omitted from a prospectus filed as part of an effective registration statement in reliance on Rule 415, 430A, 430B or 430C under the Securities Act, as amended or supplemented by any amendment or prospectus supplement), including post-effective amendments, and all materials incorporated by reference in such prospectus.

 

Registrable Securities ” means (i) any Class A Common Stock now owned or hereafter acquired by any Investor, including, without limitation, upon exchange of GS Holdings Units and Class B Common Stock, and (ii) all shares of Class A Common Stock directly or indirectly issued or then issuable with respect to the securities referred to in clause (i) above by way of a stock dividend or stock split, or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization; excluding in all cases, however, any Registrable Securities sold by a Person in a transaction in which the applicable rights under this Agreement are not assigned pursuant to Section 3.1 , and excluding for purposes of Section 2 any shares for which registration rights have terminated pursuant to Section 2.14 of this

4

Agreement. Notwithstanding the foregoing, all shares of Class A Common Stock issuable upon exercise, conversion or exchange of any security or right received by a Holder in connection with the Reorganization shall be deemed Registrable Securities for the purpose of exercising any right hereunder, regardless of whether such securities have been so converted or exchanged.

 

Reorganization ” has the meaning set forth in the recitals.

 

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

 

Representatives ” has the meaning set forth in Section 3.14(b) .

 

Restricted Securities ” means the securities of the Company required to bear the legend set forth in Section 2.13(a) hereof.

 

SEC ” means the Securities and Exchange Commission.

 

SEC Rule 144 ” means Rule 144 promulgated by the SEC under the Securities Act.

 

SEC Rule 145 ” means Rule 145 promulgated by the SEC under the Securities Act.

 

Securities Act ” means the United States Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

Selling Expenses ” means all underwriting discounts, selling commissions, and stock transfer taxes applicable to the sale of Registrable Securities, and fees and disbursements of counsel for any Holder, except for the fees and disbursements of the Selling Holder Counsel borne and paid by the Company as provided in Section 2.7 .

 

Selling Holder Counsel ” means one counsel selected by the Lead B Investor on behalf of the Holders, or, if the Lead B Investor is not an Initiating Holder, Holders of a majority of the Registrable Securities to be registered.

 

Takedown Notice ” has the meaning set forth in Section 2.1(e)(i) .

 

Takedown Request ” has the meaning set forth in Section 2.1(e) .

 

2. Registration Rights . The Company covenants and agrees as follows:

 

2.1 Demand Registration .

 

(a) Form S-1 Demand . If at any time following the date of the Prospectus for the IPO, the Company receives a request from either (i) the Lead B Investor or (ii) Holders of (individually or in the aggregate) the greater of 25% of the

5

Registrable Securities or at least $50,000,000 of Registrable Securities (calculated based on the market price of the Registrable Securities on the date on which the Company receives the written request for such registration), that the Company file or submit a Form S-1 with respect to Registrable Securities having, an aggregate value of at least $50,000,000 (calculated based on the market price of the Registrable Securities on the date on which the Company receives the written request for such registration), then the Company shall (1) within three business days after the date such request is given, give notice thereof (the “ Demand Notice ”) to all Holders other than the Initiating Holders; and (2) file or submit as soon as practicable thereafter and use commercially reasonable efforts to have such registration statement declared effective by the SEC within 60 days of such Demand Notice, but in no event later than 90 days after the date such Demand Notice is given by the Company, a Form S-1 covering all Registrable Securities that the Initiating Holders requested to be registered and any additional Registrable Securities requested to be included in such registration by any other Holders, as specified by notice given by each such Holder to the Company within five business days of the date the Demand Notice is given, and in each case, subject to the limitations of Section 2.1(c) and Section 2.3 .

 

(b) Form S-3 Demand . If at any time following the date of the Prospectus for the IPO and when the Company is eligible to use a Form S-3, the Company receives a request from either (i) the Lead B Investor or (ii) Holders of (individually or in the aggregate) the greater of 12.5% of the Registrable Securities or $20,000,000 of Registrable Securities (calculated based on the market price of the Registrable Securities on the date on which the Company receives the written request for such registration) that the Company file a Form S-3 (which Form S-3 registration, at the request of the Initiating Holders, may be a shelf registration pursuant to Rule 415 promulgated under the Securities Act) with respect to outstanding Registrable Securities of the Lead B Investor or Holders having an aggregate value of at least $20,000,000 (calculated based on the market price of the Registrable Securities on the date on which the Company receives the written request for such registration), then the Company shall (x) within two business days after the date such request is given, give a Demand Notice to all Holders other than the Initiating Holders; and (y) file, as soon as practicable but in no event later than 30 days after the date such request is given by the Initiating Holders, a Form S-3 covering the Registrable Securities requested to be included in such registration by any other Holders, as specified by notice given by each such Holder to the Company within three business days of the date the Demand Notice is given, or such shorter period as may be reasonably requested under the circumstances, and in each case, subject to the limitations of Section 2.1(c) and Section 2.3 . If the Initiating Holders request, and if the Company is a Well-Known Seasoned Issuer (as defined in Rule 405 promulgated under the Securities Act), the Company shall cause such Form S-3 to be made pursuant to an Automatic Shelf Registration Statement and, if then permitted, will omit the names of the participating Holders and the amount of the Registrable Securities to be offered thereunder if so requested by the Initiating Holders.

 

(c) Notwithstanding the foregoing obligations, if the Company furnishes to Holders requesting registration pursuant to this Section 2.1 a certificate signed by the Company’s chief executive officer stating that in the good faith judgment

6

of the Company’s Board of Directors it would be materially detrimental to the Company and its stockholders for such registration statement to either become effective or remain effective for as long as such registration statement otherwise would be required to remain effective, because such action would (i) materially interfere with a significant acquisition, corporate reorganization, or other similar transaction involving the Company; (ii) require premature disclosure of material information that the Company has a bona fide business purpose for preserving as confidential; or (iii) render the Company unable to comply with requirements under the Securities Act or Exchange Act, then the Company shall have the right to defer taking action with respect to such filing, and any time periods with respect to filing or effectiveness thereof shall be tolled correspondingly, for a period of not more than 60 days after the request of the Initiating Holders is given; provided, however, that the Company may not invoke this right more than twice in any 12-month period for a period of more than 90 days in aggregate; and provided, further, that the Company shall not register any securities for its own account or that of any other stockholder during such 90-day period other than an Excluded Registration; and provided, further, that, in the case of clause (ii) above, (x) the Company shall instruct all executive officers and directors of the Company to suspend sales of the Company’s securities other than pursuant to existing Rule 10b5-1 trading plans and (y) the Company may not defer taking any action required pursuant to this Section 2.1 past the date upon which the applicable information is disclosed to the public or ceases to be material.

 

(d) The Company shall not be obligated to effect, or to take any action to effect, any registration pursuant to Section 2.1(a) , if requested, (i) during the period that is 30 days before the Company’s good faith estimate of the date of filing of, and ending on a date that is 90 days after the effective date of a Company-initiated registration, provided , that the Company is actively employing in good faith reasonable best efforts to cause at least 80% of the Registrable Securities subject to each request by a Holder to be included in such registration statement to be so included and to cause such registration statement to become effective pursuant to Section 2.2 of this Agreement; (ii) (x) at the request of the Lead B Investor, after the Company has effected two registrations pursuant to Section 2.1(a) at the request of the Lead B Investor, or (y) at the request of any Holders other than the Lead B Investor, after the Company has effected three registrations pursuant to Section 2.1(a) at the request of any Holders other than the Lead B Investor; or (iii) if the Initiating Holders propose to dispose of shares of Registrable Securities that may be immediately registered on Form S-3 pursuant to a request made pursuant to Section 2.1(b) . The Company shall not be obligated to effect, or to take any action to effect, any registration pursuant to Section 2.1(b) , if requested, (i) during the period that is 30 days before the Company’s good faith estimate of the date of filing of, and ending on a date that is 90 days after the effective date of, a Company-initiated registration, provided , that the Company is actively employing in good faith reasonable best efforts to cause at least 80% of the Registrable Securities subject to each request by a Holder to be included in such registration statement to be so included and to cause such registration statement to become effective pursuant to Section 2.2 of this Agreement; or (ii) if the Company has effected one registration pursuant to Section 2.1(b) within the 90-day period immediately preceding the date of such request. A registration shall not be counted as “effected” for purposes of this Section 2.1(d) until such time as the applicable registration statement has become effective or been declared effective by the SEC, unless

7

the Initiating Holders withdraw their request for such registration, elect not to pay the related registration expenses, and forfeit their right to one demand registration statement pursuant to Section 2.7 , in which case such withdrawn registration statement shall be counted as “effected” for purposes of this Section 2.1(d) .

 

(e) At any time a shelf registration statement covering Registrable Securities is effective, (i) the Lead B Investor or (ii) Holders of (individually or in the aggregate) the greater of 12.5% of the Registrable Securities or $20,000,000 of Registrable Securities (calculated based on the market price of the Registrable Securities on the date on which the Company receives the written request for such registration), may deliver a written request to the Company to effect a public offering, including an underwritten public offering, of all or a portion of the Registrable Securities held by such Initiating Holder(s) that are registered on such registration statement (a “ Takedown Request ”).

 

(i) With respect to any Takedown Request involving an underwritten public offering, promptly upon receipt of such Takedown Request (but in no event more than two business days thereafter) the Company shall deliver a notice (a “ Takedown Notice ”) to each other Holder of Registrable Securities covered by the applicable registration statement, or to all other Holders of Registrable Securities if such registration statement is undesignated (each a “ Potential Takedown Participant ”). The Takedown Notice shall offer each such Potential Takedown Participant the opportunity to include in the applicable underwritten public offering such number of Registrable Securities as each such Potential Takedown Participant may request in writing. Subject to Section 2.3(a) , the underwritten public offering shall include all such Registrable Securities with respect to which the Company has received written requests for inclusion therein from any Potential Takedown Participant within three business days after the date that the Takedown Notice has been delivered. Any Potential Takedown Participant’s written request to participate in such underwritten public offering shall be binding on the Potential Takedown Participant, subject to Section 2.3(d) .

 

(ii) A s promptly as practicable after receiving a Takedown Request, the Company shall (i) file with the SEC a prospectus supplement naming the participating Holders as selling stockholders and the amount of Registrable Securities to be offered and include, to the extent not included or incorporated by reference in the registration statement, any other information omitted from the Prospectus used in connection with such registration statement as permitted by Rule 430B promulgated under the Securities Act (including the plan of distribution and the names of any underwriters, placement agents or brokers) and (ii) pay any necessary filing fees to the SEC within the time period required; provided, that, in connection with a Takedown Request relating to an underwritten public offering, the Company shall coordinate the timing of the foregoing actions with the Initiating Holder(s).

 

(f) Notwithstanding anything herein to the contrary, to the extent that any requested action pursuant to this Section 2.1 would require waiver of one

8

or more lock-up agreements among Holders and underwriters of the Company’s securities, each such Holder agrees to provide the Company with a written waiver of each such lock-up agreement; and the Company shall defer making any public filing or executing any agreement required pursuant to this Section 2.1 until each such Holder has provided such waiver.

 

2.2 Company Registration . If the Company proposes to register (including, for this purpose, a registration effected by the Company for stockholders other than the Holders) any of its Class A Common Stock under the Securities Act in connection with the public offering of such securities for cash (other than in an Excluded Registration or the IPO), the Company shall, at such time, promptly give each Holder notice of such proposed registration. Upon the request of each applicable Holder given within 10 days after such notice is given by the Company, the Company shall, subject to the provisions of Section 2.3 , cause to be registered all of the Registrable Securities that each such Holder has requested to be included in such registration. The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 2.2 before the effective date of such registration, whether or not any Holder has elected to include Registrable Securities in such registration, and the Company shall give notice to such Holders of such termination or withdrawal promptly thereafter. The expenses (other than Selling Expenses) of such withdrawn registration shall be borne by the Company in accordance with Section 2.7 .

 

2.3 Underwriting Requirements .

 

(a) If, pursuant to Section 2.1 , the Initiating Holders intend to distribute the Registrable Securities covered by their request (or to distribute any Registrable Securities under a shelf registration statement filed pursuant to Rule 415 promulgated under the Securities Act) by means of an underwriting, they shall so advise the Company as a part of their request made pursuant to Section 2.1 , and the Company shall include such information in the Demand Notice. The underwriter(s), which shall be (an) investment banking firm(s) of national reputation, will be selected (i) in the event of an offering that includes a primary offering, by the Company and shall be reasonably acceptable to a majority in interest of the Registrable Securities held by all Initiating Holders and (ii) in the event of an offering that solely includes a secondary offering or a distribution of any Registrable Securities under a shelf registration statement filed pursuant to Rule 415 promulgated under the Securities Act, by a majority in interest of the Registrable Securities held by all Initiating Holders, which majority shall include the Lead B Investor if the Lead B Investor is an Initiating Holder, and shall also be reasonably acceptable to the Company. In such event, the right of any Holder to include such Holder’s Registrable Securities in such registration shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided herein. All Holders proposing to distribute their securities through such underwriting shall (together with the Company as provided in Section 2.4(e) ) enter into an underwriting agreement in customary form with the underwriter(s) selected for such underwriting, which

9

underwriting agreement shall be reasonably acceptable to the Company and to the Initiating Holders holding a majority of the Registrable Securities to be registered. Notwithstanding any other provision of this Section 2.3 , if the managing underwriter(s) advise(s) the Initiating Holders in writing that marketing factors require a limitation on the number of shares to be underwritten, then the Company shall so advise all Holders of Registrable Securities that otherwise would be underwritten pursuant hereto, and the number of Registrable Securities that may be included in the underwriting shall be allocated among such Holders of Registrable Securities, including the Initiating Holders, in proportion (as nearly as practicable) to the number of Registrable Securities owned by each Holder or in such other proportion as shall mutually be agreed to by all such selling Holders; provided, however, that the number of Registrable Securities held by the Holders to be included in such underwriting shall not be reduced unless all other securities are first entirely excluded from the underwriting.

 

(b) In connection with any offering involving an underwriting of shares of the Company’s capital stock pursuant to Section 2.2 , the Company shall not be required to include any of the Holders’ Registrable Securities in such underwriting unless the Holders accept the terms of the underwriting as agreed upon between the Company and its underwriters, and then only in such quantity as the underwriters in their sole discretion determine will not jeopardize the success of the offering by the Company. If the total number of securities, including Registrable Securities, requested by stockholders to be included in such offering exceeds the number of securities to be sold (other than by the Company for its own account) that the underwriters in their reasonable discretion determine is compatible with the success of the offering, then the Company shall be required to include in the offering only that number of such securities, including Registrable Securities, which the underwriters and the Company in their sole discretion determine will not jeopardize the success of the offering. If the underwriters determine that less than all of the Registrable Securities requested to be registered can be included in such offering, then the Registrable Securities that are included in such offering shall be allocated among the selling Holders in proportion (as nearly as practicable) to the number of Registrable Securities owned by each selling Holder or in such other proportion as shall mutually be agreed to by all such selling Holders. Notwithstanding the foregoing, in no event shall (i) the number of Registrable Securities included in the offering be reduced unless all other securities (other than securities to be sold by the Company for its own account) are first entirely excluded from the offering, in which case the selling Holders may be excluded further if the underwriters make the determination described above and no other stockholder’s securities are included in such offering, or (ii) the number of Registrable Securities included in the offering be reduced below thirty percent (30%) of the total number of securities included in such offering. For purposes of the provision in this Section 2.3(b) concerning apportionment, for any selling Holder that is a partnership, limited liability company, or corporation, the partners, members, retired partners, retired members, stockholders, and Affiliates of such Holder, or the estates and Immediate Family Members of any such partners, retired partners, members, and retired members and any trusts for the benefit of any of the foregoing Persons, shall be deemed to be a single “selling Holder,” and any pro rata reduction with respect to such “selling Holder” shall be based upon the aggregate number of Registrable Securities owned by all Persons included in such “selling Holder,” as defined in this sentence.

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(c) For purposes of Section 2.1 , a registration shall not be counted as “effected” if, as a result of an exercise of the underwriter’s cutback provisions in Section 2.3(a) , fewer than 50% of the total number of Registrable Securities that Holders have requested to be included in such registration statement are actually included.

 

(d) Any Holder shall have the right to withdraw all or part of its request for inclusion of its Registrable Securities in a registration by giving written notice to the Company of its request to withdraw prior to the execution of the underwriting agreement; provided , however , that (i) any Holder’s request to participate in an underwritten sale off of an effective shelf registration statement shall be binding on such Holder; (ii) each such Holder that elects to participate in such underwritten shelf takedown may condition its participation on such underwritten offering being completed within ten (10) business days of its acceptance at a price per share (after giving effect to any underwriters’ discounts or commissions) to such Holder of not less than ninety percent (90%) of the closing price for the shares on their principal trading market on the business day immediately prior to such Holder’s election to participate; and (iii) in the event that an Initiating Holder gives such written notice to withdraw with respect to a registration under Section 2.1 it thereafter shall have one fewer demand registration rights thereunder.

 

2.4 Registration Procedures . Whenever the Initiating Holders have requested that any Registrable Securities be registered pursuant to this Agreement or have initiated a distribution of any Registrable Securities under a shelf registration statement filed pursuant to Rule 415 promulgated under the Securities Act, such Holders shall, if applicable, cause any underlying GS Holdings Units, together with Class B Common Stock, to be exchanged into shares of Class A Common Stock in accordance with the terms of the Exchange Agreement prior to the sale of such Registrable Securities. Whenever required under this Section 2 to file a registration statement in respect of any Registrable Securities or requested by the Initiating Holders to conduct an underwritten sale pursuant to an effective shelf registration statement pursuant to Section 2.1(e) , the Company shall, as expeditiously as reasonably possible:

 

(a) prepare and file or submit with the SEC a registration statement with respect to such Registrable Securities and use its reasonable best efforts to cause such registration statement to become effective and, upon the request of the Holders of a majority of the Registrable Securities registered thereunder, keep such registration statement effective for a period of up to 120 days (or, in the case of a Form S-3, three years from the effective date of the registration statement if such registration statement is filed pursuant to Rule 415 promulgated under the Securities Act) or, if earlier, until the distribution contemplated in the registration statement has been completed; provided, however, that before filing or submitting a registration statement or Prospectus or any amendments or supplements thereto (including, without limitation, any documents incorporated by reference therein), or before using any Free Writing Prospectus, the Company shall provide the Selling Holder Counsel, each participating Holder, any managing underwriter or broker/dealer participating in any disposition of

11

such Registrable Securities pursuant to a registration statement and any attorney retained by any such managing underwriter or broker/dealer with an opportunity to review and comment on such registration statement and each Prospectus included therein (and each amendment or supplement thereto) and each Free Writing Prospectus to be filed with the SEC, subject to such documents being under the Company’s control, and the Company shall notify the Selling Holder Counsel and each seller of Registrable Securities pursuant to such registration statement of any stop order issued or threatened by the SEC and take all reasonable actions required to prevent the entry of such stop order or to remove it if entered, and provided, further, that in the case of a registration not filed pursuant to Rule 415 promulgated under the Securities Act, such 120-day period shall be extended for a period of time equal to the period the Holder refrains, at the request of an underwriter of Class A Common Stock (or other securities) of the Company, from selling any securities included in such registration;

 

(b) prepare and file with the SEC such amendments and supplements to such registration statement, and the Prospectus used in connection with such registration statement, as may be necessary to comply with the Securities Act in order to enable the disposition of all securities covered by such registration statement;

 

(c) furnish to the selling Holders such numbers of copies of a Prospectus, including a preliminary Prospectus, as required by the Securities Act, and such other documents as the Holders may reasonably request in order to facilitate their disposition of their Registrable Securities;

 

(d) register and qualify the securities covered by such registration statement under such other securities or “blue sky” laws of such jurisdictions as shall be reasonably requested by the selling Holders, and continue such registration or qualification in effect in such jurisdiction for as long as permissible pursuant to the laws of such jurisdiction, or for as long as any such selling Holder requests or until all of such Registrable Securities are sold, whichever is shortest, and do any and all other acts and things which may be reasonably necessary or advisable to enable any such selling Holder to consummate the disposition in such jurisdictions of the Registrable Securities owned by such selling Holder; provided, that the Company shall not be required to qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 2.4(d) or to file a general consent to service of process in any such states or jurisdictions, unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act;

 

(e) in the event of any underwritten public offering, (i) enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the underwriter(s) of such offering and, to the extent reasonably requested by such underwriter(s), take all such other actions as are reasonably required in order to expedite or facilitate the disposition of such Registrable Securities in any such underwritten public offering, including, but not limited to, sending appropriate officers of the Company to attend any “road shows” scheduled in connection with such underwritten public offering, with all reasonable out-of-pocket expenses incurred by such officers in connection with such attendance to be paid by the Company, and (ii) if requested by

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underwriter(s) of such public offering, use reasonable best efforts to cause its directors and executive officers to agree to enter into customary lock-up agreements with such underwriter(s) in connection therewith, provided, that the lock-up period shall not exceed 90 days following the date of the final prospectus or prospectus supplement relating to such offering and shall not be greater than the period agreed to by Holders in accordance with Section 2.12 , and, provided, further , that such lock-up agreements shall contain customary exclusions, including, but not limited to, exclusions for sales (other than in the open market) of the Company’s securities to cover taxes on vesting of equity awards, estate planning transactions and sales under existing Rule 10b5-1 trading plans;

 

(f) use its reasonable best efforts to cause all such Registrable Securities covered by such registration statement to be listed on a national securities exchange or trading system and each securities exchange and trading system (if any) on which similar securities issued by the Company are then listed;

 

(g) provide a transfer agent and registrar for all Registrable Securities registered pursuant to this Agreement and provide a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration statement;

 

(h) promptly make available for inspection by the selling Holders, any managing underwriter(s) participating in any disposition pursuant to such registration statement, and any attorney or accountant or other agent retained by any such underwriter or selected by the selling Holders, all financial and other records, pertinent corporate documents, and properties of the Company, and cause the Company’s officers, directors, employees, and independent accountants to supply all information reasonably requested by any such seller, underwriter, attorney, accountant, or agent, in each case, as necessary or advisable to verify the accuracy of the information in such registration statement and to conduct appropriate due diligence in connection therewith;

 

(i) if such sale is pursuant to an underwritten offering, use its reasonable best efforts to obtain a comfort letter dated the effective date of the registration statement (or, in the case of a shelf registration statement pursuant to Rule 415 promulgated under the Securities Act, on the pricing date of each offering under such shelf registration statement) and the date of the closing under the underwriting agreement from the Company’s independent registered public accounting firm in customary form and covering such matters of the type customarily covered by comfort letters as the managing underwriter reasonably requests;

 

(j) use its reasonable best efforts to furnish, at the request of any seller of Registrable Securities on the date such securities are delivered to the underwriters for sale pursuant to such registration, an opinion, dated such date, of counsel representing the Company for the purposes of such registration, addressed to the underwriters or, if there are no underwriters, any selling Holder covering such legal matters with respect to the registration in respect of which such opinion is being given as the underwriters may reasonably request and are customarily included in such opinions;

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(k) use its reasonable best efforts to comply with all applicable rules and regulations of the SEC, and make available to its security holders, as soon as reasonably practicable but no later than fifteen months after the effective date of the registration statement, an earnings statement covering a period of twelve months beginning after the effective date of the registration statement, in a manner which satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 promulgated under the Securities Act;

 

(l) cooperate with each seller of Registrable Securities and each underwriter participating in the disposition of such Registrable Securities and their respective counsel in connection with any filings required to be made with the Financial Industry Regulatory Counsel;

 

(m) cause the Registrable Securities covered by such registration statement to be registered with or approved by such other governmental agencies or authorities, as may be reasonably necessary by virtue of the business and operations of the Company to enable the seller or sellers of Registrable Securities to consummate the disposition of such Registrable Securities;

 

(n) take all other steps reasonably necessary to effect the registration of the Registrable Securities contemplated hereby and reasonably cooperate with the holders of such Registrable Securities to facilitate the disposition of such Registrable Securities pursuant thereto;

 

(o) within the deadlines specified by the Securities Act and the rules promulgated thereunder, make all required filings of all Prospectuses and Free Writing Prospectuses with the SEC;

 

(p) within the deadlines specified by the Securities Act and the rules promulgated thereunder, make all required filing fee payments in respect of any registration statement or Prospectus used under this Agreement (and any offering covered thereby);

 

(q) promptly notify the Holders, at any time when a Prospectus relating thereto is required to be delivered under the Securities Act, of the occurrence of an event requiring the preparation of a supplement or amendment to such Prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such Prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading and promptly prepare and make available to the Holders and file with the SEC any such supplement or amendment;

 

(r) notify each selling Holder, promptly after the Company receives notice thereof, of the time when the registration statement has been declared effective or a supplement to any Prospectus forming a part of such registration statement has been filed; and

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(s) after such registration statement becomes effective, notify each selling Holder of any request by the SEC that the Company amend or supplement such registration statement or Prospectus.

 

2.5 Suspension by the Company .

 

(a) Notwithstanding the provisions of this Section 2 , the Company shall, subsequent to notifying each Holder, be entitled to suspend, for a reasonable period of time, the effectiveness or use of, or trading under, any registration statement in accordance with Section 2.1(c) if the Company shall determine that any sale of any securities pursuant to such registration statement would in the good faith judgment of the Board of Directors of the Company:

 

(i) materially impede, delay or interfere with any material pending or proposed financing, acquisition, corporate reorganization or other similar transaction involving the Company;

 

(ii) require premature disclosure of material information that the Company has a bona fide business purpose for preserving as confidential; or

 

(iii) render the Company unable to comply with requirements under the Securities Act or Exchange Act;

 

in each case, for a period of not more than 60 days; provided, however, that the Company may not invoke this right more than twice in any 12-month period for a period of more than 90 days in aggregate; and provided, further, that the Company shall not register any securities for its own account or that of any other stockholder during such period other than an Excluded Registration; and provided, further, that, in the case of clause (ii) above, (x) the Company shall instruct all executive officers and directors of the Company to suspend sales of the Company’s securities other than pursuant to existing Rule 10b5-1 trading plans and (y) the Company may not suspend the use of, or trading under, any registration statement past the date upon which the applicable information is disclosed to the public or ceases to be material.

 

(b) In the event of the suspension of effectiveness of any registration statement pursuant to this Section, the applicable time period during which such registration statement is to remain effective shall be extended by that number of days equal to the number of days of the suspension.

 

(c) The Company shall promptly notify the Holders when the Company ends the period of suspension, and shall promptly amend or supplement any registration statement or prospectus to the extent necessary so that it does not contain any untrue statement or omission and otherwise complies with the requirements of the Securities Act or Exchange Act, and shall furnish to the Holders such number of copies of such amendment or supplement as the Holders may reasonably request.

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2.6 Furnish Information . It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Section 2 with respect to the Registrable Securities of any selling Holder that such Holder shall furnish to the Company such information regarding itself, the Registrable Securities held by it, and the intended method of disposition of such securities as is reasonably required to effect the registration of such Holder’s Registrable Securities, including, but not limited to, the information required by Item 507 of Regulation S-K promulgated under the Securities Act, as amended from time to time, or any similar successor rule thereto.

 

2.7 Expenses of Registration . All expenses (other than Selling Expenses) incurred in connection with registrations, filings, or qualifications pursuant to Section 2 , including all registration, filing, and qualification fees; printers’ and accounting fees; fees and disbursements of counsel for the Company; and the reasonable fees and disbursements of the Selling Holder Counsel and the reasonable fees and disbursements of any local jurisdiction counsel whose opinion is requested by the underwriters in connection with any underwritten offering, shall be borne and paid by the Company; provided, however, that the Company shall not be required to pay for any expenses of any registration proceeding begun pursuant to Section 2.1 if the registration request is subsequently withdrawn at the request of the Initiating Holders (in which case all selling Holders shall bear such expenses pro rata based upon the number of Registrable Securities that were to be included in the withdrawn registration), unless such Initiating Holders agree to deem the withdrawn registration to have been effected as of the date of such withdrawal for purposes of determining such Initiating Holders’ demand rights pursuant to Section 2.1(a) or Section 2.1(b) , as the case may be; provided, further, that if, at the time of such withdrawal, the Initiating Holders have learned of a material adverse change in the condition, business, or prospects of the Company from that known to the Initiating Holders at the time of their request and have withdrawn the request after learning of such information, then the selling Holders shall not be required to pay any of such expenses and the withdrawn registration shall not be deemed to have been effected for purposes of determining the Initiating Holders’ demand rights pursuant to Section 2.1(a) or Section 2.1(b) . All Selling Expenses relating to Registrable Securities registered pursuant to this Section 2 shall be borne and paid by the Holders pro rata on the basis of the number of Registrable Securities registered on their behalf.

 

2.8 Delay of Registration . No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any registration pursuant to this Agreement as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 2 .

 

2.9 Indemnification; Contribution . If any Registrable Securities are included in a registration statement under this Section 2 :

 

(a) To the extent permitted by law, the Company will, and it hereby does, indemnify and hold harmless each selling Holder, and the partners,

16

members, officers, agents, Affiliates, employees, trustees, stockholders and directors of each such Holder; legal counsel and accountants for each such Holder; any underwriter (as defined in the Securities Act) for each such Holder; and each Person, if any, who controls such Holder or underwriter within the meaning of the Securities Act or the Exchange Act, against any Damages, and the Company will pay to each such Holder, underwriter, controlling Person, or other aforementioned Person any legal or other expenses reasonably incurred thereby in connection with investigating or defending any claim or proceeding from which Damages may result, as such expenses are incurred; provided, however, that the indemnity agreement contained in this Section 2.9(a) shall not apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected without the consent of the Company, which consent shall not be unreasonably withheld, nor shall the Company be liable for any Damages to the extent that they arise out of or are based upon statements or omissions made in reliance upon and in conformity with written information regarding the Holder or its plan of distribution furnished by or on behalf of any such Holder, underwriter, controlling Person, or other aforementioned Person expressly for use in the Disclosure Package, the Prospectus, any Free Writing Prospectus, or any registration statement of the Company, including any preliminary Prospectus or Final Prospectus contained therein or any amendments or supplements thereto.

 

(b) To the extent permitted by law, each selling Holder, severally and not jointly, will indemnify and hold harmless the Company, and each of its directors, each of its officers who has signed the registration statement, each Person (if any), who controls the Company within the meaning of the Securities Act, legal counsel and accountants for the Company, any underwriter (as defined in the Securities Act), any other Holder selling securities in such registration statement, and any controlling Person of any such underwriter or other Holder, against any Damages, in each case only to the extent that such Damages arise out of or are based upon statements or omissions made in reliance upon and in conformity with written information regarding the Holder or its plan of distribution furnished by or on behalf of such selling Holder expressly for use in the Disclosure Package, the Prospectus, any Free Writing Prospectus, or any registration statement of the Company, including any preliminary Prospectus or Final Prospectus contained therein or any amendments or supplements thereto; and each such selling Holder will pay to the Company and each other aforementioned Person any legal or other expenses reasonably incurred thereby in connection with investigating or defending any claim or proceeding from which Damages may result, as such expenses are incurred; provided, however, that the indemnity agreement contained in this Section 2.9(b) shall not apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected without the consent of the Holder, which consent shall not be unreasonably withheld; and provided, further, that in no event shall the aggregate amounts payable by any Holder by way of indemnity or contribution under this Section 2.9(b) and Section 2.9(d)  exceed the proceeds from the offering received by such Holder (net of any Selling Expenses paid by such Holder).

 

(c) Promptly after receipt by an indemnified party under this Section 2.9 of written notice of the commencement of any action, threat or proceeding (including any governmental action) for which a party may be entitled to indemnification

17

hereunder, such indemnified party will, if a claim in respect thereof is made or intended to be made against any indemnifying party under this Section 2.9 , give the indemnifying party written notice of the commencement thereof. The indemnifying party shall have the right to participate in such action and, to the extent the indemnifying party so desires, participate jointly with any other indemnifying party to which notice has been given, and to assume the defense thereof with counsel mutually satisfactory to the parties. Each indemnified party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the reasonable and documented out-of-pocket fees and expenses of such counsel shall be paid by the indemnified party unless (i) the indemnifying party agrees to pay the same, (ii) the indemnifying party fails to assume the defense of such action with counsel reasonably satisfactory to the indemnified party within a reasonable period of time or (iii) the named parties to any such action (including any impleaded parties) include both the indemnifying party and the indemnified party and such parties have been advised by such counsel that either (x) representation of such indemnified party and the indemnifying party by the same counsel would be inappropriate under applicable standards of professional conduct, as determined in the reasonable judgment of any party or (y) there may be one or more legal defenses available to the indemnified party which are different from or in addition to those available to the indemnifying party, it being understood, however that the indemnifying party shall not be liable for fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) for each group of similar indemnified parties (e.g., the Holders, as contrasted with executive officers and directors of the Company). In any of such cases, the indemnifying party shall not have the right to assume the defense of such action on behalf of such indemnified party and all such fees and expenses shall be reimbursed as incurred. In the event that the indemnified parties retain separate counsel, such counsel shall, to the extent reasonable, cooperate with the indemnifying party’s counsel in order to control overall costs. The failure to give notice to the indemnifying party within a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the indemnified party under this Section 2.9 , except to the extent that such failure results in the loss of substantive legal rights. No indemnifying party shall be liable for any settlement entered into without its written consent, which consent shall not be unreasonably withheld. No indemnifying party shall, without the consent of each indemnified party, effect any settlement of any pending or threatened proceeding in respect of which such indemnified party is a party and indemnity has been sought hereunder by such indemnified party, unless such settlement (i) includes an unconditional release of such indemnified party from all liability for claims that are the subject matter of such proceeding 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 any indemnified party.

 

(d) To provide for just and equitable contribution to joint liability under the Securities Act in any case in which either (i) any party otherwise entitled to indemnification hereunder makes a claim for indemnification pursuant to this Section 2.9 but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case, notwithstanding the fact that this Section 2.9 provides for indemnification in such case,

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(ii) contribution under the Securities Act may be required on the part of any party hereto for which indemnification is provided under this Section 2.9 , or (iii) the indemnification provided for in this Section 2.9 from the indemnifying party is otherwise unavailable to an indemnified party hereunder, or insufficient to hold harmless an indemnified party in respect of any Damages (including any legal or other expenses reasonably incurred thereby in connection with investigating or defending any claim or proceeding from which Damages may result) referred to herein, then, and in each such case, such parties will severally and not jointly contribute to the aggregate losses, claims, Damages, liabilities, or expenses to which they may be subject (after contribution from others) in such proportion as is appropriate to reflect the relative fault of each of the indemnifying party and the indemnified party in connection with the statements, omissions, or other actions that resulted in such loss, claim, Damages, liability, or expense, as well as to reflect any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether any action in question, including the untrue or allegedly untrue statement of a material fact, or the omission or alleged omission of a material fact, has been made by, or relates to information supplied by, the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission; provided, however, that, in any such case, (x) no Holder will be required to contribute any amount in excess of the public offering price of all such Registrable Securities offered and sold by such Holder pursuant to such registration statement (net of Selling Expenses), and (y) no Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation; and provided, further, that in no event shall a Holder’s liability pursuant to this Section 2.9(d) , when combined with the amounts paid or payable by such Holder pursuant to Section 2.9(b) , exceed the proceeds from the offering received by such Holder (net of any Selling Expenses paid by such Holder).

 

(e) Unless otherwise superseded by an underwriting agreement entered into in connection with the underwritten public offering, the obligations of the Company and Holders under this Section 2.9 shall survive the completion of any offering of Registrable Securities in a registration under this Section 2 , and otherwise shall survive the termination of this Agreement; provided , however , that no underwriting agreement entered into in connection with any underwritten public offering that provides terms less favorable to the Holders than those provided in this Section 2.9 shall supersede this Agreement.

 

2.10 Reports Under Exchange Act . With a view to making available to the Holders the benefits of SEC Rule 144 and any other rule or regulation of the SEC that may at any time permit a Holder to sell securities of the Company to the public without registration or pursuant to a Form S-3, the Company shall:

 

(a) make and keep available adequate current public information, as those terms are understood and defined in SEC Rule 144;

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(b) file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act; and

 

(c) furnish to any Holder, so long as the Holder owns any Registrable Securities, forthwith upon request (i) to the extent accurate, a written statement by the Company that it has complied with the reporting requirements of SEC Rule 144 (at any time after 90 days after the effective date of the registration statement filed by the Company for the IPO), the Securities Act, and the Exchange Act, or that it qualifies as a registrant whose securities may be resold pursuant to Form S-3 or as a Well-Known Seasoned Issuer (at any time after the Company so qualifies); (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company; and (iii) such other information as may be reasonably requested in availing any Holder of any rule or regulation of the SEC that permits the selling of any such securities without registration or pursuant to Form S-3 (at any time after the Company so qualifies to use such form).

 

2.11 Limitations on Subsequent Registration Rights . From and after the Effective Date, the Company shall not, without the prior written consent of (a) the Lead B Investor and (b) the Holders of at least 50% of the Registrable Securities (on an as-converted basis), enter into any agreement with any holder or prospective holder of any securities of the Company that would allow such holder or prospective holder (i) to include such securities in any registration unless, under the terms of such agreement, such holder or prospective holder may include such securities in any such registration only to the extent that the inclusion of such securities will not reduce the number of the Registrable Securities of the Holders that are included or (ii) to demand registration of any securities held by such holder or prospective holder.

 

2.12 Lock-Up Agreements . In connection with each registration or sale of Registrable Securities pursuant to Section 2.1 or Section 2.2 conducted as an underwritten public offering, each Holder agrees, if requested, to become bound by and to execute and deliver a customary lock-up agreement with the underwriter(s) of such public offering restricting such Holder’s right to (a) transfer, directly or indirectly, any Registrable Securities or (b) enter into any swap or other arrangement that transfers to another any of the economic consequences of ownership of Registrable Securities; provided , however , that no Holder shall be required to enter into a lock-up agreement covering a period of greater than 90 days after the date of the final prospectus or prospectus supplement relating to such underwritten public offering; provided , further , that in no event shall such lock-up period be greater than the period agreed to by the Company’s directors or executive officers and the Initiating Holders. Notwithstanding the foregoing, such lock-up agreement shall not apply to distributions-in-kind to a Holder’s partners, members or stockholders and shall include such other customary exceptions to which the underwriters of such underwritten public offering may agree.

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2.13 Restrictions on Transfer .

 

(a) Each certificate, instrument or book entry representing (i) the Registrable Securities, and (ii) any other securities issued in respect of the securities referenced in clause (i) upon any stock split, stock dividend, recapitalization, merger, consolidation, or similar event, shall (unless otherwise permitted by the provisions of Section 2.13(b) ) be stamped or otherwise imprinted with a legend substantially in the following form:

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR STATE SECURITIES LAWS, AS APPLICABLE, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH TRANSFER MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933 AND ANY APPLICABLE STATE SECURITIES LAWS.

 

The Holders consent to the Company making a notation in its records and giving instructions to any transfer agent of the Restricted Securities in order to implement the restrictions on transfer set forth in this Section 2.13 .

 

(b) Each holder of Restricted Securities, by acceptance of ownership thereof, agrees to comply in all respects with the provisions of this Section 2 . Before any proposed sale, pledge, or transfer of any Restricted Securities, unless there is in effect a registration statement under the Securities Act covering the proposed transaction, the Holder thereof shall give notice to the Company of such Holder’s intention to effect such sale, pledge, or transfer. Each such notice shall describe the manner and circumstances of the proposed sale, pledge, or transfer in sufficient detail and, if reasonably requested by the Company, shall be accompanied at such Holder’s expense by either (i) a written opinion of legal counsel who shall, and whose legal opinion shall, be reasonably satisfactory to the Company, addressed to the Company, to the effect that the proposed transaction may be effected without registration under the Securities Act; (ii) a “no action” letter from the SEC to the effect that the proposed sale, pledge, or transfer of such Restricted Securities without registration will not result in a recommendation by the staff of the SEC that action be taken with respect thereto; or (iii) any other evidence reasonably satisfactory to counsel to the Company to the effect that the proposed sale, pledge, or transfer of the Restricted Securities may be effected without registration under the Securities Act, whereupon the Holder of such Restricted Securities shall be entitled to sell, pledge, or transfer such Restricted Securities in accordance with the terms of the notice given by the Holder to the Company. The Company will not

21

require such a legal opinion or “no action” letter (x) in any transaction in compliance with SEC Rule 144 or (y) in any transaction in which such Holder distributes Restricted Securities to an Affiliate of such Holder for no consideration; provided, that each transferee agrees in writing to be subject to the terms of this Section 2.13 . Each certificate, instrument or book entry representing the Restricted Securities transferred as above provided shall bear, except if such transfer is made pursuant to SEC Rule 144, the appropriate restrictive legend set forth in Section 2.13(a) , except that such certificate, instrument or book entry shall not be noted with such restrictive legend if, in the opinion of counsel for such Holder and the Company, such legend is not required in order to establish compliance with any provisions of the Securities Act, and the Company shall remove the legend in connection with any transaction in compliance with Rule 144 under the Securities Act.

 

2.14 Termination of Registration Rights . The right of any Holder to request registration or inclusion of Registrable Securities in any registration pursuant to Section 2.1 or Section 2.2 shall terminate when all of such Holder’s Registrable Securities could be sold immediately without limitation as to volume, manner of sale or other restriction under SEC Rule 144.

 

3. Miscellaneous .

 

3.1 Successors and Assigns . The rights under this Agreement may be assigned (but only with all related obligations) by a Holder to a transferee of Registrable Securities that (i) is an Affiliate of a Holder; (ii) is a Holder’s Immediate Family Member or trust for the benefit of an individual Holder or one or more of such Holder’s Immediate Family Members; or (iii) after such transfer, holds at least 5% of the Registrable Securities (on an as-converted basis); provided, however, that (x) the Company is, within a reasonable time after such transfer, furnished with written notice of the name and address of such Additional Investor and the Registrable Securities with respect to which such rights are being transferred; and (y) such Additional Investor provides an executed Joinder to the Company. For the purposes of determining the number of shares of Registrable Securities held by an Additional Investor, the holdings of an Additional Investor (1) that is an Affiliate of a Holder; (2) who is a Holder’s Immediate Family Member; or (3) that is a trust for the benefit of an individual Holder or such Holder’s Immediate Family Member shall be aggregated together and with those of the transferring Holder; provided, further, that all Additional Investors who would not qualify individually for assignment of rights shall have a single attorney-in-fact for the purpose of exercising any rights, receiving notices, or taking any action under this Agreement. The terms and conditions of this Agreement inure to the benefit of and are binding upon the respective successors and permitted assignees of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and permitted assignees any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided herein.

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3.2 Governing Law . All questions concerning the construction, interpretation and validity of this Agreement, and all disputes arising hereunder or relating to the transactions contemplated hereby, whether based on contract, tort, or other theory, shall be governed by and construed and enforced in accordance with the domestic laws of the State of Georgia, including all matters of construction, enforcement, validity and performance. In furtherance of the foregoing, the internal law of the State of Georgia will control the interpretation and construction of this Agreement, even if under such jurisdiction’s choice of law or conflict of law analysis, the substantive law of some other jurisdiction would ordinarily or necessarily apply. Any party hereto may make service on the other parties by sending or delivering a copy of the process to the party or parties to be served at the address and in the manner provided for the giving of notices in Section 3.5 .

 

3.3 Counterparts; Facsimile . This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. A facsimile, telecopy or other reproduction of this Agreement may be executed by one or more parties hereto, and an executed copy of this Agreement may be delivered by one or more parties hereto by facsimile or similar electronic transmission device pursuant to which the signature of or on behalf of such party can be seen, and such execution and delivery shall be considered valid, binding and effective for all purposes. At the request of any party hereto, all parties hereto agree to execute an original of this Agreement as well as any facsimile, telecopy or other reproduction hereof.

 

3.4 Titles and Subtitles . The titles and subtitles used in this Agreement are for convenience only and are not to be considered in construing or interpreting this Agreement.

 

3.5 Notices . All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given: upon the earlier of (a) actual receipt or personal delivery to the party to be notified, (b) when sent by facsimile, if sent during normal business hours of the recipient, and if not so sent, then on the next business day, (c) five days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one business day after deposit with a nationally recognized overnight courier, specifying next business day delivery, with written verification of receipt. All communications shall be sent to the Company at its address set forth on its signature page hereto and to the Investors at their respective addresses as set forth on Schedule A , or to such facsimile number or address as subsequently modified by written notice given in accordance with this Section 3.5 . If notice is given to the Company, a copy shall also be sent to Troutman Sanders LLP, 600 Peachtree Street NE, Suite 3000, Atlanta, Georgia 30308, Attention: W. Brinkley Dickerson Jr., Facsimile: (404) 962-6743.

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3.6 Amendments and Waivers . Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance, and either retroactively or prospectively) only with the written consent of (i) the Company and (ii) the Lead B Investor for so long as the Lead B Investor holds at least 25% of all Registrable Securities owned by the Lead B Investor as of the Effective Date (on an as-converted basis), and, thereafter, or in the case of any amendment that disproportionately adversely affects the other Holders relative to the Lead B Investor, (iii) the holders of a majority of the Registrable Securities then held by all holders (other than the Lead B Investor); provided, that the Company may in its sole discretion waive compliance with Section 2.13(b) (and the Company’s failure to object promptly in writing after notification of a proposed assignment allegedly in violation of Section 2.13(b) shall be deemed to be a waiver); and provided, further, that any provision hereof may be waived by any waiving party on such party’s own behalf, without the consent of any other party. The Company shall give prompt notice of any amendment (including of any Schedule or Exhibit) or termination hereof or waiver hereunder to any party hereto that did not consent in writing to such amendment, termination, or waiver. Any amendment, termination, or waiver effected in accordance with this Section 3.6 shall be binding on all parties hereto, regardless of whether any such party has consented thereto. No waivers of or exceptions to any term, condition, or provision of this Agreement, in any one or more instances, shall be deemed to be or construed as a further or continuing waiver of any such term, condition, or provision.

 

3.7 Severability . In case any one or more of the provisions contained in this Agreement is for any reason held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement, and such invalid, illegal, or unenforceable provision shall be reformed and construed so that it will be valid, legal, and enforceable to the maximum extent permitted by law.

 

3.8 Aggregation of Stock . All shares of Registrable Securities held or acquired by Affiliates shall be aggregated together for the purpose of determining the availability of any rights under this Agreement and such Affiliated persons may apportion such rights as among themselves in any manner they deem appropriate.

 

3.9 Entire Agreement; Termination of Investors Rights Agreement . This Agreement (including any Schedules and Exhibits hereto) constitutes the full and entire understanding and agreement among the parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between the parties is expressly canceled. This Agreement hereby terminates and supersedes the Investors Rights Agreement in its entirety.

 

3.10 Jurisdiction; Waiver of Jury Trial . EACH PARTY HERETO AGREES THAT IT SHALL BRING ANY AND ALL ACTIONS OR PROCEEDINGS IN RESPECT OF ANY CLAIM ARISING OUT OF, RELATED TO, OR IN CONNECTION WITH, THIS AGREEMENT, THE

24

TRANSACTIONS CONTAINED IN OR CONTEMPLATED BY THIS AGREEMENT, OR THE RELATIONSHIP BETWEEN THE PARTIES HERETO, WHETHER IN TORT OR CONTRACT OR AT LAW OR IN EQUITY, EXCLUSIVELY IN THE SUPERIOR Court OF DEKALB COUNTY, Georgia (or, only if the superior Court of dekalb county, Georgia declines to accept jurisdiction over a particular matter, any federal court of the United States of America located in the State of Georgia) (THE “ CHOSEN COURT ”) AND (A) IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE CHOSEN COURT, (B) WAIVES ANY OBJECTION TO LAYING VENUE IN ANY SUCH ACTION OR PROCEEDING IN THE CHOSEN COURT, (C) WAIVES ANY OBJECTION THAT THE CHOSEN COURT IS AN INCONVENIENT FORUM OR DOES NOT HAVE JURISDICTION OVER ANY PARTY HERETO AND (D) AGREES THAT SERVICE OF PROCESS UPON SUCH PARTY IN ANY SUCH ACTION OR PROCEEDING SHALL BE EFFECTIVE IF NOTICE IS GIVEN IN ACCORDANCE WITH SECTION 3.5 OF THIS AGREEMENT. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, 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 (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

3.11 Delays or Omissions . No delay or omission to exercise any right, power, or remedy accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power, or remedy of such nonbreaching or nondefaulting party, nor shall it be construed to be a waiver of or acquiescence to any such breach or default, or to any similar breach or default thereafter occurring, nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. All remedies, whether under this Agreement or by law or otherwise afforded to any party, shall be cumulative and not alternative.

 

3.12 Acknowledgment . The Company acknowledges that the Investors and their Affiliates are in the business of venture and growth capital investing, and that MIS, Fifth Third and their Affiliates are in the business of operating and investing in various financial services related concerns, and therefore such Persons review the business plans and related proprietary information of many enterprises, including enterprises which may have products or services which compete directly or indirectly with those of the Company. Nothing in this Agreement shall preclude or in any way restrict such Persons from investing or participating in any particular enterprise whether or not such enterprise has products or services which compete with those of the Company.

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3.13 Prevailing Party . In the event of any litigation arising from any claim, controversy, dispute or cause of action based upon, arising out of or relating to this Agreement, the prevailing party shall be entitled to recover from the non-prevailing party all reasonable costs incurred including court costs, attorneys fees, and all other related expenses incurred in such claim, controversy, dispute or cause of action.

 

3.14 MNPI . (a) Each Holder acknowledges that the provisions of this Agreement that require communications by the Company or other Holders to such Holder may result in such Holder and its Representatives (as defined below) acquiring MNPI (which may include, solely by way of illustration, the fact that an offering of the Company’s securities is pending or the number of Company securities or the identity of the selling Holders) (any such MNPI resulting from communications required under this Agreement, the “ Covered MNPI ”).

 

(b) Each Holder agrees that it will maintain the confidentiality of the Covered MNPI and, to the extent such Holder is not a natural Person, such confidential treatment shall be in accordance with procedures adopted by it in good faith to protect confidential information of third parties delivered to such Holder (“ Policies ”); provided , that a Holder may deliver or disclose Covered MNPI to (i) its directors, officers, employees, agents, attorneys, affiliates and financial and other advisors (collectively, the “ Representatives ”), but solely to the extent such disclosure reasonably relates to such Holder’s evaluation of exercise of its rights under this Agreement and the sale of any Registrable Securities in connection with the subject of the notice, (ii) any federal or state regulatory authority having jurisdiction over such Holder, (iii) any Person if necessary to effect compliance with any law, rule, regulation or order applicable to such Holder, (iv) in response to any subpoena or other legal process, or (v) in connection with any litigation to which such Holder is a party; provided, further , that in the case of clause (i), the recipients of such Covered MNPI are subject to the Policies or agree to hold confidential the Covered MNPI in a manner substantially consistent with the terms of this Section 3.14 and that in the case of clauses (ii) through (v), such disclosure is required by law and such Holder shall promptly notify the Company of such disclosure to the extent such Holder is legally permitted to give such notice.

 

(c) Each Holder, by its execution of a counterpart to this agreement or of a Joinder, hereby acknowledges that it is aware that the U.S. securities laws prohibit any Person who has MNPI about a company from purchasing or selling, directly or indirectly, securities of such company (including entering into hedge transactions involving such securities), or from communicating such information to any other Person under circumstances in which it is reasonably foreseeable that such Person is likely to purchase or sell such securities.

 

(d) Each Holder shall have the right, at any time and from time to time (including after receiving information regarding any potential public offering), to

26

elect not to receive any notice that the Company or any other Holders otherwise are required to deliver pursuant to this Agreement by delivering to the Company a written statement signed by such Holder that it does not want to receive any notices or any other Covered MNPI hereunder (an “ Opt-Out Request ”); in which case and notwithstanding anything to the contrary in this Agreement, the Company and other Holders shall not be required to, and shall not, deliver any notice or other information required to be provided to Holders hereunder to the extent that the Company or such other Holders reasonably expect would result in a Holder acquiring Covered MNPI. An Opt-Out Request may state a date on which it expires or, if no such date is specified, shall remain in effect indefinitely; provided, that a Holder who previously has given the Company an Opt-Out Request may revoke such request at any time by providing written notice of such revocation to the Company, and there shall be no limit on the ability of a Holder to issue and revoke subsequent Opt-Out Requests.

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

 

  GREENSKY, INC.  
       
  By: /s/ David Zalik
    David Zalik
    Chief Executive Officer
     
  Address: 5565 Glenridge Connector, Suite 700
    Atlanta, Georgia 30342
    Attention:  Chief Executive Officer
    Telephone:  (404) 334-9391
    Telecopy: (404) 832-4102
    Electronic Mail:  David.Zalik@greensky.com

 

[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]

 

EXHIBIT A

 

Joinder to Registration Rights Agreement

 

The undersigned is executing and delivering this Joinder pursuant to the Registration Rights Agreement dated as of May 23, 2018 (as may be amended, the “ Registration Rights Agreement ”), by and among GreenSky, Inc., a Delaware corporation (the “ Company ”), GreenSky Holdings, LLC, a Georgia limited liability company, and each person identified on Schedule A thereto as of the date thereof.

 

By executing and delivering this Joinder to the Company, and upon acceptance hereof by the Company upon the execution of a counterpart hereof, the undersigned hereby agrees to become a party to, to be bound by, and to comply with the provisions of the Registration Rights Agreement as a Holder of Registrable Securities in the same manner as if the undersigned were an original signatory to the Registration Rights Agreement, and the undersigned’s shares of Class A Common Stock shall be included as Registrable Securities under the Registration Rights Agreement to the extent provided therein. The Company is directed to add the undersigned’s name and address to Schedule A attached to the Registration Rights Agreement.

 

Accordingly, the undersigned has executed and delivered this Joinder as of the ____ day of _________________, 20__.

 

  Name of Stockholder:
   
   
   
  Address of Stockholder:
   
   
   
   
   
   
     
  By:  
    Name:  
    Title:  
     
Agreed and Accepted as of     
     
GreenSky, Inc.    
     
By:    
  Name:  
  Title:  
 

Exhibit 10.1

 

TAX RECEIVABLE AGREEMENT

 

BY AND AMONG

 

GREENSKY, INC.,

 

GREENSKY HOLDINGS, LLC,

 

GREENSKY, LLC,

 

and

 

THE UNDERSIGNED BENEFICIARIES,

 

Dated as of May 23, 2018

 

TABLE OF CONTENTS

 

    Page
     
ARTICLE I DEFINITIONS 2
  1.1 Definitions 2
  1.2 Rules of Construction 11
ARTICLE II DETERMINATION OF CUMULATIVE REALIZED TAX BENEFIT 11
  2.1 Basis Adjustments 11
  2.2 The Company Section 754 Election 12
  2.3 Exchange Basis Schedule 12
  2.4 Inherited Tax Attributes 12
  2.5 Tax Benefit Schedule 12
  2.6 Procedures; Amendments 13
ARTICLE III TAX BENEFIT PAYMENTS 14
  3.1 Payments 14
  3.2 No Duplicative Payments 16
  3.3 Pro-Ration of Payments as Between the Beneficiaries 16
ARTICLE IV TERMINATION 17
  4.1 Early Termination 17
  4.2 Early Termination Notice 19
  4.3 Payment upon Early Termination 19
ARTICLE V SUBORDINATION AND BREACH OF PAYMENT OBLIGATIONS 20
  5.1 Subordination 20
  5.2 Late Payments by Parent 20
ARTICLE VI TAX MATTERS; CONSISTENCY; COOPERATION 20
  6.1 Parent’s and the Company’s Tax Matters 20
  6.2 Consistency 21
  6.3 Cooperation 21
  6.4 Pre-Transactions Tax Records 21
ARTICLE VII MISCELLANEOUS 21
  7.1 Notices 21
i

Table of Contents
(continued)

 

    Page
     
  7.2 Counterparts 22
  7.3 Entire Agreement; No Third Party Beneficiaries 22
  7.4 Governing Law 22
  7.5 Severability 23
  7.6 Successors; Assignment; Amendments; Waivers 23
  7.7 Titles and Subtitles 24
  7.8 Resolution of Disputes 24
  7.9 Removal or Replacement of Beneficiary Representative 24
  7.10 Reconciliation 25
  7.11 Withholding 26
  7.12 Admission of Parent into a Consolidated Group; Transfers of Corporate Assets 26
  7.13 Confidentiality 27
  7.14 Company LLC Agreement 27
  7.15 Independent Nature of Beneficiaries’ Rights and Obligations 27
  7.16 Change in Law 27
  7.17 Interest Rate Limitation 28
ii

TAX RECEIVABLE AGREEMENT

 

This TAX RECEIVABLE AGREEMENT (as it may be amended, restated, supplemented and/or otherwise modified from time to time, this “ Agreement ”), dated as of May 23, 2018, is hereby entered into by and among GreenSky, Inc. a Delaware corporation (“ Parent ”), GreenSky Holdings, LLC, a Georgia limited liability company (the “ Company ”), GreenSky, LLC, a Georgia limited liability company (“ GSLLC ”), the Blocker Corporation Owners (as hereinafter defined), and each Person that is listed on Exhibit A hereto as one of the Sellers (other than the Blocker Corporations), (each such Person listed on Exhibit A hereto, a “ Beneficiary ”, collectively, the “ Beneficiaries ”). Each of Parent, the Company, GSLLC, the Blocker Corporation Owners, and each Beneficiary is referred to as a “ TRA Party ” and, collectively, as the “ TRA Parties ”. All capitalized terms used but not defined herein shall have the meanings ascribed to them in the Registration Statement or the Form S-1, which includes a Prospectus, filed by Parent on April 27, 2018, as amended, with the Securities and Exchange Commission (Registration No. 333-224505) (the “ Prospectus ”).

 

RECITALS

 

WHEREAS, as of May 23, 2018, Parent, the Company, GSLLC, the Sellers, the Blocker Corporations, the Blocker Corporation Owners, and certain other parties engaged in and completed the Reorganization Transactions;

 

WHEREAS, in connection with the Reorganization Transactions, the Company Units were recapitalized and the membership interests of the Company consist of a single class of common units (“ Company Common Units ”);

 

WHEREAS, immediately following the Reorganization Transactions the Company is treated as a partnership for U.S. federal income tax purposes;

 

WHEREAS, immediately following the Reorganization Transactions GSLLC is treated as an entity that is disregarded as separate from its owner (the Company) for U.S. federal income tax purposes;

 

WHEREAS, the Sellers include members of the Company (other than the Blocker Corporations) and, together with the Blocker Corporations, immediately prior to the Reorganization Transactions, hold Class A Units, Class B Units and Class C Units of the Company (the “ Company Units ”, and such members, the “ Company Members ”);

 

WHEREAS, in connection with the Offering pursuant to the Prospectus and after the Reorganization Transactions, Parent purchased approximately 27.8% of the Common Company Units from the Sellers (the “ Sale ”) and various other actions occurred;

 

WHEREAS, as a result of the Reorganization Transactions, Parent’s acquisition of Company Common Units and certain other transactions entered into in connection therewith, (i) Parent will be the managing member of the Company, (ii) Parent will directly and indirectly own Company Common Units, and (iii) the Sellers, Blocker Corporations, Profits Interest Holders, and Warrant Holders will own the remaining issued and outstanding Company Common Units;

 

WHEREAS, pursuant to the Reorganization Transactions and the Exchange Agreement, the Company Common Units and Parent Class B Common Stock held by Sellers (other than Blocker Corporations), Profits Interest Holders, and Warrant Holders are exchangeable for Parent Class A Common Stock or cash in the manner set forth in the Exchange Agreement;

 

WHEREAS, the Blocker Corporations owned the rights to the Inherited Tax Attributes (as hereinafter defined) immediately prior to the Blocker Mergers;

 

WHEREAS, each Blocker Merger is intended to qualify as a reorganization within the meaning of Section 368 of the Code;

 

WHEREAS, for U.S. federal income tax purposes, it is intended that (a) the Sale shall give rise to Basis Adjustments (as defined below) (other than with respect to the Blocker Corporations) and generally shall be treated as a transfer of Company Common Units by each applicable Beneficiary to Parent and (b) the exchange of Company Common Units pursuant to the Exchange Agreement generally shall be treated as a sale by the Beneficiaries and as a purchase by Parent of Company Common Units, in each case described in Section 741 of the Code (including, for the avoidance of doubt, a disguised sale of the Company Common Units pursuant to Section 707(a)(2)(B) of the Code);

 

WHEREAS, the Company and each of its direct or indirect Subsidiaries (that is owned through a chain of pass-through entities) that is treated as a partnership for U.S. federal income tax purposes (collectively, the “ Company Group ”) will have in effect an election under Section 754 of the Code for the year of the Sale and for each Taxable Year in which an Exchange occurs;

 

WHEREAS, the Sale resulted in, and any Exchange (and the receipt of certain payments under this Agreement) may result in (i) an increase in Parent’s proportionate share of the existing tax basis of the assets owned by the Company Group and (ii) an adjustment in the tax basis of the assets of the Company Group reflected in that proportionate share as of the date of the Sale or the Exchange (such time, the “ Exchange Date ”), with a consequent impact on the taxable income subsequently derived therefrom; and

 

WHEREAS, the Parties to this Agreement desire to provide for certain payments and make certain arrangements with respect to any tax benefits to be derived by Parent and its subsidiaries (including the Company and its subsidiaries, as applicable and without duplication (but, in each case, only with respect to Taxes imposed on the Company that are allocable to Parent or to members of the consolidated, combined, affiliated or unitary group of which Parent is the common parent) as the result of the Sale, the Blocker Merger, the Exchanges and the making of payments under this Agreement.

 

NOW, THEREFORE, in consideration of the foregoing and the respective covenants and agreements set forth herein, and intending to be legally bound hereby, the Parties hereto agree as follows:

2

ARTICLE I
DEFINITIONS

 

1.1 Definitions . As used in this Agreement, the terms set forth in this Article I shall have the following meanings.

 

Actual Interest Amount ” means the amount of any Extension Rate Interest calculated in respect of the Net Tax Benefit for a Taxable Year.

 

Actual Tax Liability ” means, with respect to any Taxable Year, the liability for Covered Taxes of Parent and its subsidiaries (including the Company and its subsidiaries, as applicable and without duplication (but, in each case, only with respect to Taxes imposed on the Company that are allocable to Parent or to members of the consolidated, combined, affiliated or unitary group of which Parent is the common parent) (a) appearing on Tax Returns of Parent for such Taxable Year and (b) if applicable, determined in accordance with a Determination (including interest imposed in respect thereof under applicable law).

 

Advisory Firm ” means an accounting firm that is nationally recognized as being expert in Covered Tax matters, selected by Parent.

 

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 the Reference Rate plus 100 basis points.

 

Agreement ” is defined in the preamble to this Agreement.

 

Amended Schedule ” is defined in Section 2.6(b) of this Agreement.

 

Arbitrators ” is defined in Section 7.8(a) of this Agreement.

 

Attributable ” is defined in Section 3.1(b)(i) of this Agreement.

 

Attribute Limitations ” is defined in Section 2.4(a) of this Agreement.

 

Audit Committee ” means the audit committee of the Board.

 

Basis Adjustment ” means the increase or decrease to the tax basis of, or Parent’s share of the tax basis of, the Reference Assets (i) under Sections 734(b), 743(b), 754, and 755 (but, in each case, only to the extent that an Exchange or the Sale is treated as an event that gives rise to such adjustment) of the Code and, in each case, the comparable sections of U.S. state and local and foreign tax law (in situations where, following an Exchange, the Company remains in existence as an entity for Tax purposes) and (ii) under Sections 732 and 1012 of the Code and, in each case, the comparable sections of U.S. state and local and foreign tax law (in situations where, as a result of one or more Exchanges, the Company becomes an entity that is disregarded as separate from its owner for Tax purposes), in each case as a result of the Sale or any Exchange (and, without duplication, as a result of any basis adjustment to which Parent succeeds in

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connection with the Sale or an Exchange, including pursuant to Proposed Treasury Regulations Section 1.743-1(f)(2) and any subsequent similar guidance and comparable sections of U.S. state and local income and franchise tax law) and, in each case, any payments made under this Agreement. Notwithstanding any other provision of this Agreement, the amount of any Basis Adjustment resulting from an Exchange shall be determined without regard to any Pre-Exchange Transfer, and as if any such Pre-Exchange Transfer had not occurred.

 

Basis Schedule ” is defined in Section 2.3 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, with respect to such security and/or (ii) investment power, which includes the power to dispose of, or to direct the disposition of, such security.

 

Beneficiaries ” is defined in the preamble to this Agreement.

 

Beneficiary Advisory Firm ” means an accounting firm that is nationally recognized as being expert in Covered Tax matters, selected by the Beneficiary Representative or the Significant Beneficiaries, as applicable; provided that such accounting firm shall be different from the accounting firm serving as the Advisory Firm.

 

Beneficiary Representative ” means G Benjamin, CPA PC.

 

Blocker Owner Advisory Firm ” means an accounting firm that is nationally recognized as being expert in Covered Tax matters, selected by the applicable Blocker Corporation Owner; provided that such accounting firm shall be different from the accounting firm serving as the Advisory Firm.

 

Blocker Corporations ” means Blocker One, Blocker Two, Blocker Three, Blocker Four, Blocker Five, Blocker Six, Blocker Seven, Blocker Eight, and Blocker Nine, collectively.

 

Blocker Corporation Owners ” means the owners of the Blocker Corporations immediately prior to the effectiveness of the transfer of the ownership interests to Parent by such owners, collectively.

 

Blocker Merger ” means the merger of each of the Blocker Corporations with and into a limited liability company subsidiary of Parent, with such subsidiary as the surviving entity, in accordance with a certain merger agreements dated May 22, 2018, by and between a subsidiary of Parent and the respective Blocker Corporations in exchange for Class A Common Stock of Parent and the rights to payments of additional consideration as described in this Agreement.

 

Blocker Eight ” means COF II Holding Fund AIV III US Inc.

 

Blocker Five ” means PIMCO BRAVO Fund II Offshore Feeder AIV XXXII LLC.

 

Blocker Four ” means TPG Georgia BL LLC, a Delaware limited liability company.

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Blocker One ” means Iconiq-G B Fund Blocker, Inc., a Delaware corporation.

 

Blocker Nine ” means COF II Holding Fund AIV III Lux Inc

 

Blocker Seven ” BRAVO III Holding Fund AIV IX Lux Inc.

 

Blocker Six ” means BRAVO III Holding Fund AIV IX US Inc.

 

Blocker Three ” means DST- GSky Investment Inc., a Delaware corporation.

 

Blocker Two ” means Iconiq G-B Series Coinvest Fund Blocker, Inc., a Delaware corporation.

 

Board ” means the Board of Directors of Parent.

 

Business Day ” means any day excluding Saturday, Sunday and any day on which commercial banks in the State of New York are authorized by law to close.

 

Change of Control ” means the occurrence of any of the following events:

 

(1) any “person” or “group” (within the meaning of Sections 13(d) and 14(d) of the Exchange Act) becomes the Beneficial Owner of securities of Parent representing more than fifty percent (50%) of the combined voting power of Parent’s then outstanding voting securities;

 

(2) the shareholders of Parent approve a plan of complete liquidation or dissolution of Parent or there is consummated an agreement or series of related agreements for the sale or other disposition, directly, or indirectly, by Parent of all or substantially all of Parent’s assets (including a sale of assets of the Company), other than such sale or other disposition by Parent of all or substantially all of Parent’s assets to an entity at least fifty percent (50%) of the combined voting power of the voting securities of which are owned by shareholders of Parent in substantially the same proportions as their ownership of Parent immediately prior to such sale;

 

(3) there is consummated a merger or consolidation of Parent or any direct or indirect subsidiary of Parent (including the Company) with any other corporation or other entity, and, immediately after the consummation of such merger or consolidation, either (x) the individuals constituting the Board immediately prior to the merger or consolidation do not constitute at least a majority of the Board surviving the merger or, if the surviving company is a subsidiary, the ultimate parent thereof, or (y) all of the Persons who were the respective Beneficial Owners of the voting securities of Parent immediately prior to such merger or consolidation do not Beneficially Own, directly or indirectly, more than 50% of the combined voting power of the then outstanding voting securities of the Person resulting from such merger or consolidation; or

 

(4) individuals who, as of the date hereof, constitute the Board (the “ Incumbent Board ”) cease for any reason to constitute at least two-thirds of the directors then comprising the Incumbent Board; provided, however, that any individual becoming a director

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subsequent to the date hereof whose election, or nomination for election by Parent’s shareholders, was approved by a vote of at least two-thirds of the directors then comprising the Incumbent Board (or treated as such) shall be considered as though such individual was a member of the Incumbent Board (but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board).

 

Notwithstanding the foregoing, a “Change of Control” shall not be deemed to have occurred by virtue of the consummation of any transaction or series of integrated transactions immediately following which the record holders of the Class A Common Stock and Class B common stock of Parent immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in and voting control over, and own substantially all of the shares of, an entity which owns all or substantially all of the assets of Parent immediately following such transaction or series of transactions.

 

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

 

Class A Member ” means any Person who holds Class A Units or has become a substituted Class A Member pursuant to the Company LLC Agreement, and who has not ceased to be a Class A Member thereafter immediately prior to the Reorganization Transactions.

 

Class A Units ” means the Equity Securities of the Company designated as Class A Units pursuant to the Company LLC Agreement immediately prior to the Reorganization Transactions.

 

Class B Common Stock ” means the Class B common stock, par value $0.001 per share, of GreenSky.

 

Class B Member ” means any Person who holds Class B Units or has become a substituted Class B Member pursuant to the Company LLC Agreement, and who has not ceased to be a Class B Member thereafter immediately prior to the Reorganization Transactions.

 

Class B Units ” means the Equity Securities of the Company designated as Class B Units pursuant to the Company LLC Agreement immediately prior to the Reorganization Transactions.

 

Class C Member ” means any Person who holds Class C Units or has become a substituted Class C Member pursuant to the Company LLC Agreement, and who has not ceased to be a Class C Member thereafter immediately prior to the Reorganization Transactions.

 

Class C Units ” means the Equity Securities of the Company designated as Class C Units pursuant to the Company LLC Agreement immediately prior to the Reorganization Transactions.

 

Code ” means the U.S. Internal Revenue Code of 1986, as amended, and any successor Law thereto.

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Company ” is defined in the preamble to this Agreement.

 

Company Common Units ” is defined in the recitals to this Agreement.

 

Company Holders ” means the Blocker Corporations, Class A Members, Class B Members, Class C Members, Option Holders, Warrant Holders and Profits Interest Holders.

 

Company LLC Agreement ” means the Amended and Restated Operating Agreement of the Company, dated as of May 23, 2018, as such agreement may be further amended, restated, supplemented and/or otherwise modified from time to time.

 

Company Members ” is defined in the recitals to this Agreement.

 

Company Unitholder ” means each holder of one or more Company Common Units that may from time to time by a party to the Exchange Agreement.

 

Company Units ” is defined in the recitals to this 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.

 

Covered Tax ” means any and all U.S. federal, state, local and foreign tax, assessment or similar charge that is based on or measured with respect to net income or profits, whether as an exclusive or an alternative basis (including for the avoidance of doubt, franchise taxes and transaction taxes imposed in lieu of income taxes), and any interest imposed in respect thereof under applicable law.

 

Cumulative Net Realized Tax Benefit ” means, for a Taxable Year, the cumulative amount of Realized Tax Benefits for all Taxable Years of Parent, up to and including such Taxable Year, net of the cumulative amount of Realized Tax Detriments for the same period. The Realized Tax Benefit and Realized Tax Detriment for each Taxable Year shall be determined based on the most recent Tax Benefit Schedule or Amended Schedule, if any, in existence at the time of such determination.

 

Default Rate ” means the Reference Rate plus 500 basis points.

 

Default Rate Interest ” is defined in Section 3.1(b)(iv) of this Agreement.

 

Depreciation ” is defined in Section 3.1(b)(i) of this Agreement.

 

Determination ” shall have the meaning ascribed to such term in Section 1313(a) of the Code or similar provision of U.S. state, local or foreign 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 Covered Tax.

 

Dispute ” is defined in Section 7.8(a) of this Agreement.

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Early Termination Effective Date ” means the date of an Early Termination Notice for purposes of determining the Early Termination Payment.

 

Early Termination Notice ” is defined in Section 4.3 of this Agreement.

 

Early Termination Payment ” is defined in Section 4.4(b) of this Agreement.

 

Early Termination Rate ” means the Long-Term Treasury Rate in effect on the applicable date plus 300 basis points.

 

Early Termination Reference Date ” is defined in Section 4.3 of this Agreement.

 

Early Termination Schedule ” is defined in Section 4.3 of this Agreement.

 

Equity Securities ” means (a) capital stock, partnership or membership interests or units (whether general or limited), and any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distribution of assets of, the issuing entity or a right to control such entity, (b) subscriptions, calls, warrants, options, purchase rights or commitments of any kind or character relating to, or entitling any Person to acquire, any equity interest, (c) stock appreciation, phantom stock, equity participation or similar rights and (d) securities convertible into or exercisable or exchangeable for any equity interests.

 

Exchange ” means, with respect to any Beneficiary, an Exchange (as such term is defined in the Exchange Agreement) of Company Common Units owned by such Beneficiary, or any other direct or indirect acquisition by Parent or the Company from such Beneficiary of Company Common Units owned by such Beneficiary. The term “ Exchanged ” shall have correlative meaning.

 

Exchange Act ” means the Securities Exchange Act of 1934, as amended, or any successor provisions thereto.

 

Exchange Agreement ” means that certain Exchange Agreement, dated as of the date hereof, by and among Parent, the Company, and Company Unitholders (including certain of the Beneficiaries), as such agreement may be amended, restated, supplemented and/or otherwise modified from time to time.

 

Exchange Date ” is defined in the preamble to this Agreement.

 

Expert ” is defined in Section 7.10 of this Agreement.

 

Extension Rate Interest ” means the interest calculated at the Agreed Rate from the due date (without extensions) for filing the U.S. federal income Tax Return of Parent for a Taxable Year until the date on which Parent makes a timely Tax Benefit Payment to the Beneficiary on or before a Final Payment Date as determined pursuant to Section 3.1(a) , calculated in respect of the Net Tax Benefit (including previously accrued Imputed Interest) for such Taxable Year. In the case of a Tax Benefit Payment made in respect of an Amended Schedule, the Extension Rate Interest means the interest calculated at the Agreed Rate from the date of such Amended

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Schedule becoming final in accordance with Section 2.6(b) until the Final Payment Date as determined pursuant to Section 3.1(a).

 

Final Payment Date ” means any date on which a payment is required to be made pursuant to this Agreement. For the avoidance of doubt, a Final Payment Date in respect of a Tax Benefit Payment is determined pursuant to Section 3.1(a) of this Agreement.

 

Hypothetical Tax Liability ” means, with respect to any Taxable Year, the liability of Parent and its subsidiaries (including the Company and its subsidiaries, as applicable and without duplication (but, in each case, only with respect to Taxes imposed on the Company that are allocable to Parent or to members of the consolidated, combined, affiliated or unitary group of which Parent is the common parent) that would arise in respect of Covered Taxes, using the same methods, elections, conventions and similar practices used on the actual relevant Tax Returns of Parent but (i) calculating depreciation, amortization, or other similar deductions, or otherwise calculating any items of income, gain, or loss, using the Non-Adjusted Tax Basis as reflected on the Basis Schedule, including amendments thereto for such Taxable Year, (ii) excluding any deduction attributable to (a) Imputed Interest for such Taxable Year and (b) any Extension Rate Interest paid or accrued for such Taxable Year, and (iii) excluding any deductions or other offsets arising from the use of the Inherited Tax Attributes. For the avoidance of doubt, the 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 any of the items described in clauses (i), (ii), and (iii) of the previous sentence. If all or a portion of the liability for Covered Taxes for the Taxable Year arises as a result of an audit or similar proceeding by a Taxing Authority of such Taxable Year, such liability shall not be included in determining the Hypothetical Tax Liability unless and until there has been a Determination.

 

Imputed Interest ” is defined in Section 3.1(b)(iii) of this Agreement.

 

Independent Directors ” means the members of the Board who are “independent” under the standards set forth in Rule 10A-3 promulgated under the U.S. Securities Exchange Act of 1933, as amended, and the corresponding rules of the principal exchange, if any, on which the Class A Common Stock is traded or quoted.

 

Inherited Tax Attributes ” is defined in Section 2.4(a) of this Agreement.

 

Inherited Tax Attribute Schedule ” is defined in Section 2.4(b) of this Agreement.

 

IRS ” means the U.S. Internal Revenue Service.

 

Joinder ” means a joinder to this Agreement, in form and substance substantially similar to Exhibit B to this Agreement.

 

Joinder Requirement ” is defined in Section 7.6(a) of this Agreement.

 

LIBOR ” means during any period, a rate per annum equal to the ICE LIBOR rate for a period of one month (“ ICE LIBOR ”), as published on the applicable Reuters screen page (such page currently being the LIBOR01 page) (or such other commercially available source providing

9

quotations of ICE LIBOR as may be designated by Parent from time to time) for deposits with a term equivalent to such period in dollars, determined as of approximately 11:00 a.m., London time, two (2) Business Days prior to the commencement of such period, for dollar deposits (for delivery on the first day of such period).

 

Long-Term Treasury Rate ” means the Long-Term Composite Rate, which is the unweighted average of bid yields on all outstanding fixed-coupon bonds neither due nor callable in less than 10 years, as published by the U.S. Department of the Treasury or by any other publicly available source of such market rate.

 

Market Value ” means the “Value,” as defined in the Exchange Agreement.

 

Maximum Rate ” is defined in Section 7.17 of this Agreement.

 

Net Tax Benefit ” is defined in Section 3.1(b)(ii) of this Agreement.

 

Non-Adjusted Tax Basis ” means, for purposes of this Agreement, with respect to any Reference Asset at any time, the amount of tax basis that such asset would have had at such time if no Basis Adjustment had been made.

 

Objection Notice ” is defined in Section 2.6(a)(i) of this Agreement.

 

Outstanding Class A Stock ” means the aggregate number of shares of Parent Class A Common Stock issued and outstanding immediately prior to the Blocker Merger.

 

Parent ” is defined in the preamble to this Agreement.

 

Parent Class A Common Stock ” means Class A Common Stock of Parent, par value $0.01 per share.

 

Parent Class B Common Stock ” means Class B Common Stock of Parent, par value $0.001 per share.

 

Parent Letter ” means a letter prepared by Parent in connection with the performance of its obligations under this Agreement, which states that the relevant Schedules, notices or other information to be provided by Parent to the Beneficiaries, along with all supporting schedules and work papers, were prepared in a manner that is consistent with the terms of this Agreement and, to the extent not expressly provided in this Agreement, on a reasonable basis in light of the facts and law in existence on the date such Schedules, notices or other information were delivered by Parent to the Beneficiaries.

 

Parties ” means the parties named on the signature pages to this agreement and each additional party that satisfies the Joinder Requirement, in each case with their respective successors and assigns.

 

Person ” means any individual, corporation, firm, partnership, joint venture, limited liability company, estate, trust, business association, organization, governmental entity or other entity.

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Pre-Exchange Transfer ” means any transfer of one or more Company Common Units (including upon the death of a Beneficiary or upon the issuance of Company Common Units resulting from the exercise of an option to acquire such Company Common Units) (i) that occurs prior to an Exchange of such Company Common Units and (ii) to which Section 743(b) of the Code applies.

 

Profits Interest ” means outstanding awards of profits interests in the Company.

 

Realized Tax Benefit ” means, for a Taxable Year, the excess, if any, of the Hypothetical Tax Liability over the Actual Tax Liability for such Taxable Year, provided, however , that for any Taxable Year in which (i) the Hypothetical Tax Liability is a negative number, the Realized Tax Benefit for such Taxable Year shall be zero, and (ii) if the Actual Tax Liability is a negative number, and the Hypothetical Tax Liability is a positive number, the Actual Tax Liability shall be deemed to equal zero for purposes of calculating the amount of the Realized Tax Benefit. If all or a portion of the Actual Tax Liability for such Taxable Year arises as a result of an audit or similar proceeding by a Taxing Authority of any Taxable Year, such liability shall not be included in determining the Realized Tax Benefit unless and until there has been a Determination with respect to such Actual Tax Liability.

 

Realized Tax Detriment ” means, for a Taxable Year, the excess, if any, of the Actual Tax Liability over the Hypothetical Tax Liability for such Taxable Year; provided, however, that for any Taxable Year in which (i) the Actual Tax liability is a negative number, the Realized Tax Detriment for such Taxable Year shall be zero and (ii) if the Hypothetical Tax Liability is a negative number, and the Actual Tax Liability is a positive number, the Hypothetical Tax Liability shall be deemed to equal zero for purposes of calculating the amount of the Realized Tax Detriment for such Taxable Year. If all or a portion of the Actual Tax Liability for such Taxable Year arises as a result of an audit or similar proceeding by a Taxing Authority of any Taxable Year, such liability shall not be included in determining the Realized Tax Detriment unless and until there has been a Determination with respect to such Actual Tax Liability.

 

Reconciliation Dispute ” is defined in Section 7.10 of this Agreement.

 

Reconciliation Procedures ” is defined in Section 2.6 of this Agreement.

 

Reference Asset ” means any asset of the Company or any of its successors or assigns, whether held directly by the Company or indirectly by the Company through a member of the Company Group, at the time of the Sale or an Exchange. A Reference Asset also includes any asset the tax basis of which is determined, in whole or in part, by reference to the tax basis of an asset that is described in the preceding sentence, including “substituted basis property” within the meaning of Section 7701(a)(42) of the Code. Notwithstanding the foregoing, “Reference Asset” shall only include real property and other tangible and intangible property eligible for cost recovery pursuant to Sections 167, 168, or 197 of the Code.

 

Reference Rate ” means the Reference Rate Base plus the Reference Rate Spread.

 

Reference Rate Base ” means LIBOR during any period for which such rate is published in accordance with the definition thereof. If LIBOR ceases to be published in accordance with

11

the definition thereof, the Company and the Beneficiary Representative shall work together in good faith to select a new Reference Rate with similar characteristics.

 

Reference Rate Spread ” means 0 basis points during any period for which LIBOR is published in accordance with the definition thereof. If LIBOR ceases to be published in accordance with the definition thereof, the Company and the Beneficiary Representative shall work together in good faith to select a new Reference Rate Spread, such that the Reference Rate is not materially changed (and in no event by more than 25 basis points) as a result of the selection of a new Reference Rate Base at the time of such selection.

 

Reorganization Agreement ” means that certain Reorganization Agreement, dated May 23, 2018, by and between Parent, the Company and the other parties named therein.

 

Reorganization Transactions ” shall have the meaning ascribed to it in the Reorganization Agreement.

 

Sale ” is defined in the preamble to this Agreement. The term “ Sold ” shall have correlative meaning.

 

Schedule ” means any of the following: (i) a Basis Schedule, (ii) a Tax Benefit Schedule, or (iii) the Early Termination Schedule, and, in each case, any amendments thereto.

 

Sellers ” means, all of the members of the Company (other than the Blocker Corporations).

 

Senior Obligations ” is defined in Section 5.1 of this Agreement.

 

Share Schedule ” means the sharing percentage included on Exhibit A.

 

Significant Beneficiary ” means Financial Technology Investors, LLC, Founders Technology Investors, LLC, GS Investment Holdings, LLC and an Institutional Member (as such term is defined in the Company LLC Agreement).

 

Subsidiary ” means, with respect to any Person and as of any determination date, any other Person as to which such first Person (i) owns, directly or indirectly, or otherwise controls, more than 50% of the voting power or other similar interests of such other Person or (ii) is the sole general partner interest, or managing member or similar interest, of such Person.

 

Subsidiary Stock ” means any stock or other equity interest in any subsidiary entity of Parent that is treated as a corporation for U.S. federal income tax purposes.

 

Tax Benefit Payment ” is defined in Section 3.1(b) of this Agreement.

 

Tax Benefit Schedule ” is defined in Section 2.5(a) of this Agreement.

 

Tax Return ” means any return, declaration, report or similar statement required to be filed with respect to taxes (including any attached schedules), including any information return, claim for refund, amended return and declaration of estimated tax.

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Taxable Year ” means a taxable year of Parent as defined in Section 441(b) of the Code or comparable section of U.S. state or local or foreign tax law, as applicable (and, therefore, for the avoidance of doubt, may include a period of less than 12 months for which a Tax Return is made), ending on or after the closing date of the initial offering pursuant to the Prospectus.

 

Taxing Authority ” shall mean any domestic, foreign, national, federal, state, county, municipal, or local government, or any subdivision, agency, commission or authority thereof, or any quasi-governmental body, or any other authority of any kind, exercising regulatory or other authority in relation to tax matters.

 

Termination Objection Notice ” is defined in Section 4.3 of this Agreement.

 

Treasury Regulations ” means the final, temporary, and (to the extent they can be relied upon) proposed regulations under the Code, as promulgated from time to time (including corresponding provisions and succeeding provisions) as in effect for the relevant taxable period.

 

Two-Thirds Beneficiary and Blocker Approval ” means written approval by the Beneficiaries and Blocker Corporation Owners whose rights under this Agreement are attributable to at least two-thirds (2/3) of the Company Common Units outstanding (and not held by Parent) immediately after completion of the Reorganization Transactions (as appropriately adjusted for any subsequent changes to the number of outstanding Company Common Units). For purposes of this definition, a Beneficiary’s and a Blocker Corporation Owner’s rights under this Agreement shall be attributed to Company Common Units as of the time of a determination of Two-Thirds Beneficiary and Blocker Approval. For the avoidance of doubt, with respect to the Beneficiaries, (i) an Exchanged or Sold Company Common Unit shall be attributed only to the Beneficiary entitled to receive Tax Benefit Payments with respect to such Exchanged or Sold Company Common Unit (i.e., the Exchangor or the assignee of its rights hereunder) and (ii) an outstanding Company Common Unit that has not yet been Exchanged or Sold shall be attributed only to the Beneficiary entitled to receive Tax Benefit Payments upon the Exchange of such Unit (i.e., the member of the Company or the assignee of its rights hereunder).

 

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

 

Valuation Assumptions ” shall mean, as of an Early Termination Effective Date, the assumptions that:

 

(1) in each Taxable Year ending on or after such Early Termination Effective Date, Parent will have taxable income sufficient to fully use the deductions arising from the amount of available Inherited Tax Attributes (subject to any Attribute Limitations), Basis Adjustments and the Imputed Interest during such Taxable Year or future Taxable Years (including, for the avoidance of doubt, Basis Adjustments and Imputed Interest that would result from future Tax Benefit Payments that would be paid in accordance with the Valuation Assumptions) in which such deductions would become available;

 

(2) the U.S. federal, state, local, and foreign income tax rates that will be in effect for each such Taxable Year will be those specified for each such Taxable Year by the

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Code and other law as in effect on the Early Termination Effective Date, except to the extent any change to such tax rates for such Taxable Year has already been enacted into law;

 

(3) any loss carryovers from a prior year generated by any Basis Adjustment, Imputed Interest (including such Basis Adjustment and Imputed Interest generated as a result of payments under this Agreement), or use of the Inherited Tax Attributes (subject to any Attribute Limitations) and available as of the date of the Early Termination Schedule will be deemed used by Parent on a pro rata basis from the date of the Early Termination Schedule through the scheduled expiration date of such loss carryovers or, if such carryforwards do not have an expiration date, over the 15-year period after such carryforwards were generated;

 

(4) any non-amortizable assets to which there has been a Basis Adjustment as a result of the Sale or an Exchange (other than any corporate stock, including Subsidiary Stock) will be disposed of on the earlier of (i) the fifteenth anniversary of the applicable Basis Adjustment and (ii) the Early Termination Effective Date for an amount sufficient to fully use the Basis Adjustments with respect to such assets, and any short-term investments (as defined by GAAP) will be disposed of twelve (12) months following the Early Termination Effective Date; provided that in the event of a Change of Control which includes a taxable sale of any relevant asset, such asset shall be deemed disposed of at the time of the Change of Control (if earlier than such fifteenth anniversary or twelve (12) month period);

 

(5) any Subsidiary Stock will be deemed never to be disposed of;

 

(6) if, on the Early Termination Effective Date, any Beneficiary has Company Common Units that have not been Exchanged, then such Company Common Units shall be deemed to be Exchanged for the Market Value of the shares of Class A Common Stock that would be received by such Beneficiary if such Company Common Units had been Exchanged on the Early Termination Effective Date, and such Beneficiary shall be deemed to receive the amount of cash such Beneficiary would have been entitled to pursuant to Section 4.4(a) had such Company Common Units actually been Exchanged on the Early Termination Effective Date; and

 

(7) any payment obligations pursuant to this Agreement will be satisfied on the date that any Tax Return to which such payment obligation relates is required to be filed excluding any extensions.

 

Warrants ” means issued and outstanding warrants to purchase Class A Units.

 

1.2 Rules of Construction . Unless otherwise specified herein:

 

(a) The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms.

 

(b) For purposes of interpretation of this Agreement:

 

(i) The words “herein,” “hereto,” “hereof” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision thereof.

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(ii) References in this Agreement to a Schedule, Article, Section, clause or sub-clause refer to the appropriate Schedule to, or Article, Section, clause or subclause in, this Agreement.

 

(iii) References in this Agreement to dollars or “$” refer to the lawful currency of the United States of America.

 

(iv) The term “including” is by way of example and not limitation.

 

(v) The term “documents” includes any and all instruments, documents, agreements, certificates, notices, reports, financial statements and other writings, however evidenced, whether in physical or electronic form.

 

(c) In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including;” the words “to” and “until” each mean “to but excluding;” and the word “through” means “to and including.”

 

(d) Unless otherwise expressly provided herein, (a) references to organization documents (including the Company LLC Agreement), agreements (including this Agreement) and other contractual instruments shall be deemed to include all subsequent amendments, restatements, extensions, supplements and other modifications thereto, but only to the extent that such amendments, restatements, extensions, supplements and other modifications are permitted hereby; and (b) references to any law (including the Code and the Treasury Regulations) shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting such Law.

 

ARTICLE II
DETERMINATION OF CUMULATIVE REALIZED TAX BENEFIT

 

2.1 Basis Adjustments . The Parties acknowledge and agree that for all tax reporting purposes (A) the Sale and each Exchange shall be treated as a transfer or sale, respectively, of Company Common Units by the applicable Beneficiary to Parent and (B) the Sale and each Exchange will give rise to a Basis Adjustment. The Basis Adjustment with respect to a Reference Asset (or applicable portions thereof, where the Basis Adjustment exceeds the basis adjustment under Section 732 or 743(b) of the Code) shall be recovered over the applicable period under applicable Law. Basis Adjustments reflecting Parent’s increased share of the Non-Adjusted Tax Basis in a Reference Asset shall be determined as of the Exchange Date and shall not be adjusted as a result of future changes to Parent’s ownership percentage in the Company. The Parties acknowledge and agree that (x) all payments to a Beneficiary with respect to the Sale or an Exchange pursuant to this Agreement (other than amounts treated as interest under the Code) will be treated as subsequent upward purchase price adjustments that have the effect of creating additional Basis Adjustments in respect of such Beneficiary in the year of payment and (y) as a result, such additional Basis Adjustments in respect of such Beneficiary will be incorporated into the current year calculation and into future year calculations, as appropriate under applicable law. For the avoidance of doubt, for U.S. federal income tax purposes, (A) payments made under this Agreement shall not be treated as resulting in a Basis Adjustment or as additional consideration described as “other property” in section 356 of the Code in each case to the extent

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such payments are treated as Imputed Interest or are Actual Interest Amounts and (B) payments made to a Blocker Corporation Owner under this Agreement shall be treated as additional consideration described as “other property” within the meaning of Section 356 of the Code pursuant to the applicable Blocker Merger.

 

2.2 The Company Section 754 Election . In its capacity as the sole managing member of the Company, Parent will ensure that, on and after the date hereof and continuing throughout the term of this Agreement, the Company and each of its direct and indirect Subsidiaries (that is owned through a chain of pass-through entities) that is treated as a partnership for U.S. federal income tax purposes will have in effect an election under Section 754 of the Code (and under any similar provisions of applicable U.S. state or local law) for each Taxable Year.

 

2.3 Exchange Basis Schedule . Within ninety (90) calendar days after the filing of the U.S. federal income Tax Return of Parent for each relevant Taxable Year, Parent shall deliver to the Beneficiary Representative, for the benefit of each Beneficiary, a schedule (the “ Basis Schedule ”) that shows, in reasonable detail as necessary in order to understand the calculations performed under this Agreement: (a) the Non-Adjusted Tax Basis of the Reference Assets as of each applicable Exchange Date; (b) the Basis Adjustments with respect to the Reference Assets as a result of the Sale (if effected in such Taxable Year) or the relevant Exchanges effected in such Taxable Year, calculated solely with respect to Exchanges or the portion of the Sale effected by the applicable Beneficiary; (c) the period (or periods) over which the Reference Assets are amortizable and/or depreciable; and (d) the period (or periods) over which each Basis Adjustment described in clause (b) is amortizable and/or depreciable. The Basis Schedule will become final and binding on the Parties pursuant to the procedures set forth in Section 2.6(a) and may be amended by the Parties pursuant to the procedures set forth in Section 2.6(b) .

 

2.4 Inherited Tax Attributes .

 

(a) Consequences of the Blocker Merger . The parties hereto further acknowledge that the Blocker Corporations may have certain tax attributes at the time of such Blocker Merger to which Parent could inherit in the Blocker Merger under the Code or similar provisions of U.S. federal, state or local and foreign tax law arising from basis adjustments pursuant to Section 743 of the Code and the regulations thereunder. For this purpose, the term “ Inherited Tax Attributes ” with respect to a Blocker Corporation shall refer to the items of loss or deduction that will arise to the Blocker Corporation or its successor as a result of certain transactions that occurred prior to the IPO which increased the adjusted basis of property of the Company (or its predecessor) with respect to the Blocker Corporation (or its predecessor) pursuant to Sections 743(b), 755, 732, or 1012 of the Code; provided that such items will not constitute an Inherited Tax Attribute until such time as such items are available to be claimed as a loss or deduction for U.S. federal income tax purposes. The parties further acknowledge that, in the event that the Blocker Merger is effected, the Parent’s ability to utilize an Inherited Tax Attribute to offset its taxable income or to reduce its Tax payments may be limited under Sections 382, 383 and 384 of the Code or similar provisions of U.S. federal, state or local and foreign tax law (the “ Attribute Limitations ”).

 

(b) Inherited Tax Attribute Schedule Generally . Within 90 calendar days after filing its U.S. federal income Tax Return for the year in which the Blocker Merger occurred,

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Parent shall deliver to each Blocker Corporation Owner, a schedule (each, an “ Inherited Tax Attribute Schedule ”) that shows, in reasonable detail, for U.S. federal income tax purposes, (i) the amount of each Inherited Tax Attribute with respect to the relevant Blocker Corporation, separately stated to the extent relevant, (ii) the amount of each Attribute Limitation for the Blocker Corporation Owner, if any, separately stated to the extent relevant, and (iii) the amount of any “net unrealized built-in gain” or “net unrealized built-in loss” as defined in Section 382(h)(3) of the Code for the relevant Blocker Corporation. At the time Parent delivers the Inherited Tax Attribute Schedule to the Blocker Corporation Owner, it shall (x) deliver to the Blocker Corporation Owner supporting schedules and work papers, as determined by the Parent or requested by the Blocker Corporation Owner, that provide a reasonable level of detail regarding the data and calculations that were relevant for purposes of preparing the Inherited Tax Attribute Schedule and a letter from the Advisory Firm supporting such Inherited Tax Attribute Schedule and (y) allow the Blocker Corporation Owner reasonable access to the appropriate representatives at Parent, the Company, and the Advisory Firm in connection with its review of such schedule. Each Inherited Tax Attribute Schedule shall become final and binding on the parties unless the Blocker Corporation Owner, within thirty (30) calendar days after receiving its respective Inherited Tax Attribute Schedule, provides Parent with notice of a material objection to such Inherited Tax Attribute Schedule made in good faith and in reasonable detail. If Parent and Blocker Corporation Owner, negotiating in good faith, are unable to successfully resolve the issues raised in such notice within sixty (60) calendar days after such notice was delivered to Parent, Parent and Blocker Corporation Owner shall employ the Reconciliation Procedures.

 

(c) Amendments to Inherited Tax Attribute Schedule . Each Inherited Tax Attribute Schedule may be amended from time to time by Parent (i) in connection with a Determination, (ii) to correct inaccuracies to the original Inherited Tax Attribute Schedule identified after the date of the Blocker Merger as a result of the receipt of additional information or (iii) to comply with the expert’s determination under the Reconciliation Procedures. At the time Parent delivers such amended Inherited Tax Attribute Schedule to Blocker Corporation Owner, it shall (x) deliver to the Blocker Corporation Owner schedules and work papers providing reasonable detail regarding the preparation of the relevant amended Inherited Tax Attribute Schedule and a letter from the Advisory Firm supporting such amended Inherited Tax Attribute Schedule and (y) allow the Blocker Corporation Owner reasonable access to the appropriate representatives at Parent, the Company, and the Advisory Firm in connection with its review of such schedule. Parent shall provide an Amended Schedule to the Blocker Corporation Owner within sixty (60) calendar days of the occurrence of an event referenced in clauses (i) through (iii) of the first sentence of this Section 2.4(c). Each amended Inherited Tax Attribute Schedule shall become final and binding on the parties unless the Blocker Corporation Owner, within thirty (30) calendar days after receiving such amended Inherited Tax Attribute Schedule, provides Parent with notice of a material objection to such amended Inherited Tax Attribute Schedule made in good faith and in reasonable detail. If Parent and Blocker Corporation Owner, negotiating in good faith, are unable to successfully resolve the issues raised in such notice within thirty (30) calendar days after such notice was delivered to Parent, Parent and the Blocker Corporation Owner shall employ the Reconciliation Procedures.

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2.5 Tax Benefit Schedule .

 

(a) Tax Benefit Schedule . Within ninety (90) calendar days after the filing of the U.S. federal income Tax Return of Parent for any Taxable Year in which there is a Realized Tax Benefit or Realized Tax Detriment, Parent shall provide to the Beneficiary Representative and each Blocker Corporation Owner a schedule showing, in reasonable detail, the calculation of the Realized Tax Benefit or Realized Tax Detriment for such Taxable Year (a “ Tax Benefit Schedule ”) with respect to each Beneficiary and each Blocker Corporation Owner (which shall be prepared consistent with the Share Schedule included on Exhibit A). The Tax Benefit Schedules will become final and binding on the Parties pursuant to the procedures set forth in Section 2.6(a) , and may be amended by the Parties pursuant to the procedures set forth in Section 2.6(b) .

 

(b) Applicable Principles . Subject to the provisions of this Agreement, the Realized Tax Benefit or Realized Tax Detriment for each Taxable Year is intended to measure the decrease or increase in the Actual Tax Liability of Parent for such Taxable Year attributable to the Basis Adjustments, Imputed Interest and Extension Rate Interest, and the Inherited Tax Attributes as determined using a “with and without” methodology described in Section 2.6(a) . For the avoidance of doubt, the actual Covered Tax liability will take into account the deduction of the portion of the Tax Benefit Payment that must be accounted for as Imputed Interest under the Code based upon the characterization of the Tax Benefit Payment as additional consideration payable by the Company for the Company Common Units acquired in the Sale or an Exchange, or payable by Parent for the assets acquired pursuant to the Blocker Merger, as the case may be. Carryovers or carrybacks of any tax item attributable to any Basis Adjustment, Imputed Interest or Extension Rate Interest or the Inherited Tax Attributes shall be considered to be subject to the rules of the Code and the Treasury Regulations or the appropriate provisions of U.S. state and local and foreign tax law, as applicable, governing the use, limitation and expiration of carryovers or carrybacks of the relevant type. If a carryover or carryback of any Covered Tax item includes a portion that is attributable to the Basis Adjustment, Imputed Interest, or the Inherited Tax Attributes and another portion that is not, such portions shall be considered to be used in the order determined using such “with and without” methodology. The Parties agree that all Tax Benefit Payments attributable to the Sale or an Exchange will be treated as subsequent upward purchase price adjustments that give rise to further Basis Adjustments for Parent beginning in the Taxable Year of payment, and as a result, such additional Basis Adjustments will be incorporated into such Taxable Year continuing for future Taxable Years until any incremental Basis Adjustment benefits with respect to a Tax Benefit Payment equals a de minimis amount. For the avoidance of doubt, the treatment of Tax Benefit Payments pursuant to the preceding sentence shall not apply to Tax Benefit Payments attributable to the Blocker Corporation Owner.

 

2.6 Procedures; Amendments .

 

(a) Procedures . Each time Parent delivers an applicable Schedule to the Beneficiary Representative or a Blocker Corporation Owner under this Agreement, including any Amended Schedule delivered pursuant to Section 2.6(b) , but excluding any Early Termination Schedule or amended Early Termination Schedule delivered pursuant to the procedures set forth in Section 4.2 , Parent shall also: (x) deliver supporting schedules and work papers, as determined by Parent or as reasonably requested by the Beneficiary Representative or Blocker Corporation

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Owner, that provide a reasonable level of detail regarding the data and calculations that were relevant for purposes of preparing the Schedule; (y) deliver a Parent Letter supporting such Schedule; and (z) allow the Beneficiary Representative and Blocker Corporation Owner and their respective advisors to have reasonable access at no cost to the appropriate representatives, as determined by Parent or as reasonably requested by the Beneficiary Representative or Blocker Corporation Owner, at Parent and the Advisory Firm in connection with a review of such Schedule. Without limiting the generality of the preceding sentence, Parent shall ensure that any Tax Benefit Schedule that is delivered to the Beneficiary Representative or Blocker Corporation Owners, along with any supporting schedules and work papers, provides a reasonably detailed presentation of the calculation of the Actual Tax Liability of Parent for the relevant Taxable Year (the “with” calculation) and the Hypothetical Tax Liability of Parent for such Taxable Year (the “without” calculation), 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 the Parties thirty (30) calendar days from the date on which the Beneficiary Representative and the Blocker Corporation Owner first received the applicable Schedule or amendment thereto unless:

 

(i) the Beneficiary Representative or any Blocker Corporation Owner within thirty (30) calendar days after receiving the applicable Schedule or amendment thereto, provides Parent with (A) written notice of a material objection to such Schedule that is made in good faith and in reasonable detail (an “ Objection Notice ”); or

 

(ii) the Beneficiary Representative and each of the Blocker Corporation Owners provide a written waiver of its right to deliver an Objection Notice within the time period described in clause (i) above, in which case such Schedule or amendment thereto becomes binding on the date the waivers from the Beneficiary Representative and Blocker Corporation Owners are received by Parent.

 

In the event that Beneficiary Representative or a Blocker Corporation Owner timely delivers an Objection Notice pursuant to clause (i) above, and if the Parties, for any reason, are unable to successfully resolve the issues raised in the Objection Notice within thirty (30) calendar days after receipt by Parent of the Objection Notice, Parent and the Beneficiary Representative and Blocker Corporation Owners shall employ the reconciliation procedures as described in Section 7.10 of this Agreement (the “ Reconciliation Procedures ”).

 

(b) Amended Schedule . The applicable Schedule for any Taxable Year may be amended from time to time by Parent: (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 originally provided to the Beneficiary Representative and Blocker Corporation Owners; (iii) to comply with an Expert’s determination under the Reconciliation Procedures applicable to this Agreement; (iv) to reflect a change in the Realized Tax Benefit or Realized Tax Detriment for such Taxable Year attributable to a carryback or carryforward of a loss or other Tax item to such Taxable Year; (v) to reflect a change in the Realized Tax Benefit or Realized Tax Detriment for such Taxable Year attributable to an amended Tax Return filed for such Taxable Year; or (vi) to adjust a Basis Schedule to take into account any Tax Benefit Payments made pursuant to this

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Agreement (any such Schedule, an “ Amended Schedule ”). Parent shall provide an Amended Schedule to the Beneficiary Representative and Blocker Corporation Owners within sixty (60) calendar days of the occurrence of an event referenced in clauses (i) through (vi) of the immediately preceding sentence, and any such Amended Schedule shall be subject to approval procedures similar to those described in Section 2.6(a). For the avoidance of doubt, if a Schedule is amended after such Schedule becomes final pursuant to Section 2.6(a) , the Amended Schedule shall not be taken into account in calculating any Tax Benefit Payment in the Taxable Year to which such amendment relates but instead shall be taken into account in calculating the Cumulative Net Realized Tax Benefit for the Taxable Year in which the amendment is executed.

 

2.7 Significant Beneficiaries . For the purposes of Sections 2.3, 2.5 and 2.6 of this Agreement, a Significant Beneficiary shall have the same procedural rights and obligations as the Beneficiary Representative and Parent shall have the same procedural duties and obligations to a Significant Beneficiary as it does to the Beneficiary Representative.

 

ARTICLE III
TAX BENEFIT PAYMENTS

 

3.1 Payments .

 

(a) Timing of Payments . Subject to Sections 3.2 and 3.3 , within five (5) Business Days following the date on which each Tax Benefit Schedule that is required to be delivered by Parent to the Beneficiaries pursuant to Section 2.5(a) of this Agreement becomes final in accordance with Section 2.6(a) of this Agreement (such date, a “ Final Payment Date ” in respect of any applicable Tax Benefit Payment), unless required pursuant to the last sentence of this Section 3.1(a) , Parent shall pay to each relevant Beneficiary the Tax Benefit Payment as determined pursuant to Section 3.1(b) . Subject to Sections 3.2 and 3.3, within five (5) Business Days following the date on which each Inherited Tax Attribute Schedule that is required to be delivered by Parent to the Blocker Corporation Owner pursuant to Section 2.4(b) and Section 2.4(c) of this Agreement becomes final in accordance with Section 2.4(b) or Section 2.4(c) of this Agreement, as applicable (such date, a “Final Payment Date” in respect of any applicable Tax Benefit Payment), unless required pursuant to the last sentence of this Section 3.1(a), Parent shall pay to each relevant Blocker Corporation Owner the Tax Benefit Payment as determined pursuant to Section 3.1(b). Each Tax Benefit Payment made pursuant to this Section 3.1(a) shall be made by wire transfer of immediately available funds to the bank account previously designated by such Beneficiary or Blocker Corporation Owner, as the case may be, or as otherwise agreed by Parent and such Beneficiary or Blocker Corporation Owner, as the case may be. For the avoidance of doubt, neither the Beneficiaries nor the Blocker Corporation Owners shall be required under any circumstances to return any portion of any Tax Benefit Payment previously paid by Parent to the Beneficiaries or Blocker Corporation Owners, as the case may be (including any portion of any Early Termination Payment).

 

(b) Amount of Payments . For purposes of this Agreement, a “ Tax Benefit Payment ” with respect to any (i) Beneficiary means an amount, not less than zero, equal to the sum of: (A) the Net Tax Benefit that is Attributable to such Beneficiary and (B) the Actual Interest Amount in respect of such portion of Net Tax Benefit and (ii) Blocker Corporation Owner means an amount, not less than zero, equal to the sum of A) the Net Tax Benefit that is

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Attributable to such Blocker Corporation Owner in accordance with Section 3.1(b)(i)(B) hereof and (B) the Actual Interest Amount in respect of such portion of Net Tax Benefit.

 

(i) Attributable. The portion of any Net Tax Benefit of Parent that is “Attributable” to any Beneficiary shall be determined by reference to the assets from which arise the depreciation, amortization or other similar deductions for recovery of cost or basis (“Depreciation”) and the Inherited Tax Attributes, and the Imputed Interest that produce the Realized Tax Benefit, under the following principles:

 

(A) Any Realized Tax Benefit arising from a deduction to Parent with respect to a Taxable Year for Depreciation arising in respect of a Basis Adjustment to a Reference Asset is Attributable to a Beneficiary to the extent that the ratio of all Depreciation for the Taxable Year in respect of Basis Adjustments resulting from the portion of the Sale and from all Exchanges effected by such Beneficiary bears to the aggregate of all Depreciation for the Taxable Year in respect of Basis Adjustments resulting from all Exchanges by all Beneficiaries.

 

(B) Any Realized Tax Benefit arising from the use of an Inherited Tax Attribute of a Blocker Corporation is Attributable to a Blocker Corporation Owner of such Blocker Corporation in proportion to such Blocker Corporation Owners’ ownership percentage reflected on Exhibit A.

 

(C) Any Realized Tax Benefit arising from a deduction to the Corporation with respect to a Taxable Year in respect of Imputed Interest is Attributable to a Beneficiary that is required to include the Imputed Interest in income (without regard to whether such Beneficiary is actually subject to tax thereon).

 

(ii) Net Tax Benefit . The “ Net Tax Benefit ” for a Taxable Year equals the amount of the excess, if any, of (x) 85% of the Cumulative Net Realized Tax Benefit Attributable to Beneficiary or Blocker Corporation Owner as of the end of such Taxable Year over (y) the aggregate amount of all Tax Benefit Payments previously made to such Beneficiary or Blocker Corporation Owner under this Section 3.1. For the avoidance of doubt, if the Cumulative Net Realized Tax Benefit as of the end of any Taxable Year is less than the aggregate amount of all Tax Benefit Payments previously made to a Beneficiary or Blocker Corporation Owner, such Beneficiary shall not be required to return any portion of any Tax Benefit Payment previously made by Parent to such Beneficiary or Blocker Corporation Owner.

 

(iii) Imputed Interest . The principles of Sections 1272, 1274, or 483 of the Code, as applicable, and the principles of any similar provision of U.S. state and local law, will apply to cause a portion of any Net Tax Benefit payable by Parent to a Beneficiary or Blocker Corporation Owner under this Agreement to be treated as imputed interest (“ Imputed Interest ”). For the avoidance of doubt, the deduction for the amount of Imputed Interest as determined with respect to any Net Tax Benefit payable by Parent to a Beneficiary or Blocker Corporation Owner shall be excluded in determining the Hypothetical Tax Liability of Parent for purposes of calculating Realized Tax Benefits and Realized Tax Detriments pursuant to this Agreement.

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(iv) Default Rate Interest . In the event that Parent does not make timely payment of all or any portion of a Tax Benefit Payment to a Beneficiary or Blocker Corporation Owner on or before a Final Payment Date as determined pursuant to Section 3.1(a) , the amount of “ Default Rate Interest ” calculated in respect of the Net Tax Benefit (including previously accrued Imputed Interest and Extension Rate Interest) for a Taxable Year will equal interest calculated at the Default Rate from a Final Payment Date for a Tax Benefit Payment as determined pursuant to Section 3.1(a) until the date on which Parent makes such Tax Benefit Payment to such Beneficiary or Blocker Corporation Owner. For the avoidance of doubt, the amount of any Default Rate Interest as determined with respect to any Net Tax Benefit payable by Parent to a Beneficiary or Blocker Corporation Owner shall be excluded in the Hypothetical Tax Liability of Parent for purposes of calculating Realized Tax Benefits and Realized Tax Detriments pursuant to this Agreement.

 

(v) Value . Parent, the Beneficiaries and Blocker Corporation Owners hereby acknowledge and agree that, as of the date of this Agreement and as of the date of the Sale and any future Exchange that may be subject to this Agreement, the aggregate value of the Tax Benefit Payments cannot be reasonably ascertained for U.S. federal income or other applicable tax purposes.

 

(c) Interest . The provisions of Section 3.1(b) are intended to operate so that interest will effectively accrue in respect of the Net Tax Benefit for any Taxable Year as follows:

 

(i) first, at the applicable rate used to determine the amount of Imputed Interest under the Code (from the relevant Exchange Date until the due date (without extensions) for filing the U.S. federal income Tax Return of Parent for such Taxable Year);

 

(ii) second, at the Agreed Rate in respect of any Extension Rate Interest (from the due date (without extensions) for filing the U.S. federal income Tax Return of Parent for such Taxable Year until a Final Payment Date for a Tax Benefit Payment as determined pursuant to Section 3.1(a)) ; and

 

(iii) third, at the Default Rate in respect of any Default Rate Interest (from a Final Payment Date for a Tax Benefit Payment as determined pursuant to Section 3.1(a) until the date on which Parent makes the relevant Tax Benefit Payment to a Beneficiary or Blocker Corporation Owner).

 

(iv) For the avoidance of doubt, interest that accrues pursuant to Sections 3.1(c)(ii) and 3.1(c)(iii) hereof shall not be treated as interest for Tax purposes but shall instead be treated as additional consideration payable by the Company for the Company Common Units acquired in the Sale or an Exchange, or the assets acquired pursuant to the Blocker Merger, as the case may be, unless otherwise required by applicable law.

 

3.2 No Duplicative Payments . It is intended that the provisions of this Agreement will not result in the duplicative payment of any amount (including interest) that may be required under this Agreement, and the provisions of this Agreement shall be consistently interpreted and applied in accordance with that intent. For purposes of this Agreement, and also for the

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avoidance of doubt, no Tax Benefit Payment shall be calculated or made in respect of any estimated tax payments, including any estimated U.S. federal income tax payments.

 

3.3 Pro-Ration of Payments as Between the Beneficiaries and Blocker Corporation Owners; Coordination of Benefits .

 

(a) Insufficient Taxable Income . Notwithstanding anything in Section 3.1(b) to the contrary, if the aggregate potential Covered Tax benefit of Parent as calculated with respect to the Basis Adjustments, the Inherited Tax Attributes, and Imputed Interest (in each case, without regard to the Taxable Year of origination) permitted to be utilized in a particular Taxable Year is limited in such Taxable Year because Parent does not have sufficient actual taxable income or otherwise pursuant to applicable law, then the available Covered Tax benefit for Parent shall be allocated among the Beneficiaries or Blocker Corporation Owners, as the case may be, in proportion to the respective Tax Benefit Payment that would have been payable if Parent had in fact had sufficient taxable income so that there had been no such limitation.

 

(b) Pro-Rata Payments . After taking into account Section 3.3(a), if for any reason Parent 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 (i) Parent shall pay the same proportion of each Tax Benefit Payment due to each Beneficiary or Blocker Corporation Owner in respect of such Taxable Year, without favoring one obligation over the other, and (ii) no Tax Benefit Payment shall be made in respect of any Taxable Year until all Tax Benefit Payments in respect of prior Taxable Years have been made in full.

 

(c) Late Payments . If for any reason Parent is not able to timely and fully satisfy its payment obligations under this Agreement in respect of a particular Taxable Year, then Default Rate Interest will begin to accrue pursuant to Section 5.2 .

 

(d) Excess Payments . To the extent Parent makes a payment to a Beneficiary or Blocker Corporation Owner in respect of a particular Taxable Year under Section 3.1(a) of this Agreement (taking into account Section 3.3(a) and (b), but excluding payments attributable to Accrued Amounts) in an amount in excess of the amount of such payment that should have been made to such Beneficiary or Blocker Corporation Owner in respect of such Taxable Year, then (i) such Beneficiary or Blocker Corporation Owner shall not receive further payments under Section 3.1(a) until such Beneficiary or Blocker Corporation Owner has foregone an amount of payments equal to such excess and (ii) Parent will pay the amount of such Beneficiary’s or Blocker Corporation Owner’s foregone payments to the other Persons to whom a payment is due under this Agreement in a manner such that each such Person to whom a payment is due under this Agreement, to the maximum extent possible, receives aggregate payments under Section 3.1(a) (taking into account Section 3.3(a) and (b), but excluding payments attributable to Accrued Amounts) in the amount it would have received if there had been no excess payment to such Beneficiary or Blocker Corporation Owner.

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ARTICLE IV
TERMINATION

 

4.1 Termination . Unless terminated earlier pursuant to Section 4.2 , this Agreement will terminate when there is no further potential for a Tax Benefit Payment pursuant to this Agreement. Tax Benefit Payments under this Agreement are not conditioned on any Beneficiary or Blocker Corporation Owner retaining an interest in Parent, the Company, or any successor thereto.

 

4.2 Early Termination .

 

(a) Parent’s Early Termination Right . With the written approval of a majority of the Independent Directors, Parent may completely terminate this Agreement, as and to the extent provided herein, with respect to all amounts payable to the Beneficiaries or Blocker Corporation Owners pursuant to this Agreement by paying to the Beneficiaries or Blocker Corporation Owners the Early Termination Payment; provided that Early Termination Payments may be made pursuant to this Section 4.2(a) only if made to all Beneficiaries or Blocker Corporation Owners that are entitled t o such a payment simultaneously; provided further, that Parent may withdraw any notice to execute its termination rights under this Section 4.2(a) prior to the time at which any Early Termination Payment has been paid. Upon Parent’s payment of the Early Termination Payment, Parent shall not have any further payment obligations under this Agreement, other than with respect to any: (i) prior Tax Benefit Payments that are due and payable under this Agreement but that still remain unpaid as of the date of the Early Termination Notice; and (ii) current Tax Benefit Payment due for the Taxable Year ending on or including the date of the Early Termination Notice (except to the extent that the amount described in clause (ii) is included in the calculation of the Early Termination Payment). If an Exchange subsequently occurs with respect to Company Common Units for which Parent has exercised its termination rights under this Section 4.2(a) , Parent shall have no obligations under this Agreement with respect to such Exchange.

 

(b) Acceleration Upon Change of Control . In the event of a Change of Control, all obligations hereunder shall be accelerated and such obligations shall be calculated pursuant to this Article IV as if an Early Termination Notice had been delivered on the closing date of the Change of Control and utilizing the Valuation Assumptions by substituting the phrase “the closing date of a Change of Control” in each place where the phrase “Early Termination Effective Date” appears. Such obligations shall include, but not be limited to, (1) the Early Termination Payment calculated as if an Early Termination Notice had been delivered on the closing date of the Change of Control, (2) any Tax Benefit Payments agreed to by Parent and the Beneficiaries or Blocker Corporation Owners as due and payable but unpaid as of the Early Termination Notice and (3) any Tax Benefit Payments due for any Taxable Year ending prior to, with or including the closing date of a Change of Control (except to the extent that any amounts described in clauses (2) or (3) are included in the Early Termination Payment). For the avoidance of doubt, Sections 4.3 and 4.4 shall apply to a Change of Control, mutadis mutandi .

 

(c) Acceleration Upon Breach of Agreement . In the event that Parent materially breaches any of its material obligations under this Agreement, whether as a result of failure to make any material payment due pursuant to this Agreement within three months of receiving written notice from the Beneficiary Representative or Blocker Corporation Owners of Parent’s such failure to timely pay, failure to honor any other material obligation required

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hereunder to the extent not cured within thirty (30) days of receiving written notice from any Beneficiary or Blocker Corporation Owner that is materially prejudiced by such failure, or by operation of law as a result of the rejection of this Agreement in a case commenced under the Bankruptcy Code or otherwise, then all obligations hereunder shall be accelerated and become immediately due and payable upon notice of acceleration from a 10% Beneficiary or as a result of a Two-Thirds Beneficiary and Blocker Approval ( provided that in the case of any proceeding under the Bankruptcy Code or other insolvency statute, such acceleration shall be automatic without any such notice), and such obligations shall be calculated as if an Early Termination Notice had been delivered on the date of such notice of acceleration (or, in the case of any proceeding under the Bankruptcy Code or other insolvency statute, on the date of such breach) and shall include, but not be limited to: (i) the Early Termination Payment calculated as if an Early Termination Notice had been delivered on the date of such acceleration; (ii) any prior Tax Benefit Payments that are due and payable under this Agreement but that still remain unpaid as of the date of such acceleration; and (iii) any current Tax Benefit Payment due for the Taxable Year ending with or including the date of such acceleration. For purposes of this Section 4.2(c) , and subject to the following sentence, the Parties agree that the failure to make any material payment due pursuant to this Agreement within three months of receiving written notice from the Beneficiary Representative or Blocker Corporation Owner of Parent’s such failure to timely pay shall be deemed to be a material breach of a material obligation under this Agreement for all purposes of this Agreement, and that it will not be considered to be a material breach of a material obligation under this Agreement to make a payment due pursuant to this Agreement within three months of receiving such written notice. Notwithstanding anything in this Agreement to the contrary, it shall not be a material breach of a material obligation of this Agreement if Parent fails to make any Tax Benefit Payment to the extent that Parent has insufficient funds, or cannot take commercially reasonable actions to obtain sufficient funds, to make such payment; provided that the interest provisions of Section 5.2 shall apply to such late payment (unless Parent 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).

 

4.3 Early Termination Notice . If Parent chooses to exercise its right of early termination under Section 4.2 above, Parent shall deliver to the Beneficiaries and the Blocker Corporation Owners a notice of Parent’s decision to exercise such right (an “ Early Termination Notice ”) and a schedule (the “ Early Termination Schedule ”) showing in reasonable detail the calculation of the Early Termination Payment. Parent shall also (x) deliver supporting schedules and work papers, as determined by Parent or as reasonably requested by a Beneficiary or Blocker Corporation Owner, that provide a reasonable level of detail regarding the data and calculations that were relevant for purposes of preparing the Early Termination Schedule; (y) deliver a Parent Letter supporting such Early Termination Schedule; and (z) allow the Beneficiaries or Blocker Corporation Owners and their advisors to have reasonable access to the appropriate representatives, as determined by Parent or as reasonably requested by the Beneficiaries or Blocker Corporation Owner, at Parent and the Advisory Firm in connection with a review of such Early Termination Schedule. The Early Termination Schedule shall become final and binding on each Party forty-five (45) calendar days from the first date on which the Beneficiaries or Blocker Corporation Owners received such Early Termination Schedule unless:

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(i) a Beneficiary or Blocker Corporation Owner, within forty-five (45) calendar days after receiving the Early Termination Schedule, provides Parent with (A) notice of a material objection to such Early Termination Schedule made in good faith and setting forth in reasonable detail such Beneficiary’s or Blocker Corporation Owner’s material objection (a “ Termination Objection Notice ”) and (B) a letter from a Beneficiary Advisory Firm or Blocker Owner Advisory Firm, as applicable, in support of such Termination Objection Notice; or

 

(ii) each Beneficiary or Blocker Corporation Owner provides a written waiver of such right of a Termination Objection Notice within the period described in clause (i) above, in which case such Early Termination Schedule becomes binding on the date the waiver from all Beneficiaries or Blocker Corporation Owners is received by Parent.

 

In the event that a Beneficiary or Blocker Corporation Owner timely delivers a Termination Objection Notice pursuant to clause (i) above, and if the Parties, for any reason, are unable to successfully resolve the issues raised in the Termination Objection Notice within thirty (30) calendar days after receipt by Parent of the Termination Objection Notice, Parent and such Beneficiary or Blocker Corporation Owner shall employ the Reconciliation Procedures. For the avoidance of doubt, and notwithstanding anything to the contrary herein, the expense of preparing and obtaining the letter from a Beneficiary Advisory Firm or Blocker Owner Advisory Firm referenced in clause (i) above shall be borne solely by such Beneficiary or Blocker Corporation Owner and Parent shall have no liability with respect to such letter or any of the expenses associated with its preparation and delivery. The date on which the Early Termination Schedule becomes final in accordance with this Section 4.3 shall be the “ Early Termination Reference Date .”

 

4.4 Payment upon Early Termination .

 

(a) Timing of Payment . Within five (5) Business Days after the Early Termination Reference Date, Parent shall pay to each Beneficiary or Blocker Corporation Owner an amount equal to the Early Termination Payment for such Beneficiary or Blocker Corporation Owner. Such Early Termination Payment shall be made by Parent by wire transfer of immediately available funds to a bank account or accounts designated by the Beneficiaries or Blocker Corporation Owners or as otherwise agreed by Parent and the Beneficiaries or Blocker Corporation Owners.

 

(b) Amount of Payment . The “ Early Termination Payment ” payable to a Beneficiary or Blocker Corporation Owner pursuant to Section 4.4(a) shall equal the present value, discounted at the Early Termination Rate as determined as of the Early Termination Reference Date, of all Tax Benefit Payments that would be required to be paid by Parent to such Beneficiary or Blocker Corporation Owner, whether payable with respect to Company Common Units that were Sold or Exchanged prior to the Early Termination Effective Date or on or after the Early Termination Effective Date, beginning from the Early Termination Effective Date and using the Valuation Assumptions. For the avoidance of doubt, an Early Termination Payment shall be made to each Beneficiary, regardless of whether such Beneficiary has Sold or Exchanged all of its Company Common Units as of the Early Termination Effective Date.

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ARTICLE V
SUBORDINATION AND BREACH OF PAYMENT OBLIGATIONS

 

5.1 Subordination . Notwithstanding any other provision of this Agreement to the contrary, any Tax Benefit Payment or Early Termination Payment required to be made by Parent to the Beneficiaries or the Blocker Corporation Owners 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 owed in respect of secured or unsecured indebtedness for borrowed money of Parent and its Subsidiaries (in all events, excluding any debt instruments between Parent and any of its Subsidiaries or Affiliates) (“ Senior Obligations ”) and shall rank pari passu in right of payment with all current or future unsecured obligations of Parent 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 the agreements governing Senior Obligations, such payment obligation nevertheless shall accrue for the benefit of the Beneficiaries or the Blocker Corporation Owners and Parent 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. For the avoidance of doubt, notwithstanding the above, the determination of whether it is a breach of this Agreement if Parent fails to make any Tax Benefit Payment when due shall be governed by Section 4.2(c) .

 

5.2 Late Payments by Parent . Except as otherwise provided herein, the amount of all or any portion of any Tax Benefit Payment or Early Termination Payment not made to the Beneficiaries or Blocker Corporation Owners when due under the terms of this Agreement, whether as a result of Section 5.1 and the terms of the Senior Obligations or otherwise, shall be payable together with Default Rate Interest, which shall accrue beginning on a Final Payment Date and be computed as provided in Section 3.1(b)(iv) .

 

5.3 Right of Setoff . Notwithstanding any other provision of this Agreement, if a Beneficiary or a Blocker Corporation Owner owes any amounts to Parent, Parent may, without advance notice to or demand on such Beneficiary or Blocker Corporation Owner set-off or apply any such amounts against the Tax Benefit Payments otherwise payable to such Beneficiary or Blocker Corporation Owner under this Agreement.

 

ARTICLE VI
TAX MATTERS; CONSISTENCY; COOPERATION

 

6.1 Parent’s and the Company’s Tax Matters . Except as otherwise provided herein, Parent shall have full responsibility for, and sole discretion over, all Tax matters concerning Parent and the Company Group, including the preparation, filing or amending of any Tax Return and defending, contesting or settling any issue pertaining to Taxes, subject to a requirement that the Parent act in good faith in connection with its control of any matter which is reasonably expected to materially affect the Beneficiaries’ rights and obligations under this Agreement. Notwithstanding the foregoing, Parent shall notify the Beneficiary Representative, the Significant Beneficiaries and Blocker Corporation Owners of, and keep them reasonably informed with respect to, the portion of any tax audit of Parent or the Company, or any of the Company’s Subsidiaries, the outcome of which is reasonably expected to affect the Tax Benefit Payments payable to the Beneficiaries or Blocker Corporation Owners under this Agreement.

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6.2 Consistency . All calculations and determinations made hereunder, including any Basis Adjustments, the Schedules, and the determination of any Realized Tax Benefits or Realized Tax Detriments, shall be made in accordance with the elections, methodologies or positions taken by Parent and the Company on their respective Tax Returns. Each Beneficiary and Blocker Corporation Owner shall prepare its Tax Returns in a manner that is consistent with the terms of this Agreement, and any related calculations or determinations that are made hereunder, including the terms of Section 2.1 of this Agreement and the Schedules provided to the Beneficiaries and Blocker Corporation Owners under this Agreement unless otherwise required by applicable Law. In the event that an Advisory Firm is replaced with another Advisory Firm acceptable to the Audit Committee, such replacement Advisory Firm shall perform its services under this Agreement using procedures and methodologies consistent with the previous Advisory Firm, unless otherwise required by law or unless Parent, the Beneficiary Representative, the Significant Beneficiaries and Blocker Corporation Owners agree to the use of other procedures and methodologies.

 

6.3 Cooperation . Each Beneficiary and Blocker Corporation Owner shall (a) furnish to Parent in a timely manner such information, documents and other materials as Parent may reasonably request for purposes of making any determination or computation necessary or appropriate under this Agreement, preparing any Tax Return or contesting or defending any audit, examination or controversy with any Taxing Authority, (b) make itself available to Parent and its representatives to provide explanations of documents and materials and such other information as Parent or its representatives may reasonably request in connection with any of the matters described in clause (a) above, and (c) reasonably cooperate in connection with any such matter, and Parent shall reimburse any Beneficiary or Blocker Corporation Owner for any reasonable third-party costs and expenses incurred by such Beneficiary or Blocker Corporation Owner pursuant to this Section 6.3 .

 

6.4 Pre-Transactions Tax Records . Parent and its advisors may rely on all Tax Returns of the Company that were prepared and filed prior to completion of the Reorganization Transactions and may assume in good faith that all such Tax Returns are correct, complete and accurate unless otherwise established by a Determination.

 

6.5 Tax Treatment of Beneficiary Rights . The Parties acknowledge and hereby agree to treat for all tax reporting purposes any payments made to a Beneficiary under this Agreement: (i) such payments arising from the Sale, as money received within the meaning of Section 351(b)(1) of the Code, and (ii) such payments arising from an Exchange, as money received within the meaning of Section 1001(b) of the Code for the applicable Company Common Units exchanged by such Beneficiary in such Exchange, in each case, except with respect to Imputed Interest. The Parties shall for all tax reporting purposes treat such payments consistently with this Section 6.5 except upon a contrary final determination by an applicable taxing authority.

 

6.6 Tax Treatment of Blocker Corporation Owners Rights . The Parties acknowledge and hereby agree to treat for U.S. federal income tax purposes any payments made to a Blocker Corporation Owner under this Agreement as additional consideration described as “other property” within the meaning of Section 356 of the Code pursuant to the applicable Blocker Merger, except with respect to Imputed Interest. The Parties shall for all tax reporting purposes

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treat such payments consistently with this Section 6.6 except upon a contrary final determination by an applicable taxing authority.

 

ARTICLE VII
MISCELLANEOUS

 

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) if delivered personally, on the date of delivery 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 Parent, to:

 

GreenSky, Inc.

5565 Glenridge Connector, Suite 700

Glenridge Highlands 2

Atlanta, GA 30342

Attention: Chief Legal Officer

Fax: (878) 839-1263

Email: steve.fox@greenskycredit.com

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

 

Troutman Sanders LLP

600 Peachtree Street, Suite 3000

Atlanta, GA 30308

Attention: W. Brinkley Dickerson Jr.

Fax: (404) 962-6743

Email: brink.dickerson@troutman.com

 

if to the Company, to:

 

GreenSky Holdings, LLC

5565 Glenridge Connector, Suite 700

Glenridge Highlands 2

Atlanta, GA 30342

Attention: Chief Legal Officer

Fax: (878) 839-1263

Email: steve.fox@greenskycredit.com

 

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

 

Troutman Sanders LLP

600 Peachtree Street, Suite 3000

Atlanta, GA 30308

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Attention: W. Brinkley Dickerson Jr.

Fax: (404) 962-6743

Email: brink.dickerson@troutman.com

 

if to a Beneficiary or Blocker Corporation Owner, to the address and facsimile number set forth in the Company’s records, with a copy to the Beneficiary Representative (in the case of a Beneficiary). Any party may change its address by giving the other party written notice of its new address in the manner set forth above.

 

7.2 Counterparts . This Agreement may be executed in one or more counterparts, 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 transmission or electronic mail shall be as effective as delivery of a manually signed counterpart of this Agreement.

 

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 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.

 

7.4 Governing Law . This Agreement shall be governed by, and construed in accordance with, the law of the State of Delaware, without regard to the conflicts of laws principles thereof that would mandate the application of the laws of another jurisdiction.

 

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.

 

7.6 Successors; Assignment; Amendments; Waivers .

 

(a) Assignment . No Beneficiary or Blocker Corporation Owner may assign, sell, pledge, or otherwise alienate or transfer any interest in this Agreement, including the right to receive any Tax Benefit Payments under this Agreement, to any Person without (i) the prior written consent of Parent, which consent shall not be unreasonably withheld, conditioned, or delayed, and which consent shall only be withheld if Parent determines and notifies such Beneficiary or Blocker Corporation Owner that, upon consultation with counsel, such transfer would (x) be prohibited by law, (y) result in a breach of any material agreement of Parent that is

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not entered into to frustrate the assignability of any interest in this Agreement, or (z) cause an unreasonable non-tax regulatory burden on Parent, and (ii) without such Person executing and delivering a Joinder agreeing to succeed to the applicable portion of such Beneficiary’s or Blocker Corporation Owner’s interest in this Agreement and to become a Party for all purposes of this Agreement (the “ Joinder Requirement ”); provided, however , that to the extent any Beneficiary sells, exchanges, distributes, or otherwise transfers Company Common Units to any Person (other than Parent or the Company) in accordance with the terms of the Exchange Agreement and/or Company LLC Agreement, the Beneficiaries shall have the option to assign to the transferee of such Company Common Units its rights under this Agreement with respect to such transferred Company Common Units; provided, further , that such transferee has satisfied the Joinder Requirement. For the avoidance of doubt, if a Beneficiary transfers Company Common Units in accordance with the terms of the Exchange Agreement and/or Company LLC Agreement but does not assign to the transferee of such Company Common Units its rights under this Agreement with respect to such transferred Company Common Units, such Beneficiary shall continue to be entitled to receive the Tax Benefit Payments arising in respect of a subsequent Exchange of such Company Common Units and such transferee may not enforce the provisions of Sections 2.6, 4.2, 6.1, and 6.2 herein. Notwithstanding any other provision of this Agreement, an assignee of only rights to receive a Tax Benefit Payment in connection with the Sale or an Exchange has no rights under this Agreement other than to enforce it right to receive a Tax Benefit Payment pursuant to this Agreement.

 

(b) Amendments . No provision of this Agreement may be amended unless such amendment is approved in writing by Parent and by the Beneficiaries or Blocker Corporation Owner who would be entitled to receive at least two-thirds of the Early Termination Payments payable to all Beneficiaries or Blocker Corporation Owners hereunder if the Company had exercised its right of early termination under Section 4.2 on the date of the most recent Exchange prior to such Amendment (excluding, for purposes of this sentence, all payments made to any Beneficiary or Blocker Corporation Owner pursuant to this Agreement since the date of such most recent Exchange); provided that no such amendment shall be effective if such amendment will have a materially disproportionate effect on the payments certain Beneficiaries or Blocker Corporation Owners may receive under this Agreement unless at least two-thirds of such Beneficiaries or Blocker Corporation Owners materially disproportionately effected (with such two-thirds threshold being measured by the entitlement to Early Termination Payments as set forth in the preceding portion of this sentence) consent in writing to such amendment. No provision of this Agreement may be waived unless such waiver is in writing and signed by the Party against whom the waiver is to be effective.

 

(c) Successors . All of the terms and provisions of this Agreement shall be binding upon, and shall inure to the benefit of and be enforceable by, the Parties hereto and their respective successors, assigns, heirs, executors, administrators and legal representatives. Parent 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 Parent, by written agreement, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that Parent would be required to perform if no such succession had taken place.

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(d) 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 right or remedy consequent upon a breach thereof, shall constitute a waiver of any such breach or any other covenant, duty, agreement, or condition.

 

7.7 Titles and Subtitles . The headings and 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.

 

7.8 Resolution of Disputes .

 

(a) Except for Reconciliation Disputes subject to Section 7.10 , any and all disputes which cannot be settled after substantial good-faith negotiation, 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 resolved by arbitration in accordance with the International Institute for Conflict Prevention and Resolution Rules for Non-Administered Arbitration by a panel of three arbitrators (the “ Arbitrators ”), of which Parent shall designate one Arbitrator and the Beneficiaries or Blocker Corporation Owners party to such Dispute shall designate one Arbitrator in accordance with the “screened” appointment procedure provided in Resolution Rule 5.4. The arbitration shall be governed by the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq ., and judgment upon the award rendered by the arbitrators may be entered by any court having jurisdiction thereof. The place of the arbitration shall be Wilmington, Delaware. The Arbitrators are not empowered to award damages in excess of compensatory damages, and each Party hereby irrevocably waives any right to recover punitive, exemplary or similar damages with respect to any Dispute.

 

(b) Notwithstanding the provisions of paragraph (a), any Party may bring an action or special proceeding in any court of competent jurisdiction for the purpose of compelling another 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), each Party (i) expressly consents to the application of paragraph (c) of this Section 7.8 to any such action or proceeding, and (ii) agrees 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. For the avoidance of doubt, this Section 7.8 shall not apply to Reconciliation Disputes to be settled in accordance with the procedures set forth in Section 7.10 .

 

(c) Each Party hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the Chancery Court of the State of Delaware or, if such Court declines jurisdiction, the courts of the State of Delaware sitting in Wilmington, Delaware, and of the U.S. District Court for the District of Delaware sitting in Wilmington, Delaware, and any appellate court from any thereof, in any action or proceeding brought in accordance with the provisions of Section 7.8(b) or any judicial proceeding ancillary to an arbitration or contemplated arbitration (including any proceeding to compel arbitration to obtain temporary or preliminary judicial relief in aid of arbitration or to confirm an arbitration award) arising out of or relating to this Agreement or for recognition or enforcement of any judgment, and each of the Parties hereto irrevocably and unconditionally agrees that all claims in respect of

32

any such action or proceeding may be heard and determined in such Delaware State court or, to the fullest extent permitted by applicable law, in such U.S. District Court. Each Party agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

 

(d) Each Party irrevocably and unconditionally waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in any court referred to in Section 7.8(c) . Each Party irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of any such suit, action or proceeding in any such court.

 

(e) Each Party irrevocably consents to service of process by means of notice in the manner provided for in Section 7.1 . Nothing in this Agreement shall affect the right of any Party to serve process in any other manner permitted by law.

 

(f) WAIVER OF RIGHT TO TRIAL BY JURY. 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 ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).

 

7.9 Removal or Replacement of Beneficiary Representative . The Beneficiary Representative shall not be removed or replaced without the written consent of Parent and the Two-Thirds Beneficiary and Blocker Approval.

 

7.10 Reconciliation . In the event that Parent and the Beneficiary Representative, a Significant Beneficiary, or a Blocker Corporation Owner are unable to resolve a disagreement with respect to a Basis Schedule, Tax Benefit Schedule, Inherited Tax Attribute Schedule (as applicable), or with respect to an Early Termination Schedule, within the relevant time period designated in this Agreement (a “ 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 firm, and unless Parent and the Beneficiary Representative, such Significant Beneficiary, or such Blocker Corporation Owner agree otherwise, the Expert shall not, and the firm that employs the Expert shall not, have any material relationship with Parent or the Beneficiary Representative, such Significant Beneficiary, or such Blocker Corporation Owner or other actual or potential conflict of interest. If the Parties are unable to agree on an Expert within fifteen (15) calendar days of receipt by the respondent(s) of written notice of a Reconciliation Dispute, the selection of an Expert shall be treated as a Dispute subject to Section 7.8 and an arbitration panel shall pick an Expert from a nationally recognized accounting firm that does not have any material relationship with Parent or the Beneficiary Representative, such Significant Beneficiary, or such Blocker Corporation Owner or other actual or potential conflict of interest. The Expert shall resolve any matter relating to the Basis Schedule or an amendment thereto, the Inherited Tax Attribute Schedule or an amendment thereto or the Early Termination Schedule or an amendment thereto within thirty (30) calendar

33

days and shall resolve any matter relating to a Tax Benefit Schedule or an amendment thereto within fifteen (15) calendar days or as soon thereafter as is reasonably practicable, in each case after the matter has been submitted to the Expert for resolution. Notwithstanding the preceding sentence, if the matter is not resolved before any payment that is the subject of a disagreement would be due (in the absence of such disagreement) or any Tax Return reflecting the subject of a disagreement is due, the undisputed amount shall be paid on the date prescribed by this Agreement and such Tax Return may be filed as prepared by Parent, 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 Parent except as provided in the next sentence. Parent, such Significant Beneficiary, or such Blocker Corporation Owner shall bear its own costs and expenses of such proceeding, unless (i) the Expert adopts such Significant Beneficiary’s, or such Blocker Corporation Owner’s position, in which case Parent shall reimburse the Significant Beneficiary or Blocker Corporation Owner, as the case may be, for any reasonable and documented out-of-pocket costs and expenses in such proceeding, or (ii) the Expert adopts Parent’s position, in which case the Significant Beneficiary or Blocker Corporation Owner, as the case may be, shall reimburse Parent for any reasonable and documented 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 7.10 shall be decided by the Expert. The Expert shall finally determine any Reconciliation Dispute and the determinations of the Expert pursuant to this Section 7.10 shall be binding on Parent, the Beneficiaries, and Blocker Corporation Owners and may be entered and enforced in any court having competent jurisdiction.

 

7.11 Withholding . Parent shall be entitled to deduct and withhold from any payment payable pursuant to this Agreement such amounts as Parent is required to deduct and withhold with respect to the making of such payment under any provision of U.S. federal, state, local or foreign tax law. To the extent that amounts are so withheld and paid over to the appropriate Taxing Authority by Parent, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the applicable Beneficiary or Blocker Corporation Owner. Each Beneficiary or Blocker Corporation Owner shall promptly provide Parent with any applicable tax forms and certifications reasonably requested by Parent in connection with determining whether any such deductions and withholdings are required under any provision of U.S. federal state, local or foreign tax law.

 

7.12 Admission of Parent into a Consolidated Group; Transfers of Corporate Assets .

 

(a) If Parent becomes a member of an affiliated or consolidated group of corporations that files a consolidated income tax return pursuant to Sections 1501, et seq. or other applicable Sections of the Code or any corresponding provisions of state, local or foreign law, then: (i) the provisions of this Agreement shall be applied with respect to the group as a whole; and (ii) Tax Benefit Payments, Early Termination Payments and other applicable items hereunder shall be computed with reference to the consolidated taxable income of the group as a whole.

 

(b) If Parent (or any other entity that is obligated to make a Tax Benefit Payment or Early Termination Payment hereunder) or any member of the Company Group transfers (or is deemed to transfer) one or more assets to a corporation with which Parent or any

34

other entity that is obligated to make a Tax Benefit Payment or Early Termination Payment hereunder does not file a consolidated tax return pursuant to Section 1501 of the Code (or will not file such a return following a series of transactions undertaken in connection with such transfer(s)), such entity, for purposes of calculating the amount of any Tax Benefit Payment or Early Termination Payment due hereunder, shall be treated as having disposed of such asset in a fully taxable transaction on the date of such transfer. The consideration deemed to be received by such entity shall be equal to the net fair market value of the transferred asset as determined by Parent, 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.

 

7.13 Confidentiality . Each Beneficiary and its assignees and each Blocker Corporation Owner and each of its assignees acknowledges and agrees that the information of Parent is confidential and, except in the course of performing any duties as necessary for Parent 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 Parent and its Affiliates and successors, learned by any Beneficiary or Blocker Corporation Owner heretofore or hereafter. This Section 7.13 shall not apply to (i) any information that has been made publicly available by Parent or any of its Affiliates, becomes public knowledge (except as a result of an act of any Beneficiary or Blocker Corporation Owner in violation of this Agreement) or is generally known to the business community, (ii) the disclosure of information to the extent necessary for a Beneficiary or Blocker Corporation Owner to prosecute or defend claims arising under or relating to this Agreement, and (iii) the disclosure of information to the extent necessary for a Beneficiary or Blocker Corporation Owner 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 Tax Returns. Notwithstanding anything to the contrary herein, the Beneficiaries the Blocker Corporation Owners and each of their respective assignees (and each employee, representative or other agent of the Beneficiaries and Blocker Corporation Owners or their assignees, as applicable) may disclose at their discretion to any and all Persons, without limitation of any kind, the tax treatment and tax structure of Parent, the Beneficiaries and Blocker Corporation Owners and any of their transactions, and all materials of any kind (including tax opinions or other tax analyses) that are provided to the Beneficiaries or Blocker Corporation Owners relating to such tax treatment and tax structure. If a Beneficiary, Blocker Corporation Owner or an assignee commits a breach, or threatens to commit a breach, of any of the provisions of this Section 7.13 , Parent shall have the right and remedy to have the provisions of this Section 7.13 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 Parent or any of its Subsidiaries 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.

 

7.14 Company LLC Agreement . To the extent this Agreement imposes obligations on the Company or a member of the Company, this Agreement shall be treated as part of the Company LLC Agreement 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.

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7.15 Independent Nature of Beneficiaries’ Rights and Obligations . The rights and obligations of each Beneficiary and Blocker Corporation Owner hereunder are several and not joint with the rights and obligations of any other Person. A Beneficiary or Blocker Corporation Owner shall not be responsible in any way for the performance of the obligations of any other Person hereunder, nor shall a Beneficiary or Blocker Corporation Owner have the right to enforce the rights or obligations of any other Person hereunder (other than Parent). The obligations of a Beneficiary or Blocker Corporation Owner hereunder are solely for the benefit of, and shall be enforceable solely by, Parent. Nothing contained herein or in any other agreement or document delivered at any closing, and no action taken by any Beneficiary or Blocker Corporation Owner pursuant hereto or thereto, shall be deemed to constitute the Beneficiaries or Blocker Corporation Owners acting as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Beneficiaries or Blocker Corporation Owners are in any way acting in concert or as a group with respect to such rights or obligations or the transactions contemplated hereby, and Parent acknowledges that the Beneficiaries or Blocker Corporation Owners are not acting in concert or as a group and will not assert any such claim with respect to such rights or obligations or the transactions contemplated hereby.

 

7.16 Change in Law . Notwithstanding anything herein to the contrary, if, in connection with an actual or proposed change in law, a Beneficiary or a Blocker Corporation Owner reasonably believes that the existence of this Agreement could cause income (other than income arising from receipt of a payment under this Agreement) recognized by such Beneficiary or Blocker Corporation Owner (or direct or indirect equity holders in such Beneficiary or Blocker Corporation Owner) in connection with the Sale or any Exchange or the Blocker Merger 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 Beneficiary, Blocker Corporation Owner or any direct or indirect owner of such Beneficiary or Blocker Corporation Owner, then at the written election of such Beneficiary or Blocker Corporation Owner, as the case may be, in its sole discretion (in an instrument signed by such Beneficiary or Blocker Corporation Owner and delivered to Parent) and to the extent specified therein by such Beneficiary or Blocker Corporation Owner, as the case may be, this Agreement shall cease to have further effect and shall not apply to an Exchange occurring after a date specified by such Beneficiary, or may be amended by in a manner reasonably determined by such Beneficiary or Blocker Corporation Owner; provided that such amendment shall not result in an increase in any payments owed by Parent 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.

 

7.17 Interest Rate Limitation . Notwithstanding anything to the contrary contained herein, the interest paid or agreed to be paid hereunder with respect to amounts due to any Beneficiary or Blocker Corporation Owner hereunder shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the “ Maximum Rate ”). If any Beneficiary or Blocker Corporation Owner shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the Tax Benefit Payment or Early Termination Payment, as applicable (but in each case exclusive of any component thereof comprising interest) or, if it

36

exceeds such unpaid non-interest amount, refunded to Parent. In determining whether the interest contracted for, charged, or received by any Beneficiary or Blocker Corporation Owner exceeds the Maximum Rate, such Beneficiary or Blocker Corporation Owner may, to the extent permitted by applicable Law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the payment obligations owed by Parent to such Beneficiary or Blocker Corporation Owner hereunder. Notwithstanding the foregoing, it is the intention of the Parties to conform strictly to any applicable usury laws.

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IN WITNESS WHEREOF, Parent, the Company and the other Persons party hereto have duly executed this Agreement as of the date first written above.

 

  GREENSKY, INC.
     
  By: /s/ David Zalik
    Name: David Zalik
    Title: Chief Executive Officer
     
  GREENSKY HOLDINGS, LLC
     
  By: /s/ David Zalik
    Name: David Zalik
    Title: Chief Executive Officer
     
  GREENSKY, LLC
     
  By: /s/ David Zalik
    Name: David Zalik
    Title: Chief Executive Officer
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EXHIBIT B
JOINDER TO TAX RECEIVABLE AGREEMENT

 

This JOINDER (this “ Joinder ”) to the Tax Receivable Agreement, by and among GreenSky, Inc., a Delaware corporation (“ Parent ”), GreenSky Holdings, LLC, a Georgia limited liability company, (the “ Company ”), GreenSky, LLC, a Georgia limited liability company (“ GSLLC ”), and ___________________ (“ Additional Signatory ”), is dated as of ________ __, 20__.

 

WHEREAS, reference is hereby made to the Tax Receivable Agreement, dated as of May 23, 2018, by and among Parent, the Company and the other parties thereto, as such agreement may be amended and/or restated from time to time (the “ Tax Receivable Agreement ”). Capitalized terms used in this Joinder and not otherwise defined in this Joinder shall have the respective meanings given to such capitalized terms in the Tax Receivable Agreement; and

 

[WHEREAS, on __________________, Additional Signatory acquired (the “ Acquisition ”) [____] Company Common Units (collectively, “ Applicable Units ”) and the corresponding number of shares of Parent’s Class B Common Stock from [________________ (“ Transferor ”)], and Transferor, in connection with the Acquisition, has required Additional Signatory to execute and deliver this Joinder pursuant to Section 7.6(a) of the Tax Receivable Agreement.]

 

[WHEREAS, on __________________, Additional Signatory acquired (the “ Acquisition ”) from [________________ (“ Transferor ”)], the right to receive all payments under the Tax Receivable Agreement with respect to the [____] Company Common Units that were previously Sold or Exchanged (collectively, “ Applicable Units ”), and in connection with the Acquisition, Additional Signatory (i) is required to execute and deliver this Joinder pursuant to Section 7.6(a) of the Tax Receivable Agreement and (ii) will, for purposes of the Tax Receivable Agreement, be deemed to be an “Exchanging TRA Member” with respect to such Applicable Units.]

 

NOW, THEREFORE, in consideration of the foregoing and the agreements contained herein, Additional Signatory hereby agrees as follows:

 

Section 1.1. Joinder to Tax Receivable Agreement . Additional Signatory hereby (i) acknowledges that Additional Signatory has received and reviewed a complete copy of the Tax Receivable Agreement and (ii) agrees that upon execution of this Joinder, Additional Signatory (A) will become a party to the Tax Receivable Agreement and shall be fully bound by, and subject to, all of the covenants, terms and conditions of the Tax Receivable Agreement in the manner set forth in the Tax Receivable Agreement, with respect to the Applicable Units and (B) will be a “TRA Member” for all purposes of the Tax Receivable Agreement.

 

Section 1.2. Company LLC Agreement . Additional Signatory hereby (i) acknowledges that Additional Signatory has received and reviewed a complete copy of the Company LLC Agreement and (ii) agrees that Additional Signatory either is, or as a result of the execution and delivery of this Joinder has become, a party to the Company LLC Agreement and, as a result thereof, is fully bound by, and subject to, all of the covenants, terms and conditions of the

B- 1

Company LLC Agreement and shall is a Limited Partner (as such term is defined in the Company LLC Agreement for all purposes of the Company LLC Agreement. [ NOTE : THIS SECTION 1.2 ONLY TO BE INCLUDED IF THE ADDITIONAL SIGNATORY ALSO OWNS/IS ACQUIRING COMPANY COMMON UNITS ]

 

Section 1.3. Counterparts; Headings . This Joinder may be executed in separate counterparts each of which shall be an original and all of which taken together shall constitute one and the same agreement. The descriptive headings of this Joinder are inserted for convenience only and do not constitute a part of this Joinder.

 

Section 1.4. Governing Law . THIS JOINDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF.

 

[ NOTE : IF REQUESTED BY PARENT, THE JOINDER AS COMPLETED BY AN ADDITIONAL SIGNATORY WILL ALSO INCLUDE A SECTION 1.5 IN WHICH SUCH ADDITIONAL SIGNATORY REPRESENTS TO PARENT SUCH ADDITIONAL SIGNATORY’S CONTACT INFORMATION AND WIRE INSTRUCTIONS, ALONG WITH A COVENANT BY SUCH ADDITIONAL SIGNATURE TO PROMPTLY PROVIDE PARENT WITH UPDATED CONTACT INFORMATION AND WIRE INSTRUCTIONS TO THE EXTENT SUCH INFORMATION CHANGES FROM TIME TO TIME.]

 

IN WITNESS WHEREOF, this Joinder to Tax Receivable Agreement has been duly executed and delivered by the parties hereto as of the date first above written.

 

  GREENSKY, INC.
     
  By:  
    Name:
    Title:
     
  GREENSKY HOLDINGS, LLC
     
  By:  
    Name:
    Title:
     
  ADDITIONAL SIGNATORY
     
  By:  
    Name:
    Title:
B- 2

Exhibit 10.2

 

EXCHANGE AGREEMENT

 

EXCHANGE AGREEMENT (this “ Agreement ”), dated as of May 23, 2018, among GreenSky Holdings, LLC, a Georgia limited liability company (the “ Company ”), GreenSky, Inc., a Delaware corporation (“ GreenSky ”), and the Members (as defined herein) from time to time party hereto.

 

WHEREAS, the parties hereto desire to provide for the exchange of Common Units and the cancellation of Class B Common Stock (each 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.

 

Business Day ” means any day except a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by law to close.

 

Cash Settlement Amount ” means, as of a particular date, for each Company Common Unit that is Exchanged for the Cash Settlement Amount, the product of (a)(i) if the shares of Class A Common Stock trade on the NASDAQ Global Select Market or another national securities exchange, the volume weighted average price of a share over the three Trading Days ending one day prior to the date the Election of Exchange is delivered to GreenSky and the Company; (ii) if the shares of Class A Common Stock trade over-the-counter, the average of the closing bid or sale prices of a share over the three Trading Days ending prior to the date the Election of Exchange is delivered to GreenSky and the Company; and (iii) otherwise, the price of a share of Class A Common Stock as determined in good faith by the Board of Directors of GreenSky, multiplied by (b) the Exchange Rate.  

 

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

 

Class B Common Stock ” means the Class B common stock, par value $0.001 per share, of GreenSky.

 

Code ” means the United States Internal Revenue Code of 1986, as amended, and any successor law.

 

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 the

 

Company that may be issued by the Company in the future that is designated by GreenSky and the Company as a “Common Unit” for purposes of this Agreement.

 

Corporate Event ” means the occurrence of any of the following:

 

(a) a “person” or “group” within the meaning of Section 13(d) of the Exchange Act, other than GreenSky, the Company, their respective wholly-owned subsidiaries and employee benefit plans, or David Zalik and/or Robert Sheft and their affiliates and family members and trusts primarily for their benefit, becomes the direct or indirect “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of shares of Common Stock representing more than 50% of the voting power of GreenSky;

 

(b) a bona fide public tender or exchange offer or rights offering to substantially all holders of Class A Common Stock by any of GreenSky, the Company, their respective subsidiaries, or any other party;

 

(c) the consummation of (i) any recapitalization, reclassification or change of the Class A Common Stock (other than changes resulting from a subdivision or combination) as a result of which the Class A Common Stock would be converted into, or exchanged for, stock, other securities, other property or assets; (ii) any share exchange, consolidation or merger of GreenSky pursuant to which the Class A Common Stock will be converted into cash, securities or other property or assets; or (iii) any sale, lease or other transfer in one transaction or a series of transactions of all or substantially all of the consolidated assets of GreenSky, the Company and their respective subsidiaries, taken as a whole, to any person or entity other than a wholly owned subsidiary of GreenSky; and

 

(d) the stockholders of GreenSky or the Members of the Company approve any plan or proposal for the liquidation or dissolution of GreenSky or the Company, respectively.

 

Corporate Event Period ” means the period from and including the date that is 10 scheduled Trading Days prior to the anticipated effective date of an anticipated Corporate Event (or, if later, the earlier of (x) the Business Day after the public announcement of an anticipated Corporate Event and (y) the actual effective date of such Corporate Event) until and including the date that is 10 Trading Days after the actual effective date of such Corporate Event.

 

Election of Exchange ” has the meaning given to such term in Section 2.1(b) of this Agreement.

 

Exchange ” has the meaning set forth in Section 2.1(a) of this Agreement. The term “ Exchanged ” shall have a correlative meaning.

 

Exchange Act ” means the United States Securities Exchange Act of 1934, as amended.

 

Exchange Rate ” means 1.0, subject to adjustment pursuant to Section 2.3 of this Agreement.

 

IPO ” means the initial public offering and sale of Class A Common Stock (as contemplated by the GreenSky’s registration statement on Form S-1 (File No. 333-224505).

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LLC Agreement ” means the Second Amended and Restated Operating Agreement of the Company dated on or about the date hereof, as such agreement may be amended and/or restated from time to time.

 

Member ” means each holder of one or more Common Units that may from time to time be a party to this Agreement.

 

Permitted Transferee ” has the meaning given to such term in Section 3.1 of this Agreement.

 

Person ” means any individual, firm, corporation, partnership, trust, incorporated or unincorporated association, joint venture, joint stock company, limited liability company, governmental authority or other entity of any kind, and shall include any successor (by merger or otherwise) of such entity.

 

Publicly Traded ” means listed or admitted to trading on the NASDAQ Global Select Market or another national securities exchange, or any successor to any of the foregoing.

 

Securities Act ” means the United States Securities Act of 1933, as amended.

 

Stock Amount ” means, for each Company Common Unit that is Exchanged for the Stock Amount, a number of shares of Class A Common Stock that is equal to the Exchange Rate.

 

Trading Day ” means a day on which shares of the Class A Common Stock (i) 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 (ii) 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.

 

ARTICLE II

 

SECTION 2.1.  Exchange of Common Units .

 

(a) Subject to Section 2.1(d) , from and after the date of the closing of the IPO, each Member shall be entitled, upon the terms and subject to the conditions hereof, to surrender to the Company Common Units (other than unvested Common Units that were issued by the Company upon conversion of Profits Interests) in exchange (an “ Exchange ”) for the delivery to such exchanging Member, for each Company Common Unit so surrendered, of either (x) the Stock Amount; provided that any such Exchange is for a minimum of the lesser of 1,000 Common Units or all of the Common Units then held by such Member; or (y) if the disinterested members of the Board of Directors of GreenSky so elect, provided that the Exchange does not occur during a Corporate Event Period, the Cash Settlement Amount. Upon an Exchange, a number of shares of Class B Common Stock belonging to the exchanging Member equal to the number of Common Units Exchanged shall automatically be cancelled. Notwithstanding the

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foregoing, the Company, in its sole discretion, may refuse to Exchange any Common Units issued upon exercise of warrants if the Election of Exchange with respect to the Common Units issued upon exercise of such warrants is not delivered to GreenSky and the Company within 30 days following the issuance of the Common Units.

 

(b) A Member shall exercise its right to Exchange Common Units and have shares of Class B Common Stock cancelled as set forth in Section 2.1(a) above by delivering to GreenSky and to the Company a written election of exchange in the form of Exhibit A hereto (an “ Election of Exchange ”), duly executed by such Member or such Member’s duly authorized attorney in respect of the Common Units and Class B Common Stock to be Exchanged and canceled, as the case may be, delivered during normal business hours in accordance with the notice provisions set forth in Section 3.2 .

 

(c) Upon the surrender for Exchange of the applicable Common Units and instructions or stock powers representing a corresponding number of shares of Class B Common Stock in the manner provided in this Article II , if the Class A Common Stock is eligible for the depository and book-entry services of The Depository Trust Company, the Company will, subject to Section 2.4 below, deliver or cause to be delivered within three Trading Days the shares of Class A Common Stock deliverable to such exchanging Member through the facilities of The Depository Trust Company, to the account of the participant of The Depository Trust Company designated by such exchanging Member. Otherwise, the Company shall deliver or cause to be delivered within three Trading Days at the offices of the 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 GreenSky, the number of shares of Class A Common Stock deliverable upon such Exchange, registered in the name of the relevant exchanging Member or its designee.

 

(d) From time-to-time, if a Member in good faith believes that it may Exchange Common Units and desires to determine in advance whether the Company will elect to satisfy an Exchange with the Cash Settlement Amount pursuant to Section 2.1(a)(y) , then the Member may request in writing in accordance with the notice provisions set forth in Section 3.2 that the Company advise it in advance of its decision through delivery of a cash election substantially in the form of Exhibit B hereto. Such cash election shall be binding upon the Company with respect to any Election of Exchange received by GreenSky and the Company prior to the earlier of (i) 60 days following its delivery to the Member, or (ii) the end of the Company’s then current fiscal year. If the Company does not deliver such notice of its cash election within 5 Business Days of GreenSky’s and the Company’s receipt of such Member’s request, the Company shall forfeit the right to satisfy such Exchange with the Cash Settlement Amount during the time period specified above.

 

(e) Upon receiving an Election of Exchange from a Member, the Company may elect to cause GreenSky to effect the Exchange under Section 2.1(a) and deliver to the Member the number of Class A Shares or the Cash Settlement Amount that such Member is entitled to receive in the Exchange, in which event the Member shall deliver to GreenSky the Common Units being surrendered in the Exchange. In all other cases, the Company shall effect the Exchange and, at the time of the Closing of any such Exchange, unless provided for otherwise, GreenSky shall contribute to the Company the number of Class A Shares or the Cash

4

Settlement Amount that such Member is entitled to receive in the Exchange and GreenSky shall be issued Common Units in an amount equal to the value of its contribution to the Company (adjusted appropriately to take into account the cash, if any, on the balance sheet of GreenSky at the time of the Exchange).

 

(f) Notwithstanding anything to the contrary herein, no Member may Exchange Common Units pursuant to Section 2.1(a) during the 180 day period after the date set forth on the final prospectus used to sell Class A Common Stock in the IPO, unless such Member has executed the Lock-Up Agreement with the Underwriters in the IPO.

 

SECTION 2.2.  Class A Common Stock to be Issued .

 

(a) GreenSky 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 the Exchange of all outstanding shares of Common Units; provided that nothing contained herein shall be construed to preclude the Company from satisfying its obligations in respect of the Exchange of the Common Units by delivery of shares of Class A Common Stock that are held in the treasury of GreenSky or any of its subsidiaries or by delivery of purchased shares of Class A Common Stock (which may or may not be held in the treasury of GreenSky or any subsidiary thereof). GreenSky and the Company covenant that all Class A Common Stock issued upon an Exchange will, upon issuance, be validly issued, fully paid and non-assessable, and that upon delivery of the shares of Class A Common Stock issued upon an Exchange, good and valid title to such shares of Class A Common Stock, free and clear of all liens, encumbrances, equities, and claims other than those created by the Member or holder.

 

(b) The Company and GreenSky shall at all times ensure that the execution and delivery of this Agreement by each of the Company and GreenSky and the consummation by each of the Company and GreenSky of the transactions contemplated hereby (including without limitation, the issuance of the Class A Common Stock) have been duly authorized by all necessary limited liability company or corporate action, as the case may be, on the part of the Company and GreenSky, including, but not limited to, all actions necessary to ensure that the acquisition of shares of Class A Common Stock pursuant to the transactions contemplated hereby, to the fullest extent of GreenSky’s board of directors’ power and authority and to the extent permitted by law, shall not be subject to any “moratorium,” “control share acquisition,” “business combination,” “fair price” or other form of anti-takeover laws and regulations of any jurisdiction that may purport to be applicable to this Agreement or the transactions contemplated hereby.

 

(c) Without in any way reducing the obligations of GreenSky under the preceding sentence, in the event that any Exchange in accordance with this Agreement is to be effected at a time when any required registration under the Securities Act has not become effective or otherwise is unavailable, upon the request and with the reasonable cooperation of the Member requesting such Exchange, GreenSky and the Company shall use commercially reasonable efforts to promptly facilitate such Exchange pursuant to any reasonably available exemption from such registration requirements. GreenSky and the Company shall use commercially reasonable efforts to list the Class A Common Stock to be delivered upon an

5

Exchange prior to such delivery upon each national securities exchange upon which the outstanding Class A Common Stock may be listed or traded at the time of such delivery.

 

SECTION 2.3.  Adjustment . The Exchange Rate shall be adjusted accordingly if there is: (a) 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; (b) 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 and the Class B Common Stock; (c) any repurchase by GreenSky of Class A Common Stock using cash on the balance sheet of GreenSky, which cash was not received pursuant to a redemption by the Company of an equivalent number of Common Units; or (d) any purchase by GreenSky of Common Units, which purchase was funded by cash on the balance sheet of GreenSky, which cash was not received by GreenSky in a public offering of an equivalent number of shares of Class A Common Stock nor in a redemption by the Company of Common Units. 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 Member shall be entitled to receive the amount of such security, securities or other property that such exchanging Member 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.

 

SECTION 2.4.  Expenses . GreenSky, the Company and each exchanging Member shall bear their own expenses in connection with the consummation of any Exchange, whether or not any such Exchange is ultimately consummated, except that the Company 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 Member that elected the Exchange, then such Member and/or the person in whose name such shares are to be delivered shall pay to the Company 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 the Company that such tax has been paid or is not payable.

 

SECTION 2.5.  Conflicts . For the avoidance of doubt, and notwithstanding anything to the contrary herein, a Member shall not be entitled to Exchange Common Units to the extent 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 Member. For the avoidance of doubt, no Exchange shall be deemed to be prohibited by law pertaining to the registration of

6

securities if such securities have been so registered or if any exemption from such registration requirements is reasonably available.

 

SECTION 2.6.  Other Exchange Procedures . Notwithstanding anything to the contrary herein, if the board of directors of GreenSky shall determine in good faith that additional restrictions on Exchange are necessary so that the Company is not treated as a “publicly traded partnership” under Section 7704 of the Code, GreenSky or the Company may impose such additional reasonable restrictions on Exchange as the board of directors of GreenSky has determined in good faith to be so necessary based on advice of counsel.

 

ARTICLE III

 

SECTION 3.1.  Additional Members . To the extent a Member validly transfers any or all of such holder’s Common Units and corresponding shares of Class B Common Stock to another person in a transaction in accordance with, and not in contravention of, the LLC Agreement or any other agreement or agreements with GreenSky or any of its subsidiaries to which a transferring Member 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 C hereto, whereupon such Permitted Transferee shall become a Member hereunder. To the extent the Company issues Common Units in the future (including, without limitation, Common Units issued upon exercise of warrants), GreenSky and the Company shall be entitled, in their sole discretion, to make any holder of such Common Units a Member hereunder through such holder’s execution and delivery of a joinder to this Agreement, substantially in the form of Exhibit C 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 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 GreenSky, to:

 

GreenSky, Inc.

Glenridge Highlands 2, Suite 700

5565 Glenridge Connector

Atlanta GA 30342

Attention: Chief Executive Officer

Email: david.zalik@greenskycredit.com

 

      with copies to:

 

GreenSky, Inc.

Glenridge Highlands 2, Suite 700

5565 Glenridge Connector

Atlanta GA 30342

7

Attention: Chief Legal Officer

Email: steve.fox@greenskycredit.com

 

and

 

Troutman Sanders, LLP

600 Peachtree Street, NE, Suite 3000

Atlanta, GA 30308

Attention: W. Brinkley Dickerson, Jr.

Email: brink.dickerson@troutman.com

 

(b) If to the Company, to:

 

GreenSky, Inc.

Glenridge Highlands 2, Suite 700

5565 Glenridge Connector

Atlanta GA 30342

Attention: Chief Executive Officer

Email: david.zalik@greenskycredit.com

 

with copies to:

 

GreenSky, Inc.

Glenridge Highlands 2, Suite 700

5565 Glenridge Connector

Atlanta GA 30342

Attention: Chief Legal Officer

Email: steve.fox@greenskycredit.com

 

and

 

Troutman Sanders, LLP

600 Peachtree Street, NE, Suite 3000

Atlanta, GA 30308

Attention: W. Brinkley Dickerson, Jr.

Email: brink.dickerson@troutman.com

 

(c) If to any Member, to the address and other contact information set forth in the records of the Company 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.

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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 and Termination . This Agreement (including any annexes, schedules or supplements hereto) may be amended, supplemented, waived or modified only in writing by the Company and a majority in interest of the Members (other than GreenSky and its subsidiaries) in accordance with their holdings of Common Units; provided that no amendment may adversely affect the rights of a Member (other than GreenSky and its subsidiaries) in any material respect without the written consent of such Member. This Agreement shall terminate on the earlier of (i) the Exchange hereunder of all outstanding Common Units, and (ii) May 31, 2033, except with respect to any Member that at such date holds 1% or more of the Common Units then outstanding, for whom it shall continue so long as such Member continues to hold 1% or more of the outstanding Common Units and for 30 days thereafter.

 

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 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 . Subject to any provision of the Certificate of Incorporation of GreenSky requiring arbitration of claims, each party hereto irrevocably submits to the exclusive jurisdiction of the Court of Chancery of the State of Delaware (unless the Federal courts have exclusive jurisdiction over the matter, in which case the United Stated District for the District of Delaware) for the purposes of any legal proceeding arising out of this Agreement, or the transactions contemplated hereby, and agrees to commence any such legal proceeding only in such courts. Each party hereto further agrees that service of any process, summons, notice or document by United States registered mail to such party’s respective address set forth herein shall be effective service of process for any such legal proceeding. Each party hereto irrevocably and unconditionally waives any objection to the laying of venue of any action, suit, hearing, claim, lawsuit, litigation, investigation, arbitration or proceeding out of this Agreement or the transactions contemplated hereby in such courts, and hereby irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such legal proceeding brought in any such court has been brought in an inconvenient forum. EACH PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING OR COUNTERCLAIM (WHETHER AT LAW, IN EQUITY, BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREBY OR THE ACTIONS OF SUCH PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF OR THEREOF.

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SECTION 3.9.  Counterparts . This Agreement may be executed and delivered (including by facsimile transmission, by e-mail delivery of a “.pdf” format data file or by DocuSign) in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed and delivered shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. Copies of executed counterparts transmitted by telecopy, by e-mail delivery of a “.pdf” format data file or other electronic transmission service shall be considered original executed counterparts for purposes of this Section 3.9 .

 

SECTION 3.10.  Tax Treatment . This Agreement shall constitute and be treated as part of the limited liability company agreement of the Company 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. The parties shall report (i) any Exchange consummated hereunder as a taxable sale of the Common Units by a Member to GreenSky pursuant to Section 1001 of the Code, and no party shall take a contrary position on any income tax return, amendment thereof or communication with a taxing authority except upon (i) a contrary final determination by a taxing authority, or (ii) the advice of legal counsel or a nationally-recognized accounting firm that, based on a change in applicable law, the above tax reporting position does not meet a more likely than not standard or otherwise requires the Company to disclose such position or create a reserve pursuant to applicable accounting principles. Further, in connection with any Exchange consummated hereunder, the Company and/or GreenSky shall provide the exchanging Member with all reasonably necessary information to enable the exchanging Member to file its income tax returns for the taxable year that includes the Exchange, including information with respect to Code Section 751 assets (including relevant information regarding “unrealized receivables” or “inventory items”) and Section 743(b) basis adjustments as soon as practicable and in all events within 60 days following the close of such taxable year (and use commercially reasonable efforts to provide estimates of such information within 90 days of the applicable Exchanges).

 

SECTION 3.11.  Withholding . Greensky and the Company shall be entitled to deduct and withhold from any payment made to a Member pursuant to any Exchange consummated under this Agreement all Taxes that each of Greensky and the Company is required to deduct and withhold with respect to such payment under the Code (or any other provision of applicable law), including, without limitation, Section 1446(f) of the Code. The Company may at its sole discretion reduce the Stock Amount or the Cash Settlement Amount paid to a Member in an Exchange in an amount that corresponds to the amount of the required withholding described in the immediately preceding sentence and all such amounts shall be treated as having been paid to such Member.

 

SECTION 3.12.  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 3.13.  Independent Nature of Members’ Rights and Obligations . The obligations of each Member hereunder are several and not joint with the obligations of any other Member, and no Member shall be responsible in any way for the performance of the obligations

10

of any other Member hereunder. The decision of each Member to enter into to this Agreement has been made by such Member independently of any other Member. Nothing contained herein, and no action taken by any Member pursuant hereto, shall be deemed to constitute the Members as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Members are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated hereby and GreenSky acknowledges that the Members are not acting in concert or as a group, and GreenSky will not assert any such claim, with respect to such obligations or the transactions contemplated hereby.

 

SECTION 3.14.  Other Agreements . Neither GreenSky nor the Company shall enter into any contract, mortgage, loan or other agreement that prohibits or restricts (a) GreenSky or the Company from performing their specific obligations under this Agreement or (b) a Member from exercising its rights under this Agreement to effect an Exchange, except, in either case, with the written consent of each such Member affected by the prohibition or restriction, or to the extent such prohibition or restriction affects all Members (other than GreenSky and its subsidiaries) on a pro rata basis, with the written consent of a majority in interest of such affected Members (other than GreenSky and its subsidiaries) in accordance with their holdings of Common Units.

 

SECTION 3.15.  Applicable Law . This Agreement shall be governed by, and construed in accordance with, the law of the State of Georgia.

 

[Remainder of Page Intentionally Left Blank]

11

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered, all as of the date first set forth above.

 

  GREENSKY HOLDINGS, LLC
   
  By: /s/ David Zalik
    Name:  David Zalik
    Title:    Chief Executive Officer
     
  GREENSKY, INC.
   
  By: /s/ David Zalik
    Name:  David Zalik
    Title:    Chief Executive Officer

 

[Signature Page – Exchange Agreement]

 

EXHIBIT A

 

[FORM OF]
ELECTION OF EXCHANGE

 

GreenSky Holdings, LLC

Glenridge Highlands 2, Suite 700

5565 Glenridge Connector

Atlanta GA 30342

Attention: Chief Legal Officer

Email: steve.fox@greenskycredit.com

 

GreenSky, Inc.

Glenridge Highlands 2, Suite 700

5565 Glenridge Connector

Atlanta GA 30342
Attention: Chief Legal Officer

Email: steve.fox@greenskycredit.com

 

Reference is hereby made to the Exchange Agreement, dated as of May 23, 2018 (the “ Exchange Agreement ”), among GreenSky Holdings, LLC, a Georgia limited liability company (the “ Company ”), GreenSky, Inc., a Delaware corporation (“ GreenSky ”), 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.

 

The undersigned Member hereby transfers to the Company or GreenSky (as specified in the Exchange Agreement) the number of Common Units and surrenders for cancellation the number of shares of Class B Common Stock set forth below in exchange for shares of Class A Common Stock to be issued in its name as set forth below (or in the name of a designee as may be set forth below) or cash, to the extent this Election is being delivered during a Cash Settlement Month, pursuant to Section 2.1(d) of the Exchange Agreement.

 

Legal Name of Member: _______________________________________________

 

Address: ______________________________________________________________________

 

Number of Common Units and shares of Class B Common Stock to be Exchanged: _______________________

 

Depository Trust Company Participant (for delivery of shares of Class A Common Stock): ___________________________________

 

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 and shares of Class B Common Stock subject to this Election of Exchange are being transferred 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 and shares of Class B Common Stock subject to this Election of Exchange is required to be obtained by the undersigned for the transfer of such Common Units.

 

The undersigned hereby irrevocably constitutes and appoints any officer of GreenSky or of the Company 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 exchange the Common Units and shares of Class B Common Stock subject to this Election of Exchange for cash or shares of Class A Common Stock on the books of GreenSky in accordance with the terms and requirements of the Exchange Agreement.

 

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.

 

 

  Name:  
     
  Dated:  
 

EXHIBIT B

 

[FORM OF]
CASH ELECTION NOTICE

 

[Exchanging Member]

 

[Address]

 

Reference is hereby made to the Exchange Agreement, dated as of May 23 , 2018 (the “ Exchange Agreement ”), by and among GreenSky Holdings, LLC, a Georgia limited liability company (the “ Company ”), and GreenSky, Inc., a Delaware corporation (“ GreenSky ”), and each of the Members from time to time party thereto. Capitalized terms used but not defined herein shall have the meanings given to them in the Exchange Agreement.

 

Pursuant to Section 2.1(d) of the Exchange Agreement, the Company hereby notifies you of its election to satisfy Exchanges of Common Units, not to exceed _____ Common Units, pursuant to any Election of Exchange delivered by you to GreenSky and the Company commencing on the date hereof and continuing for the period specified in Section 2.1(d) of the Agreement through the delivery of the Cash Amount in lieu of shares of Class A Common Stock.

 

  GREENSKY HOLDINGS, LLC
   
  By:  
    Name:  
    Title:    
 

EXHIBIT C

 

[FORM OF]
JOINDER AGREEMENT

 

This Joinder Agreement (“ Joinder Agreement ”) is a joinder to the Exchange Agreement, dated as of May 23, 2018 (the “ Agreement ”), among GreenSky, Inc., a Delaware corporation (“ GreenSky ”), GreenSky Holdings, LLC, a Georgia limited liability company (the “ Company ”), and each of the Members 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 the Company. By signing and returning this Joinder Agreement to GreenSky, the undersigned accepts and agrees to be bound by and subject to all of the terms and conditions of and agreements of a Member contained in the Agreement, with all attendant rights, duties and obligations of a Member 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 GreenSky and by the Company, the signature of the undersigned set forth below shall constitute a counterpart signature to the signature page of the Agreement.

 

Name:        
       
Address for Notices:   With copies to:
     
     
     
     
     
Attention:        
 

Exhibit 10.3

 

SECOND AMENDED AND RESTATED OPERATING AGREEMENT

 

OF

 

GREENSKY HOLDINGS, LLC

 

Dated as of May 23, 2018

 

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “FEDERAL ACT”), OR THE SECURITIES LAWS OF ANY STATE, AND ARE BEING OFFERED IN RELIANCE UPON EXEMPTIONS FROM SUCH REGISTRATION UNDER THE FEDERAL ACT AND VARIOUS APPLICABLE STATE SECURITIES ACTS. THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND MAY NOT BE OFFERED FOR SALE, PLEDGED, HYPOTHECATED, SOLD OR TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS AND CONDITIONS OF THIS AGREEMENT AND IN A TRANSACTION WHICH IS EITHER EXEMPT FROM REGISTRATION UNDER SUCH ACTS OR PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACTS.

 

TABLE OF CONTENTS

  Page
   
   
ARTICLE I GENERAL PROVISIONS 1
Section 1.1 Definitions 1
Section 1.2 Formation 1
Section 1.3 Name 1
Section 1.4 Purpose 1
Section 1.5 Term 2
Section 1.6 Principal Place of Business 2
Section 1.7 Registered Office and Registered Agent 2
     
ARTICLE II RIGHTS AND DUTIES OF MEMBERS 2
Section 2.1 Members 2
Section 2.2 Reorganization 2
Section 2.3 GreenSky’s Common Unit Purchases 2
Section 2.4 Number of Votes 2
Section 2.5 Regulatory Voting Restriction 3
Section 2.6 Governance Rights of Members 3
Section 2.7 General 3
Section 2.8 Liability of Members 3
Section 2.9 Meetings of Members and Notice/Action by Written Consent 3
Section 2.10 Power to Bind the Company 3
     
ARTICLE III MANAGEMENT 3
Section 3.1 Management; Responsibility 3
Section 3.2 Sole Manager 5
Section 3.3 No Resignation 5
Section 3.4 Removal 5
Section 3.5 Vacancies 5
Section 3.6 Delegation of Authority 5
Section 3.7 Written Action of Manager 6
Section 3.8 Liability of Manager 6
Section 3.9 Conflict of Interest Transactions 6
Section 3.10 Devotion of Time to Company 6
Section 3.11 Compensation to Manager 6
Section 3.12 Limitations on Authority of Manager 6
     
ARTICLE IV CONTRIBUTIONS/CAPITAL ACCOUNTS/LOANS/TAX BASIS 6
Section 4.1 Units Held by Members 7
Section 4.2 Additional Capital Contributions 7
Section 4.3 Capital Accounts; Voluntary Withdrawals 7
Section 4.4 Loans 7
Section 4.5 Interest 7
Section 4.6 Allocation of Liabilities 7
     
ARTICLE V TAX ALLOCATIONS 7
Section 5.1 Net Profits and Net Losses 7
 

TABLE OF CONTENTS

(continued)

  Page
     
Section 5.2 Regulatory Allocations 8
Section 5.3 Tax Allocations 8
Section 5.4 Tax Consequences 8
     
ARTICLE VI DISTRIBUTIONS 8
Section 6.1 Distributions 8
Section 6.2 Tax Distributions 8
Section 6.3 Amounts Withheld 9
     
ARTICLE VII ISSUANCE OF ADDITIONAL UNITS 10
Section 7.1 Units 10
Section 7.2 Authorization and Issuance of Additional Units 10
Section 7.3 GreenSky Incentive Plans 11
Section 7.4 Dividend Reinvestment Plan, Cash Option Purchase Plan, Stock Incentive Plan or Other Plan 13
Section 7.5 Repurchase or Redemption of shares of Class A Common Stock 14
Section 7.6 Incentive Units 14
     
ARTICLE VIII TRANSFER OF COMMON UNITS 14
Section 8.1 Restrictions on Members 14
Section 8.2 Conditions Precedent to Transfer 16
Section 8.3 Transfer Guidelines 17
Section 8.4 Rights of Assignees 17
Section 8.5 Admission of Substitute Members 17
Section 8.6 Creditors of Members 17
Section 8.7 Paramount Provision 17
     
ARTICLE IX DISSOCIATION OF A MEMBER 17
Section 9.1 Events of Dissociation 17
Section 9.2 Loss of Management Rights 18
     
ARTICLE X DISSOLUTION 18
Section 10.1 Events of Dissolution 18
Section 10.2 Statement of Assets 19
Section 10.3 Execution of Documents 19
Section 10.4 Winding-up and Distribution of Assets 19
Section 10.5 Compliance with Certain Requirements of Regulations; Deficit Capital Accounts 19
Section 10.6 Rights of Members 19
Section 10.7 Allocations During Period of Liquidation 20
Section 10.8 Character of Liquidating Distribution 20
Section 10.9 Form of Liquidating Distributions 20
Section 10.10 Cancellation of Certificate 20
ii

TABLE OF CONTENTS

(continued)

  Page
     
ARTICLE XI WAIVER OF PARTITION 20
   
ARTICLE XII EXCULPATION AND INDEMNIFICATION 20
Section 12.1 Exculpation 20
Section 12.2 Indemnification 21
Section 12.3 Effect of Modification; Survival 21
Section 12.4 Indemnitor of First Resort 21
Section 12.5 Non-exclusivity of Rights 22
     
ARTICLE XIII TAX ELECTIONS AND RESTRICTIONS 22
Section 13.1 Section 754 Election 22
Section 13.2 General Elections and Limitations 22
Section 13.3 Partnership Representative. 22
Section 13.4 Tax Treatment of the Company 23
     
ARTICLE XIV MISCELLANEOUS PROVISIONS 23
Section 14.1 Confidentiality 23
Section 14.2 Benefit 24
Section 14.3 Amendment 24
Section 14.4 Notices 25
Section 14.5 Books, Records, Accounting, Tax, Reports and Access 25
Section 14.6 Bank Accounts 26
Section 14.7 Investment Representation and Indemnity 26
Section 14.8 Governing Law 26
Section 14.9 WAIVER OF JURY TRIAL 26
Section 14.10 Jurisdiction; Service of Process 26
Section 14.11 Counsel 27
Section 14.12 Limited Liability Company 27
Section 14.13 Construction 27
Section 14.14 Interpretation 27
Section 14.15 Entire Agreement 27
Section 14.16 Headings 28
Section 14.17 Number and Gender 28
Section 14.18 Waiver 28
Section 14.19 Counterparts 28
Section 14.20 Remedies; Prevailing Party 28
iii

SECOND AMENDED AND RESTATED
OPERATING AGREEMENT OF

GREENSKY HOLDINGS, LLC

 

THIS SECOND AMENDED AND RESTATED OPERATING AGREEMENT (the “ Agreement ”) is made and entered into as of May 23, 2018, by and among all of the Members of GreenSky Holdings, LLC, a Georgia limited liability company (the “ Company ”). This Agreement supersedes any and all previous operating agreements of the Company.

 

BACKGROUND

 

This Second Amended Operating Agreement is being executed in order to facilitate an initial public offering by GreenSky, Inc., a Delaware corporation (“ GreenSky ”). As part of this process, the Members of GSLLC are contributing their membership interests in the Company in exchange for the number of Common Units in the Company specified on Exhibit B hereto. It is the intent of the Company and the Members that, for U.S. federal income tax purposes, this contribution constitutes a continuation of the Company as a partnership in accordance with Section 708(a) of the Code.

 

AGREEMENT

 

IN CONSIDERATION OF the mutual covenants and agreements hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

ARTICLE I
GENERAL PROVISIONS

 

Section 1.1 Definitions . Capitalized terms used in this Agreement and not defined herein shall have the meanings set forth on Exhibit A attached hereto and made a part hereof.

 

Section 1.2 Formation . The parties hereby acknowledge that (a) the Company was formed pursuant to the Act by the filing of Articles of Organization with the Secretary of State of Georgia on July 25, 2017, and (b) the Company and, if required, each of the Members, shall execute or cause to be executed from time to time all other instruments, certificates, notices and documents and shall do or cause to be done all such acts and things (including keeping books and records and making publications or periodic filings) as may now or hereafter be required for the valid existence and, when appropriate, termination of the Company as a limited liability company under the laws of the State of Georgia and as may be necessary in order to protect the liability of the Members as members under the laws of the State of Georgia.

 

Section 1.3 Name . The Company shall operate under the name of “GreenSky Holdings, LLC” or under such other name as the Manager shall, from time to time, determine.

 

Section 1.4 Purpose . The Company shall engage in the business (the “ Business ”) of owning and operating GreenSky, LLC, a Georgia limited liability company, and, through it, providing financial services, and the Company may, in connection therewith, engage in such other activities and businesses related, directly or indirectly, thereto as the Manager shall

 

determine. The Company shall have all powers necessary and appropriate to carry out the foregoing purpose, which powers shall be exercised by the Manager on the terms and conditions hereinafter set forth.

 

Section 1.5 Term . The term of the Company shall continue until dissolved pursuant to the terms of this Agreement or the Act.

 

Section 1.6 Principal Place of Business . The principal place of business of the Company shall be at such location as the Manager shall, from time to time, determine.

 

Section 1.7 Registered Office and Registered Agent . The registered agent for service of process and the registered office of the Company shall be National Registered Agents, Inc., 289 S. Culver St., Lawrenceville, Georgia 30046. The registered office and registered agent may be changed from time to time as the Manager deem advisable by filing the address of the new registered office and/or the name of the new registered agent as required by the Act.

 

ARTICLE II
RIGHTS AND DUTIES OF MEMBERS

 

Section 2.1 Members . The Members of the Company and their respective Common Units and Company Percentages, reflecting the purchases through the date of this Agreement, are set forth on Exhibit B hereto. The Manager shall amend Exhibit B from time-to-time to reflect changes in such information.

 

Section 2.2 Reorganization . In order to affect the Reorganization, immediately prior to the “effective time” of the Reorganization, the outstanding Class A Units, Class B Units, Class C Units and Profits Interests of the Company shall be contributed to the Company and the Common Units set forth next to each Member on Exhibit B shall be issued in lieu thereof.

 

Section 2.3 Revaluation . The parties hereto acknowledge and agree that the IPO of GreenSky and the related transactions will result in “revaluation of partnership property” and corresponding adjustments to Capital Account balances as described in Section 1.704-1(b)(2)(iv)(f) of the Treasury Regulations.

 

Section 2.4 Number of Votes .

 

(a) Subject to the Regulatory Voting Restriction, each Member holding Common Units shall be entitled to vote on any matter submitted to a vote of the Members pursuant to the terms of this Agreement and as provided under the Act. Each Common Unit held by a Member shall carry one (1) vote.

 

(b) Any references in this Agreement to a majority or other proportion of units, including with respect to the percentage of units required to approve a matter, shall refer to such majority or other proportion of the voting power of such units, stock or shares, based on the votes that the holders of such outstanding units (including Common Units subject to the Regulatory Voting Restriction) are entitled to cast as of the record date for voting on (or taking action by consent with respect to) such matter.

2

(c) Holders of Incentive Units shall not be entitled to any voting rights.

 

Section 2.5 Regulatory Voting Restriction . Notwithstanding the stated or statutory voting rights, in no event shall a Regulated Holder be entitled to cast a number of votes representing more than 4.99% of the voting power of all Units entitled to vote on any matter (including matters with respect to which such holders are entitled or required to provide their approval or consent) (such voting rights to be allocated pro rata among the Regulated Holder based on the number of Common Units held by each such holder); provided, however , that the Regulatory Voting Restriction shall not apply to matters described in Section 14.3 hereof or as otherwise provided expressly herein. The restrictions described in this Section 2.5 are referred to herein as the “ Regulatory Voting Restriction .”

 

Section 2.6 Governance Rights of Members . Only such matters as require Member appraisal pursuant to the Act or as may otherwise be specified herein, shall require the vote of the Members, and in any such event it shall require the vote of Members representing a majority of the Common Units (subject to the Regulatory Voting Restriction) or such other group of members as may be specified herein.

 

Section 2.7 General . Subject to the foregoing, the Members hereby delegate management of the Company to the Manager on the terms and conditions of ARTICLE III hereof.

 

Section 2.8 Liability of Members . No Member shall be liable as such for the liabilities, debts or obligations of the Company. The failure of the Company to observe any formalities or requirements relating to the exercise of its powers or management of its business or affairs under this Agreement or the Act shall not be grounds for imposing personal liability on the Members for liabilities, debts or obligations of the Company.

 

Section 2.9 Meetings of Members and Notice/Action by Written Consent . Meetings of the Members shall be held at such times and upon such terms and conditions as the Manager shall from time to time determine. Any actions required or permitted by this Agreement to be taken by the Members may be taken without a meeting if the action is approved, in a written consent of the Members entitled to vote on such action, by Members holding not less than the minimum number of Units that would be necessary to authorize such action in accordance with the provisions of this Agreement; provided , however , that a copy of any written consent must be sent to all Members as so as practical after the taking of such action by written consent and filed with the records of the Company.

 

Section 2.10 Power to Bind the Company . No Member (acting solely in its capacity as such) shall have any authority to bind the Company to any third party with respect to any matter except pursuant to a resolution expressly authorizing such action, which resolution is duly adopted by the Manager.

 

ARTICLE III
MANAGEMENT

 

Section 3.1 Management; Responsibility .

3

(a) The Manager shall have all the rights and powers to manage and direct the affairs of the Company, subject to the provisions of the Act and any limitations in the Company’s Articles of Organization and this Agreement as to actions required to be authorized or approved by the Members. Without prejudice to such general powers, but subject to the same limitations, the Manager shall have the following powers: (1) to determine the overarching strategy and direct the overall business of the Company; (2) to determine the compensation of the Manager and officers of the company (including officers employed by Affiliates of the Company); (3) to determine the budget; (4) to establish overall policies and mandate procedures for the conduct, promotion or attainment of the business, purposes or activities of the Company; (5) to oversee the day-to-day business and affairs of the Company and to make such rules and regulations therefor not inconsistent with law or with the Company’s Articles of Organization or with this Agreement, as the Manager shall deem to be in the best interests of the Company; (6) to appoint and remove at the Manager’s pleasure the officers, agents, employees and consultants of the Company (including officers employed by Affiliates of the Company), and prescribe their duties; (7) to borrow money and incur indebtedness for the purposes of the Company and to cause to be executed and delivered therefor, in the Company’s name, promissory notes, bonds, debentures, deeds of trust, mortgages, pledges, hypothecations or other evidences of debt and securities therefor; (8) to acquire real and personal property, arrange financing and enter into contracts; (9) subject to Section 6.2 , to determine the amount and timing of any distributions to the Members; and (10) to make all other arrangements and do all things which are necessary or convenient to the conduct, promotion or attainment of the business, purposes or activities of the Company. It is the intent of the parties hereto that the Manager shall be deemed to be a “manager” of the Company (as defined in Section 14-11-101(15) of the Act) for all purposes under the Act.

 

(b) Notwithstanding any other provision of this Agreement (but subject to the last sentence of this Section 3.1(b) and ARTICLE XII of this Agreement), none of the Members or any of their respective Affiliates, members, equity holders, partners, employees, agents, portfolio companies, representatives or other related persons (each, a “ Related Person ”), shall be liable to the Company or any other Member or person for any breach of any implied duty of loyalty or due care or any other fiduciary duty, other than as a result of any acts or omissions not committed in good faith or that involve intentional misconduct. To the extent that, at law or in equity, any Related Person has duties (including fiduciary duties) and liabilities relating thereto to the Company or to another Member or the Manager, (i) the Related Person acting under this Agreement shall not be liable to the Company or to any such other Member or the Manager (if applicable) to the extent such Related Person acted in good faith absent intentional misconduct and in accordance with the provisions of this Agreement and (ii) the Related Person’s duties and liabilities are hereby restricted by and subject in all respects to the provisions of this Agreement. Notwithstanding anything contained herein, the provisions of this Section 3.1(b) shall not apply to any Member or Manager in his capacity as a Manager or an executive officer or employee of the Company.

 

(c) Notwithstanding anything herein or at law or in equity to the contrary, to the fullest extent permitted by law, the doctrine of corporate opportunity, or any analogous doctrine, shall not apply to any Member, or any of their respective Related Persons or Affiliates who is not an employee, consultant or service provider of the Company or its subsidiaries (an “ Exempted Person ”). The Company renounces any interest or expectancy of the Company in, or in being offered an opportunity to participate in, business opportunities that are from time to time

4

presented to any Exempted Person. No Exempted Person who acquires knowledge of a potential transaction, agreement, arrangement or other matter that may be an opportunity for the Company shall have any duty to communicate or offer such opportunity to the Company, and such Exempted Person shall not be liable to the Company or to the Members for breach of any fiduciary or other duty by reason of the fact that such Exempted Person pursues or acquires such opportunity, or directs such opportunity to another Person or does not communicate such opportunity or information to the Company. No amendment or repeal of this Section 3.1(c) shall apply to or have any effect on the liability or alleged liability of any Exempted Person for or with respect to any opportunities of which any such Exempted Person becomes aware prior to such amendment or repeal. For the avoidance of doubt, the provisions of this Section 3.1(c) shall have independent effect with respect to, and shall not be construed as being in lieu of or otherwise limiting, any separate obligations of any Person under any existing agreement between such Person and the Company and/or its subsidiaries, including any agreement related to any noncompetition, nonsolicitation, confidentiality or other restrictions on the activities or operations of such Person.

 

Section 3.2 Sole Manager . GreenSky shall be the sole Manager of the Company.

 

Section 3.3 No Resignation . GreenSky may not resign as the Manager of the Company.

 

Section 3.4 Removal . The Courts of the State of Delaware may remove the Manager for “Cause” at any time upon request of Members holding a majority of the Common Units. For purposes of this provision, “ Cause ” shall mean:

 

(a) the continuing failure or refusal of the Manager to perform those material duties that he is required to perform in furtherance of the business of the Company after his receipt of a detailed notice setting forth such failures and a reasonable time period to cure;

 

(b) the Manager engaging in an activity that is intentionally injurious to the Company;

 

(c) the Manager committing a fraud against the Company or using or appropriating for personal use or benefit funds or property of the Company when not authorized to do so; or

 

(d) the Manager committing an act of gross negligence or willful misconduct regarding the business of the Company.

 

Section 3.5 Vacancies . Any vacancy occurring for any reason in the position of Manager of the Company may be filled by the affirmative vote of holders of a majority of the Common Units (subject to the Regulatory Voting Restriction). A Manager elected to replace GreenSky (or a successor to such Manager) shall hold office until his earlier resignation or removal.

 

Section 3.6 Delegation of Authority . The Manager may delegate to one or more employees of the Company, each of whom will serve at the pleasure of the Manager, the authority to carry out the Company’s day-to-day business activities (each of whom in such capacity may be referred to individually in this Agreement as an “officer” and collectively as

5

“officers”). Any authority delegated by the Manager under this section is subject to the limitations contained in this Agreement, nonwaivable provisions of applicable law and the specific authorization given by the Manager; provided , however , that any authorization may be amended, modified, or revoked by a vote of the Manager at any time. For convenience of reference, the Manager may designate officers of the Company including a Chairperson, Chief Executive Officer, President, Vice President, Secretary, or Treasurer. Such officers shall have the duties assigned by the Manager.

 

Section 3.7 Written Action of Manager . The Manager shall not be required to hold meetings and may take actions in writing.

 

Section 3.8 Liability of Manager . The Manager shall not be liable as such for the liabilities, debts or obligations of the Company. The failure of the Company to observe any formalities or requirements relating to the exercise of its powers or management of its business or affairs under this Agreement or the Act shall not be grounds for imposing personal liability on the Manager for liabilities, debts or obligations of the Company.

 

Section 3.9 Conflict of Interest Transactions . Anything in this Agreement to the contrary notwithstanding, no Member shall be prohibited from dealing, on commercially reasonable terms, with any person or entity deemed to be an Affiliate of any Member.

 

Section 3.10 Devotion of Time to Company . Affiliates of the Manager may engage in any other business or non-business activity, whether or not similar to the Business of the Company, and neither the Company nor any Member shall have any right to any earnings, profits or other interest or rights with respect to such other activities.

 

Section 3.11 Compensation to Manager . The Manager may receive reasonable compensation at its discretion. The Manager shall be reimbursed for all reasonable costs and expenses incurred by it on behalf of the Company in accordance with the Company’s customary reimbursement policies.

 

Section 3.12 Limitations on Authority of Manager . The Manager shall have no authority to:

 

(a) do any act in contravention of this Agreement;

 

(b) do any act on behalf of the Company that would make it impossible to carry on the ordinary business of the Company;

 

(c) confess a judgment against the Company; or

 

(d) possess Company property, or assign the rights in specific Company property, other than for a Company purpose.

 

ARTICLE IV
CONTRIBUTIONS/CAPITAL ACCOUNTS/LOANS/TAX BASIS

6

Section 4.1 Units Held by Members . Immediately after the Reorganization, the Members hold the number of Common Units set forth on Exhibit B attached hereto.

 

Section 4.2 Additional Capital Contributions . No Member shall be required to make any additional Capital Contributions without the consent of such Member.

 

Section 4.3 Capital Accounts; Voluntary Withdrawals . A Capital Account shall be maintained for each Member in accordance with the Code and the Regulations. Except as specifically permitted pursuant to this Agreement, no Member shall have the right to withdraw from the Company or make demand for withdrawal of any part of such Member’s Capital Account.

 

Section 4.4 Loans . If the Company borrows funds from, or loans funds to, any Member, a loan account shall be established and maintained for such lending Member or, as the case maybe, for the Company. Subject to applicable provisions of the Code, the borrower shall pay interest at a rate acceptable to the lender.

 

Section 4.5 Interest . No interest shall be paid by the Company with respect to any Capital Contributions or Capital Account balances.

 

Section 4.6 Allocation of Liabilities . For purposes of determining the income tax basis of each Member’s interest in the Company, the liabilities of the Company, if any, shall be allocated among the Members pursuant to Section 752 of the Code and the Regulations promulgated thereunder.

 

ARTICLE V
ALLOCATIONS

 

Net Profits and Net Losses and other items of Company income, gain, credit, loss and deduction shall be allocated each Company Year among the Members as follows:

 

Section 5.1 Net Profits and Net Losses .

 

(a) Except as otherwise provided in this Agreement, Net Profits and Net Losses (and, to the extent necessary, individual items of income, gain, loss, deduction or credit) of the Company shall be allocated to the Members pro rata in proportion to their respective Company Percentages.

 

(b) Notwithstanding the other provisions of Section 5.1 , to the extent any Net Losses allocated to a Member under Section 5.1 would cause such Member (hereafter, a “ Restricted Member ”) to have a Capital Account deficit (or cause an increase in such Capital Account deficit) as of the end of the Company Year to which such Net Losses relate, such Net Losses shall not be allocated to such Restricted Member and instead shall be allocated to the other Members (the “ Permitted Members ”), in proportion to, and to the maximum extent that, the amounts in which such Net Losses may be allocated to the Permitted Members without causing any of the Permitted Members to have a Capital Account deficit.

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Section 5.2 Regulatory Allocations . The provisions set forth in Exhibit C are intended to conform with the Code and Regulations and shall be interpreted in accordance therewith. Further, the Manager shall be permitted to adjust allocations of Net Profits, Net Losses and, to the extent necessary, individual items of income, gain, loss or deduction of the Company to give economic effect to the provisions of Section 6.1 , Section 10.4 and the other relevant provisions of this Agreement.

 

Section 5.3 Tax Allocations . For Federal, state and local income tax purposes, items of income, gain, loss, deduction and credit shall be allocated to the Members in accordance with the allocations of the corresponding items for Capital Account purposes under Section 5.1 and Section 5.2 , except that items with respect to which there is a difference between tax and book basis will be allocated in accordance with the “traditional method” set forth in Regulations Section 1.704-3(b).

 

Section 5.4 Tax Consequences . The Members acknowledge that they are aware of the income tax consequences of the allocations made by this ARTICLE V and Exhibit C and shall be bound by the provisions of this ARTICLE V and Exhibit C in reporting their portion of Company income and loss for Federal income tax purposes.

 

ARTICLE VI
DISTRIBUTIONS

 

Section 6.1 Distributions . Distributions to the Members of Distributable Cash may be made when, as and if declared by the Manager pursuant to Section 3.1, and such distributions to the Members shall be made pro rata in proportion to their respective Company Percentages.

 

Section 6.2 Tax Distributions.

 

(a) Subject to the Act, the other provisions of this Agreement, applicable law, and contractual limitations applicable to the Company, as subject to the availabilities of Distributable Cash, the Company shall make a ratable distribution among the Members, in accordance with their respective Company Percentages, of an aggregate amount in cash sufficient to allow each Member to pay the amount by which (i) the product of (A) a Member’s allocable share of net taxable income of the Company for the Company Year or other relevant period, and (B) the Tax Rate, exceeds (ii) the sum of the amounts distributed in cash to such Member pursuant to Section 6.1 . If there are not sufficient funds on hand to distribute the full amount otherwise required to be distributed pursuant to this Section 6.2(a) such distribution shall be made to the extent of the available funds ratably among the Members in proportion to each Member’s respective Company Percentage and the Company shall make future distributions as soon as funds become available to pay the remaining portion of such distribution ratably among the Members in accordance with their respective Company Percentage.

 

(b) In computing taxable income or losses for the purposes of determining the amount of distributions pursuant to this Section 6.2 , items of income, gain, loss and deduction shall be determined without regard to any adjustments pursuant to Section 743, Section 734, or Section 704(c) of the Code. In the event that the amount of the distributions made pursuant to this Section 6.2 is less than the aggregate excess tax liability of the Members described in the

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first sentence of Section 6.2(a), any distributions made pursuant to this Section 6.2 shall be made to all the Members in proportion to their respective shares of the excess tax liability. The amounts distributable pursuant to this Section 6.2 shall be calculated and distributed at the following times: (i) quarterly, on an estimated basis, with respect to the portion of the Company Year through the end of such quarterly period, at least 10 days prior to the date on which U.S. federal corporate estimated tax payments are due and (ii) with respect to each Company Year, at the end of such Company Year.

 

Section 6.3 Amounts Withheld .

 

(a) Withholding for Taxes . All amounts withheld pursuant to the Code or any provision of any state or local tax law with respect to any payment, distribution or allocation to the Company or the Members shall be treated as amounts distributed to the Members pursuant to this ARTICLE VI for all purposes under this Agreement. The Manager is authorized to withhold from payments and distributions, or with respect to allocations, to the Members and to pay over to any Federal, state or local government any amounts required to be so withheld and paid over pursuant to the Code or any other applicable law or regulation, and such amounts shall be allocated to the Member with respect to which such amount was withheld. Each Member and former Member shall, to the fullest extent permitted by law, indemnify and hold harmless the Company, the Manager and each other Person who is or who is deemed to be the responsible withholding agent or paying agent for United States federal, state or local or non-U.S. income tax purposes against all claims, liabilities and expenses relating to the Company’s, the Manager’s or such other Person’s obligation to withhold and to pay over, or otherwise to pay, any withholding or other taxes payable by the Company, the Manager or any of their Affiliates with respect to such Member or former Member based on such Member’s or former Member’s status or as a result of such Member’s or former Member’s ownership of Units, Transfer of Units (including by Exchange) or participation in the Company, as determined and apportioned in the good faith and reasonable discretion of the Manager.

 

(b) Withholding for an Adjustment Liability . In the event the Company becomes liable for an adjustment in respect of the distributive share of a Member (or a former Member) under Section 6225 of the Code as applicable under the Partnership Audit Provisions (such liability, as reasonably determined by the Partnership Representative, the “ Adjustment Liability ”), the Company is hereby authorized and directed by each Member to withhold from the distributions or other amounts payable to such Member in the amount of the Adjustment Liability and to remit such amount to the Internal Revenue Service or as may otherwise be required. The amount of the remitted Adjustment Liability shall be treated for all purposes of the Agreement as having been distributed or paid to the Member (or former Member) in question. If the Partnership Representative determines at any time that the Adjustment Liability with respect to a particular Member (or former Member) exceeds the amount of distributions or other amounts payable to such Member (or former Member) at such time (an “ Adjustment Liability Shortfall ”), the Member (or former Member) in question shall as soon as practicable after receiving written notice from the Partnership Representative of the amount of such Adjustment Liability Shortfall make a cash contribution to the Company equal to the amount of such Adjustment Liability Shortfall, which the Company shall use to effectuate the remittance. The amount of the Adjustment Liability Shortfall so contributed shall not be treated as a Capital Contribution for purposes of the Agreement and the associated remittance to the taxing authority

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shall not be treated as a distribution for purposes of the Agreement. The obligations of each Member (or former Member) under this Section 6.3(b) shall remain binding for as long as is necessary to resolve the income tax matters relating the Company and for Members and former Members to satisfy their payment obligations. Additionally, the obligations of each Member (or former Member) under this Section 6.3(b) shall survive the transfer or redemption by such Member of its Units and the termination of this Agreement or the dissolution of the Company and shall apply jointly and severally to such Member and former Member and direct or indirect transferees or successors to such Member or former Member’s interests.

 

ARTICLE VII
ISSUANCE OF ADDITIONAL UNITS

 

Section 7.1 Units . Interests in the Company shall be represented by Units, or such other securities of the Company, in each case as the Manager may establish in its discretion in accordance with the terms and subject to the restrictions hereof. Immediately after the “effective time” of the Reorganization, the Units will be comprised of a single class of Common Units. To the extent required pursuant to Section 7.2 , the Manager may create one or more classes or series of Common Units or preferred Units solely to the extent they are in the aggregate substantially equivalent to a class of common stock of GreenSky or class or series of preferred stock of GreenSky; provided that as long as there are any Members of the Company (other than GreenSky), then no such new class or series of Units may deprive such Members of, or dilute or reduce, the pro rata share of all interests they would have received or to which they would have been entitled if such new class or series of Units had not been created except to the extent (and solely to the extent) the Company actually receives cash in an aggregate amount, or other property with a Market Price in an aggregate amount, equal to the pro rata share allocated to such new class or series of Units and the number thereof issued by the Company.

 

Section 7.2 Authorization and Issuance of Additional Units .

 

(a) The Company shall undertake all actions, including, without limitation, a reclassification, distribution, division or recapitalization, with respect to the Common Units, to maintain at all times a one-to-one ratio between the number of Common Units owned by GreenSky and the number of outstanding shares of Class A Common Stock, disregarding, for purposes of maintaining the one-to-one ratio, (i) unvested shares of Class A Stock issued pursuant to Incentive Plans, (ii) treasury stock or (iii) preferred stock or other debt or equity securities (including without limitation warrants, options or rights) issued by GreenSky that are convertible into or exercisable or exchangeable for Class A Common Stock (except to the extent the net proceeds from such other securities, including any exercise or purchase price payable upon conversion, exercise or exchange thereof, has been contributed by GreenSky to the equity capital of the Company). In the event GreenSky issues, transfers or delivers from treasury stock or repurchases Class A Common Stock in a transaction not contemplated in this Agreement, the Manager shall take all actions such that, after giving effect to all such issuances, transfers, deliveries or repurchases, the number of outstanding Common Units owned by GreenSky will equal on a one-for-one basis the number of outstanding shares of Class A Common Stock. In the event GreenSky issues, transfers or delivers from treasury stock or repurchases or redeems GreenSky’s preferred stock in a transaction not contemplated in this Agreement, the Manager shall have the authority to take all actions such that, after giving effect to all such issuances,

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transfers, deliveries, repurchases or redemptions, GreenSky holds (in the case of any issuance, transfer or delivery) or ceases to hold (in the case of any repurchase or redemption) equity interests in the Company that (in the good faith determination by the Manager) are in the aggregate substantially equivalent to the outstanding preferred stock of GreenSky so issued, transferred, delivered, repurchased or redeemed. The Company shall not undertake any subdivision (by any Common Unit split, Common Unit distribution, reclassification, recapitalization or similar event) or combination (by reverse Common Unit split, reclassification, recapitalization or similar event) of the Common Units that is not accompanied by an identical subdivision or combination of Class A Common Stock to maintain at all times a one-to-one ratio between the number of Common Units owned by GreenSky and the number of outstanding shares of Class A Common Stock, unless such action is necessary to maintain at all times a one-to-one ratio between the number of Common Units owned by GreenSky and the number of outstanding shares of Class A Common Stock as contemplated by the first sentence of this Section 7.2 . Simultaneously with any Common Unit split, Common Unit distribution, reclassification, recapitalization or similar event) or combination (by reverse Common Unit split, reclassification, recapitalization or similar event) of the Common Units, GreenSky shall implement a comparable adjustment to the Class B Common Stock so as to maintain at all times a one-to-one ratio between the number of Common Units owned by Members other than GreenSky and the number of outstanding shares of Class B Common Stock.

 

(b) The Company shall be permitted to issue additional Units or other equity securities in the Company only to the Persons and on the terms and conditions provided for in, this Section 7.2 . Subject to the foregoing, the Manager may cause the Company to issue additional Common Units authorized under this Agreement at such times and upon such terms as the Manager shall determine, and the Manager shall amend this Agreement as necessary in connection with the issuance of additional Common Units and admission of additional Members under this Section 7.5 without the requirement of any consent or acknowledgement of any other Member.

 

(c) Notwithstanding anything to the contrary in this Section 7.2, in the event that (i) GreenSky repurchases Class A Common Stock using cash on the balance sheet of GreenSky, which cash was not received pursuant to a redemption by the Company of an equivalent number of Common Units, or (ii) GreenSky purchases Common Units, which purchase was funded by cash on the balance sheet of GreenSky, which cash was not received by GreenSky in a public offering of an equivalent number of shares of Class A Common Stock nor in a redemption by the Company of Common Units, then, in each such case, the requirement to maintain a one-to-one ratio shall not apply. In any such case, appropriate adjustments to the Exchange Rate shall be made pursuant to Section 2.3 of the Exchange Agreement.

 

Section 7.3 GreenSky Incentive Plans.

 

(a) Options Granted to Persons other than LLC Employees . If at any time or from time to time, in connection with any Incentive Plan, a stock option granted over shares of Class A Common Stock to a Person other than an LLC Employee is duly exercised:

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(i) GreenSky shall, as soon as practicable after such exercise, make a Capital Contribution to the Company in an amount equal to the exercise price paid to GreenSky by such exercising Person in connection with the exercise of such stock option.

 

(ii) Notwithstanding the amount of the Capital Contribution actually made pursuant to Section 7.3(a)(i) , GreenSky shall be deemed to have contributed to the Company as a Capital Contribution, in lieu of the Capital Contribution actually made and in consideration of additional Common Units, an amount equal to the Market Price of a share of Class A Common Stock as of the date of such exercise multiplied by the number of shares of Class A Common Stock then being issued by GreenSky in connection with the exercise of such stock option.

 

(iii) GreenSky shall receive in exchange for such Capital Contributions (as deemed made under Section 7.3(a)(ii) ), a corresponding number of Units of a class correlative to the class of equity securities for which such stock options were granted.

 

(b) Options Granted to LLC Employees . If at any time or from time to time, in connection with any Incentive Plan, a stock option granted over shares of Class A Common Stock to an LLC Employee is duly exercised:

 

(i) GreenSky shall sell to the optionee, and the optionee shall purchase from GreenSky, for a cash price per share equal to the Market Price of a share of Class A Common Stock at the time of the exercise, the number of shares of Class A Common Stock equal to the quotient of (x) the exercise price payable by the optionee in connection with the exercise of such stock option divided by (y) the Market Price of a share of Class A Common Stock at the time of such exercise.

 

(ii) GreenSky shall sell to the Company (or if the optionee is an employee of, or other service provider to, a Subsidiary, GreenSky shall sell to such Subsidiary), and the Company (or such Subsidiary, as applicable) shall purchase from GreenSky, a number of shares of Class A Common Stock equal to the excess of (x) the number of shares of Class A Common Stock as to which such stock option is being exercised over (y) the number of shares of Class A Common Stock sold pursuant to Section 7.3(b)(i) hereof. The purchase price per share of Class A Common Stock for such sale of shares of Class A Common Stock to the Company (or such Subsidiary) shall be the Market Price of a share of Class A Common Stock as of the date of exercise of such stock option.

 

(iii) The Company shall transfer to the optionee (or if the optionee is an employee of, or other service provider to, a Subsidiary, the Subsidiary shall transfer to the Optionee) at no additional cost to such LLC Employee and as additional compensation to such LLC Employee, the number of shares of Class A Common Stock described in Section 7.3(b)(ii) .

 

(iv) GreenSky shall, as soon as practicable after such exercise, make a Capital Contribution to the Company in an amount equal to all proceeds received (from whatever source, but excluding any payment in respect of payroll taxes or other withholdings) by the GreenSky connection with the exercise of such stock option. GreenSky shall receive for such Capital Contribution, a number of Common Units equal to the number of shares of Class A Common Stock for which such option was exercised.

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(c) Restricted Stock Granted to LLC Employees . If at any time or from time to time, in connection with any Incentive Plan any shares of Class A Common Stock (other than shares of Class A Common Stock issued upon exercise of a stock option) are issued to an LLC Employee (including any shares of Class A Common Stock that are subject to forfeiture in the event such LLC Employee terminates his or her employment with the Company or any Subsidiary) in consideration for services performed for the Company or any Subsidiary:

 

(i) GreenSky shall issue such number of shares of Class A Common Stock as are to be issued to such LLC Employee in accordance with the Incentive Plan;

 

(ii) On the date (such date, the “ Vesting Date ”) that the Market Price of such shares is includible in taxable income of such LLC Employee, the following events will be deemed to have occurred: (a) GreenSky shall be deemed to have sold such shares of Class A Common Stock to the Company (or if such LLC Employee is an employee of, or other service provider to, a Subsidiary, to such Subsidiary) for a purchase price equal to the Market Price of such shares of Class A Common Stock, (b) the Company (or such Subsidiary) shall be deemed to have delivered such shares of Class A Common Stock to such LLC Employee, (c) GreenSky shall be deemed to have contributed the purchase price for such shares of Class A Common Stock to the Company as a Capital Contribution, and (d) in the case where such LLC Employee is an employee of a Subsidiary, the Company shall be deemed to have contributed such amount to the capital of the Subsidiary; and

 

(iii) The Company shall issue to GreenSky on the Vesting Date a number of Units equal to the number of shares of Class A Common Stock issued under Section 7.3(c)(i) in consideration for a Capital Contribution in cash in an amount equal to the product of (x) the number of such newly issued Units multiplied by (y) the Market Price of a share of Class A Common Stock.

 

(d) Future Stock Incentive Plans . Nothing in this Agreement shall be construed or applied to preclude or restrain GreenSky from adopting, modifying or terminating stock incentive plans for the benefit of employees, directors or other business associates of GreenSky, the Company or any of their respective Affiliates. The Members acknowledge and agree that, in the event that any such plan is adopted, modified or terminated by GreenSky, amendments to this Section 7.3 may become necessary or advisable and that any approval or consent to any such amendments requested by GreenSky shall be deemed granted by the Manager without the requirement of any further consent or acknowledgement of any other Member.

 

(e) Anti-dilution Adjustments . For all purposes of this Section 7.3 , the number of shares of Class A Common Stock and the corresponding number of Common Units shall be determined after giving effect to all anti-dilution or similar adjustments that are applicable, as of the date of exercise or vesting, to the option, warrant, restricted stock or other equity interest that is being exercised or becomes vested under the applicable Incentive Plan and applicable award or grant documentation, and taking into account the cash, if any, on the balance sheet of GreenSky at such time.

 

Section 7.4 Dividend Reinvestment Plan, Cash Option Purchase Plan, Stock Incentive Plan or Other Plan . Except as may otherwise be provided in this ARTICLE VII , all amounts

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received or deemed received by GreenSky in respect of any dividend reinvestment plan, cash option purchase plan, stock incentive or other stock or subscription plan or agreement, either (a) shall be utilized by GreenSky to effect open market purchases of shares of Class A Common Stock, or (b) if GreenSky elects instead to issue new shares of Class A Common Stock with respect to such amounts, shall be contributed by GreenSky to the Company in exchange for additional Common Units. Upon such contribution, the Company will issue to GreenSky a number of Common Units equal to the number of new shares of Class A Common Stock so issued (adjusted appropriately to take into account the cash, if any, on the balance sheet of GreenSky at such time).

 

Section 7.5 Repurchase or Redemption of shares of Class A Common Stock . If, at any time, any shares of Class A Common Stock are repurchased or redeemed (whether by exercise of a put or call, automatically or by means of another arrangement) by GreenSky for cash, then the Manager shall cause the Company, immediately prior to such repurchase or redemption of Class A Common Stock, to, if and to the extent that the cash used by GreenSky to redeem shares of Class A Common Stock is cash from the Company, redeem a corresponding number of Common Units held by GreenSky, at an aggregate redemption price equal to the aggregate purchase or redemption price of the shares of Class A Common Stock being repurchased or redeemed by GreenSky (plus any expenses related thereto) and upon such other terms as are the same for the shares of Class A Common Stock being repurchased or redeemed by GreenSky.

 

Section 7.6 Incentive Units . Pursuant to the terms of one or more Incentive Plans approved by the Manager, the Manager may provide for the issuance of Incentive Units in order to provide equity incentive compensation to executives and other service providers of the Company and its Affiliates, with such terms, conditions, rights and obligations, including vesting, forfeiture and repurchase and the Manager’s ability to reissue Incentive Units that cease to be outstanding as a result of forfeitures or repurchases, as may be determined by the Manager and as set forth herein, in the Incentive Plan, and in the related Incentive Unit Agreements pursuant to which any such Incentive Unit may be awarded.

 

ARTICLE VIII
TRANSFER OF COMMON UNITS

 

Section 8.1 Restrictions on Members . Except as expressly permitted in this Agreement, or as consented to by the Manager, no Member shall directly or indirectly (including through the sale of the Member by its parent entity or equityholders), sell, transfer, assign, give, bequeath, devise, donate, exchange, pledge, hypothecate, enter into a derivative contract or similar arrangement with respect to, encumber, distribute or otherwise dispose of, either voluntarily or by operation of law (a “ Transfer ”), all or any part of the Common Units or any rights or interests therein, whether now owned or hereafter acquired; provided, however, that:

 

(a) A Member may Transfer all or any portion of his or her Units, together with an equal number of shares of Class B Common Stock, in exchange for an equal number of shares of Class A Common Stock to GreenSky pursuant to the terms of one or more Exchange Agreements,

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(b) an individual Member may Transfer all or any portion of his or her Units without consideration to its (i) Family Group if such Member is treated as the owner of such Units within the meaning of Section 676 of the Code provided that such Transfer complies with the requirements of Section 8.2 or (ii) in the case of an employee exercising options, a limited liability company owned by the employee or the employee and the employee’s spouse,

 

(c) all or any portion of an individual Member’s Units (which, in the case of Incentive Units, shall only include vested Units) may, on the death of such Member, be Transferred without consideration to its Family Group, provided that such Transfer complies with the requirements of Section 8.2 ,

 

(d) Financial Technology Investors, LLC and Founders Technology Investors, LLC may Transfer all or any portion of their Units without consideration to David Zalik or any member of the Family Group of such Person if such Person is treated as the owner of such Units within the meaning of Section 676 of the Code, provided that such Transfer complies with the requirements of Section 8.2 ,

 

(e) GS Investment Holdings, LLC may Transfer all or any portion of its Units without consideration to Robert Sheft (in his capacity as an owner or as an individual Member) or any member of the Family Group of such Person if such Person is treated as the owner of such Units within the meaning of Section 676 of the Code, provided that such Transfer complies with the requirements of Section 8.2 ,

 

(f) An Institutional Member may Transfer all or any portion of its Units to a partner, shareholder, member or affiliated investment fund of such Member, provided such Transfer complies with requirements Section 8.2 .

 

The Transfers described in Section 8.1(b) through Section 8.1(f), are “ Permitted Transfers ,” and the transferees in such Permitted Transfers are “ Permitted Transferees .” Any transfer in violation of the terms of this Agreement shall be null and void ab initio and without any force or effect. No Member shall avoid the provisions of this Agreement by making one or more Transfers to one or more Permitted Transferees and then disposing of all or any portion of such party’s interest in any such Permitted Transferee, and any Transfer or attempted Transfer in violation of this covenant shall be null and void ab initio . A Permitted Transferee pursuant to this Section 8.1 may Transfer its, his or her Units pursuant to this Section 8.1 only to the Member who transferred such Units to such Permitted Transferee (the “ Transferor Member ”) or to a person that would be a Permitted Transferee of such Transferor Member at the time of such subsequent Transfer. Any Unit Transferred by a Member shall remain subject to the same restrictions that were applicable to such Unit while held by such Member. The Company shall not, except for Transfers or issuances made in accordance with the terms and conditions of this Agreement, cause or permit the issuance or Transfer of any Unit to be made on its books.

 

Each Member that is not an individual agrees and acknowledges that (i) any direct or indirect transfer, issuance, redemption or other similar transaction in which the beneficial ownership of the equity interests in such Member changes shall be deemed a “Transfer” hereunder and shall be subject mutatis mutandis to the restrictions set forth in this ARTICLE VIII , (ii) such Member shall cause such Transfer to be made only in compliance with this

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Agreement as if the interest so transferred were a Unit and (iii) in the event that any direct or indirect beneficial owner of such Member effects any such Transfer of the equity interests of such Member, other than in compliance with the terms of this Agreement (as if the interest so transferred were a Unit), such Member shall be in breach of this Agreement (regardless of whether such Member had the right to prohibit or impede such Transfer or had knowledge of such Transfer). Notwithstanding the foregoing, but without by implication in any way impacting any Permitted Transfers, (x) in no event shall the transfer, issuance or redemption of limited partnership interests in an Institutional Member (or any beneficial owner of an Institutional Member) that is a fund be deemed a “Transfer” hereunder and (y) nothing in this ARTICLE VIII shall restrict any Transfer of equity interests in an Institutional Member or the ultimate parent of an Institutional Member (or in any corporation, trust, limited liability company, general or limited partnership or other entity controlling or under common control with a fund that beneficially owns equity interests of an Institutional Member).

 

Section 8.2 Conditions Precedent to Transfer .

 

(a) Any implication in this ARTICLE VIII to the contrary notwithstanding, no Transfer shall be effective unless there shall be furnished to the Manager evidence in form and substance reasonably satisfactory to the Manager (which shall, if requested by the Manager, include an opinion of counsel reasonably satisfactory to the Manager and obtained at the sole expense of the intended transferor) that:

 

(i) the proposed Transfer is exempt from the registration requirements of the Securities Act of 1933, as from time to time amended, and will not result in a violation of any applicable state blue sky or other securities laws;

 

(ii) the proposed transferee (A) accepts in writing all the terms and provisions of this Agreement and the purchase agreement applicable to the transferor with respect to the Units being transferred; and (B) has paid all reasonable expenses in connection with its admission as a Member;

 

(iii) all debts and obligations (if any) of the transferor Member to the Company with respect to the transferred Units (including without limitation any due, but unpaid, Capital Contributions) have been paid;

 

(iv) the proposed Transfer does not result in a violation of applicable laws;

 

(v) the proposed Transfer would not cause the Company to become, with respect to any employee benefit plan subject to Title I of ERISA, a “party-in-interest” (as defined in ERISA Section 3(14)) or a “disqualified person” (as defined in Code Section 4975(c));

 

(vi) the proposed Transfer would not, in the opinion of legal counsel to the Company, cause any portion of the assets of the Company to constitute assets of any employee benefit plan pursuant to Department of Labor Regulations Section 2510.2-101;

 

(vii) the proposed Transfer is in compliance with, and does not cause the Company to lose its status as a partnership for purposes of, laws governing federal and state income taxes;

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(viii) the proposed Transfer is not made to any person who lacks the legal right, power or capacity to own Units;

 

(ix) the proposed Transfer does not cause the Company to become a “publicly traded partnership,” as such term is defined in Code Section 469(k)(2) or Code Section 7704(b);

 

(x) the proposed Transfer does not cause the Company to become a reporting company under the Exchange Act; and

 

(xi) the proposed Transfer does not subject the Company to regulation under the Investment Company Act of 1940, the Investment Advisors Act of 1940 or ERISA, each as amended.

 

Section 8.3 Transfer Guidelines . The Manager shall use reasonable best efforts to be eligible for the 100-partner private placement safe harbor (within the meaning of Regulations Section 1.7704-1(h), and shall have the discretion to establish reasonable transfer guidelines in order to comply with any of the safe harbor provisions of Regulations Section 1.7704-1, as it reasonably determines to be necessary based on the advice of counsel.

 

Section 8.4 Rights of Assignees . Subject to Section 8.5 , an Assignee of a Unit has no right to participate in the management of the business and affairs of the Company or to become a Member. The Assignee is only entitled to receive allocations of Net Profits and Net Losses, and distributions of Distributable Cash and capital attributable to the Unit.

 

Section 8.5 Admission of Substitute Members . An Assignee of a Unit shall be admitted as a Substitute Member, and admitted to all the rights of the Member who initially assigned the Unit, only upon compliance with the requirements of Section 8.1 and Section 8.2 . If so admitted, the Substitute Member shall have all of the rights and powers, and shall be subject to all the restrictions and liabilities, of the Member assigning the Unit. Except as otherwise agreed by the Company, the admission of a Substitute Member shall not release the Member assigning the Unit from any liability to the Company that may have existed prior to such approval.

 

Section 8.6 Creditors of Members . In no instance shall a creditor of a Member be entitled to rights greater than those of an Assignee set forth in Section 8.5 above.

 

Section 8.7 Paramount Provision . The parties to this Agreement expressly acknowledge and agree that the restrictions on transfer contained herein (i) are reasonable and necessary for the efficient operation of the Company, and (ii) are not, and shall not be construed as being, an unlawful restraint on alienation of a Common Unit.

 

ARTICLE IX
DISSOCIATION OF A MEMBER

 

Section 9.1 Events of Dissociation . A Member shall cease to be a Member (a “Dissociated Member”) upon the occurrence of any of the following events (an “ Event of Dissociation ”):

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(a) such Member: (i) makes an assignment for the benefit of creditors; (ii) files a voluntary petition in bankruptcy; (iii) is adjudicated a bankrupt or insolvent; (iv) files a petition or answer seeking for such Member any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any statute, law or regulation; (v) files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against such Member in any proceeding of this nature; (vi) seeks, consents to, or acquiesces in the appointment of a trustee, receiver or liquidator of the Member or of all or any substantial part of such Member’s properties;

 

(b) if, within one hundred twenty (120) days after the commencement of any proceeding against such Member seeking the reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any statute, law or regulation, the proceeding shall not have been dismissed, or if within ninety (90) days after the appointment without his or her consent or acquiescence of a trustee, receiver or liquidator of such Member or of all or any substantial part of such Member’s properties, the appointment is not vacated or stayed, or within ninety (90) days after the expiration of any stay, the appointment is not vacated;

 

(c) the attempt by such Member to encumber or otherwise transfer his Units in violation of the terms of this Agreement (including indirect transfers prohibited by Section 8.1 );

 

(d) with respect to any individual Member, the death of such Member or the entry of an order by a court of competent jurisdiction adjudicating such Member incompetent to manage such Member’s property; or

 

(e) the dissolution, winding-up or liquidation of any Member that is a corporation, partnership or other entity.

 

Section 9.2 Loss of Management Rights . Upon the occurrence of any Event of Dissociation set forth in Section 9.1 hereof, the Dissociated Member shall become an Assignee and, unless and until such Assignee shall become a Substitute Member in accordance with ARTICLE VIII hereof, shall lose all rights with respect to the management of the Company set forth in this Agreement.

 

ARTICLE X
DISSOLUTION

 

Section 10.1 Events of Dissolution . The Company shall be dissolved upon the first to occur of the following events:

 

(a) unanimous decision of the Manager and Members; or

 

(b) the disposition by sale, foreclosure, or condemnation of substantially all of the Company’s assets other than cash.

 

The Members hereby agree that the Company shall not dissolve prior to the occurrence of an event of dissolution described in this Section 10.1 and that no Member shall seek a dissolution of the Company under Section 14-11-603 of the Act.

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Section 10.2 Statement of Assets . Upon a termination of the Company, each of the Members shall be furnished with a statement, certified by the Company, setting forth the assets and liabilities of the Company as of the date of complete dissolution.

 

Section 10.3 Execution of Documents . The Manager shall have full authority to make, execute, deliver and record any and all documents required or deemed necessary or desirable by it to effect and reflect the termination and dissolution of the Company.

 

Section 10.4 Winding-up and Distribution of Assets . Upon the occurrence of an event of dissolution described in Section 10.1 hereof, the Company shall cease to carry on its business and the Manager shall wind up the Company’s affairs and dissolve the Company in accordance with the provisions of Section 14-11-605 of the Act and as hereinafter set forth:

 

(a) Prior to any distribution to the Members, the Manager shall set aside from the assets of the Company sufficient assets to be applied to the payment of creditors other than Members and their Affiliates, in the order of priority provided by law (whether by making immediate payment or the making or reasonable provision for payment thereof).

 

(b) After the payment required by Section 10.4(a) hereof and after giving effect to all contributions, distributions and allocations for all periods, any remaining assets of the Company shall be distributed in accordance with Section 6.1 .

 

(c) No Member shall receive additional compensation for any services performed pursuant to this ARTICLE X .

 

Section 10.5 Compliance with Certain Requirements of Regulations; Deficit Capital Accounts . If any Member has a deficit balance in his Capital Account (after giving effect to all contributions, distributions and allocations for all Company Years, including the Company Year during which such liquidation occurs), such Member shall have no obligation to make any contribution to the capital of the Company with respect to such deficit, and such deficit shall not be considered a debt owed to the Company or to any other third-party for any purpose whatsoever. In the discretion of the Manager, a pro rata portion of the distributions that would otherwise be made to the Members pursuant to this ARTICLE X may be:

 

(a) Distributed to a trust established for the benefit of the Members for the purposes of liquidating Company assets, collecting amounts owed to the Company, and paying any contingent or unforeseen liabilities or obligations of the Company. The assets of any such trust shall be distributed to the Members from time to time, in the reasonable discretion of the Manager, in the same proportions as the amount distributed to such trust by the Company would otherwise have been distributed to the Members pursuant to Section 10.4 hereof; or

 

(b) withheld to provide a reasonable reserve for Company liabilities (contingent or otherwise) and to reflect the unrealized portion of any installment obligations owed to the Company, provided that such withheld amounts shall be distributed to the Members as soon as practicable.

 

Section 10.6 Rights of Members . Except as otherwise provided in this Agreement, each Member shall look solely to the property of the Company for the return of its Capital

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Contribution or any loan he has made and shall have no right or power to demand or receive property other than cash from the Company. If the assets of the Company remaining after payment or discharge of the debts or liabilities of the Company are insufficient to return any such loan or a Member’s Capital Contribution, the Members shall have no recourse against the Company or any Member.

 

Section 10.7 Allocations During Period of Liquidation . During the period commencing on the first day of the Company Year during which an event of dissolution occurs and ending on the date on which all of the assets of the Company have been distributed to the Members pursuant to Section 10.4 hereof, the Members shall continue to share Net Profits, Net Losses, gain, loss, and other items of Company income, gain, loss or deduction in the manner provided in ARTICLE V and Exhibit C hereof.

 

Section 10.8 Character of Liquidating Distribution . All payments made in liquidation of the Units of a Member shall be made in exchange for the Units of such Member in Company property pursuant to Section 736(b)(1) of the Code, including the interest of such Member in Company goodwill.

 

Section 10.9 Form of Liquidating Distributions . For purposes of making distributions required by Section 10.4 hereof, the Manager may determine whether to distribute all or any portion of the Company’s property in-kind or to sell all or any portion of the Company’s property and distribute the proceeds therefrom.

 

Section 10.10 Cancellation of Certificate . Upon the completion of the winding-up of the Company’s affairs and distribution of the Company’s assets, the Company shall be terminated and the Members shall cause the Company to execute and file a Certificate of Termination in accordance with Section 14-11-609 of the Act.

 

ARTICLE XI
WAIVER OF PARTITION

 

The Members agree that irreparable damage and harm shall be done to the goodwill and reputation of the Company and to each of the Members if any Member shall bring an action in court to partition any property of the Company. Accordingly, each Member hereby waives and renounces such Member’s right to seek or maintain a petition for the partition of any property which the Company may, at any time, own or to compel any sale thereof under the laws of any jurisdiction which has jurisdiction with respect to such petition.

 

ARTICLE XII
EXCULPATION AND INDEMNIFICATION

 

Section 12.1 Exculpation . The Manager shall owe the same fiduciary duties to the Members as it would with respect to shareholders under the Delaware General Corporation Law were the Company a Delaware corporation. Otherwise, and notwithstanding any other provisions of this Agreement, whether express or implied, or obligation or duty at law or in equity, none of the Members or Manager, or any officers, directors, managers, stockholders, members, partners, employees, representatives or agents of any of the foregoing or any Affiliate of the foregoing (collectively, the “ Covered Persons ”) nor any former Covered Person shall be liable to the

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Company or any other person for any act or omission (in relation to the Company, this Agreement, any related document or any transaction or investment contemplated hereby or thereby) taken or omitted in good faith by a Covered Person and in the reasonable belief that such act or omission is in or is not contrary to the best interests of the Company and is within the scope of authority granted to such Covered Person by this Agreement, provided a court of competent jurisdiction shall not have determined that such act or omission constitutes fraud, willful misconduct, bad faith, or gross negligence.

 

Section 12.2 Indemnification . To the fullest extent permitted by law, the Company shall indemnify and hold harmless each Covered Person and each former Covered Person from and against any and all losses, claims, demands, liabilities, expenses, judgments, fines, settlements and other amounts arising from any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative (“ Claims ”), in which the Covered Person may be involved, or threatened to be involved, as a party or otherwise, by reason of its management of the affairs of the Company or which relates to or arises out of the Company or its property, business or affairs. A Covered Person or former Covered Person shall not be entitled to indemnification under this Section 12.2 with respect to (a) any Claim with respect to which a court of competent jurisdiction has determined that such Covered Person has engaged in fraud, willful misconduct, bad faith or gross negligence (b) any Claim that arises out of a breach of this Agreement, or (c) any Claim initiated by such Covered Person unless such Claim (or part thereof) (i) was brought to enforce such Covered Person’s rights to indemnification hereunder or (ii) was authorized or consented to by the Manager. Expenses incurred by a Covered Person in defending any Claim shall be paid by the Company in advance of the final disposition of such Claim upon receipt by the Company of an undertaking by or on behalf of such Covered Person to repay such amount if it shall be ultimately determined that such Covered Person is not entitled to be indemnified by the Company as authorized by this Section 12.2 .

 

Section 12.3 Effect of Modification; Survival . Any repeal or modification of this ARTICLE XII shall not adversely affect any rights of such Covered Person pursuant to this ARTICLE XII , including the right to indemnification and to the advancement of expenses of a Covered Person existing at the time of such repeal or modification with respect to any acts or omissions occurring prior to such repeal or modification. This ARTICLE XII shall survive any termination of this Agreement.

 

Section 12.4 Indemnitor of First Resort . The Company hereby acknowledges that certain Covered Persons (the “ Specified Covered Persons ”) may have rights to indemnification and advancement of expenses provided by a Member or its Affiliates (directly or by insurance retained by such entity) (collectively, the “ Member Indemnitors ”). The Company hereby agrees and acknowledges that (a) it is the indemnitor of first resort with respect to the Specified Covered Persons, (b) it shall be required to advance the full amount of expenses incurred by the Specified Covered Persons, as required by the terms of this Agreement (or any other agreement between the Company and the Specified Covered Persons), without regard to any rights the Specified Covered Persons may have against the Member Indemnitors and (c) it irrevocably waives, relinquishes and releases the Member Indemnitors from any and all claims against the Member Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof. The Company further agrees that no advancement or payment by the Member Indemnitors on behalf of the Company with respect to any claim for which the Specified

21

Covered Persons have sought indemnification from the Company shall affect the foregoing and the Member Indemnitors shall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of the Specified Covered Persons against the Company.

 

Section 12.5 Non-exclusivity of Rights . The rights conferred on any Covered Person by this ARTICLE XII shall not be exclusive of any other rights that such Covered Person may have or hereafter acquire under any statute, provision of this Agreement, agreement, vote of members or disinterested directors or otherwise.

 

ARTICLE XIII
TAX ELECTIONS AND RESTRICTIONS

 

Section 13.1 Section 754 Election . The Company shall have in effect an election under Section 754 of the Code (and corresponding elections under state and local law) for the taxable year of the Company that includes the date hereof and subsequent taxable years in which the Company is treated as a partnership for U.S. federal income tax purposes.

 

Section 13.2 General Elections and Limitations . The Manager shall be authorized, in its sole discretion, to make all elections required or permitted with respect to Federal or state taxes on Company tax returns; provided, however, no election shall be made by either the Company or the Members to be excluded from the application of the provisions of Subchapter K of Subtitle A of the Code or from any similar provisions of any state tax law.

 

Section 13.3 Partnership Representative.

 

(a) Pursuant to the Partnership Audit Provisions, the Manager shall be designated and may, on behalf of the Company, at any time, and without further notice to or consent from any Member, act as the “partnership representative” of the Company (within the meaning given to such term in Section 6223 of the Code) (the “ Partnership Representative ”) for purposes of the Code. The Partnership Representative shall have the right and obligation to take all actions authorized and required, respectively, by the Code for the Partnership Representative and is authorized and required to represent the Company (at the Company’s expense) in connection with all examinations of the Company’s affairs by tax authorities, including resulting administrative and judicial proceedings, and to expend Company funds for professional services reasonably incurred in connection therewith. The Partnership Representative is hereby authorized, and shall have the discretion based upon the advice of counsel, to make all elections under Section 6226 of the Code and the Regulations thereunder. Each Member agrees to cooperate with the Company and the Partnership Representative and to do or refrain from doing any or all things reasonably requested by the Company or the Partnership Representative with respect to the conduct of such proceedings, including the making of, and compliance with, any elections with respect thereto. The Partnership Representative shall keep Members reasonably informed regarding any material income tax proceedings, and the Members shall have the right to observe and participate through representatives of their own choosing (at their sole expense) in any such tax proceedings to the extent permitted by applicable law. Nothing herein shall diminish, limit or restrict the rights of any Member under the Partnership Audit Provisions.

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(b) In the event the Company incurs any liability for taxes, interest or penalties:

 

(i) The Partnership Representative may, or if such amounts are material, shall, cause the Members (including any former Member) to whom such liability relates, as determined by the Partnership Representative, in its sole good faith discretion and after consulting with the Company’s and the affected Member’s tax advisors, to pay, and each such Member hereby agrees to pay, such amount to the Company, and such amount shall not be treated as a Capital Contribution; and

 

(ii) Any amount not paid by a Member (or former Member) within ten (10) days following the receipt of the request to pay delivered by the Partnership Representative shall be treated for purposes of this Agreement as withholding payment governed by Section 6.3(b) hereof.

 

(iii) The obligations of each Member (or former Member) under this Section 13.3 and Section 6.3(b) shall survive the transfer or redemption by such Member of its Units and the termination of this Agreement or the dissolution of the Company.

 

Section 13.4 Tax Treatment of the Company . The Company shall be treated as a partnership for U.S. federal, state, local and non-U.S. tax purposes, to the extent applicable. The Manager and the Members shall take no action (or fail to take any action) that could cause the Company to be treated as other than in accordance with the first sentence of this Section 13.4 .

 

ARTICLE XIV
MISCELLANEOUS PROVISIONS

 

Section 14.1 Confidentiality .

 

(a) Each Member acknowledges that during the term of this Agreement, it will have access to and become acquainted with trade secrets, proprietary information and confidential information belonging to the Company and its Affiliates that are not generally known to the public, including, but not limited to, information concerning business plans, financial statements and other information provided pursuant to this Agreement, operating practices and methods, expansion plans, strategic plans, marketing plans, contracts, customer lists or other business documents that the Company treats as confidential, in any format whatsoever (including oral, written, electronic or any other form or medium) (collectively, “ Confidential Information ”). In addition, each Member acknowledges that: (i) the Company has invested, and continues to invest, substantial time, expense and specialized knowledge in developing its Confidential Information; (ii) the Confidential Information provides the Company with a competitive advantage over others in the marketplace; and (iii) the Company would be irreparably harmed if the Confidential Information were disclosed to competitors or made available to the public. Without limiting the applicability of any other agreement to which any Member is subject, no Member shall, directly or indirectly, disclose or use (other than solely for the purposes of such Member monitoring and analyzing its investment in the Company), including, without limitation, use for personal, commercial or proprietary advantage or profit, any Confidential Information of which such Member is or becomes aware. Each Member in possession of Confidential

23

Information shall take all appropriate steps to safeguard such information and to protect it against disclosure, misuse, espionage, loss and theft.

 

(b) Nothing contained in Section 14.1(a) shall prevent any Member from disclosing Confidential Information: (i) upon the order of any court, regulatory body or administrative agency; (ii) upon the request or demand of any regulatory agency or authority having jurisdiction over such Member; (iii) to the extent compelled by legal process or required or requested pursuant to subpoena, interrogatories or other discovery requests; (iv) to the extent necessary in connection with the exercise of any remedy hereunder; (v) to the other Member(s); or (vi) to such Member’s Affiliates, representatives or agents who, in the reasonable judgment of such Member, need to know such Confidential Information and agree to be bound by the provisions of this Section 14.1 as if a Member; provided , that in the case of clause (i), (ii) or (iii), such Member shall (A) other than in the case of routine regulatory examinations, notify the Company and other Members of the proposed disclosure as far in advance of such disclosure as practicable (but in no event make any such disclosure before notifying the Company and other Members) and (B) use reasonable efforts to ensure that any Confidential Information so disclosed is accorded confidential treatment satisfactory to the Company, when and if available. Notwithstanding anything herein to the contrary, the Investor or any other Member that is an institutional investor and any of their respective Affiliates may make customary disclosures to their limited partners and prospective limited partners in the ordinary course of business, subject to customary confidentiality obligations. It is further expressly acknowledged that nothing in Section 14.1(a) , this Section 14.1(b) or otherwise in this Agreement shall limit or otherwise apply to disclosure by a Regulated Holder or any of its representatives to any banking regulatory authority with jurisdiction over the Regulated Holder or any of its Affiliates, and that, for the avoidance of doubt, neither the Regulated Holder nor any of its representatives shall have any obligation to notify the Company of any such examination or communication.

 

(c) The restrictions of Section 14.1(a) shall not apply to Confidential Information that: (i) is or becomes generally available to the public other than as a result of a disclosure by a Member in violation of this Agreement; (ii) is or has been independently developed or conceived by such Member without use of Confidential Information; or (iii) becomes available to such Member or any of its Affiliates, representatives or agents on a non-confidential basis from a source other than the Company, the other Members or any of their respective Affiliates, representatives or agents, provided , that such source is not known by the receiving Member to be bound by a confidentiality agreement regarding the Company.

 

(d) The obligations of each Member under this Section 14.1 shall survive for so long as such Member remains a Member, and for three years following the earlier of (i) termination, dissolution, liquidation and winding up of the Company, (ii) the withdrawal of such Member from the Company, and (iii) such Member’s Transfer of its Units.

 

Section 14.2 Benefit . This Agreement shall be binding upon, and shall inure to the benefit of, the Members specifically named herein and, as provided in this Agreement, their respective heirs, administrators, executors, transferees, successors and permitted assigns.

 

Section 14.3 Amendment . This Agreement shall be amended only upon the favorable vote of (a) Members representing a majority of the outstanding Units, and (b) approval of the

24

Manager; provided that any amendment to, or restatement of, this Agreement that modifies the Regulatory Voting Restrictions shall require approval of the Members subject to the Regulatory Voting Restrictions.

 

Section 14.4 Notices . All notices and other communications required or permitted hereunder shall be in writing and shall be delivered by nationally recognized overnight carrier or by hand or by messenger or by electronic mail with receipt confirmed, and shall be addressed to the intended recipient party at such party’s address appearing in Exhibit B (or at the address of the Company’s principal office, in the case of notices to the Company), or at such other address as such intended recipient party shall have furnished to the sending party. Each such notice or other communication shall, for all purposes of this Agreement, be treated as effective or having been given when delivered or when delivery is refused.

 

Section 14.5 Books, Records, Accounting, Tax, Reports and Access .

 

(a) At all times during the existence of the Company, the Company shall keep, or cause to be kept, true books of account in which shall be entered fully and accurately each transaction of the Company. Such books of account, together with an executed copy of this Agreement (and all amendments thereto), shall, at all times, be maintained at the principal office of the Company and be open to the reasonable inspection and examination by the Voting Members or their duly authorized representatives during normal business hours.

 

(b) As soon as reasonably practicable after the end of each Company Year, but in no event later than 120 days after the end thereof, there shall be delivered to each Member an annual financial statement showing the financial condition of the Company at the end of such Company Year and the results of its operations for the Company Year then ended.

 

(c) The Company shall cause income tax returns for the Company to be prepared, at Company expense, and timely filed with the appropriate authorities. Within 60 days after the end of each Company Year and within 15 days of the due date for estimated tax payments, each Member shall be furnished with a statement indicating the amounts of any Net Profits and Net Losses allocated to such Member, and the amount of any distributions made to such Member pursuant to this Agreement. The Company shall pay all required taxes attributable to the Company, if any, including without limitation any sales taxes. The Company shall provide each Member with the necessary apportionment data for all state tax returns.

 

(d) The Company shall furnish each Member with it Schedule K-1 within 60 days of the end of each Company Year. Each Member shall provide the Company with information relevant to tax status or reporting of the Company as reasonably requested by the Company from time to time.

 

(e) Notwithstanding anything to the contrary in this Section 14.5 , any other provision of this Agreement or the Act, any Member that is, or is an Affiliate of, a financial institution that is a lender or a participant in any of the Company’s loan programs shall not be entitled to inspect or otherwise have access to any performance or other data that identifies loans owned by any other financial institution.

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Section 14.6 Bank Accounts . All funds of the Company shall be deposited in the Company’s name in one or more amounts at such Federally-insured bank, savings and loan or building and loan, or other commercial institutions, as the Manager shall, from time to time, determine. Withdrawals from any such accounts shall be made upon such signature(s) as the Manager shall, from time to time, designate.

 

Section 14.7 Investment Representation and Indemnity . Each Member, by executing this Agreement or any agreement to be bound by this Agreement, represents to the other Members and to the Company that:

 

(a) such Member has acquired his or its Unit in the Company with the intent of holding such interest for investment and without the intent of participating, directly or indirectly, in any “sale or distribution” (for securities laws purposes) unless he or it shall first comply with all applicable securities laws;

 

(b) such Member is a bona fide resident of the state of its mailing address as shown in this Agreement; and

 

(c) such Member shall indemnify the other Members and the Company from and against any and all loss, damage, liability, claims and expenses incurred, suffered or sustained by any of them in any manner because of the falsity of any representation made in this Section 14.7 including, without limitation, liability which would not have occurred (had such representation been true) for violation of the securities laws of the United States or of any state.

 

Section 14.8 Governing Law . This Agreement and all matters arising hereunder shall be construed and interpreted according to, and governed by, the laws of the State of Georgia without regard to the principles of conflicts of laws thereof.

 

Section 14.9 WAIVER OF JURY TRIAL . EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

Section 14.10 Jurisdiction; Service of Process . Any action or proceeding seeking to enforce any provision of, or based on any right arising out of, or relating in any manner to, this Agreement (whether based on contract, tort or any other theory) must be brought against any of the parties in Fulton County, Georgia, or in the United States District Court for the Northern District of Georgia, and each of the parties consent to the jurisdiction of such courts (and of the appropriate appellate courts) in any such action or proceeding and waives any objection to venue

26

laid therein. Process in any action or proceeding referred to in the preceding sentence may be served on any party anywhere in the world.

 

Section 14.11 Counsel . The parties acknowledge that the Company was represented by legal counsel at all times during the preparation of this Agreement. The Company’s legal counsel has advised each Member that a conflict may exist between the interests of such Member and those of the Company or the other Members. The Company’s legal counsel has further advised each Member to seek the advice of independent counsel before entering into this Agreement. Each Member has had all information necessary to make an informed decision with regard to this Agreement and the opportunity to consult with independent counsel before entering into this Agreement and, with the Company, waives all claims against the Company’s legal counsel regarding any possible conflict of interest with regard to this Agreement or its preparation. The parties also acknowledge that the Company’s legal counsel may currently represent, or may have represented, one or more of the Members or its Affiliates in other matters; and the parties hereby waive any actual or potential conflict of interest arising out of that representation, and consent to the representation of the Company in this matter and to the continued representation of the parties in other matters.

 

Section 14.12 Limited Liability Company . The parties to this Agreement agree to form a limited liability company and do not intend to form a partnership under the laws of the State of Georgia or any other laws; provided , however , that, as set forth in Section 13.4 , to the extent permitted by law, the Company will be treated as a partnership for U.S. Federal, state, local and non-U.S. tax purposes, to the extent applicable.

 

Section 14.13 Construction . In the event any provision of this Agreement shall be found to be void by a court of competent jurisdiction, the remaining provisions of this Agreement shall nevertheless be binding with the same effect as though the void provision had not been included herein unless such void provision or clause shall be so significant as to materially affect the Members’ expectations regarding this Agreement. Otherwise, the Members agree to replace any void provision with a valid provision which most closely approximates the intent and economic effect of the void provision.

 

Section 14.14 Interpretation . The parties hereto acknowledge and agree that (a) each party hereto and its counsel reviewed and negotiated the terms and provisions of this Agreement and have contributed to its revision, (b) the rule of construction to the effect that any ambiguities are resolved against the drafting party shall not be employed in the interpretation of this Agreement and (c) the terms and provisions of this Agreement shall be construed fairly as to all parties hereto, regardless of which party was generally responsible for the preparation of this Agreement.

 

Section 14.15 Entire Agreement . This Agreement, together with all exhibits and schedules hereto and all other agreements referenced herein and therein, including, for the avoidance of doubt, the Exchange Agreement and the Tax Receivable Agreement, contains the entire agreement of the parties hereto relating to the subject matter hereof and supersedes all prior contracts, agreements, discussions and understandings between them. No course of prior dealings between the parties shall be relevant to supplement or explain any term used in this Agreement. Acceptance or acquiescence in a course of performance rendered under this

27

Agreement shall not be relevant to determine the meaning of this Agreement even though the accepting or the acquiescing party has knowledge of the nature of the performance and an opportunity for objection.

 

Section 14.16 Headings . All headings in this Agreement are for convenience only, are not a part of this Agreement and shall not be used as an aid in the construction of any provision hereof.

 

Section 14.17 Number and Gender . As used herein, the singular and plural each includes the other, the masculine, feminine and neuter each include the others, and this Agreement shall be read accordingly when required by the facts.

 

Section 14.18 Waiver . A waiver of any default or breach hereunder by any party hereto shall not constitute a waiver by such party of any other default or breach, or a subsequent waiver by such party of the same default or breach. Further, to be effective, any waiver shall be in writing and shall be signed by the party granting such waiver; provided that any waiver of any rights under this Agreement shall be treated as an amendment to such rights with respect to the matter that is subject of the waiver, and approval of such waiver shall be provided in accordance with Section 14.3 .

 

Section 14.19 Counterparts . This Agreement may be executed in several counterparts, each of which shall be deemed an original, and all of the counterparts together shall constitute one and the same instrument.

 

Section 14.20 Remedies; Prevailing Party . Any Person having any rights under any provision of this Agreement will be entitled to enforce its rights under this Agreement to recover damages and costs (including attorneys’ fees) caused by any breach of any provision of this Agreement and to exercise all other rights existing in its favor. The parties hereto agree and acknowledge that money damages may not be an adequate remedy for any breach of the provisions of this Agreement and that any party may in its sole discretion apply to any court of law or equity of competent jurisdiction (without posting any bond or deposit) for specific performance and/or other injunctive relief in order to enforce or prevent any violations of the provisions of this Agreement. In the event of any litigation arising from any claim, controversy, dispute or cause of action based upon, arising out of or relating to this agreement, the prevailing party shall be entitled to recover from the non-prevailing party all reasonable costs incurred including court costs, attorneys’ fees, and all other related expenses incurred in such claim, controversy, dispute or cause of action.

 

(Signatures appear on the following pages)

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

 

  COMPANY
     
  GreenSky Holdings, LLC
     
  By: /s/ David Zalik
    Chief Executive Officer

 

(Signature Page to Operating Agreement)

 

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

 

  COMPANY
     
  GreenSky, Inc.
     
  By: /s/ David Zalik
    Chief Executive Officer

 

(Signature Page to Operating Agreement)

 

EXHIBIT A

 

DEFINITIONS

 

The terms listed below have the meanings given to them in the referenced sections:

 

Term Section
Agreement Preamble
Adjustment Liability 6.3(b)
Adjustment Liability Shortfall 6.3(b)
Business 1.4
Cause 3.4
Claims 12.2
Confidential Information Section 14.1
Company Preamble
Covered Persons 12.1
Dissociated Member 9.1
Event of Dissociation 9.1
Exempted Person 3.1
GreenSky Background
Member Indemnitors 12.4
Partnership Representative 13.3(a)
Permitted Members 5.1
Permitted Transfers 8.1
Permitted Transferees 8.1
Regulatory Voting Restriction 2.5
Related Person 3.1(b)
Restricted Member 5.1
Specified Covered Persons 12.4
Transfer 8.1
Transferor Member 8.1
Vesting Date 7.3

 

As used in this Agreement, each of the following terms shall have the specific definition indicated:

 

Act ” means the Georgia Limited Liability Company Act, as from time to time amended, or any provisions from time to time in effect and corresponding thereto.

 

Adjusted Capital Account Deficit ” means the deficit balance, if any, in a Member’s Capital Account at the end of the relevant taxable period after giving effect to the following adjustments:

 

(i) The crediting to such Capital Account of any amount which such Member is obligated to restore pursuant to any provision of this Agreement or is deemed to be obligated to restore pursuant to Regulations Sections 1.704¬2(g)(1) and 1.704-2(i)(5); and
 

(ii) debiting thereto the items described in Regulations Sections 1.704- 1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), and 1.704-1 (b)(2)(ii)(d)(6).

 

The foregoing is intended to comply with the provisions of Regulations Section 1.704- 1(b)(2)(ii)(d), and shall be interpreted consistently therewith.

 

Affiliate ” means, with respect to any individual, corporation, partnership, limited liability company, trust or other entity (collectively referred to as a “ person ”), any of the following:

 

(i) any person who, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, another person;

 

(ii) any person owning or controlling ten percent (10%) or more of the outstanding voting securities or beneficial interest of another person;

 

(iii) any person who is an officer, director, general partner or trustee of such person, or anyone acting in a substantially similar capacity to such person;

 

(iv) any person who is an officer, director, general partner, trustee or holder of ten percent (10%) or more of the voting securities or beneficial interest of any of the foregoing; and

 

(v) with respect to Ithan Creek Investors USB, LLC, any mutual funds or similar pooled vehicles or accounts that are controlled by, under common control with, managed or advised by the same management company or registered investment advisor (or an affiliate of such management company or registered investment advisor) as Ithan Creek Investors USB, LLC;

 

but shall not be deemed to include (a) any person providing legal, accounting or other professional services to the Company, its Members or their Affiliates merely by reason of the provision of such services or (b) any portfolio company of the Investor or its Affiliates.

 

For avoidance of doubt, with respect to an Institutional Member, an Affiliate shall also include any Affiliated Fund.

 

Affiliated Fund ” means each corporation, trust, limited liability company, general or limited partnership or other entity controlling or under common control with the relevant Institutional Member.

 

Assignee ” means a transferee of a Unit who shall not have been admitted as a Substituted Member.

 

Capital Account ” means, with respect to any Member, the Capital Account maintained for such Member in accordance with the following provisions:

A- 2

(i) To each Member’s Capital Account there shall be credited (A) such Member’s Capital Contributions, (B) such Member’s distributive share of Net Profits and any items in the nature of income or gain that are specially allocated pursuant to Section 1 or Section 2 of Exhibit C hereof, and (C) the amount of any Company liabilities assumed by such Member or that are secured by any property distributed to such Member. The principal amount of a promissory note that is not readily traded on an established securities market and that is contributed to the Company by the maker of the note (or a Member related to the maker of the note within the meaning of Regulations Section 1.704-1(b)(2)(ii)(c)) shall not be included in the Capital Account of any Member until the Company makes a taxable disposition of the note or until (and to the extent) principal payments are made on the note, all in accordance with Regulations Section 1.704- 1(b)(2) (iv)(d) (2);

 

(ii) To each Member’s Capital Account there shall be debited (A) the amount of money and the Gross Asset Value of any property distributed to such Member pursuant to any provision of this Agreement, (B) such Member’s distributive share of Net Losses and any items in the nature of expenses or losses that are specially allocated pursuant to Section 1 or Section 2 of Exhibit C hereof, and (C) the amount of any liabilities of such Member assumed by the Company or that are secured by any property contributed by such Member to the Company;

 

(iii) In the event Units are 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 Units; and

 

(iv) In determining the amount of any liability for purposes of subparagraphs (i) and (ii) above there shall be taken into account Code Section 752(c) and any other applicable provisions of the Code and Regulations.

 

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. In the event the Manager determines that it is prudent to modify the manner in which the Capital Accounts, or any debits or credits thereto (including, without limitation, debits or credits relating to liabilities that are secured by contributed or distributed property or that are assumed by the Company or any Members), the Manager may make such modification, provided that it is not likely to have a material effect on the amounts distributed to any person pursuant to ARTICLE X hereof upon the dissolution of the Company. The Manager also shall (i) make any adjustments that are necessary or appropriate to maintain equality between the Capital Accounts of the Members and the amount of capital reflected on the Company’s balance sheet, as computed for book purposes, in accordance with Regulations Section 1.704-1(b)(2)(iv)(q) and (ii) make any appropriate modifications in the event unanticipated events might otherwise cause this Agreement not to comply with Regulations Section 1.704-1(b).

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Capital Contribution ” means, with respect to any Member, the amount of money and the fair market value of assets (when contributed) as reasonably determined by the Manager, in each case, contributed to the Company with respect to such Member’s Units, including initial and additional contributions.

 

Class A Common Stock ” means the Class A Common Stock, par value $.01, of GreenSky.

 

Class B Common Stock ” means the Class B Common Stock, par value $.01, of GreenSky.

 

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

 

Common Units ” means the Units designated as Common Units under this Agreement.

 

Company Minimum Gain ” has the same meaning as the term “partnership minimum gain” in Regulations Sections 1.704-2(b)(2) and 1.704-(2)(d).

 

Company Percentage ” of a Member on a pertinent date means the ratio (expressed as a percentage) of the number of Common Units held by such Member to the aggregate Common Units held by all Members.

 

Company Year ” means the accounting period of the Company.

 

Contributed Property ” means property contributed by a Member to the Company, the income tax basis of which to the Company is determined, in whole or in part, by reference to the income tax basis of such property (or of any property exchanged for such property) in the hands of such Member.

 

Depreciation ” means, for each Company Year, an amount equal to the depreciation, amortization or other cost recovery deduction allowable with respect to an asset for such Company Year for Federal income tax purposes, 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 Company Year, 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 Company Year bears to such beginning adjusted tax basis; provided , however , that if the adjusted basis for Federal income tax purposes of an asset at the beginning of such Company Year is zero ($0), Depreciation shall be determined with reference to such beginning Gross Asset Value using any reasonable method selected by the Members.

 

Distributable Cash ” means the excess, if any, of

 

(i) the Company’s aggregate cash receipts (other than Capital Contributions) over

 

(ii) the aggregate of the Company’s expenditures from such cash receipts (including, but not limited to, debt service and debt reduction with respect to any loans made by Members to the Company) and such amounts as the
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Manager determines are reasonable to retain from such cash receipts for Company purposes;

 

provided , however , that retained amounts shall become Distributable Cash when the Manager determines that their retention is no longer necessary; provided , further , however , that Distributable Cash shall not be reduced by depreciation, amortization, cost recovery deductions and other similar non-cash expenses.

 

Economic Risk of Loss ” means the economic risk of loss that a Member or a Related Person bears for a Company liability as determined under Regulations Section 1.752-2.

 

Effective Date ” means May 23, 2018.

 

Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

Exchange Agreement ” means the Exchange Agreement(s) among the Company, GreenSky and the other Persons named therein providing generally for the exchange of Common Units, together with shares of Class B Common Stock, for Class A Common Stock.

 

Family Group ” means, with respect to a Person who is an individual, (i) such Person’s spouse and direct descendants (whether natural or adopted) (collectively, for purposes of this definition, “ relatives ”), and (ii) any trust, the trustee of which is such Person and which at all times is and remains solely for the benefit of such Person and/or such Person’s relatives.

 

GAAP ” means United States generally accepted accounting principles, consistently applied.

 

Gross Asset Value ” shall mean, with respect to any asset, the adjusted basis of the asset for federal income tax purposes, except as follows:

 

(a) with the exception of contributions in the form of cash, 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, as reasonably determined by the Manager;

 

(b) the Gross Asset Value of all Company assets shall be adjusted to equal their respective gross fair market values as reasonably determined by the Manager, immediately prior to the following times: (i) the acquisition of additional Units or other interests in the Company by any new or existing Member in exchange for more than a de minimis Capital Contribution; (ii) the distribution by the Company to a Member of more than a de minimis amount of Company property as consideration for Units or other interests in the Company; (iii) the grant of Units in the Company (other than a de minimis number of Units) as consideration for the provision of services to or for the benefit of the Company by an existing Member acting in a Member capacity, or by a new Member acting in a Member capacity or in anticipation of becoming a Member (including the grant of Incentive Units); and (iv) the liquidation of the Company within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g); provided , however , that adjustments pursuant to subsections (i), (ii) and (iii) of this subclause (b) shall be made only if the Manager reasonably determines that such adjustments are necessary or appropriate to reflect the relative economic interest of the Members in the Company;

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(c) the Gross Asset Value of any Company asset distributed to any Member shall be the gross fair market value of such asset on the date of distribution as reasonably determined by the Manager; and

 

(d) the Gross Asset Values of the Company assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Code Section 734(b) or 743(b), 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) and subclause (vii) of the definition of “Net Profits and Net Losses;” provided , however , that such Gross Asset Values shall not be adjusted pursuant to this subclause (d) to the extent that the Manager determines that an adjustment pursuant to subclause (b) above is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant to this subclause (d).

 

Incentive Plan ” shall mean the Equity Incentive Plan of the Company or any successor plan of the Company.

 

Incentive Unit Agreement ” shall mean an agreement between a Member and the Company evidencing an award of Incentive Units.

 

Incentive Units ” shall mean the membership interests including, without limitation, Profits Interests (and options to purchase membership interests) in the Company issued to certain of the Company’s Manager, executives and other service providers and designated as such upon issuance, having the powers, preferences, rights, qualifications, limitations and restrictions set forth herein, in the Incentive Plan and the applicable Incentive Unit Agreements.

 

Institutional Member ” means a bank, bank holding company, or investment fund, or a subsidiaries thereof.

 

IPO ” means the initial public offering of shares of Class A Common Stock by GreenSky.

 

LLC Employee ” means an employee of, or other service provider to, the Company or any Subsidiary, in each case acting in such capacity.

 

Manager ” means the person or persons designated or elected as such pursuant to ARTICLE III of the Agreement, and initially shall mean GreenSky in such capacity.

 

Market Price ” means, with respect to a share of Class A Common Stock as of a specified date, the last sale price per share of Class A Common Stock, regular way, or if no such sale took place on such day, the average of the closing bid and asked prices per share of Class A Common Stock, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the Nasdaq Global Select Market or, if the Class A Common Stock is not listed or admitted to trading on the Nasdaq Global Select Market, as reported on the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the Class A Common Stock is listed or admitted to trading or, if the Class A Common Stock is not listed or admitted to trading on any national securities exchange, the last quoted price, or, if not so quoted,

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the average of the high bid and low asked prices in the over-the-counter market, as reported by the National Association of Securities Dealers, Inc. Automated Quotation System or, if such system is no longer in use, the principal other automated quotation system that may then be in use or, if the Class A Common Stock is not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Class A Common Stock selected by Board of Directors of GreenSky or, in the event that no trading price is available for the shares of Class A Common Stock, the fair market value of a share of Class A Common Stock, as determined in good faith by the Board of Directors of GreenSky.

 

Member(s) ” means, individually, each of the signatories to this Agreement other than the Company and, collectively, all of the Members, and includes any party or parties substituted for any of them pursuant to ARTICLE VIII hereof.

 

Member Nonrecourse Debt ” has the same meaning as the term “partner nonrecourse debt” in Regulations Section 1.704-2(b)(4).

 

Member Nonrecourse Debt Minimum Gain ” means an amount, with respect to each Member Nonrecourse Debt, equal to the Company Minimum Gain that would result if such Member Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance with Regulations 1.704-2(i)(3).

 

Member Nonrecourse Deductions ” has the same meaning as the term “partner nonrecourse deductions” in Regulations 1.704-2(i)(1) and 1.704-(2)(i)(2).

 

Net Precontribution Gain ” means the net gain (if any) that would have been recognized by the distributee Member under Section 704(c)(1)(B) of the Code if all property that (i) had been contributed to the Company within seven (7) years of the distribution and (ii) is held by the Company immediately before the distribution had been distributed by the Company to another Member. If any portion of the property distributed consists of property that had been contributed by the distributee Member to the Company, then such property shall not be taken into account in determining Net Precontribution Gain. If the property distributed consists of an interest in an entity, the preceding sentence shall not apply to the extent that the value of such interest is attributable to the property contributed to such entity after such interest had been contributed to the Company.

 

Net Profits and Net Losses ” means, for a Company Year, an amount equal to the Company’s taxable income or loss for such period determined in accordance with Code Section 703(a), adjusted as follows:

 

(i) There shall be included all items of income, gain, loss or deduction required to be separately stated pursuant to Code Section 703(a)(1);

 

(ii) any income of the Company exempt from Federal income tax shall be added;
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(iii) any expenditures of the Company described in Code Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to Regulations Section 1.704-1(b)(2)(iv)(i), shall be subtracted;

 

(iv) in the event the Gross Asset Value of any Company asset is adjusted pursuant to subparagraphs (a) or (b) of the definition of Gross Asset Value, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the Gross Asset Value of the asset) or an item of loss (if the adjustment decreases the Gross Asset Value of the asset) from the disposition of such asset and shall be taken into account for purposes of computing Net Profits and Net Losses;

 

(v) 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;

 

(vi) in lieu of the depreciation, amortization and other cost recovery deductions calculated pursuant to Code Section 703(a), there shall, be taken into account Depreciation for such Company Year, computed in accordance with the definition of Depreciation;

 

(vii) to the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Code Section 734(b) 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 such basis) from the disposition of such asset and shall be taken into account for purposes of computing Net Profits and Net Losses; and

 

(viii) any item of Company income, gain, loss or deduction which shall be specially allocated pursuant to Sections 1 and 2 of Exhibit C hereto shall not be included in Net Profits and Net Losses.

 

The amounts of the items of Company income, gain, loss or deduction available to be specially allocated pursuant to Exhibit C , Sections 1 and 2 hereof shall be determined by applying rules analogous to those set forth in subparagraphs (ii) through (vii) above.

 

Nonrecourse Deductions ” has the meaning set forth in Regulations Section 1.704-2(b)(1) and 1.704-2(c).

 

Nonrecourse Liability ” has the meaning set forth in Regulations Section 1.704-2(b)(3).

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Partnership Audit Provisions ” means the Bipartisan Budget Act of 2015 and Sections 6221-6231 of the Code (and the Regulations promulgated thereunder), as amended thereunder.

 

Person ” or “ person ” means any individual, firm, corporation, partnership, trust, incorporated or unincorporated association, joint venture, joint stock company, limited liability company, governmental authority or other entity of any kind, and shall include any successor (by merger or otherwise) of such entity.

 

Profits Interest ” means an interest in the future profits of the Company satisfying the requirements for a partnership profits interest transferred in connection with the performance of services, as set forth in IRS Revenue Procedures 93-27 and 2001-43, or any future IRS guidance or other authority that supplements or supersedes the foregoing IRS Revenue Procedures.

 

Regulated Holder ” means a bank or bank holding companies, together with its subsidiaries.

 

Regulations ” means the Federal income tax regulations promulgated under the Code; including temporary Regulations, as amended.

 

Regulatory Allocations ” has the meaning ascribed to it in Section 2 of Exhibit C hereto.

 

Reorganization ” means the transactions described in the Reorganization Agreement among the Company, GreenSky, and the other parties thereto dated as of May 23, 2018.

 

Related Person ” means a person having a relationship to a Member described in Regulations Section 1.752-4(b).

 

Subsidiary ” means any corporation, partnership, joint venture or other entity of which the Company owns, directly or indirectly, more than 20% of the outstanding voting securities or equity interests.

 

Substitute Member ” means an Assignee who shall have been admitted to all of the rights of membership pursuant to this Agreement (other than as set forth in Section 8.5 ). As a Substitute Member, an Assignee shall succeed to the Capital Account of the transferor Member and all the terms and conditions of this Agreement (other than as set forth in Section 8.5 ) shall inure to the benefit of, and be binding upon, such Substitute Member, his estate, his personal representatives, his heirs and legatees, and his successors in interest.

 

Tax Rate ” means the greater of (i) 45% or (ii) a rate equal to the highest effective marginal combined federal, state and local income tax rate for a Company Year applicable to Parent for such Company Year, taking into account the character of the relevant tax items (e.g., ordinary or capital) as reasonably determined by the Manager, which, with respect to each of clauses (i) and (ii), in no event shall exceed the highest effective marginal combined federal, state and local income tax rate for a Company Year applicable to any individual or corporation that is a resident of New York State and New York City.

 

Tax Receivable Agreement ” means the Tax Receivable Agreement among the Company, GreenSky and the other Persons named therein providing generally GreenSky will

A- 9

agree to pay those other Persons 85% of certain cash tax savings, if any, in United States federal, state and local taxes that GreenSky realizes or is deemed to realize in connection with the Reorganization transactions, the offering-related transactions and any future exchanges of Units for Class A Common Stock pursuant to the Exchange Agreement.

 

“Unit ” means a portion of the interest of a Member in the Company, including any and all benefits to which such Member may be entitled to under the Act and in this Agreement, together with all obligations of such Member to comply with the terms and provisions of this Agreement.

 

Value ” means (a) for any stock option, the Market Price for the trading day immediately preceding the date of exercise of a stock option under such stock option; and (b) for any equity security other than a stock option, the Market Price for the trading day immediately preceding the Vesting Date.

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EXHIBIT C

 

ALLOCATIONS

 

1. (a) Minimum Gain Chargeback . Except as otherwise provided in Regulations Section 1.704-2(f), notwithstanding any other provision of this Section 1 to the contrary, if there shall be a net decrease in Company Minimum Gain for a Company Year, each Member shall be specially allocated items of Company income and gain for such Company Year (and, if necessary, subsequent Company Years) equal to each such Member’s share of the net decrease in Company Minimum Gain, determined in accordance with Regulations Section 1.704-2(g). Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Member pursuant thereto. The items to be so allocated shall be determined in accordance with Regulations Sections 1.704-2(f)(6) and 1.704-2(j)(2). If a minimum gain chargeback shall exceed the Company’s income and gain for the Company Year, such excess shall be treated as a minimum gain chargeback requirement in each succeeding Company Year until fully charged back. This Section is intended to comply with the minimum gain chargeback requirement of Regulations Section 1.7042(f) and shall be interpreted consistently therewith.

 

(b) Member Minimum Gain Chargeback . Except as otherwise provided in Regulations Section 1.704-2(i)(4), notwithstanding any other provision of this Section 1 to the contrary, if there is a net decrease in Member Nonrecourse Debt Minimum Gain attributable to a Member Nonrecourse Debt during any Company Year, each Member who has a share of Member Nonrecourse Debt Minimum Gain attributable to such Member Nonrecourse Debt, determined in accordance with Regulations Section 1.704-2(i)(5), shall be specially allocated items of Company income and gain for such Company Year (and, if necessary, subsequent Company Years) in an amount equal to such Member’s share of the net decrease in Member Nonrecourse Debt Minimum Gain attributable to such Member Nonrecourse Debt, determined in accordance with Regulations Section 1.704-2(i)(4). Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Member pursuant thereto. The items to be so allocated shall be determined in accordance with Regulations Sections 1.704-2(i)(4) and 1.704- 2(j)(2). This Section is intended to comply with the minimum gain chargeback requirement in Section 1.704-2(i)(4) and shall be interpreted consistently therewith.

 

(c) Qualified Income Offset . In the event any Member shall unexpectedly receive any adjustments, allocations or distributions described in Regulations Section 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6), there shall subsequently be specially allocated to such Member items of income and gain so as to eliminate, to the extent required by the Regulations, the Adjusted Capital Account Deficit of such Member as quickly as possible; provided , however , that an allocation pursuant to this Section 1(c) shall be made only if, and to the extent, such Member would have an Adjusted Capital Account Deficit after all allocations provided for in this Exhibit C , other than those required by this Section 1(c) , have been made.

 

(d) Gross Income Allocation . In the event any Member shall have Adjusted Capital Account Deficit at the end of any Company Year, there shall be specially allocated to each such

 

Member subsequent items of income or gain in the amount of such excess as quickly as possible; provided , however , that an allocation pursuant to this Section 1(d) shall be made only if, and to the extent, such Member would have a negative Capital Account balance after all other allocations provided for in this Exhibit C , other than those required by Section 1(c) hereof and this Section 1(d) , have been made.

 

(e) Nonrecourse Deductions . Nonrecourse Deductions for any Company Year or other period shall be allocated among the Members, pro rata , based on their respective share of Net Profits and Net Losses under Section 5.1 .

 

(f) Member Loan Nonrecourse Deductions . Any Nonrecourse Deductions for any Company Year or other period pertaining to any nonrecourse loan made by a Member to the Company shall be allocated to the Member who bears the Economic Risk of Loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Regulations Section 1.704-2(i)(1). If more than one Member bears the economic risk of loss, such deduction shall be allocated between or among such Members in accordance with the ratios in which such Members share such economic risk of loss.

 

(g) Section 754 Adjustments . To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Code Section 734(b) or Code Section 743 (b) is required pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(2) or Regulations Section 1.704- 1(b)(2)(iv)(m)(4) to be taken into account in determining Capital Accounts as the result of a distribution to a Member in complete liquidation of such Member’s Units in the Company, the amount of such adjustment to Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) and such gain or loss shall be specially allocated to the Members in accordance with their Units in the Company in the event Regulations Section 1.704-1(b)(2)(iv)(m)(2) applies, or to the Member to whom such distribution was made in the event Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.

 

2. Curative Allocations . The allocations set forth in Sections 1 and 5 of this Exhibit D (the “ Regulatory Allocations ”) are intended to comply with certain requirements of Regulations Section 1.704. It is the intent of the Members that, to the extent possible, all Regulatory Allocations shall be offset either with other Regulatory Allocations or with special allocations of other items of Company income, gain, loss or deduction pursuant to this Section 2 . Therefore, notwithstanding any other provision of this Exhibit C (other than the Regulatory Allocations), the Members shall make such offsetting special allocations of Company income, gain, loss or deduction in whatever manner they determine appropriate so that, after such offsetting allocations are made, each Member’s Capital Account balance is, to the extent possible, equal to the Capital Account balance such Member would have had if the Regulatory Allocations were not part of the Agreement and all Company items were allocated pursuant to Section 5.1 of the Agreement.

 

3. Allocations Upon Transfer . Any implication in this Agreement to the contrary notwithstanding, if any Unit shall be transferred during any Company Year, the Net Profits and Net Losses allocable with respect to such Unit for such Company Year shall be allocated between the transferor and the transferee on the basis of the number of days in such Company

C- 2

Year each party was, according to the books and records of the Company, the owner of record of the Unit transferred, unless the transferor and transferee agree to use the closing of the books method, and agree to pay the costs of the Company in effectuating such closing of the books. Anything in this Section 4 notwithstanding, however, items described in Code Section 706(d)(2)(B) must be allocated pursuant to Code Section 706(d)(2).

 

4. Tax Treatment of Certain Distributions . To the extent permitted by Section 1.704-2(h)(3) of the Regulations, the Manager shall endeavor not to treat distributions of Distributable Cash as having been made from the proceeds of a Nonrecourse Liability or Member Nonrecourse Debt.

 

5. Section 737 Gain . In the case of any distribution by the Company to a Member, such Member shall be treated as recognizing gain in an amount equal to the lesser of:

 

(a) the excess (if any) of (i) the fair market value of the property (other than money) received in the distribution, over (ii) the adjusted basis of such Member’s interest in the Company immediately before the distribution reduced (but not below zero) by the amount of money received in the distribution, or

 

(b) the Net Precontribution Gain of the Member.

 

Allocations pursuant to this Section 7 are solely for purposes of Federal, state, and local taxes and shall not affect, or in any way be taken into account in computing, any Member’s Capital Account or share of Net Profits, Net Losses, other items, or distributions pursuant to any provision of this Agreement.

C- 3

Exhibit 10.6

Execution Version

 

CERTAIN CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT, MARKED BY [*****] HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

 

FIFTH AMENDMENT TO LOAN ORIGINATION AGREEMENT

 

THIS FIFTH AMENDMENT TO LOAN ORIGINATION AGREEMENT (this “Amendment”) is made as of May 21, 2018 by and between GreenSky, LLC (f/k/a GreenSky Trade Credit, LLC), a Georgia limited liability company (“Servicer”), and Synovus Bank, a Georgia state-chartered bank (“Lender”). Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to such terms in the Origination Agreement (as defined herein).

WITNESSETH:

WHEREAS, Lender and Servicer have previously entered into that certain Origination Agreement dated as of August 4, 2015, as amended (the “Origination Agreement”);

WHEREAS, on or about the date hereof, Lender is entering into one or more purchase agreements to acquire groups of loans originated by a financial institution other than Lender through the lending program administered by Servicer and, in connection therewith, Lender and Servicer have agreed to treat such acquired loans as if they were initially originated under the Origination Agreement and serviced at all times under the Servicing Agreement except as otherwise set forth in the applicable purchase agreement and as otherwise set forth in this Amendment; and

WHEREAS, Lender and Servicer desire to amend the Origination Agreement as set forth herein;

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Lender and Servicer hereby agree as follows:

1.       Effective as of the Effective Date, the Origination Agreement is hereby amended as follows:

a.       Section 1.01 of the Origination Agreement is hereby amended by deleting the definition of “Acquired Loans” and inserting the following in lieu thereof:

““ Acquired Loans ” shall mean loans previously originated by a financial institution other than Lender through the lending program administered by Servicer that are acquired by Lender from time to time and that Lender and Servicer agree in writing to treat as Loans under this Origination Agreement.”

b.       Section 2.01(a)(i) of the Origination Agreement is hereby deleted in its entirety and the following is inserted in lieu thereof:

“(i) Subject to the terms and conditions hereof, Lender will fund newly originated Loans for the Program Sponsor’s customers identified by Servicer that meet the Underwriting Criteria up to a limit of $[*****] ($[*****] ) in aggregate outstanding principal balances at any time (the “ Commitment Amount ”); provided, however , that, unless otherwise agreed in writing by the Lender, (A) (i) [*****] and (ii) [*****] and (B) [*****]. The Commitment Amount may be increased in accordance with the mutual

 

 

CERTAIN CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT, MARKED BY [*****] HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

 

agreement of Lender and Servicer as evidenced by a written agreement. Loans shall be funded at 100% of par of the Loan.”

c.       Schedule B to the Origination Agreement is hereby amended by deleting item 3 under the heading [*****] in its entirety and inserting the following in lieu thereof:

[*****]

2.       Except as expressly amended hereby, the Origination Agreement shall remain in full force and effect.

3.       This Amendment may be executed and delivered by Lender and Servicer in facsimile or PDF format and in any number of separate counterparts, all of which, when delivered, shall together constitute one and the same document.

 

[Signature page follows]

 

 

 

CERTAIN CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT, MARKED BY [*****] HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

 

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

 

 

SERVICER :

     
 

GREENSKY, LLC

     
  By: /s/ Timothy D. Kaliban
    (Signature)
     
  Name: Timothy D. Kaliban
    (Print Name)
     
  Title: President
     
     
     
  LENDER :
     
  SYNOVUS BANK
     
  By: /s/ Christopher Pyle
    (Signature)
     
  Name: Christopher Pyle
    (Print Name)
     
  Title: Group Executive

 

 

 

 

Exhibit 10.7

Execution Version

 

CERTAIN CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT, MARKED BY [*****] HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

 

 

FOURTH AMENDMENT TO SERVICING AGREEMENT

 

THIS FOURTH AMENDMENT TO SERVICING AGREEMENT (this “Amendment”) is made as of May 21, 2018 by and between GreenSky, LLC (f/k/a GreenSky Trade Credit, LLC), a Georgia limited liability company (“Servicer”), and Synovus Bank, a Georgia state-chartered bank (“Lender”). Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to such terms in the Servicing Agreement (as defined herein).

WITNESSETH:

WHEREAS, Lender and Servicer have previously entered into that certain Servicing Agreement dated as of August 4, 2015, as amended (the “Servicing Agreement”);

WHEREAS, on or about the date hereof, Lender is entering into one or more purchase agreements to acquire groups of loans originated by a financial institution other than Lender through the lending program administered by Servicer and, in connection therewith, Lender and Servicer have agreed to treat such acquired loans as if they were initially originated under the Origination Agreement and serviced at all times under the Servicing Agreement except as otherwise set forth in the applicable purchase agreement and as otherwise set forth in this Amendment; and

WHEREAS, Lender and Servicer desire to amend the Origination Agreement as set forth herein;

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Lender and Servicer hereby agree as follows:

1.        Effective as of the Effective Date, the Origination Agreement is hereby amended as follows:

a.       Section 1.01 of the Servicing Agreement is hereby amended by adding the following definitions in alphabetical order:

““ 2018 Acquired Loans ” shall mean: (a) the “Loans” as defined in that certain Purchase and Sale Agreement between Lender, Servicer and [*****] dated as of February 28, 2018, and (b) the May 2018 Acquired Loans.”

““ May 2018 Acquired Loans ” shall mean: (a) the “Loans” as defined in that certain Purchase and Sale Agreement between Lender, Servicer and [*****] dated as of May 21, 2018, (b) the “Loans” as defined in that certain Purchase and Sale Agreement between Lender, Servicer and [*****] dated as of May 21, 2018, and (c) the “Loans” as defined in that certain Purchase and Sale Agreement between Lender, Servicer and [*****] dated as of May 21, 2018.”

b.        Section 1.01 of the Servicing Agreement is hereby amended by deleting the definition of “Promotional Loans” set forth therein and inserting the following in lieu thereof:

 

 

CERTAIN CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT, MARKED BY [*****] HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

 

““Promotional Loans” shall mean each Loan for the greater of (i) 12 months from the date of initial funding, (ii) in the case of a deferred or interest only Loan, the duration of the deferred or interest only period (not to exceed 24 months) or (iii) in the case of a May 2018 Acquired Loan, 12 months from the date such Loan was acquired, for purposes of calculating the Bank Margin.”

c.       Section 3.01(e) of the Servicing Agreement is hereby amended by deleting the first sentence thereof and inserting the following in lieu thereof:

[*****]

 

d.       Section 3.0l(e)(iv) of the Servicing Agreement is hereby amended by deleting the definition of [*****] set forth therein and inserting the following in lieu thereof:

[*****]

 

2.       Except as expressly amended hereby, the Servicing Agreement shall remain in full force and effect.

3.       This Amendment may be executed and delivered by Lender and Servicer in facsimile or PDF format and in any number of separate counterparts, all of which, when delivered, shall together constitute one and the same document.

 

 

 

[Signature page follows]

 

 

 

 

 

 

CERTAIN CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT, MARKED BY [*****] HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

 

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

 

 

 

SERVICER :

     
 

GREENSKY, LLC

     
  By: /s/ Timothy D. Kaliban
    (Signature)
     
  Name: Timothy D. Kaliban
    (Print Name)
     
  Title: President
     
     
     
  LENDER :
     
  SYNOVUS BANK
     
  By: /s/ Christopher Pyle
    (Signature)
     
  Name: Christopher Pyle
    (Print Name)
     
  Title: Group Executive

 

 

Exhibit 99.1

 

News Release

 

GreenSky, Inc. Announces Closing of Initial Public Offering and Exercise in Full of the Underwriters’ Option to Purchase Additional Shares

 

ATLANTA, GA, May 29, 2018 – GreenSky, Inc. (“GreenSky”) (NASDAQ: GSKY) today announced the closing of its initial public offering of 43,700,000 shares of its Class A common stock at a price to the public of $23.00 per share, which includes the exercise in full of the underwriters’ option to purchase an additional 5,700,000 shares of its Class A common stock, for a total of approximately $1.01 billion in aggregate gross proceeds. The shares began trading on The Nasdaq Global Select Market under the ticker symbol “GSKY” on May 24, 2018.

 

Goldman Sachs & Co. LLC, J.P. Morgan and Morgan Stanley acted as joint lead book-running managers and as representatives of the underwriters for the offering. BofA Merrill Lynch, Citigroup, Credit Suisse and SunTrust Robinson Humphrey also acted as book-running managers for the offering. Raymond James, Sandler O’Neill + Partners, L.P., Fifth Third Securities and Guggenheim Securities acted as co-managers for the offering.

 

A registration statement relating to these securities was filed with, and declared effective by, the United States Securities and Exchange Commission (“SEC”). Copies of the registration statement can be accessed through the SEC’s website at www.sec.gov. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

 

This offering was made only by means of a prospectus. Copies of the final prospectus may be obtained from: Goldman Sachs & Co. LLC, Attention: Prospectus Department, 200 West Street, New York, NY 10282, via telephone: 1-866-471-2526, or via email: prospectus-ny@ny.email.gs.com; J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, or via telephone: 1-866-8039204; and Morgan Stanley & Co. LLC, Attention: Prospectus Department, 180 Varick Street, Second Floor, New York, NY 10014.

 

About GreenSky, Inc.

 

GreenSky is a leading technology company that powers commerce at the point of sale. GreenSky’s platform is powered by a proprietary technology infrastructure that delivers stability, speed, scalability and security and that facilitates merchant sales, while reducing the friction, and improving the economics, associated with a consumer making a purchase and a bank extending financing for that purchase.

 

For more information, contact:

 

Rebecca Gardy
Senior Vice President, Investor Relations
GreenSky, Inc.
(404) 334-7334
rebecca.gardy@greensky.com